Our Broadband 'Plan' Is Already Toast
Art Brodsky
Public Knowledge
May 8, 2009
For a couple of hours yesterday, there appeared a glimmer of hope that maybe, just
maybe, someone in the U.S. Senate was serious about a broadband policy. That glimmer
– the Senate Commerce Committee announced a confirmation hearing for May 12 for
Julius Genachowski, the pick to be the chairman of the Federal Communications
Commission (FCC).
But the glimmer, much like a buffer copy, was only transitory. A couple of hours later,
the hearing was postponed until after Memorial Day. Why? The Republicans now have to
pick not one, but possibly two nominees for the FCC, and haven’t decided on a package.
It would be horrible, just horrible, for the Senate at least to proceed on the Democratic
nominees, Genachowski and perhaps Mignon Clyburn, daughter of House Majority Whip
James Clyburn (D-SC) to fill out the Commission while the Republicans hash it out. Or
not. It would be nice if all parties grew up and let the Commission get a chairman
already. Not happening.
The result is that the agency continues to drift while the Senate Republicans are trying to
work the angles on Texas politics for Sen. Kay Bailey Hutchison, (R-TX), and
Republican Leader Mitch McConnell (R-KY) ponders. It’s not even clear whether the
Republicans need one nominee, to replace FCC Commissioner Jonathan Adelstein, or
two, if current Republican Commissioner Rob McDowell is to be jettisoned when his
term expired in June. Hutchison, the senior Republican on the committee who is running
for governor, has reportedly selected Meredith Atwell Baker, former administrator of the
National Telecommunications and Information Administration (NTIA), who is also by
happenstance the daughter-in-law of Texas Republican major domo James Baker.
That’s a view of the short term. The pessimistic view of the longer term is – who cares?
The Europeans and the rest of the world are going to continue to eat our lunch on
broadband anyway, so it really doesn’t matter whether it’s another six weeks or whenever
for the FCC to get fully kitted out with commissioners.
Earlier this week, the European Parliament came within a few votes of passing another
major broadband/telecommunications policy. Only the continuing greed of Hollywood
kept the matter from passing. The Parliamentarians, to their credit, voted that a judicial
order is needed before someone’s Internet service can be taken away. French President
Nicolas Sarkozy was backing his “three strikes” law to allow Internet Service Providers
to kick a customer off of the Internet if there are three accusations of copyright
infringement.
(Note to the Freedom Fries crowd: Did you know that le baseball was such a French
passion that they adopted “three strikes”? Who knew? Not moi.)
Instead, the Parliament voted overwhelmingly, 407-57 for an amendment which
provided: “that no restriction may be imposed on the fundamental rights and freedoms of
end-users, without a prior ruling by the judicial authorities.” The result of the popular
rebellion is that approval of the European plan will be pushed back until next year.
Here on our side of the pond, the FCC is due to come up with a broadband plan by
February and submit it to Congress. The Notice of Inquiry the FCC issued April 8 is 59
pages of question about what policy should be put in place to help bring back America’s
broadband penetration.
Meanwhile, the Europeans were ready to pass a 12-point program. Here are some
highlights from the European Commission summary:
“Functional separation as a means to overcome competition problems: National telecoms
regulators will gain the additional tool of being able to oblige telecoms operators to
separate communication networks from their service branches, as a last-resort remedy.
This new remedy was advocated in 2007 by the 27 national regulators in a unanimous
opinion. Functional separation can rapidly improve competition in markets while
maintaining incentives for investment in new networks. Functional separation has already
been implemented in the UK since January 2006 where it triggered a surge in broadband
connections (from 100.000 unbundled lines in December 2005 to 5.5 million 3 years
later). The new EU rules on functional separation will also add legal certainty for
countries currently moving towards different forms of separation, such as Sweden,
Poland and Italy, while ensuring overall consistency for the benefit of the single market.”
“Encouraging competition and investment in next generation access networks: The new
rules bring legal certainty for investment in next generation access (NGA) networks.
NGA networks, based on new optical fiber and wireless network technologies, are the
way forward, replacing inefficient traditional copper-wire networks. The new regulations
will reaffirm the importance of competition in this new sector while at the same time
preserving incentives to invest by taking into account the risks involved in allowing
access to NGA networks and allowing for various cooperative arrangements between
investors and access-seeking operators. In this way, the new rules will also ensure
telecoms operators receive a fair return on their investments. The Commission started the
public consultation on NGA networks in September 2008 (IP/08/1370); and this will soon
be followed by a second public consultation. The rules governing the sharing of network
elements, such as ducts or in-building wiring, between operators are also updated.
Besides improving competition and services for businesses and consumers, this will also
help lower the overall financial costs for operators of deploying NGA networks.”
