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Our New National Broadband Plan Doesn't Address Competition?
Consumer advocates not impressed by first glimpse of plan...
by Karl Bode 03:42PM Wednesday Dec 16 2009
With just 63 days left to go before the FCC unveils the nation's first ever broadband plan, the FCC this morning shared the plan's basic structure with the press and public. According to a press announcement (pdf), the plan will focus on reforming the USF, fostering more ISP transparency, address spectrum issues, exploring accessibility for those with disabilities and pushing for the creation of a national wireless broadband network. The plan also hopes to address innovation in the set top box market, examine bringing broadband to tribal lands -- and will even examine the impact broadband has on media and media diversity.

Missing from this flurry of agenda items? The plan seemingly doesn't address what's arguably the biggest problem in the U.S. broadband industry: the lack of significant competition in many major markets. Today's omission is annoying consumer groups -- and it should. Fostering additional competition can organically help a world of consumer issues (network neutrality, high prices, unfair cap and overage schemes, poor customer service) without having to rely on a frequently incompetent Uncle Sam to individually regulate each problem.

We see almost nothing in this plan that would address the competition crisis in American broadband markets
-Ben Scott, Free Press
"America’s most basic broadband problem is that we are stuck with a duopoly of local cable and telephone companies that controls virtually every broadband market in America," argues Free Press Policy Director Ben Scott. "We see almost nothing in this plan that would address the competition crisis in American broadband markets or rapidly advance American broadband networks to world class quality," says Scott.

"There was no discussion of opening telecommunications networks to competitors," complains Public Knowledge President Gigi B. Sohn. "There was no discussion of structural separations of carriers into wholesale and retail components. These are the factors that Harvard’s Berkman Center told the FCC in a study a mere two months ago were the reasons other countries have surpassed ours – they are using policies we discarded."

The study Sohn's citing argued that countries that embraced open access policies backed up by consistent regulatory enforcement saw increased competition and lower consumer prices. It also highlighted how countries like France took our discarded system of local loop unbundling, and built a healthy competitive fiber market and consumer benefits (like 100Mbps Cable, VoIP & 120 TV Channels for $38). The study was, of course, roundly criticized by industry carriers -- who'd prefer the government continues what they've been doing: whatever the industry's largest and wealthiest carriers tells them to.

While there have been the occasional mystery leaks to the Wall Street Journal inferring that the FCC was going to do something substantive like revisit local loop unbundling, there's been plenty of hints indicating that the FCC's broadband plan was going to stick pretty close to the status quo.

A recent FCC report highlighting key obstacles to a healthy broadband industry oddly failed to cite flawed FCC policy or a lack of competition as contributing factors. While lip service was paid by the FCC in terms of consumer involvement in the plan -- consumers were, as usual, largely absent from any substantive policy shifts while armies of carrier lobbyists worked tirelessly to impact the plan. Speeches made by new FCC boss Julius Genachowski consistently strive to make everybody feel good about the process, but just as consistently fail to address core industry problems.

Yes, there's still 63 days left, and perhaps the FCC is keeping many details close to their vest to prevent industry lobbyists from derailing them. Yes, the problems facing the FCC are so vast, they certainly can't be addressed overnight. Still, there's worrying indications that we may be watching a very elaborate dog and pony show, where the FCC only tackles the uncontroversial subjects (who opposes helping the disabled?) but lacks the courage to really stand up to carriers, rock the boat, and implement brave policies that could seriously reshape the sector.

While it's great the FCC is suddenly concerned with making everybody feel good about the process, any national broadband plan worth its salt is going to annoy major carriers -- because it should make increased competition its primary goal. Increased competition means reduced revenues, a constricted ability for carriers to engage in anti-competitive practices, and limits their ability to lag on network upgrades and expansion. If the FCC isn't making a lack of competition the plan's primary angle, neither they -- nor their national broadband plan -- can be taken seriously.

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Austin, TX
·Time Warner Cable
·Verizon Online DSL

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*raises hand timidly*

I know that everyone wants 50/50 to the home for $50 per month. However the first priority of the broadband plan is, and should be, getting decent internet service out to as many people as possible. 1.5/512 DSL for $50 per month isn't exactly hot stuff, but the program should try to make that service available to 99% of the nation before beefing up competition in more urban areas.