There weren’t any great surprises at today’s National Telecommunications and Information Administration roundtable discussion of the non-discrimination and interconnection requirements of the American Recovery and Reinvestment Act (better known as the stimulus bill). The roundtable was one in a series that is designed to provide recommendations to the NTIA and the Rural Utilities Service of the Department of Agriculture about how they should spend the collective $7.2 billion dollars for broadband deployment and other related programs they have been given under the stimulus bill.
Ben Scott of Free Press and I called for NTIA to adopt requirements that go beyond the FCC’s four broadband principles and prohibit a grant recipient from degrading, prioritizing or discriminating against any lawful content, application or service over the recipients’ Internet access service, subject to a rule of reasonable network management. The broadband principles do not prohibit a network provider from favoring certain content, applications and services over others. PK advisory board member and Wharton Professor Kevin Werbach, computer scientist and engineer kc claffey and I urged that grant recipients be required to provide unbundled access or permit line sharing for competitors. And the trade associations representing the largest wireless, wireline and cable network providers argued that grant recipients should be to required to do no more than abide by the FCC’s four principles.
The trade associations all rallied around one core argument: since the goal of the stimulus bill is to create jobs and stimulate the economy quickly, the NTIA should not impose “new” and “untested” openness requirements. Requiring anything more than adherence with the FCC’s principles would inject “contentiousness,” and “complexity,” which would lead to “litigation” and “delay.” The United States Telecom Association, which represents wireline carriers, even went so far to say that parties, and particularly rural providers, would be dissuaded from applying if the NTIA adopted stronger non-discrimination and interconnection rules.
Of course, there is nothing “new” or “untested” about a requirement that communications networks refrain from favoring certain content, applications or services over others. Network providers operated under that regime for 70 years. Unbundling requirements were part of the Telecommunications Act of 1996, and resulted in an explosion of competition for narrowband Internet access services. We’ve suggested that NTIA look to the Communications Act and its subsequent amendments for guidance on how to craft these requirements.
The allegation that openness requirements would somehow reduce investment and job growth is similarly flawed. Network providers claim that their networks are open now, yet they continue to invest. AT&T is planning on investing nearly $18 billion on its broadband infrastructure this year alone. And open networks create jobs not only for network providers, but also for the applications, service and content providers who innovate on the “edge” of the network.
As for “contentiousness” and “litigation,” the telephone companies should know about that, since they basically sued the FCC on its interpretation of nearly every pro-competitive provision of the 1996 Act.
With regard to the argument that rural providers would not apply for funding because of the so-called burdens of real non-discrimination requirements, several audience members representing such providers vehemently disagreed. Judging by the huge crowd at the first informational meeting about the grant program (dozens had to be turned away, and thousands were on the webcast of the event), there is no shortage of network providers and others interested in taking advantage of this extraordinary government benefit. So if the big guys want to take their ball and go home, that’s fine. There will be plenty of applicants waiting to take their place in line.
I’m actually inclined to
I’m actually inclined to agree with you. Incumbents frequently say that their primary goal is to avoid regulation (and my organization often supports this position). Well, the best way to avoid regulation is to avoid taking money from the government. These grants always come with strings attached, and this doesn’t bother me. If firms want to compete in the free market, there needs to be a strong deterrent against taking handouts from the government. This provides an unfair advantage, and distorts the market.
Personally, I wish you the best of luck in establishing these rules, and I hope that the major providers do in fact “take their ball and go home.”
If they do this, however, will PK turn around and argue that unbundling and open access should apply to all private networks, regardless of whether firms accept taxpayer money?
Gigi, the providers were not
Gigi, the providers were not “throwing FUD.” Unlike the DC lobbyists (including yourself) who are lobbying to regulate a business whose logistics they do not begin to understand, I am actually a rural broadband provider. (In fact, I have “lit up” previously unserved areas totaling 5 times the size of Manhattan island in the past month.) The fact is that backbone bandwidth is expensive in rural areas, and the requirements you seek to impose would make it uneconomical for would-be providers to accept the grant money; they would ultimately lose far more than they were given. Your proposed regulation would therefore either doom rural efforts to failure or prevent them from being undertaken at all, preventing the stimulus funding from achieving its intended purpose. See my testimony before the FCC at http://www.brettglass.com/FCC/remarks.html for more.
Yes, DB, we would, because
Yes, DB, we would, because competition is good for consumers, the broadband market is not competitive, and the quickest way to get to a competitive market is through open access. It doesn’t matter to us whether there is government money involved, although the existence of government money makes the case all the more compelling.
Gigi, what you say is simply
Gigi, what you say is simply not so. The market is extremely competitive. In our small town of 28,000 souls, there are not only the cable company, the telephone companies, and myself; there are also three cellular providers and three competitive wireless broadband providers. Your claims that there is no competition are simply false. And once this false premise has been debunked (as it should be), your entire argument for intensive, overbearing, innovation-destroying regulation of the Internet falls apart. Your argument is also patently false because regulation does not enable competition; it kills it.
In short, it is you and your organization who are “throwing FUD.”
As for your claims that “open access” is needed: these, too, are blatantly false. Our ISP has offered wholesale access to its network to other providers for 10 years, and not a single provider has ever expressed an interest. Each wants to own its own infrastructure.