Before the

National Telecommunications and Information Administration

Washington, DC 20230

 

In the Matter of                                                )

                                                                        )

Request for Comments on Deployment )           Docket No. 011109273-1273-01

Of Broadband Networks and Advanced           )

Telecommunications                                          )

 

COMMENTS OF

THE ALLIANCE FOR PUBLIC TECHNOLOGY

 

I.                   Introduction

The Alliance for Public Technology (APT) welcomes the opportunity to comment on the state of deployment of advanced telecommunications services in America, the role of NTIA in accelerating that deployment and fulfilling the goals of Section 706 of the 1996 Telecommunications Act, and the need for comprehensive national policies to ensure all Americans have access to advanced telecommunications services.

APT is a nonprofit organization comprised of public interest groups and individuals that have advocated for more than a decade the need for ubiquitous deployment of advanced telecommunications services throughout our nation.

The issue in this proceeding is not simply about increased speed for telecommunications services. The life-enhancing applications of the technology have the potential to bring better and more affordable health care to all citizens; expand educational opportunities for lifelong learning; enable independent living for senior citizens and people with disabilities; create opportunities for jobs and economic advancement, as well as the ability to control one’s own finances; make government more responsive to all citizens; and simplify access to communications technology.

Every sector of our nation must have affordable and useable access to advanced services. Without universal access, the benefits from these services and applications are diminished.  To that end, APT articulated the concept of “connecting each to all”[1] (i.e. networks gain their value by having everyone connected) and promoted the following goal for advanced universal service that is now embodied in Section 706 of the 1996 Act:

Make available as far as possible, to all people of the

United States, regardless of race, color, national origin,

income, residence in rural or urban area, or disability

high capacity two-way communications networks 

capable of enabling users to originate and receive 

affordable and accessible high quality voice, data,

graphics, video and other types of telecommunications

services.[2]

            There are many issues in broadband deployment that undermine its potential to provide social and economic benefits to all Americans.  Uneven deployment across the country, confusing regulations, and a lack of commitment to ensuring access for all continue to hamper efforts to bring these life enhancing services to all Americans. It is critical that government policies address these problems so that the opportunities to improve quality of life through advanced technology are accessible to all Americans.  APT commends NTIA for its initiatives on these important topics.
            As the leading consumer proponent on these issues, APT will address questions put forth in the Request for Comments, particularly:

1.      What should be the primary policy considerations in formulating broadband policy for the country?

2.      How should broadband services be defined?

 

3.      What is the current status of supply and demand of broadband services?

 

4.      Should the government adopt as a goal “access for all” to broadband service?

 

5.      Can proposed regulatory changes be made under existing authority or is legislation required?

These questions must be addressed within the context of the development of a national broadband policy.  Americans cannot enjoy the life-enhancing applications made possible by advanced telecommunications services without accelerated deployment of the necessary infrastructure.  Policies must encourage deployment by removing barriers, creating incentives, lowering consumer costs of broadband services and intervening in areas where the competitive market fails.

II.        What should be the primary policy considerations in formulating broadband policy for the country?

            Broadband data services do not conform to the properties of the voice and video worlds.  It is a service that combines elements of all other forms of communication and as such, must be regulated is a new way. The successes of previous policy must continue and be coupled with new tools. APT believes that we must enact new comprehensive policies to guarantee universal access to advanced telecommunications services, remove barriers to deployment, create incentives for deployment, provide a technology neutral framework, bolster facilities-based competition and establish timelines for deployment.  The new regulatory paradigms for broadband services must be flexible and evolving.  As the technology advances, the policies must move forward on a parallel track to ensure that consumers are not waiting for the new services, as is the unfortunate case today.

 

 

 

A.        Barriers and Incentives

 

Above all, policies must demonstrate a strong commitment to providing incentives and removing barriers to industry’s rapid deployment of advanced services.  Section 706 clearly authorizes the FCC to use "price cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment." However, these tools have not been utilized, and while Congress has debated such incentives as broadband tax credits, barriers still remain and incentives are lacking.  LATA restrictions, for example, were created for voice communication. In today’s data environment, where distance is irrelevant, they are a disincentive. Similarly, pricing must be cost-based to encourage investment.  If service providers are unable or unwilling to deploy advanced services because of regulatory impediments and limited opportunities to recoup investments, then there will continue to be limited availability of broadband services.

