Universal Broadband

Kudos to Larry Downes for his excellent guest column on CNET: "What's in a Title? For broadband its Oz vs. Kansas." I recommend reading it.

It is a very readable, informative overview of the great folly it would be for the FCC to reclassify broadband services from unregulated information services to regulated common carrier telecommunications services.

Mr. Downes' piece makes it abundantly clear that any Title II reclassification by the FCC would be a monumentally bad idea.

In one of the best, most strongly-worded and serious letters to the FCC that I have read in my 18 years following FCC issues closely, the united broadband industry's letter to FCC Chairman Genachowski is simply a must-read; it explains why the FCC's serious interest in reclassifying unregulated broadband information services as regulated telecom services is among the worst and most destructive ideas the FCC has ever seriously considered.

The letter characterized Title II reclassification as:

• "a radical new direction,"
• "regulating the Internet,"
• "a profound mistake,"
• "betraying decades of bipartisan support for keeping the Internet unregulated,"
• "misguided regulatory overreach," and a
• "Pandora's Box."

A particularly strong summary statement was:

Pending FCC policy proposals in the National Broadband Plan and the Open Internet regulation proceeding would vastly expand the implicit multi-billion dollar subisidies Google already enjoys, as by far the largest user of Internet bandwidth and the smallest contributor to the Internet's cost relative to its use.

Interestingly, the FCC's largely Google-driven policy proposals effectively would:

• Promote Google's gold-plated, 1 Gigabit broadband vision for the National Broadband Plan at a time of trillion dollar Federal budget deficits;
• Recommend a substantial expansion of public subisidies for broadband that would commercially benefit Google most without requiring Google to contribute its fair share to universal broadband service; and
• Regulate the Internet for the first time in a way that would result in heavily subsidizing Google's out-of-control bandwidth usage. 

I.   Does Google need more subsidies?

Google is one of the most-profitable, fastest-growing, cash-rich companies in the world, with over $10b in annual free cash flow, 17% revenue growth, and ~$25b in cash on hand.

FCC Chairman Genachowski's speech to NARUC: "Broadband: Our Enduring Engine for Prosperity and Opportunity" raises some big open questions.

Kudos to Phil Kerpen of Americans for Prosperity for their spot-on report of quotes from FreePress that exposes what FreePress is really all about.

Their report shows, in FreePress' own words, that they are a dystopian nightmare masquerading as a public interest group protecting freedom of the press.

The Media and Democracy Coalition, the leading advocates for the FCC to effectively take over management of the Internet and the American broadband industry are gathering on Capitol Hill 11 am Wednesday (Rayburn 2123) to present their policy recommendations to the FCC for a "Bold Practical National Broadband Plan." 

Here are some questions the panelists should be asked:

The FCC just signalled it is considering requiring forced access and more special access as part of its soon to be released National Broadband Plan.

• Colin Crowell, a top aide to FCC Chairman Genachowski told Bloomberg that mandating competitors lease their facilities to other competitors "has a lot of appeal as part of a national strategy" in order to help small businesses grow and aid job creation.
• Not coincidentally, Public Knowledge and five CLECs released a new study supporting this forced access approach with uneconomic analysis and selective investment and job math. 

There are fatal and destructive flaws underlying this forced wholesale access and market share redistribution scheme.  

Google announced it plans to enter the competitive broadband market and will build out what it calls an "ultra-fast" fiber broadband network that would be available to 50,000 Americans, 500,000 at most.

Given that the purpose of my new watchdog site www.GoogleMonitor.com is making Google more transparent and accountable -- I offer some pertinent questions people may want to ask Google about its new high-profile broadband plans.

At core the FCC's contemplation of reclassifying, or effectively treating, unregulated broadband info services as regulated telecom services, would be tantamount to the FCC declaring "eminent domain" over private broadband providers, i.e. justifying a government takings of private property for public uses, but doing so "without just compensation" or any statutory authority. 

• The U.S. Constitution's Fifth Amendment requires: "nor shall private property be taken for public use, without just compensation."

A gaping missing element in all the FCC's discussions of all the new "public uses" it envisions for broadband in its pending National Broadband Plan and its proposed preemptive Open Internet regulations is any consideration at all of the potential hundreds of billions of dollars of un-budgeted liability to the U.S. Treasury that could result from the takings of private network property without just compensation -- at a time of skyrocketing trillion dollar Federal budget deficits and rapidly mounting public debt.   

If Congress and the Administration truly are focused on lowering unemployment and creating jobs, one of the easiest things they can do is tell the FCC to not kill potentially tens of thousands of jobs by preemptively regulating broadband Internet access to address a non-existent problem.   

Kudos to the American Consumer Institute for an excellent study on the job-killing impact of a net neutrality industrial policy which would effectively chose competitive broadband companies as job losers and much smaller and less job-intensive netopolies as winners. (See summary of study here.)

It is amazing that with one hand, the FCC is working on a National Broadband Plan to allegedly help the nation advance economically, while its other hand is totally working at cross-purposes economically -- pushing proposed net neutrality regulations that would kill jobs.

We will learn in the coming weeks/months whether the FCC appreciates the real world around them, a fragile economy, persistent high unemployment and underemployment, and less investment, or whether they operate in a bubble imagining that their actions can only have positive effects on the economy and not negative ones.

We also will see if the FCC cares about the economy, jobs, and unemployment, or if they view themselves as independent of, and shielded from such real world concerns.