The FCC’s National Broadband Plan – while containing some factual errors and a few concessions to political convenience – is by and large a well-considered and visionary document. It sets ambitious goals but it’s never a bad idea to aspire to greatness. Among the plan’s most emphatic and sensible recommendations is that the government aid consumers by eliminating barriers to entry for new providers and by fostering competition.

Since then, the FCC has squandered vast amounts of resources and political capital on efforts that fail to advance the plan’s goals, particularly that of broadband competition. Chief among these has been the push for rules to assure "network neutrality," aka an "open Internet," two buzz phrases with no agreed-upon definition.

Besieged by lobbyists, including many from Google, the Commission put the country’s welfare aside to address a putative "threat" – ginned up out of whole cloth by those seeking rules that would benefit their corporate sponsors. (Ironically, that threat would have been even more implausible had the Commission stuck to its knitting and acted quickly to foster competition.)

The "net neutrality" regulations were voted into place on the winter solstice – quite literally the darkest day of the year and with Congress out of town – and then rushed through before a new Republican majority assumed control of the House of Representatives. They are politically divisive, of questionable legality and, worst of all, harmful rather than helpful. They ignore both the technical and economic realities of the broadband business. And by raising providers’ costs – both the cost of providing service and the cost of compliance – they strongly discourage investment in broadband deployment. By so doing, they run counter to two goals of the broadband plan: new service to unserved areas and more competition in areas with insufficient broadband choice. Further, by favoring mobile wireless broadband providers over fixed and satellite providers (which actually have less spectrum and, therefore, more technical constraints on their services), the regulations draw a distinction that defies technical reality and is clearly driven by politics rather than by data.

“The ‘net neutrality’ regulations were voted into place on the winter solstice – quite literally the darkest day of the year.”

In the meantime, the FCC has failed to stick to its own Broadband Plan schedule. No new spectrum has been auctioned or dedicated to unlicensed or nonexclusively licensed use. The Universal Service Fund has not yet been overhauled, delaying the deployment of broadband to areas where there is no business case for unsubsidized service. And as of January 2011, not a single one of the pro-competition milestones the FCC laid out for the third quarter of 2010 – much less for 2011 – have been reached.

Of particular concern among these missed milestones is the FCC’s failure to halt the anticompetitive pricing of "special access" lines (leased data lines) that provide a competitive broadband provider’s air supply. When I founded the world’s first terrestrial wireless Internet service provider (WISP) in 1992, I never dreamed that, more than 18 years later, a local ISP would be unable to obtain Internet backbone bandwidth for less than 20 times the price at which the local ILEC sold it at retail. Yet this is true for many small, independent and competitive providers – especially rural ones.

Burdened by predatory pricing and unable to raise capital due to the new regulations (which leave far too many things – particularly the definition of "reasonable network management" – to the FCC), many competitive providers may not survive. What’s more, because these same leased lines are essential to the existence of competitive mobile carriers, this same failure to act could lead to a wireless duopoly in much of the country, with only those mobile providers that also are ILECs able to survive.

Brett Glass founded and heads Lariat, a rural WISP in Laramie, Wyo. Contact him at

The Daily


Bernstein Halting Media Coverage

Bernstein is temporarily suspending its coverage of U.S. media companies in light of senior analyst Todd Juenger’s sabbatical.

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