Geoff Feiss - July 13, 2005
Montana Telecommunications Association
Broadband Developments
MTA Commentary: Broadband Developments
July 13, 2005
There’s been more news recently on the broadband front. By broadband, I’m referring to high speed internet connectivity. People can get broadband service from a variety of sources, including DSL service from local telephone companies, cable-modem service from cable TV companies, broadband wireless service from a variety of wireless sources including satellite providers, and even broadband over electric power lines.
Last December, the Organisation for Economic Co-operation and Development (www.oecd.org) issued a report ranking the U.S. 12th among world economies for broadband subscribership per 100 inhabitants. But, as Federal Communications Commission Chairman Kevin Martin noted recently in a Wall Street Journal editorial, “our OECD ranking does not match the reality.”
For example…the U.S. has more than twice the population of the other countries ahead of it on the OECD list. And, no other country has as many urban areas or as many remote and widely-dispersed rural areas spanning huge distances. If you compare the broadband penetration rates of some “leading” countries with comparable U.S. states with similar population density, you see similar penetration rates. For example, Japan, which ranks 8th in the OECD report has a population density of 350 inhabitants per square kilometer and has 15 broadband subscribers per 100 inhabitants. These numbers are very similar to Massachusetts which has a [similar] population density…and 18 broadband subscribers per 100 inhabitants.
In fact, the U.S. is doing quite respectably in terms of broadband deployment and subscribership. I’ve mentioned before that Montana’s own independent telephone companies are exemplary in their broadband deployment and investment efforts. Over 250 Montana communities have access to broadband services from their local phone company.
Now, availability of broadband and actual usage are two different things. We can do better when it comes to actually employing broadband for personal, academic and commercial purposes. But even here, the FCC reported earlier this month that the U.S. leads the world in the total number of broadband connections at 38 million subscribers. According to the same FCC report, our broadband subscribership increased by 34% last year, with DSL subscribership increasing at an amazing 45% rate.
Meanwhile, the U.S. Supreme Court issued a decision in June that further affects broadband development efforts. The Court ruled that cable-modem service is not a telecommunications service. It’s an information service and therefore it is not subject to a host of rules and regulations that telecommunications service is obligated to comply with. As FCC Chairman Martin noted,
Cable companies will continue to have incentives to invest in broadband networks without fear of having to provide their rivals access at unfair discounts. The decision also paves the way for the FCC to place telephone companies on equal footing with cable providers. We can now move forward and remove the legacy regulation that reduces telephone companies’ incentives to provide broadband.
This raises a couple of key issues. First, as Mr. Martin’s comments indicate, there’s a discrepancy between the treatment of cable broadband networks and telephone company broadband networks. The Supreme Court just ruled that the cable networks are free from various “legacy” regulation. However telephone companies’ DSL networks are still subject to such regulatory overlays, and the Chairman points out that this discrepancy should be eliminated.
The next trick is figuring out how to treat regulatory discrepancies between similar services offered over different networks. In particular, voice communications offered over telephone networks are considered telecommunications services subject to various rules, regulations, fees and assessments; but voice communications provided over broadband cable networks, for example, are not subject to the same regulations. If voice services migrate to broadband platforms in order to avoid rules associated with telecommunications services, then the support for the public telecommunications network infrastructure will disappear. In areas where there’s a variety of network alternatives, this may not be an overwhelming problem. But in areas, such as rural America, it’s a big deal.
So while public policy is nearing resolution on the treatment of broadband network deployment, we now have to turn our attention to ensuring continued investment in infrastructure that brings affordable access to quality telecommunications services, particularly in high cost areas of the country where access may not be economically viable.
Montana has a lot to gain, or lose, in this debate. Fortunately, we have some strong advocates in Helena and Washington. That’s good, because when the stakes are this high, it’s good to have friends!
For Montana Public Radio, this is Geoff Feiss, general manager of the Montana Telecommunications Association.
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