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Does FCC want broadband competition to succeed?

Is the market, or the FCC, the problem in "timely and reasonable" broadband deployment? 

  • The FCC's just released 706 broadband report, like the wireless competition report that preceded it in May, again indicts the broadband industry for not meeting the FCC's new arbitrary, subjective, and after-the-fact expectations of where the nation should be at this particular point in time, despite the FCC's own facts that 95% of Americans have access to broadband and that Americans have more broadband competitive choices than any country in the world.

To see if the FCC is more interested in actually getting broadband deployment to all Americans fastest or in micromanaging broadband access, economics and providers -- look at how the FCC has burdened LightSquared, the start-up that seeks to be the EIGHTH national U.S. broadband competitor!

  • (To count: 1. cable, 2. DSL/Fiber, 3. Verizon Wireless, 4. AT&T Mobility, 5. Sprint, 6. T-Mobile, 7. Clear (WiMax); & 8. LightSquared.)    

Some context is needed here.

In the aftermath of the Great Recession, when credit remains tight, jobs are needed, and broadband investors are highly concerned about earning a return on long term investments, especially given a well-known more Title II regulatory-minded FCC/Adminstration, the FCC has effectively torpedoed much of LightSquared's ability to raise the large amounts of capital over time it will need to build-out, launch and operate an EIGHTH national broadband network.

Despite the FCC knowing the high risk of deploying a satellite broadband network in a "timely" fashion (given Teledesic & Iridium's prior experience), the FCC piled on massive regulatory burdens on this start-up before it could even start. 

  • First, it made it much harder to raise capital by arbitrarily cutting its potential addressable market by more than half by effectively banning it from earning any revenue from wholesaling bandwidth to the nation's two largest wireless broadband providers Verizon and AT&T. 
  • Second, the FCC effectively mandated a wireless net neutrality model that potentially will prohibit LightSquared from innovating with reasonable network management or ever experimenting with other business models if market conditions ever were to warrant it. 
  • Third, the FCC imposed strict build-out benchmarks and timetables on the platform, signaling to potential LightSquared investors that the FCC bureaucracy will be the equivalent of LightSquared's shadow General Contractor.    

In sum, if the FCC was truly interested in broadband competition succeeding, and actually encouraging broadband deployment in a timely and reasonable manner like the 706 provision and the Telecom Act require, the FCC would not be taking repeated actions that capital markets naturally would interpret as obviously hostile to broadband competition policy. 

  • The FCC's inexplicable 706 broadband conclusion that broadband deployment is not timely or reasonable...
  • ...on the heels of the FCC's fact-challenged finding that wireless is not effectively competitive...
  • ...on top of the FCC seeking to regulate broadband information services as telephone monopolies with no legal authority or factual predicate of changed circumstances...
  • ...on top of the FCC imposing mandatory Open Internet/net neutrality broadband regulations when there is no evidence of a problem to address... 
  • ...cumulatively show that the FCC does not support the bipartisan consensus competition policy in the Telecom Act, but is pursuing its own unauthorized "de-competition policy."

The FCC's actions increasingly indicate that the FCC does not want broadband to succeed, so that the FCC can justify more regulation and Government control of the broadband Internet.