Big Network Providers Throw FUD at Broadband Stimulus Roundtable

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.

My oral statement is here. The webcast will be posted here.

The Latest