B.        A Fair Regulatory Environment

 

A fair regulatory environment reflecting a technology-neutral philosophy is crucial to deployment.  Policies should foster investment in high capacity network services on terms of equality among all providers in the broadband market and respond quickly to the changes in technology and the organization of the industry. Broadband services must be allowed to flourish regardless of the platform.  Cable, DSL, satellite, wireless and whatever other platforms may emerge must all be treated equally so that they can serve all Americans.  True competition in broadband cannot occur until the regulatory policies are neutral.

Within this technology neutral framework, the existing principles of common carriage and interconnection must be maintained.  Regardless of the platform, the systems must be open and able to interface with each other.  The goal is a network of networks, with different technologies, service and content providers able to interconnect.  This framework protects consumers by ensuring their access to the network and content providers by guaranteeing they are not blocked by the service providers.  Consumer choice increases and costs decrease because all the systems will have to compete with each other on equal ground.

C.        Community Based Solutions

 

1.         Social Compacts

Many solutions exist at the local level and these policies, such as social compacts and demand aggregation, can be incorporated in national initiatives. An example of a social compact comes from North Carolina, where an agreement was reached between the state and BellSouth, Sprint and Verizon to bring advanced services to rural parts of the state at costs comparable to urban areas.  The companies committed to providing high-speed access to all parts of the state within three years.  They also established Telework Centers in the most economically distressed parts of the state.  These centers will be central locations where residents can conduct business over high-speed connections and will also provide training and advice in e-commerce. This partnership between government and industry addresses the specific needs of citizens who are not receiving the advanced services that are needed to live and work.[3]

 

2.         Demand Aggregation

The Texas Public Utility Commission, in its 2001 report to the state legislature, recommended a policy of demand aggregation.  Customers can join together to increase their demand power in areas where providers are not deploying advanced services. School districts, libraries, hospitals and colleges can form coalitions that create demand for services.  The service providers can gain benefits from working with demand aggregation consortiums, as it would become economical for them to enter particular markets where the individual demand for services was not sufficient.[4] These goals and policies are efficient measures that government at all levels can utilize. They are solutions to the failures of the market and they do not place undue burdens on either the service providers or the consumers.

3.         National Programs

National policies and programs executed at the local level also contribute to deployment of broadband services.  The E-rate funding program has brought thousands of schools and libraries online.  The Technology Opportunities Program (TOP) grants assist local organizations to develop applications that benefit their communities and ultimately encourage demand for broadband services.  Government at all levels must continue to employ such programs that make deployment more economic while developing innovative, community-based applications.

 

 

D.        Facilities-Based Competition

True broadband competition can only be facilities-based.  Without strong inter-modal and intra-modal competition among and within the different platforms, innovation will be lacking.  Different technologies can push each other, developing more advanced and comprehensive services. From this innovation we can gain expertise on the many potential uses of fiber technology and how best to deploy it to the home.  Beyond innovation, facilities-based competition offers more opportunities for consumers.  Reselling services and dismantling networks does not automatically decrease prices for consumers or provide more choices.  True competition comes from companies with full service operations that can offer various service packages that address individual needs and desires.  Facilities-based competition will bring advanced services to more Americans as competitors seek venues where they can build facilities that will succeed.  Finally, facilities-based competition provides for network reliability.  After the events of September 11th, it is necessary to have overlapping facilities to maintain service in the event of disaster.

E.         Deployment Timelines

 

Timelines for deployment of advanced services to all Americans should be established. Congress is considering a proposal that would ensure deployment of DSL to all central offices or equivalents within five years. The state of Iowa has set the goal of bringing advanced services to all Iowa residents by 2005, through a combination of public and private endeavors that will increase demand for the services. One national goal should be set, with rules that would ensure every consumer will have access to some form of broadband service (cable, phone, satellite, wireless or other technology), at 200 kbps (the speed the Federal Communications Commission cites as “broadband’)[5], within a fixed time frame.  Such a goal will require close scrutiny of the market and public policies to determine if deployment is making progress.  Policymakers, industries and consumers will be better able to ascertain if the market is working or if policies need review and revision. We should be even more ambitious, setting a national goal for next generation advanced services to follow within a set time frame.

