Feb 19 - March 4: In Like a Lion

Feb 19 - March 4: In Like a Lion

"In like a lion," the old saying goes. And March arrives with a bluster of activity around broadband.

Universal Broadband

The Leichtman Research Group reported this week that the broadband growth rate cooled for the fourth year in a row. The 19 largest cable and telephone providers, which account for about 93% of the US broadband market, acquired 3.4 million net high-speed Internet subscribers last year. That's compared with 4.1 million in 2009, 5.4 million in 2008, 8.5 million in 2007 and a peak of 10.4 million in 2006. High-speed Internet services are now vital to communities' economic health and even well-connected smaller cities can now compete with traditional urban powers like New York and Chicago. We've seen few private-sector solutions to slowing broadband uptake. Boston, for example, recently partnered with Comcast to give low-income residents cheaper rates for Internet services.

"In a post-Civil Rights era," Malkia Cyril of the Center for Media Justice wrote in a letter to the editor of the Washington Post, "we should be beyond a time when there were such clear gaps in the rights and opportunities for different members of our society. She noted that America has work to do before our vision of an equal society is a reality -- highlighted by the national Broadband Map which shows that large sections of the country have little to no access to high-speed Internet service. This means drastically fewer opportunities for millions of Americans to take classes, apply for jobs or attract employers to struggling areas. "To make sure that efforts to increase Internet access are effective, we need the Federal Communications Commission to have the authority to set real and meaningful rules for Internet service providers to benefit all Americans."

The American Recovery and Reinvestment Act invested billions into broadband deployment and adoption. But budget concerns now have some suggesting cutbacks on funding for rural broadband and the Department of Agriculture's Community Connect program. And some companies have been more vocal about why they shunned ARRA funding. However, researchers now say broadband is a key ingredient in addressing areas of persisting poverty in the US. “The provision of broadband won't in and of itself change much in terms of economic prospects,” said Brian Dabson, director of the Rural Policy Research Institute at the University of Missouri. “But without it there is very little chance you can improve.” In addition, ARRA funding has supported buildout of middle mile open access fiber networks (http://benton.org/node/51747) that provide connections for multiple, local broadband access providers. When you look globally, writes Dan O'Shea in Connected Planet countries like China really are carrying the broadband spending load, and you have to wonder what will happen in countries like the US that have been leaning a bit on stimulus after the stimulus era is over.

Last month, the Federal Communications Commission (FCC) proposed a major overhaul of the federal Universal Service Fund (USF) focused on the programs that subsidize network deployment and use in rural areas. And lobbyists are taking the opportunity to promote their own agendas. One key piece to reform will be broadening the base of contributors to the fund. The Consumer Federation of America has gone as far as to suggest that high-bandwidth companies -- like Netflix -- should contribute to the fund.

On March 3, the FCC also proposed a major overhaul of the two USF programs -- called Lifeline and LinkUp -- focused on adoption by low-income consumers. The FCC is considering changes in rules including:

Strengthening protections against waste, fraud, and abuse, including through creation of a National Accountability Database to verify consumer eligibility;
Taking immediate steps to create a uniform national framework for validating ongoing eligibility;
Ensuring Lifeline only supports services consumers are actually using;
Allowing discounts to be used for bundled voice-broadband service plans;
Launching pilot programs to test strategies for supporting broadband service; and
Evaluating a cap on the program, either temporary or permanent, in light of recent, rapid growth.

Although part of last year's National Broadband Plan, the Lifeline/LinkUp proposal drew some criticism from the Plan's architect, Blair Levin. He said the two programs should both be phased out rather than expanded to promote broadband because spreading broadband to low-income groups is a different kind of problem than spreading telephone access. He recognized cost of service as a major issue, but noted that the FCC should also craft a program prepared to deal with challenges around device literacy, search literacy, and even basic word literacy. "No one needs these to use a phone," he said. Levin detailed a new way forward, proposing an FCC assistance program created from scratch. The program would entirely focus on broadband, and heavily emphasize training.

At its March 3 meeting, the FCC also launched a proceeding focused on improving broadband access for Native Nations and named a FCC-Native Nations Broadband Task Force to assist in developing and executing a FCC consultation policy, eliciting input to ensure that Native concerns are considered in all Commission proceedings related to broadband, developing additional recommendations for promoting broadband deployment and adoption on Tribal lands, and coordinating with external entities, including other federal departments and agencies.

Network Neutrality

At Congress, the recent debate has centered not on universal deployment and adoption of broadband, but on the FCC's open Internet rules adopted in December. Funding for implementation of those rules has been part of the budget debate, but House Republicans are fighting network neutrality on a number of fronts. House Speaker John Boehner (R-OH) fired a major salvo in a speech in which he made clear that Republicans have no intention of finding any compromise on network neutrality.

House Democrats argue that proposal from House Republicans to repeal network neutrality could tie the hands of the FCC and prevent the agency from reissuing Internet line rules, which have been broadly accepted, House Democrats said. The memo says that the Republican plan to roll back the rules through the Congressional Review Act (CRA) could create "uncertainty" about the FCC's role. They oppose CRA repeal of network neutrality rules because there is "broad agreement on certain aspects of the FCC’s rules, such as the need for transparency, the prohibition on blocking of lawful content, and the right to exercise reasonable network management." The CRA repeal, however, "would bluntly remove the FCC’s authority to enforce even these consensus measures," the Democrats argue.

House Commerce Committee Republican leadership ultimately rescheduled a network neutrality vote with a hearing on the CRA appeal on March 9. Meanwhile, House GOP leaders huddle with Internet service providers -- asking industry for more support in the effort to repeal the rules. At the end of the day, however, there's little chance Congress will overturn the FCC's rules.

Broadband Policy in the States

Finally, not all broadband action is in Washington (DC) these days. The North Carolina state legislature is considering a bill that would restrict municipal broadband. In Illinois, Gov Pat Quinn (D-IL) remains undecided about signing an Internet sales tax bill sitting on his desk: It could force thousands of website marketers to flee the state, but he expressed strong concern that brick-and-mortar retailers are hurt by the current tax system. And although Congress is still considering legalizing online gambling, Gov. Chris Christie (R-NJ) vetoed a bill that would have made his state the first in the nation to legalize Internet gambling. Regardless of Gov Christie's decision, gambling experts say momentum is growing behind states' efforts to legalize online gambling for their own residents, known as intrastate gambling. Last week, Iowa lawmakers introduced a bill to legalize online poker, and California and Florida are among other states considering similar bills. Once one state passes an online-gambling law, "you will see other states go 'aha.' It will spread very rapidly," said Anthony Cabot, an expert in Internet gambling law.