Testimony of Consumers Union

For decades, consumers have suffered under monopolistic cable pricing that has resulted in skyrocketing cable bills and fewer consumer choices. And despite the promise of more competition in wireless and wire line phone services, consumers have seen more consolidation and fewer marketplace choices. But the advent of broadband now offers tremendous opportunity to inject new and potentially vigorous competition into the telecommunications marketplace that has become increasingly concentrated over the past decade.

We applaud the Committee’s efforts to modernize regulations to foster broadband competition, technological innovation and adoption of high-speed Internet. And we welcome the Committee’s interest in fostering greater consumer choice by prohibiting preemption of municipal broadband networks that offer affordable broadband services. That provision helps ensure that communities do not face additional roadblocks to affordable broadband access for their residents.

Unfortunately, the draft as a whole heads in exactly the wrong direction: it will hamper competition, stifle innovation, and do little to promote ubiquitous affordable access to advanced services. It suffers from the following significant weaknesses:

* It fails to confront the last mile bottlenecks created by the dominant providers’ existing control over competition, and may in fact foreclose opportunities for future meaningful competition in broadband.

* It relieves incumbent monopolists of key interconnection obligations and requirements to offer just and reasonable prices, terms and conditions to unaffiliated providers, while giving them unprecedented ability to restrain broadband competition, and therefore phone and video competition, offered by new market entrants.

* It hands over unprecedented power to broadband providers to discriminate among potential competitors and prevent their own customers from freely accessing content on the Internet and to use applications and devices of their choice. As it purports to promote competition in voice, video and data services, it virtually ensures that the dominant incumbents will compete only with each other while squeezing out third party competitors.

* It preempts the ability of localities to require new video entrants build out services to all consumers in a franchise area without any national requirements for true competition for those consumers who could most benefit from it.

* Its unenforceable anti-redlining provisions fail to offer any meaningful consumer protection.

* It federalizes all consumer protection standards and enforcement; narrowly limits the types of standards that FCC must set, leaving out critical existing consumer protections; preempts states from setting their own standards; and prevents states from taking final enforcement action for violation of even minimal federal standards.

* Its minimal federal remedies require the injured party to initiate a complaint with FCC, bear the burden of proof, and suffer through a lengthy, cumbersome and likely unsatisfactory complaint process that provides dominant incumbents with even more power to abuse consumers and exclude competitors from their networks.

See press release at: http://www.hearusnow.org/other/newsroom/tvradiocable/billregulatinginternetwouldstymiecompetition/