Broadband Plan Hit Over Competition

WASHINGTON (AP) -- The sweeping national broadband plan that federal regulators delivered to Congress last week doesn't go far enough to satisfy some experts who warn that the United States would still trail other industrialized nations in prices and speed.

Those experts insist that the FCC plan is not nearly ambitious enough to bring faster Internet connections at lower prices to more Americans. That's because the proposal fails to bring adequate competition, they say, to a duopoly broadband market now controlled by giant phone and cable TV companies.

According to the New America Foundation, a 100-megabit broadband connection costs as little $16 per month in Sweden and $24 per month in Korea, while service that is only half that fast costs $145 per month in the U.S.

"What I want is big bandwidth for cheap prices," said Sascha Meinrath, director of the New America Foundation's Open Technology Initiative. "But the plan punts on competition."

The national broadband plan, mandated by last year's stimulus bill, offers a roadmap for bringing affordable high-speed Internet access to Americans who currently don't have it and dramatically increasing speeds for those who do. With Congress holding two hearings on the plan this week, some interest groups are already voicing concern.

Although wireless companies are pleased with a recommendation to free up more airwaves for mobile broadband access, television broadcasters fear most of that spectrum would come from them - whether they want to give it up or not.

Rural phone companies are concerned about proposals to overhaul two federal programs that are significant sources of revenue for them: the Universal Service Fund, which subsidizes phone service in poor and rural areas, and the intercarrier compensation system, which governs charges that telecom carriers pay to connect calls.

And public safety officials are upset that the plan does not include a proposal to give them exclusive access to more spectrum for emergency communications networks.

But some of the loudest criticisms are coming from those who have been most vocal in pushing for a national broadband plan.

Meinrath, for one, takes issue with the plan's goal of delivering broadband connections of 100 megabits per second -- at least 20 times faster than most residential services today -- to 100 million U.S. households by 2020.

Meinrath believes this sets up the U.S. to slip even further behind other nations because the goal it sets for the rest of country - most likely rural America - puts minimum speeds at a paltry 4 megabits downstream.

"This is like entering the race and saying: 'Let's go for last place,'" he said.

Many public-interest groups are disappointed that the plan does not recommend "open access" rules that would require the big phone and cable TV companies to lease their networks to rivals so they can offer services at their own prices. Because it is so expensive to extend lines to every home and business, they say, such obligations may be the only way to drive competition in many markets.

Yochai Benkler, co-director of Harvard's Berkman Center for Internet and Society, believes the U.S. should also study experiments in other countries with faster or cheaper broadband connections.

In the Netherlands and Switzerland, for instance, telecommunications companies voluntarily share the cost of building networks that they all can use. In France, the government requires companies to share some network construction costs. And in Sweden and the U.K., the government mandates a "structural separation" between the company that builds a network and the carriers that use it.

For their part, the phone and cable TV companies insist that the U.S. broadband market is not broken. Walter McCormick, head of the U.S. Telecom Association, which represents phone companies, noted that the broadband plan itself puts the number of Americans with home broadband connections at 200 million in 2009, up from 8 million in 2000.

"Broadband investment is occurring at an unprecedented rate and all of it is private-sector investment," McCormick said.

And the phone and cable TV companies are investing billions in network upgrades to deliver faster connections. Robert McDowell, one of the two Republicans on the five-member FCC, pointed out that the cable TV industry will bring broadband speeds of up to 100 megabits per second to more than 100 million American homes over the next few years.

Although the FCC proposal doesn't explicitly call for the type of open access sought by public-interest groups, McDowell worries that such obligations could come out of a review of competition rules that the FCC is recommending for networks that serve businesses and other larger customers. Such regulations, he said, would discourage phone and cable TV companies from continuing their planned upgrades.

For now, there is at least one thing that everyone seems to like in the FCC plan: its recognition that broadband has become a critical part of everyday life.