Wednesday, June 10, 2009

Broadband Nation: Where Do We Go From Here

So, the FCC has now taken initial comments in its inquiry looking to develop a national broadband plan to deliver to Congress next February. There were a boatload (battleship size!) of comments filed with the agency, and this is only the beginning of what is likely to be a year-long paper barrage. Congress probably should have required the FCC to deliver a reforestation plan next February along with the broadband plan.

Here are my comments. The main two fundamental points are these:

  • The plan must contain within its parameters sufficient flexibility to allow policymakers and broadband providers to respond to the rapid pace of technological and marketplace changes. Built-in flexibility that preserves considerable private sector discretion for adaptation and experimentation is essential in a dynamic environment.
  • The plan also should be grounded in certain fundamental free market-oriented principles. These principles should dictate that federal support for broadband should be targeted predominantly to providing access to presently unserved areas and to increasing, if this can be accomplished efficiently and effectively, broadband adoption; that any federal support should favor private sector companies over government providers; that competitive bidding procedures should be used to the extent possible to distribute any federal support; and that the government should not adopt any further net neutrality or open access mandates because these regulations have the effect of deterring investment and chilling innovation.

There will be much talk in the FCC's inquiry about the need for new public-private partnerships, new "third ways," new government collaborations, and the like. Much of this talk is superficially appealing, and as my comments make clear, there is role for government to play in achieving certain well-defined objectives. But there is a real risk, especially in the context of the government writing a mandated "plan," of tilting too far in the direction of government control. The government has enough on its hands managing the existing "government collaborations" and "public-private partnerships" with the financial institutions and automakers to become overly involved in managing the broadband marketplace. Note that after investing well over $200 billion in private capital to build-out and upgrade broadband networks, the facilities-based operators are not seeking bail-outs.

The reality is that the nation has made very substantial progress over the past decade in making broadband deployment almost ubiquitous. Over 90% of America's households have broadband available, and close to 60% subscribe. As my FCC comments explain, the focus of the government's efforts should be on providing narrowly targeted support to bring broadband to unserved areas and to encourage, albeit only in efficient and effective ways, greater adoption. (For example, with respect to adoption, it may make sense for the government to narrowly target subsidies for broadband subscriptions a la the LifeLine and Linkup programs, and for the purchase of computers by low income persons.)

Here's another reality. For a long time now, there has been a vocal "talking broadband down" crowd that rather relentlessly has belittled and minimized the progress the U.S. has made regarding broadband deployment and subscription. As I explained in an April 2007 blog, "The Talking Broadband Down Crowd," the crowd has a distinct purpose in mind: "Quite simply, those here in the U.S. who continue to talk down this country's broadband achievements clearly have a policy agenda in mind. The agenda is to impose net neutrality (read: common carrier regulation) on broadband providers on the perverse theory that somehow consumers will take more broadband if all the providers are required to offer exactly the same service--just as in the good ol' days of Ma Bell." Certainly, Free Press, with its proposal, now clear for all to see, to impose common carrier regulation on all broadband providers, is a leader of the talking broadband down pack.

Unfortunately, Acting FCC Chairman Michael Copps too often has fallen in with this company. He has frequently bemoaned the U.S.'s (allegedly) poor broadband showing by uncritically citing the OECD rankings as if they are another one of the gospels – all the while ignoring other indicators of substantial progress. Anyone who wants to understand - and is willing to spend a bit of time to be educated – as to why the OECD rankings are not useful or appropriate benchmarks from which to argue for a pro-regulatory and government interventionist broadband agenda, should watch the video from the Free State Foundation's "Broadband Nation" event on Friday. The event featured Ambassador David Gross, the State Department's most recent U.S. Coordinator for International Communications and Information Policy. He patiently explained in considerable detail the nuances, and the flaws, in the OECD rankings that make them generally inapt to the U.S. situation, and the other panelists – Rob Atkinson (Information Technology and Innovation Foundation), Link Hoewing (Verizon), and Christopher Guttman-McCabe (CTIA) – all agreed on this point.

To be sure, there is more progress to be made. And the government can play a supportive, appropriately limited, role. But it would be a serious mistake to jettison the generally light-handed regulatory regime under which so much progress already has been achieved.