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Genachowski to Broadband: Reduce Prices, Increase Speeds, Increase Access, Embrace Competition

Leonard Grace

Broadband providers are not taking the recent move by the FCC to reclassify broadband under Title II; i.e., put broadband under its regulation arm along with the likes of telephone companies, very lightly and have come out swinging to stop that effort. See (Obama's Internet Takeover: Telecom giant challenges FCC role in broadband)

Seemingly at issue; an appeal brought by Comcast with the D.C. Court of Appeals and the subsequent defeat of the FCC's perceived role as a broadband regulator, ruling the communication had no authority under current legislation to sanction Comcast over a 2008 Internet throttling incident. That defeat prompted the FCC to go back in an attempt to move broadband under its umbrella of regulated services. In a recent YouTube video commissioner Julius Genachowski stated that his intentions in moving to regulate broadband was to foster an environment that would encourage competition, lower prices, increase Internet speeds, and increase access to quality broadband.

Division on Capitol Hill

Regulation of any industry is seen as anti-business and a jobs killer by Republicans, See (Boehner slams FCC for 'takeover of Internet') while Democrats, See (FCC's Democrat members rally behind Genachowski on broadband reform) see the need to regulate big business as more of a tool to reign in prices and create options for consumers. Both sides have points of contention from runaway mergers with resulting job losses, to a (hands off) approach, in letting the market determine competitive outcomes. Each thinks they are right, and while a healthy debate is stamped in our government system, the resulting stalemates can prove too problematic. It's is time to work on a compromise, a win-win for all concerned, and if not, why not?

Regulatory Ramifications

The thinking of FCC commissioners center on the idea that the Internet has become a necessity for both consumers and businesses, like electricity, telephones, water, sewer which must be cultivated, tended too, and watched over as a "mother hen", and its authority regarding our communications infrastructure should be regulated to ensure equality for all. It is just too important of an entity not to regulate, and it has the votes to do so. While it has the votes to create regulation without going through congressional approval, it will certainly be challenged in court over this authority again. See (FCC Understating Systemic Risks of "Third Way" — Why It's a Disaster Waiting to Happen)

Is not regulation after all, a "slippery slope", which does not distinguish between the inherent ramifications of mandating competition, pricing, access, and Internet speeds? Genachowski made the point that only six of forty-eight current Title II rules would be applied to broadband, See (Who's more neutral? Republican bill would forestall FCC's 'Third Way'), leaving one to think lightness in regulatory oversight, but just the mention of future regulation sent broadband provider stocks tumbling on Wall Street.

Without any legislative update of the Title II rules for many years, the FCC is viewed as being forced to adopt its own rules for broadband which will promote its established agenda for the National Broadband Plan. Once you go down the regulatory path it is hard to pull back on the reins, and the FCC has taken those first steps. Be careful what you as for and what you do with it once obtained. It will be slippery and may turn into mud very quickly.

By Leonard Grace, Founder & Editor - Broadband Convergent
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Why regulation in the absence of market failure? Answer: Corporate lobbying Brett Glass  –  May 19, 2010 1:26 PM PDT

In a Congressional oversight hearing shortly after he took office, FCC Chairman Julius Genachowski said:

"When the market works and there’s sufficient competition, then the FCC has no need to act. When the market isn’t working, and the consumers could benefit from policies to promote competition, then the Commission MUST act."

Yet, the FCC is moving to regulate broadband providers in the absence of market failure. Why?

Could have to do with the millions of dollars that Google, which favors regulation of ISPs, gave to the Obama campaign?

Or the nearly equal amount it gave to the Obama transition team?

Or the tens of thousands of dollars Google contributed toward the inauguration?

Or the presence of several Google employees and executives in paid and unpaid advisory posts within the Administration?

Or the presence of Google's former chief lobbyist, Andrew McLaughlin, in a high ranking position within the administration? (Note: McLaughlin was recently confirmed to still be communicating with his colleagues at Google regarding lobbying internally for regulation of ISPs, but was given only a slap on the wrist. Why?)

Or the fact that the Chairman Genachowski's press secretary, prior to joining the FCC, was the chief PR spokesperson at not one but TWO lobbying groups which lobby for Google's regulatory agenda?

Or the fact that the Chairman has granted numerous and frequent audiences to lobbying groups such as the New America Foundation, Free Press, Media Access Project, and Public Knowledge (all of which lobby for Google) but will not schedule a single meeting with small ISPs — vital small businesses which provide broadband where other companies won't — who might be hurt by Google's lobbying agenda?

Or the fact that the FCC's recent "workshops" on its "open Internet" agenda have been "stacked" — with proponents of onerous regulation far outnumbering those who opposed it or even questioned it?

All of this is quite troubling to those of us who actually have it as our mission to provide high quality broadband to consumers — and would be hindered in this by the proposed regulations. (In fact, merely the threat of Title II regulation has scared away the last outside investor in our own company, leaving us completely self-funded with no prospect of obtaining outside capital.)

But lately, we've stopped getting responses to our missives to the FCC. The process is now driven by corporate lobbying and partisan politics, and people from the "real world," with real concerns, need not bother to try to be heard.

Sad.

Why regulation in the absence of market failure? Answer: Corporate lobbying Leonard Grace  –  Jun 11, 2010 12:55 PM PDT

Brett,

Thanks for the great comment!

I have not doubt that business owners like you shuld have an active voice in any regulatory agenda that will affect competition going forward. The FCC should look carefully at any regulation of markets that will stifle investment and job creation going forward. This industry was builit on private investment from entrepreneurs just like you who have the (where-with-all) to maake a positive difference in the communities you serve. Keep voicing your opinion; help create a coalition of business owners, wanting the same fairness as yourself, to present a united voice.

keep

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