III.       How should broadband services be defined?

 

Definitions of broadband are inconsistent and often limit the scope of the services. The Federal Communications Commission has chosen to focus on a basic definition of advanced telecommunications capability, proposing to keep it confined to bandwidths of 200 kilobits per second (kbps). This limits the capabilities of advanced services, focusing only on the current technologies. The definition of advanced services must be dynamic and evolve with the changes in technology.[6] Perhaps definitions of broadband should include multiple levels.  Broadband could be defined as 200 kbps service today, with an acknowledgement of the limits of that definition and a secondary definition could be developed that addresses the speed of the services in the near future.  In fact, it is already evident that higher speed applications are emerging. In its preliminary engineering report Internet 2, a consortium of colleges and universities working with government and industry to develop the next generation of Internet services, notes that the capacity required by each Internet 2 participant could reach as high as high as 622 Mbps.[7]  Therefore, we must be ambitious in any definition of broadband, anticipating the rapid advances in technology that are occurring.

IV.       What is the current status of supply and demand of broadband services?

            A.        Supply

While statistics indicate that more people have access to advanced services today than one or two years ago, critical gaps remain. The FCC has identified people with disabilities, low-income, rural, minority, Native Americans and other marginialized communities as being at risk of not receiving advanced services in a timely fashion.[8]  If these communities are at risk, then there is a problem with the supply of broadband services. Deployment is not simply the act of laying the fiber and cable.  It is also important to consider if consumers are able to access the technology that may pass by their home.  Some members of the above mentioned groups may have a broadband connection available in their community, but for financial, technical or other reasons are unable to access it.  Others simply have no opportunity for any access.  We must identify, in both served and underserved areas, why services are not utilized more. Funding research in this areas is a critical role for government.

            Supply and demand are inexorably linked.  Simple economics dictate that as more supply becomes available, costs decrease.  Lower costs lead to increased demand.  In the broadband world, this translates to a need for more deployment.  Increased service rollout can lead to more subscribers, which in turn can lead to lower costs for the individual consumer and greater value to the network.  As the technology becomes more pervasive, more consumers will subscribe.  However, this theory will not hold true for all communities.  The market will fail to serve some areas.  In these cases, policy intervention must correct the flaws of the marketplace.

The problems with supply of broadband services stem from ineffectual policies that do not create an environment conducive to investment and deployment. There is no public funding for incentives for deployment and few mechanisms for communities to develop partnerships with the providers of advanced services.  Supply is hampered by regulatory disparity and the disincentives of unbundling and below-cost pricing.  Removing barriers to investment and regulatory costs to capital allows companies to recoup their investment.  Tax credits, eliminating LATA boundaries and reform of pricing and unbundling regulations can encourage investment and give companies the opportunity to provide services at lower costs. If providing broadband services becomes more profitable, then the individual cost for the company and the consumer drops. Problems with supply must be addressed with policies that decrease costs for consumers, allow industries greater opportunities to invest in facilities and ensure deployment and access to communities where the market fails.

            B.        Demand

            Demand is a problematic concept.  Some argue that broadband deployment is proceeding on an acceptable scale and the issue lies with low take rates and the lack of “killer” applications that would spur demand.  In APT’s view, there are many compelling applications already in practice and many more that could be developed with strong public/private cooperation.  They are life-altering, yet these programs are not widely known.  One reason for this is the fact that they are not entertainment based, such as the Napster model and movies on demand, which have been cited as examples of “killer” applications.[9]  The applications already in practice, such as telemedicine and real time sign language translation, are “killer apps” for much different, and more important reasons.  These applications enhance quality of life.  Rural residents can get the medical care they need from urban hospitals and patients with chronic diseases such as diabetes and asthma can monitor their own conditions in the home and reduce the number of acute care medical visits.  People who are deaf have expanded opportunities, greater empowerment and lower personal costs by being able to work with an interpreter over a video connection, rather than having to travel.  Such a connection also allows the interpreters to serve more people.  These are just two examples of the real “killer apps.”  They mean much more than any movie on demand.

            To further develop these projects and spur broadband demand, government must act as facilitator.  At all levels, government can unite industry, consumers, and community organizations to find ways to deploy infrastructure and create useful applications.  Examples of this cooperation already exist, with programs such as Technology Opportunity Program (TOP) grants and the E-rate funding.  But more is needed. 

Broadband policy must continually encourage aggregation of demand because it is critical to bringing services to areas that do not possess sufficient individual demand to attract the market.  Community institutions can band together to provide economic incentives for providers to deploy the necessary services. Such arrangements are key to bringing services to areas which likely would not receive services for years because of their remote location or economic conditions. 

Second, demand must be nurtured.  Deployment alone is insufficient.  Policies must provide opportunities for training on the new technology so consumers are educated and interested.  Community institutions such as schools, community technology centers (CTCs) and economic development organizations must engage their constituencies so that demand is not short lived.  Demand will grow when costs for services decrease and potential consumers are informed of the possibilities available with broadband.

