[RTC List] ISPs Move to Shape Broadband Push

[Bob Morse]

Just more information to digest. This article touches on a number of 
issues being discussed. Even "net neutrality" is still hanging around.

http://online.wsj.com/article/SB123059580600140977.html

President-elect Barack Obama's call to improve the nation's broadband 
infrastructure has cable and phone company lobbyists maneuvering to get 
a leg up.

Lawmakers in Congress want a plan that will create jobs over the next 
two to three years while also tackling the longer-term goal of improving 
the availability and quality of high-speed Web access in the U.S. The 
U.S. has slipped to 15th from fourth place since 2001 in broadband 
penetration, according to the Organization for Economic Cooperation and 
Development. Advocates say broadband deployment is critical to the 
competitiveness of the U.S. economy.

Among the issues are what speed Congress should define as broadband and 
whether government money should be funneled only to areas that have no 
broadband access, or if it should also subsidize upgrades to existing 
networks.

Policies under serious consideration are corporate tax credits to build 
new wireless or landline infrastructure, government-backed broadband 
"bonds" and grants to companies or local governments, legislative aides 
and lobbyists close to the process say. There also is strong agreement 
that low-income consumers need to be encouraged to sign up for broadband 
-- for example, through vouchers to purchase computers or discounts on 
monthly service.

Senate Finance Committee and Commerce Committee members are drawing up a 
few options, as are House members such as California Rep. Anna Eshoo and 
Massachusetts Rep. Ed Markey, chairman of the telecommunications 
subcommittee. The Obama transition team's point person has been former 
Federal Communications Commission chief of staff Blair Levin.

"There aren't any quarrels about the need for more broadband," says Ms. 
Eshoo, who outlined a series of broadband stimulus options in a memo to 
the House leadership in October. "It's a matter of how we're going to do 
it and the actual language."

The Obama transition team declined to comment.

Large cable operators are seeking to increase the FCC's definition of 
broadband download speed to about five megabits per second, about 6½ 
times as fast as the current definition, according to people familiar 
with the situation. Internet-service providers building out "unserved" 
regions, where service of that speed isn't available, would be given the 
full benefit of tax incentives or grants.

The big cable providers also want to target "underserved" areas, where 
there is only one broadband provider or the service isn't widely 
available. In those markets, companies would get incentives to build out 
next-generation services. The download speed that would qualify as 
next-generation would likely be in the range of 40 to 50 megabits per 
second, people involved in the discussions say.

The cable plan would disadvantage phone companies, especially smaller 
ones whose digital-subscriber-line services are slower than cable 
modems. The Independent Telephone and Telecommunications Alliance, which 
represents midsize phone companies, is pushing for a slower broadband 
standard, in the range of 1.5 to three megabits per second. Curt Stamp, 
the group's president, says the federal largesse should be used to 
subsidize carrier investments in rural areas rather than to finance 
upgrades to their existing networks.

Wireless services will likely be able to qualify as broadband at a 
slower download speed than landline services. But if the mark is set 
above two megabits per second it could be a boost for Clearwire Corp., a 
start-up operator that is rolling out a WiMax network capable of 
download speeds of two to four megabits per second. Other carriers 
weren't planning major wireless upgrades until at least 2010.

Equipment makers such as Cisco Systems Inc. and Motorola Inc. stand to 
benefit if carriers undertake massive upgrades. Carl Russo, CEO of 
Calix, which supplies equipment to phone and cable providers, says 
Congress should define broadband as 10 megabits per second so the 
networks it builds now will be able to support bandwidth-hogging 
applications of the future, such as high-definition video.

"Remember, you only get to do this once, so you want to build the widest 
highway possible," Mr. Russo says. The Telecommunications Industry 
Association, which represents equipment makers, is pushing for a $25 
billion grant program for Internet service providers. Under another 
proposal that is being discussed, grants could go to state and municipal 
authorities, which would build high-speed networks and then open them up 
to competing service providers. That would likely meet with considerable 
resistance from large carriers like Verizon Communications Inc., which 
have challenged attempts by local governments to build and operate their 
own wireless or high-speed fiber networks.

Steve Davis, senior vice president of policy for Qwest Communications 
International Inc., says the big phone company wouldn't object to public 
broadband projects in areas that currently have no high-speed Internet 
service, provided private operators have a right of first refusal in 
building the networks. "The first place the government should look is to 
the industry," Mr. Davis says.

Meanwhile, outside groups are offering various proposals to Congress. 
Consumer advocacy group Free Press released a 31-page broadband-stimulus 
proposal that calls for a $44 billion investment in Internet services 
over three years, much of which would be funneled through the FCC's 
existing Universal Service Fund, which subsidizes telephone services in 
rural areas and for low-income people.

Public-interest groups are clamoring for conditions to be imposed on 
carriers that receive tax credits, such as pledges not to degrade any 
Internet traffic, a principle referred to as "net neutrality."