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Communications Industry Urges Congress to Act on Broadband

U.S. is falling behind, unions, businesses warn

By Martin H. Bosworth
ConsumerAffairs.Com

July 15, 2008 

A coalition of players in the telecom, cable, health care, and public interest groups has teamed up with the Communications Workers of America (CWA) to push Congress to pass legislation that would improve efforts to collect broadband data and measure availability around the country.

The coalition yesterday sent letters to the leadership of the House and Senate Commerce Committees urging them to support legislation currently languishing in Congress that would better measure broadband data availability in the U.S., including the Senate's "Broadband Data Improvement Act." The letter said improved data on broadband access should be a precursor to adopting a national broadband access strategy.

"We believe Congress should adopt legislation this year that provides federal government support for state initiatives using public-private partnerships to identify gaps in broadband coverage and to develop both the supply of and demand for broadband in those areas," the coalition letter said.

"We cannot afford to let another year go by without adopting policies that will stimulate the economy in such ways, while expanding use of the networks that are already deployed and providing broadband in previously underserved areas."

Joining the CWA are telecom heavyweights such as AT&T and Verizon, as well as arch-rivals Comcast and Cablevision, and groups ranging from the National Farmers' Association and the National Rural Health Association. CWA president Larry Cohen said the bills would "greatly improve the quality of that information and will move us another step closer to bringing high speed Internet access to every American."

The coalition cited studies performed by Connected Nation, an organization that advocates public-private partnerships for improving Internet access, that said the economic impact of improved broadband access could exceed $134 billion.

The Connected Nation study claimed the U.S. could generate $6.4 billion in savings from reduced driving due to working at home, and $92 billion through the generation or realignment of jobs that used high-speed Internet connections.

The numbers are bad

Information on broadband availability in America has traditionally come from the Federal Communications Commission (FCC), which publishes regular studies detailing broadband penetration and access in the U.S. The FCC's data collection methods have been heavily criticized for relying on an Internet connection speed of 200 kilobits per second (kpbs) as its benchmark for broadband, which most high-speed connections easily surpass. The FCC also used ZIP code data for subscriber access, meaning that if even one person in the region has broadband access, then the entire area was deemed successful--regardless if others in the region had access or not.

The FCC recently admitted that its broadband data collection efforts were faulty, and agreed to adopt new rules for measuring broadband access, but has continued to release reports with the old, flawed data as examples of successful efforts to improve broadband availability.

Hidden agenda?

The public-private partnership model of improving Internet access may seem laudable, but it has also been criticized for allegedly serving the aims of incumbent telecom and cable companies while providing little in the way of meaningful improvements in broadband access. Connected Nation was originally known as "Connect Kentucky" in its original form, a plan created by the Kentucky government to track broadband deployment throughout the state and offer solutions for improved access.

Public Knowledge's Art Brodsky, in a study of Connect Kentucky/Connected Nation, claimed that BellSouth (later bought by AT&T) began influencing the state government and reshaping the program to meet its aims of pushing its services and preempting other businesses from making inroads through the state.

"Although purportedly striving to bring broadband, as opposed to BellSouth broadband, to unserved areas, Connect hasn't provided much help to other companies, and in some cases has been downright hostile by bringing in would-be competitors when a local ISP has already started talking with local officials," Brodsky said.

The expected goal was that cable companies would reduce prices and improve their offerings in order to promote better competition -- but that didn't happen, a new report says.

The report released by the Alliance for Community Media found that not only did cable prices drop minimally or not at all in markets with new telecom competition, but that many cable franchises are cutting or eliminating public, educational, and government (PEG) channels and facilities from their offerings, and the new competitors are doing a poor job of picking up the slack.

"Even in the early stages of adoption and implementation, the negative fallout from the state video franchise laws has been substantial and will continue to mount," the alliance said. "As incumbents and new entrants apply to operate under these new franchises, more communities will experience the cutbacks and degradation of PEG services reported in this survey, leaving many communities in the nation without the diverse, local programming provided through PEG channels."

Among the report's findings:

• Respondents from 17 communities in 8 different states report loss of access to PEG facilities managed by cable operators soon after state video franchise laws removed local obligations from those companies. Comcast used the new state video franchising laws to close all of its PEG facilities in northern Indiana and southwestern Michigan.

• 26 percent of respondents that had local cable access in public locations such as libraries and schools, and 41 percent of the respondents who had a local cable network supporting PEG channels reported loss or reduction of that access. Communities across the country were affected, in states such as California, Florida, Texas, and Ohio.

• AT&T's high-speed "U-verse" service was reported to delay access to PEG channels, preventing recording of PEG programs to digital video recorders (DVRs), and did not support closed captioning for PEG programs.

• Two-thirds of respondents said basic cable rates have increased in their communities even after the new franchising rates were adopted in their communities and competitors began offering service. Only 1 percent said that rates have gone down.

Under the FCC's new rules, new entrants into a market could negotiate on the state level, rather than with the particular town or municipality the entrant wanted to provide new services to. The time for municipalities to approve or deny new franchises was reduced to 90 days.

The new rules also prohibited what the FCC called "unreasonable" requirements for opening a new franchise, a move critics said would enable telecoms to build out only in wealthy neighborhoods and ignore lower-income areas.

FCC chairman Kevin Martin aggressively campaigned for the new rules as a part of his larger reform plans for the cable industry. During his time as chairman, Martin has regularly advanced rulings or opinions designed to restrict cable companies, while relaxing rules for their rivals in the telecom sector.

The new franchise rules were immediately challenged in court by both the cable industry and local community groups, but an appeals court ruled on June 27 that the rules were "reasonable," and did not represent an undue burden on customers or restrict competition.

The Commission members were also subjected to multiple hearings before Congress on the agency's lopsided favorable treatment of telecom companies over the industry, with the video franchising rules singled out as an example of the agency usurping Congressional authority in its decision-making.

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