A Sensible Broadband Policy
January 7, 2010
I know you’ve been on the edges of your seats (President Obama included) awaiting my broadband policy recommendations and I don’t want to keep you in suspense any longer.
Here is what my policy would look like:
1. Implement bill and keep – end of debate and fraud.
2. Outsource management of the USF and apply funds only to projects that bring scalable bandwidth to where it is needed – not just rural America. The emphasis on funding should be by public/private partnerships with a proven, successful private partner in the Telecom business. The cornerstone of fund use – all networks deployed whether wire line or wireless are open access, non-discriminatory, wholesale availability and interconnection points charged on a cost-plus basis. Wire line, if you are talking less them 100 megabits – sorry. Wireless, if you are talking less than 40 megabits – sorry. In ten years, we would like gigabit service to dominate 90% of the United States. If we can put a man on the moon in 10 years, we sure as hell can deliver a gig in less time. USF may be applied to satellite access, to the most remote areas of America, where the economics of building infrastructure does not make sense.
3. Put a sunset provision on copper loops, special access and UNE-anything whereby the ILEC, after three years (2013), must provide the products but at rates they choose to charge.
4. Put a sunset provision on copper loops, special access and UNE-anything whereby the ILEC, after five years (2015), no longer has to supply anyone with these products if they so choose.
5. Mobility. Open access device standards mandated by law so anyone may have device and application access within reason and within the security of the connections.
6. Net Neutrality. Let market forces determine it based upon the previous five points. If you use a lot of bandwidth, you should pay for it.
7. Internet Open Access. It needs to be a public/private partnership(s) for peering points delivering IP access on a cost plus basis. ISP rates are obscene today, and though I don’t like government fiddling, this may be a reasonable solution to the problem in the short term. Even the threat of intervention would have a positive effect. IP access is a staple of the Internet – everyone needs it and they need it inexpensively.
8. Lobbyist restrictions. No regulator with a vote should ever be alone in meeting with a lobbyist without a third party witness including a recording or notes of what is being discussed. This documentation must be open for public inspection.
9. Rights-of-way issues are state and local issues except on federal property. However, federal extortion laws should be applied against states and municipalities that extort value-in-kind and unreasonable fees such as a percent of revenue, real estate taxes, etc. The cost obligation should be to return the RoW to the condition as it existed prior to deployment. RoW should not be a money-making proposition or tax subsidy.
10. Pole attachments should be regulated whereby a closed network provider pays a higher rental cost premium to be on a pole over an open access provider. Being attached to a pole has nothing to do with the type of service going through a cable (present wisdom) – it should be about the type of network – open access network or closed network. The higher rental charges to closed networks providers can be used to subsidize attachments to open access providers. Open access providers will place fewer burdens on poles and are more efficient in pole use, maintenance, make/ready, aesthetics and safety.
My logic has everything to do with getting more and better reliable bandwidth – where and when it is needed. It is not based upon some crazy un-served and under-served definition and some type of speed limitation as a measure. The race is open-ended because bigger and more bandwidth connectivity will drive more innovation and more jobs – period. Look at some of the things we do today with limited bandwidth and imagine the possibilities with gigabit synchronous speeds! This bandwidth thing does not have an end point – it will go on forever – optics and lasers have changed things forever.
There are a few of you, however, that would not like the policy I have proposed. Why? Perhaps it is because you are living in your old business model and sitting still with special access and loops that would enable the ILEC and Cable Companies to eventually crush you in a slow, methodical manner. Organic bandwidth growth all by itself is outstripping the T1 crowd, DSL crowd, DOCSIS crowd and IAD crowd…organic demand is on a tear.
As an industry since CA1996, Telecom has become a welfare recipient of sorts from the federal government. What is it that makes business grow? Drives innovation? Creates jobs? Expands the economy? Let me clue you in…President Obama–pay close attention…
The answer is private capital formation and application of private capital into the economy. The biggest obstacle of capital formation to advance our nation’s communications infrastructure is the uncertainty of regulations and policy. In as much policy can create opportunity, ill-conceived policies can cause uncertainty. The CA1996 Act has burned this mantra into the souls of many in the private equity and venture capital industries: if regulations are not clear and transparent or policies are not concise, it is smartest to stay away. (Author’s note: I am assuming PE folks and VC’s have souls!)
Infrastructure is a high fixed-cost business that requires gobs and gobs of capital. We are not advancing our cause by demanding loops, special access price breaks, or grabbing the edges of spectrum bands. We are not serving our nation competitively on a global basis; our industry is part of the problem right alongside government policy.
I submit a more direct policy as I have outlined above would attract capital and also rationalize the deployment of capital. The latter is particularly important given the painful lessons learned since the CA1996 land-grab mentality of co-location, renting/ building fiber on top of each other as closed networks (yet oversupplying certain routes with enough fiber capacity for the next 100 years).
If I hear from the FCC on this, I’ll let you know…
Written by Dave Rusin - Telecom Executive
Posted by wbrache | Filed Under Telecommunications industry
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