“Towards a more open and more “neutral” net for the consumer: The new telecoms rules
will ensure that European consumers have an ever greater choice of competing broadband
service providers available to them. Internet service providers have powerful tools at their
disposal that allow them to differentiate between the various data transmissions on the
internet, such as voice or ‘peer-to-peer’ communication. Even though traffic management
can allow premium high-quality services (such as IPTV) to develop and can help ensure
secure communications, the same techniques may also be used to degrade the quality of
other services to unacceptably low levels. That is why, under the new EU rules, national
telecoms authorities will have the powers to set minimum quality levels for network
transmission services so as to promote “net neutrality” and “net freedoms” for European
citizens. In addition, thanks to the new transparency requirements, consumers will be
informed – even before signing a contract – about the nature of the service to which they
are subscribing, including traffic management techniques and their impact on service
quality, as well as any other limitations (such as bandwidth caps or available connection
speed).”
Here is the summary of the rest:
1. A right of European consumers to change, in 1 working day, fixed or mobile
operator while keeping their old phone number.
2. A new European Telecoms Authority that will help ensure fair competition and
more consistency of regulation on the telecoms markets. It will be called “BEREC”
(“Body of European Regulators for Electronic Communications) and will replace, as
from this summer, the loose cooperation between national regulators that exists today in
the “European Regulators Group” with a better structured, more efficient approach.
3. A new Commission say on the competition remedies for the telecoms markets:
The new EU Telecoms Rules will give the Commission the power to oversee remedies
proposed by national regulators to avoid inconsistent regulation that distorts competition
in the single telecoms market.
4. National telecoms regulators will gain greater independence: The new telecoms
rules reinforce national telecoms regulators’ independence by eliminating political
interference in their day-to-day duties and by adding protection against arbitrary
dismissal for the heads of national regulators.
5. Better management of radio spectrum for unleashing the digital dividend and
providing broadband access for all: Currently, in rural areas of the EU only an average of
70% of the population can have access to a broadband network connection (IP/09/343).
The reform will help in overcoming this “digital divide” by better managing radio
spectrum and by making it available for wireless broadband services in regions where
building a new fiber infrastructure is too costly. The reform brings a much stronger
emphasis on flexibility in spectrum use, allowing operators to introduce innovative
technologies and services quickly.
6. A boost to 3G mobile services: The agreement on the reform also paves the way
for the swift adoption of the new GSM Directive. The new Directive will allow any
service, starting with 3G and extending later to other new technologies, to operate in the
GSM band which is currently reserved exclusively for GSM services.
7. Recognition of the right to internet access: The new telecoms rules recognise
explicitly that internet access is part of fundamental rights such as the freedom of
expression and the freedom to access information. The rules therefore provide that any
measures taken regarding access to or use of services and applications through electronic
communications networks must respect the fundamental rights and freedoms of citizens,
including in relation to privacy, freedom of expression and access to information and
education, as well as due process. The new rules also clarify that the final word on this
important matter of internet access must be with a judicial authority.
8. Consumer protection against personal data breaches and spam
9. Better access to emergency services.
That’s quite a comprehensive list, one that should be approved and put into place next
year. Our broadband plan will be submitted in February, and then Congress will have at
it, possibly.
Is there anyone who thinks that Congress could produce something like this, with its
emphasis on competition? Is there anyone who thinks Congress could produce anything
in the way of a meaningful broadband plan that will make a real difference and raise our
broadband ranking in the world?
How’s an open network plan working out abroad? British Telecom (BT) was forced to
split its wholesale and retail operations. BT Chairman Sir Michael Rake told Cecilia
Kang of the Washington Post: “It was painful at the time but has been better for the
country and consumers in the long run.” In an interview, Rake said “There needs to be a
level playing field and the simple thing to do to achieve that is to open access…It’s the
only way to create competition and thereby create investment and jobs.”
So far, there’s no evidence of such a plan even getting serious consideration. There is not
one Republican on the House Energy and Commerce Committee who would vote for
giving competitors access to the telecom networks of big telephone and cable companies.
There are too many Democrats who pledge fealty to the dictates of Verizon and AT&T to
bring back meaningful competition for the great body of consumers in their districts
through the return of wholesale and line-sharing along with a regulatory package that
could make the networks a fertile field for competition. Even now, the network operators
are trying to soften the modest non-discrimination rules in the stimulus package. They
will marshal all of their resources to stop any legislation that remotely resembles what the
Europeans have produced – all the lobbyists, economists and front groups that money can
buy.
So go ahead, FCC, do a broadband plan, and hope that what’s produced isn’t so
sufficiently bland that it will be worthless. Congress will water it down some more, and
it’s not a far stretch to believe that at the end of the day we won’t be that much better off.
It would take a major commitment from the Obama Administration to fight for the
structural and regulatory changes that would do any more than work around the edges of
our failed broadband policy. Even then, it’s likely that enough Democrats in the House
and Senate would vote for big business over the reemergence of innovation and the
welfare of consumers.
Thanks to Hollywood, we have a little breathing room to come up with something while
the Europeans grind through their processes to approve their policies. But it’s not enough
to remedy the situation. Our broadband policy will continue to lag behind.