Strike Up the Broadband

...A smart, forward-looking broadband policy would include certain key steps: First, fiber deployed to businesses would be unregulated...

...Over the next decade, telecom companies will have to make substantial decisions regarding investments in broadband and broadband services...

...The FCC has subjected broadband for businesses, apartment buildings, and even condominiums to the same tired regulations it uses for old copper-based systems...

...That investment—if it materializes —will enable a limitless range of productivity-enhancing applications, generating real revenues, for real companies, and improving the quality of life for everyone...

...A recent study from the International Telecommunications Union found that the United States ranks a distant 11th in high-speed Internet connections per capita...

...Telecommunications has also been the backbone for growth in countless other industries...

...From the credit card reader at the gas pump to online product tracking, telecommunications advances stoked the economic growth of the last decade...

...And the FCC has said its "strategic goal" for broadband is to "establish regulatory policies that promote competition, innovation, and investment in broadband services and facilities...

...Unfortunately, despite Powell's powerful vision, nearly a year after the FCC boasted that it would provide "substantial" regulatory relief and "incentives for carriers to invest in broadband network facilities," the companies that have the money to invest in building these new networks are still being thwarted by an uncertain and often contradictory regulatory landscape...

...Much of the rapid expansion in telecommunications services has been built on the back of the old copper-wire telephone infrastructure...

...Old "narrowband" telephone lines are stretched to capacity, but the market is begging for better, faster connections...

...These investments will be risky, given the dominant broadband position of cable companies and further competition from satellite and wireless operators...

...And there are strong economic incentives for companies to lay fiber where they can reach the most customers—businesses, apartments, and condominiums...

...The United States is also losing competitive ground in infrastructure...

...For example, the FCC removed the broadband unbundling requirements under one section of the law only to conclude that the carriers have other unbundling obligations under a different section...

...there is no reason why a different set of rules should apply to Internet access from a telephone company...

...If Powell's vision can be fully implemented, he will leave a lasting mark, not just on the FCC, but on the entire U.S...

...Remember your first time on the web...

...In its Triennial Review Order last year, the FCC acknowledged that the so-called incumbent telephone carriers (the old Bell companies) "are unlikely to make the enormous investment required" for broadband deployment, "if their competitors can share in the benefits of these facilities without participating in the risk inherent to such large-scale capital investment...

...The sorry state of existing regulations is that both the former Bell companies and new market entrants are discouraged from building networks with new technologies and new facilities...

...Unlike the old telephone market, broadband is one where everyone is starting from scratch—Bell companies, new competitors, and cable companies...

...It has now been almost four years since the telecom boom went bust...

...New fiber is going to have to be laid by somebody...

...Information technology now accounts for an estimated $825 billion of our current economic output, or 8.3 percent of the GDP Old "narrowband" telephone lines are stretched to capacity, but the market is begging for better, faster connections...

...But has the FCC encouraged a race to build new infrastructure for these facilities...

...There is no better engine for new jobs and growth than the telecommunications sector...

...machines, web browsing, and PDAs have revolutionized the way Americans do business...

...Cell phones, email, data networks, fax Jay Lefkowitz, a Washington lawyer, was head of the White House Domestic Policy Council until last fall...

...You would think that the FCC would leave these most lucrative broadband markets—the ones most likely to attract fierce competition—unregulated and not subject to unbundling, because competition will naturally flourish, providing improved service and lower costs...

...The FCC should simply step aside and let the market work...

...Last year's Triennial Review Order was heralded by the Republican commissioners as "bold action" (Kathleen Abernathy) and a "momentous step" (Powell), providing "sweeping regulatory relief for broadband and new investments" (Kevin Martin...

...Recognizing the economic significance of the issue, Powell has called broadband deployment "the most central communications policy objective of our day...

...After all, why build your own network when you can lease someone else's at a cheaper rate...

...But they will be hamstrung because of the commission's failure to deregulate broadband deployment...

...For example, a telecom company like Verizon could spend over a billion dollars laying fiber and then have to let its competitors use the fiber for a nominal fee...

...Fax machines, credit card readers, and computer networks, not to mention the proliferation of phone lines, all depended on existing infrastructure...

...The Communications Workers of America reports that more than 900,000 jobs have been lost in telecommunications and information industries since 2001...

...BY JAY LEFKOWITZ IN HIS TENURE as chairman of the Federal Communications Commission, Michael Powell has spoken eloquently, and with genuine foresight, about the "digital revolution," which he calls "the most important economic development of our time...

...Accordingly, the FCC lifted many rules requiring telephone companies to sell all of their products to competitors at below-cost prices...

...These are the last places where we need government trying to "foster competition" through regulation...

...Second, apartment buildings and condominiums should not be subject to unbundling requirements at all...

...Consumers should have a choice between three different platforms for broadband service—telephone, cable, and wireless...

...Thus, the next several hundred billion dollars of spending in the telecommunications industry should be devoted to pushing the web to the speed of light...

...The FCC's decision was straightforward, and was based on its conclusion that unbundling broadband facilities is both unnecessary, because competing providers do not need access to those broadband facilities, and harmful, because it would deter deployment by all providers...

...It is time for the FCC to keep its promises and bring broadband regulation into the 21st century...

...Has the FCC made this simple change...

...Until the FCC removes the present uncertainty and, better yet, the obstacles it has created, investment will suffer...

...Indeed, the present approach is an invitation to widely disparate state-by-state, neighborhood-to-neighborhood, building-to-building, and even customer-to-customer regulation in an area where, without clearly defined rules, commercial investments are simply too risky...

...We are on the verge of losing the FCC's promised revolution before it even begins...

...this is called "unbundling" in FCC-speak...

...Worse, the FCC has created confusion as to when unbundling can be required by the states...

...Powell's clear vision of a digital future is now in danger of being lost in the quicksand of his agency...

...Over the past decade, the number of U.S...

...Instead, by allowing states to order unbundling, the FCC's rules actually encourage new competitors to piggyback on the Bell companies once they begin deploying broadband...

...Guess again...

...Cable providers have already made tremendous inroads in providing broadband services, giving stiff competition to telephone carriers...

...Of course not...

...But the opportunity for a new boom is just around the corner if only the regulators will allow it...

...Unfortunately, as is often the case with regulatory agencies, what the FCC gave with one hand it seemed to take away with the other...

...Powell has made clear that if the united states is going to compete successfully in the information age, "we have to help get broadband built and deployed to every American...

...if the FCC does not follow through on its promise to provide real regulatory relief, there will be serious economic consequences...

...Some companies have moved aggressively to be ready to roll out the next generation of broadband, and are poised to begin making these investments in the coming weeks...

...Moreover, the FCC has set residential broadband deployment as a goal, and nearly one-third of the population currently lives in apartments, condominiums, and the like...

...The FCC has already decided that cable's broadband services should be deregulated...

...cell phone subscribers increased by roughly 1,200 percent, and, from 1995 to 2002, the number of people with Internet access leapt from 18 million to 166 million...

...Finally, if the FCC is serious about promoting broadband deployment, it should make clear that the Internet is not going to be subject to the arcane regulatory rules that apply to traditional voice services...

...overall investment by wireline telecommunications carriers has declined by more than $60 billion...

...This should all be of no small concern to policymakers in the White House and the FCC...

...But saying it doesn't make it so...

...Probably it was via a dial-up modem...

...The market capitalization of the telecommunications and equipment manufacturing sectors has declined by some $2 trillion from its peak...

...Leaving broadband trapped in a regulatory morass skews the incentives for deployment, ultimately hurting American consumers (fewer products) and workers (fewer jobs...