FCC’s Broadband Plan: Who’s for It—and Against It
Since the FCC formally revealed its plan to expand broadband access on Tuesday, the idea has been generally well-received. And really, what's there to protest so far? The plan's stated goal is to connect "100 million households to affordable 100-megabits-per-second service, building the world's largest market of high-speed broadband users and ensuring that new jobs and businesses are created in America." It also stresses making broadband faster and more powerful.
So far the only group consistently cited as being the "loser" in all of this is the National Association of Broadcasters, which has expressed reservations about losing its portion of the airwaves to make room for the broadband providers. But which industry players stand to win big if the plan moves forward? Here's what the Post reported on this point:
Mid-size broadband providers, such as TW Telecom and Cbeyond, are shaping up to be the plan's biggest beneficiaries, gaining access to more subscribers and the rights to federal funds to expand their networks. Makers of network equipment, such as Cisco, and creators of Web-based content, such as Google, could also experience significant boosts in their business. And cellphone carriers could reap big gains from a proposal to allocate a large chunk of airwaves for the next generation of smartphones and portable devices.
The Post went on to draw a distinction between midsize and major providers:
Major providers, such as AT&T, Comcast and Verizon Communications, would gain broader subscriber bases, but they could be forced to share their wireless and fixed-wire networks with smaller rivals, exposing them potentially to stiffer competition.
These major providers, while they're now giving statements of tentative support to the press -- with caveats advocating less regulation -- are the same ones who've been pushing for this kind of proposal for years.
A letter the providers sent to lawmakers in July 2008 details their support. In the letter (PDF), AT&T and Verizon urged Congress to enact legislation to expand broadband access. The letter's 31 signatories included major broadband providers, but also groups as wide-ranging as the International Brotherhood of Electrical Workers, American Association of People with Disabilities, U.S. Chamber of Commerce, and U.S. Cattlemen’s Association.
The National Cable and Telecommunications Association, which was the largest lobbying group in the entertainment industry in 2009, also signed on to the letter. Comcast, also one of the biggest lobbyists in the industry, signed on too. Since the FCC announced its plan, both the cable lobbying group and Comcast executives have already written blog posts detailing how they would like the FCC to implement it. Together, the three top groups -- in third, the National Association of Broadcasters, which has its concerns about the plan -- spent nearly $40 million on lobbying in 2009.
And for concerned consumers, the Post points out that the plan "only sets the goal of 'affordable' broadband services," but does not tackle prices through rules or caps.
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3 comments
gunste24
March 17, 2010, 7:10 p.m.
As usual the industry is writing the rules and the public will have to suffer the consequences and pay for it all.
Government by the people, for the people, will be run by industry
websmith
March 17, 2010, 7:14 p.m.
There is no such thing as federal money. There is only your money and everyone involved will be only too happy to take it. Broadband is available for 95% of the country, but only 60% of the population takes advantage of it at less than $30 per month.
The last time the government got involved with telecom, it passed the Telecom Deregulation Act in 1996, which left the TelCos regulated to their rates and serving areas, but stole their private property and forced them to sell it at below market value. When the bubble popped and Greenspan lowered the interest rate to try to stop the bleeding, the new money, thanks to more government legislation, found its way into the housing market. 25 million people are out of work, 7 million more houses are on the verge of foreclosure, and 700 hundred more banks are in trouble.
Providing 100mb service is not like flipping a switch. 100s of billions of dollars must be spent to develop equipment, buy equipment, and deploy equipment. On top of that, the population has to spend money to be able to use it. Because of the low take rate, the telecom industry has not yet recovered the investment it made while making 1.5mb service to 95% of the country. It not only will not, it can’t make the investment to take the service to 100mb. If only 60% of the population will pay for 1.5mb, less than 5% of the population is going to pay for 100mbs. The only way that this is going to happen is if the government forces you to pay for it. No one is going to pay for this but you.
While you may well be forced to pay to deliver 100mb to 100 million doors, few than 2% of the people behind those doors are going to use it. The nation will not have 100mb no matter how much the government says that it does. This is like saying that the government is going to expand health care without more doctors, nurses and hospitals. That little sleight of hand is going to cost you $2.5 trillion and this magic trick will cost you half as much again.
When your money begins to inflate the bubble, the VCs, and investment banks will be rushing to cash in before it pops and manufacturers and TelCos are left holding equipment and service that no one wants. There will even be a few IPOs that will leave investors holding worthless stock after the VCs get their multiple. The government may even manage to close up a number of the 1200 TelCos in the country this time around leaving you with no service at all.
Once again, they are offering you swamp land and you are rushing to buy it. You will end up with less than nothing and the government will end up with your money and more control.
Paul Latham
March 20, 2010, 5:34 p.m.
Mendicate with Microwaves. Access equals egress. Increase Derivatives, Credit-Default-Swaps:
Welcome New Age Transformation. It’s Psychloptic.
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