I'm reading FCC comments today (partly in preparation for a "speed" sub-group conference call this afternoon). I love the comments from Consumer's Union -- click HERE to read them (Mac Firefox users -- the link doesn't work for me in Firefox, open it in Safari).
But there are a LOT of good comments. If you want to get edumacated about broadband, go to school on these comments. Click HERE to go to the page with all the comments they've received so far.
Here's a tasty snippet from Consumers Union comparing Bush and Clinton policies, and suggesting a way forward.
The Bush Administration
The policy outlined by Chairman Powell at the start of the Bush Administration and
implemented by both Chairman Powell and later Chairman Kevin Martin was essentially to let a
duopoly of cable and telephone companies dribble out broadband at high prices without
obligations to allow competition to flourish on their networks or policies to promote universal
service.
Attempting to provide incentives to the incumbent duopolists to roll out the new
technology quickly and keep the price low, the FCC abandoned one of the cornerstone of
communications policy in America, the obligation that communications network be available
without discrimination. It also abandoned the efforts to support vigorous service competition on
advanced networks, which was the cornerstone of the success abroad.
After failing to promote competition within the telephone network, the Bush
Administration allowed a merger wave to dramatically reduce the number of potential
competitors who could build networks. The dominant telephone companies were rewarded for
failing to compete with one another by being allowed to buy each other up. When competition
floundered under the weight of decisions that made it impossible for even giants like AT&T and
MCI to compete in local phone service, the FCC let the largest Baby Bells buy out their biggest
actual and potential competitors.
The FCC also squelched competition in wireless communications by allowing the largest
incumbent telephone companies to expand their control over wireless communications by lifting
the cap on the amount of spectrum that an incumbent landline company could license. After the
wireless mergers, the FCC then auctioned new spectrum, allowing the dominant Bell operating
companies to buy up licenses to use more spectrum, closing out new entrants.
Having allowed the incumbent wireline companies to achieve market power over price
through mergers, the FCC failed to prevent pricing abuse of key network services (like wholesale
loops and special access) that were critical for new entrants (either landline or wireless) to
compete.
While competition floundered, the FCC did little to promote universal service. In eight
years, the FCC failed to reform the universal service fund so that it would support advanced
communications facilities in rural areas or make them more affordable in urban area. The fund
grew dramatically, enriching the incumbent telephone companies, without promoting the public
interest in a ubiquitous broadband network.
Finally, the FCC sought to slash the power of local governments to establish the public
interest obligation on cable communications companies, who were moving into the
communications business, to meet the needs of local communities, without establishing public
interest obligations at the federal level. This triggered a race to the bottom, restricting the ability
of local governments to deploy advance communications networks for public services.
The Clinton Administration
Although the Clinton Administration identified the universal service problem early, its policy
was mixed. On the universal service front, the Clinton administration embraced an expansive
approach to the e-rate programs that supported advanced service for schools and libraries and
implemented other institutional programs to promote technology literacy and use in institutional
settings, but it did not reform universal service to promote broadband penetration.
On the broader telecommunications policy front, it fully embraced platform service
competition, attempting to ensure that unbundling of network elements would make the
monopoly elements available to competitors, but it struggled to keep the platform open under the
convoluted language of the Telecommunications Act. It repeatedly lost court cases to the
Regional Bell Operating companies, cases that ultimately allowed Michael Powell to implement
his full-throated hostility to platform service competition.
While the Clinton administration embraced platform service competition, it set the
precedent of allowing local telephone companies to merge, undermining the possibility for
vigorous head-to-head competition between telephone companies. The Bell Atlantic/NYNEX
and SBC/Ameritech mergers were crucial in this regard, as they were mergers between
contiguous service areas, where cross-border competition was likely and in the later case actually
existed. While the Clinton Administration made it clear it would oppose mergers between local
and long distance companies, the loss of the local companies as potential competitors severely
limited the prospects for facilities based competition and placed much more pressure on the
platform service competition model to deliver effective competition. Ironically, at the very same
time that this model succeeded abroad, it was abandoned in the U.S.
In the wireless space, the Clinton Administration preserved the cap on the holding of
wireless licenses in place, but it did not expand the unlicensed use of spectrum.
VI. CONCLUSION
Neither the digital divide nor the precipitous decline in the U.S. standing in broadband was
inevitable. The Clinton Administration’s declaration of a digital divide problem may have
seemed to come a bit early in the process of deployment of the new technology and may have
been driven by a desire to exploit a political opportunity because of the constituencies that would
be served by implementing policies to close the divide. However, given the immense importance
that the Internet has taken on in social, economic and political life and the persistence of the
digital divide, early attention given to the issues seems more like good foresight than politically
motivated analysis. On the other hand, the Bush Administration’s declaration of “mission
accomplished” in broadband seems to play out in the opposite manner; bad analysis put forward
in defense of bad policy.
Those who argued for the “have later” position have had the ground cut from under them.
A decade and a half after the Internet began its powerful penetration and transformation of
economic, political and social life, more than one-third of American households remain
disconnected, disadvantaged and disenfranchised. TV, radios, telephone, VCRs DVD players,
cell phones, have all achieved higher levels of penetration and several of them achieved it faster
than Internet connectivity. The households that are disconnected are overwhelmingly low
income and tend to be disproportionately, minority households; the digital divide compounds
existing fault lines in the U.S.
A decade and a half of policy implementation may have closed off some policy options,
like the mergers and auctioning of spectrum to the large incumbents, but others remain open.
The reliance on a cozy duopoly of facilities-based competitors to achieve the goal of
universal service appears to have failed and is not likely to deliver service that will match the
nations that have passed the U.S. The FCC could ensure that the dominant networks allow
competition in services without discrimination. This would spur the development of applications
and services that would stimulate demand. Promoting within platform competition and the
deployment of the dominant platform were the keys to the success of other nations. They were
also central to U.S. world leadership in telecommunications prior to the passage of the
Telecommunications Act of 1996.
The FCC could make more airwaves available for unlicensed use, which would avoid the
stranglehold that the deep-pocketed incumbents have on the auction of spectrum, and expand the
scope of WiFi approaches to service.
The FCC could aggressively reform universal service funds to support broadband.
Ultimately, Congress could conclude that more vigorous efforts are necessary to ensure
leadership in broadband, but that would require policymakers to abandon the do nothing
approach that has failed over the past eight years.
