The Federal Communications Commission (FCC) wants to put the deployment of
high-speed Internet services in the hands of a relatively select number of
companies, a report Monday shows, and in the end it’s the consumers who lose.
Those are the findings of “The Role of ISPs in the Growth of the Commercial
Internet,” conducted by Mark Cooper, research director for the Consumer
Federation of America.
“All you have to do is look at the rising prices during a recession, both
with the cable and telephone companies,” Cooper said. “The high prices
just subsidize their operations. The DNA of these two industries have no
gene for competition in them.”
The report comes on the heels of a Monday
announcement by a new organization, BroadNet Alliance, which wants the
“marketplace to pick winners and losers, not a regulatory agency.”
The FCC has spent the year filing highly controversial rulings that put the
onus of broadband deployment almost entirely in the hands of the businesses
that own the broadband network and out of reach for many competitive ISPs.
An FCC ruling set forth in February, many say, which labeled ISPs an
“information service with a telecommunications component,” opened the door
to new line-sharing
and cable
competition rulings later in the year.
As a result, many local and regional digital subscriber line (DSL)
providers are going out of business, while cable is exempted from even
opening its network up to the competition.
“Look at Texas; 60 days ago there were three DSL providers in my area,”
said David Robertson, president of San Antonio-based ISP Stic.net and vice
president of the Texas ISP Association. “Since then, two of them have gone
out of business.”
According to the report, in 1997 there were close to 8,000 ISPs nationwide,
a number that’s declined since then to somewhere around 7,200.
Dane Jasper, president of the California ISP Association, said the
shutdowns are happening around the country and something the FCC wholly
endorses.
“We’re looking at a future where there’s only a handful of companies
providing broadband,” he said. “Do we trust competition, or do we trust a
couple of companies?”
Jasper said its obvious which choice the FCC has made, even with a history
that proves competition has only spurred lower prices and better customer
service. He points to the long distance industry, which the FCC
deregulated, as an example. After deregulation, prices dropped and
customer support improved.
DSL and cable, on the other hand, serve 95 percent of the broadband world,
but only five percent control the service. In the short span of a couple
years, he said, prices have increased by 25 percent.
The report shows the FCC need look no further than the ISP industry itself
to show the affects of competition on services. The reports indicated
there are 15 ISPs for every 100,000 dial-up customers. In broadband, there
are five. In the dial-up community, telephone carriers are only five
percent of the competition.
The problem with the FCC, the new report shows, is its chairman’s
insistence that inter-nodal competition — DSL vs. cable vs. wireless — is
the best method to spur broadband growth.
Michael Powell and the FCC have proposed and implemented several key
rulings to support their belief in inter-nodal competition, rulings that
have the backing of the Bush Administration, and rewrite the
conditions put in place by the Telecom Act of 1996.
Cooper said that thinking has no bearing on the technological barriers DSL,
cable and wireless each gace. DSL doesn’t handle video-on-demand
well, cable’s shared network architecture makes it unsuitable for
enterprise networks, and satellite service in rural areas (where neither DSL
or cable have plans on entering) is still spotty.
“The technologies just don’t overlap well,” he said. “So while the FCC
might think there will be competing broadband services in one area, there’s
really only a couple choices.”
George W. Bush, talking at the White House 21st Century High Tech Forum in
Washington, D.C., told business
leaders to look to the FCC for his administration’s broadband policy.
“I’m confident that the chairman and the board is focusing on policies that
will bring high- speed Internet service, will create competition, will keep
the consumers in mind,” Bush said.
