February 2009

Sen Ron Wyden (D-OR), a prominent champion for the tech industry, will find himself at odds with telecom lobbyists over provisions in the economic stimulus package designed to give consumers unrestricted access to the Web. Sen Wyden has lined up behind the House provisions on open access, which are more detailed than those in the Senate legislation related to how the recovery package's billions of dollars for developing Internet infrastructure should be spent. In the House bill that passed last week, lawmakers call upon the Federal Communications Commission (FCC) to define what "open access" is within 45 days of the stimulus's passage. In addition, companies applying for broadband grants will have to adhere to a 2005 policy statement by the FCC that says consumers should access the Web with no restrictions placed by providers on their Internet traffic or content. The Senate version has general language saying companies applying for broadband grants should stick to "non-discrimination" contractual obligations that will be published by the Commerce Department in coordination with the FCC.

[Commentary] Are we stimulating rural broadband deployment to the best of our ability by focusing solely on a big-government, top-down approach to federal and state officials picking winners and losers by writing big checks? Could there be some way to enhance what's already there with a small-government, market-driven strategy that rewards progressive projects, gets money flowing quickly, and maximizes the impact of government dollars? Daily offers a plan: $1 billion in budget authority for fast-track partial loan guarantees for next-generation broadband -- that would allow $25 billion in guarantees to be distributed thereby enabling $50 billion in total investment to be realized. These guarantees would cover 100% of the losses up to 40-60% of the total value of the loan. The size of the guarantees would be based on a sliding scale relative to the overall density of a project. Projects under 10 premises per linear mile of inhabited road could get 60%; projects over 25 premises could get 40%; and in between is the sliding scale. The fast-track approval process would require applicants to have market-ready projects but would approve projects based on a simple checklist that insures they have what they need to take their plans to the private capital markets. Once given a guarantee, applicants would have 120 days to secure financing before the guarantees expire. In this way we rely on the capital markets to vet which projects are financially viable and deserve funding. Any project supported by these guarantees must provide universal, open, and next-generation broadband access. These guaranteed loans can be used to fund all aspects of network deployment and operation. And while the emphasis is on wireline broadband, up to 20% of these loans can go to deploying complementary next-generation wireless access. All communities under 50,000 without a next-generation wireline broadband provider are eligible. All owner/operator models are eligible. All forms of capital can be guaranteed.

Time Warner Cable will expand a test of usage-based Internet billing to four additional markets, while Charter Communications has confirmed that starting next week it will impose usage limits on most of its broadband users. Time Warner Cable chief operating officer Landel Hobbs, on the operator's earnings call Wednesday, said the operator will expand its "consumption-based billing" beyond the small Beaumont, Texas, system where it initiated a test last year. "With Congress poised to spend billions getting Americans connected to a better, faster Internet," said S. Derek Turner, research director of Free Press, "we're concerned that caps discourage Internet adoption and stifle economic growth. In general, we're wary of any roadblock to the development of applications and services that drive experimentation and innovation online. We need to be expanding our digital economy, not shrinking it."

The Telecommunications and Information Administration announced the appointment of Anna Gomez as the Deputy Assistant Secretary for Communications and Information, and Deputy National Telecommunications and Information Administration (NTIA) Administrator. One of Gomez's top duties will be to help facilitate the nation's historic transition to digital television. Gomez is the Vice President, State and Federal Regulatory, Government Affairs advocating on behalf of Sprint Nextel before state and federal government agencies regarding non-spectrum issues that affect the company's wireless and wireline assets. Prior to her work in private industry, Gomez worked for several years at the Federal Communications Commission in various management positions including Chief, Network Services Division, Common Carrier Bureau and most recently as Deputy Chief of the International Bureau where she assisted in developing and implementing policy on international telecommunications and satellite spectrum. Gomez also served as a Senior Legal Advisor to former FCC Chairman William Kennard. Prior to her work at the FCC, Gomez served as the Deputy Chief of Staff in the National Economic Council during the Clinton Administration specializing in the development of US telecommunications policy and issues related to Hispanic education. Gomez also served as Staff Counsel in the Senate for the Subcommittee on Communication.