V.        Should the government adopt as a goal “access for all” to broadband service?

            Access for all is the law.  Section 706 of the Telecommunications Act of 1996 explicitly calls for the deployment of advanced services to “all Americans.” But this goal has been ignored.  The FCC has initiated three Notices of Inquiry regarding Section 706, but has done little to implement its provisions. 

Access for all is a critical component of a connected society. When everyone is connected, we all benefit.  The applications, such as telemedicine, distance learning, real time sign language translation and others, become more valuable with increased use and availability. The goals in Section 706 recognized these benefits of universal deployment and policies must now be enacted to reach these objectives.

Some communities have received advanced telecommunications services very quickly; some will wait years, if not decades before obtaining access. Advanced telecommunications capabilities are not being deployed to all Americans because of the realities of the marketplace, which by its nature does not serve all customers equally.  Therefore, policies must be implemented to ensure access for all and help those communities that the marketplace leaves behind. Rural, low-income populations and people with disabilities are some of those groups who are not able to fully access the technology.  Frequently, they cannot offer the demand necessary to meet the economic criteria for deployment. For example, rural communities are hampered by the costs to industry of building infrastructure over great distances.[10]  Public policy intervention is needed to stimulate deployment, but this intervention is incomplete without a commitment to universal access. As demand grows, serving these communities becomes more economic. If universal access policies are not implemented to ensure deployment for these communities, the gap between information rich and information poor will continue to widen.

            The goal of “access for all” must be primary in this debate.  Section 706 first codified this principle.  Now is the time for action.

VI.              Can proposed regulatory changes be made under existing authority or is legislation required?

Regulatory changes can certainly be made under the current policy framework.

Section 706 of the Telecommunications Act gives the Federal Communications Commission explicit authority to use price cap regulation, regulatory forbearance and other methods to remove barriers to investment.  NTIA, while not a regulatory body, could make recommendations for more funding for TOP grants, which help communities develop advanced applications.

            Legislation is needed to remove barriers and accelerate deployment.  For example, interLATA boundaries are often cited as a barrier to investment.  While long-distance entry under Section 271 of the Act is removing these barriers on a state by state basis, it is a slow process.  Legislation that would eliminate interLATA boundaries would speed deployment to many areas that are still several years away from 271 approval.  Another legislative effort that would be very helpful in bringing broadband to all Americans would be a deployment timeline.  If Congress were to set specific goals for the pace of deployment, then clear measurements would be available when evaluating policies and market behavior.  This would enable policymakers to evaluate whether market forces are working or whether greater policy intervention is needed.

            It has been nearly six years since the passage of the Telecommunications Act and Section 706 and millions of Americans are still waiting for the promise of universal access to advanced services to be fulfilled.  It is time to ensure that broadband is deployed to all communities.  It is imperative that national broadband policies be enacted immediately, through regulatory and, if necessary, legislative action. 

VII.           Conclusion

 

APT commends NTIA for its action in this inquiry and looks forward to contributing to the development broadband policy with NTIA.  It is imperative that NTIA, the FCC, Congress and state and local jurisdictions collaborate on these issues in order to construct a framework that will bring broadband to all Americans. 

Respectfully submitted,

 

Matthew D. Bennett

Policy Director

Alliance for Public Technology

919 18th Street, NW

Suite 900

Washington, D.C. 20006



[1] Connecting Each to All, Alliance for Public Technology, 1993

[2] Principles to Implement the Goal of Advanced Service, Alliance For Public Technology, at 3 (1995).

[3] See North Carolina, Office of the Governor Press Release Gov. Hunt, Communications Companies Forge Agreement to Bring Internet Access to All North Carolinians. (April 26, 2000) at http://www.nccommerce.com/publicaffairs/releases/rural_internet.htm

[4] Texas Public Utilities Commission, Report to the 77th Legislature on Advanced Services In Rural and High Cost Areas (January, 2001) pg 69.

[5] Federal Communications Commission, Third Notice Of Inquiry, CC Docket No. 98-146, at Paragraph 5

[6] Comments of the Alliance for Public Technology In the Matter of Inquiry Concerning Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion and Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of the Telecommunications Act of 1996, CC Docket No. 98-146 (March 20, 2000) at 2.

[7] Internet2 Preliminary Engineering Report, January 1997, http://www.internet2.edu/html/97engineering.html#

[8] Deployment of Advanced Telecommunications Capability, Second Report, August 2000, FCC 00-290, at p. 6.

[9] See Comments of AT&T Corp. In the Matter of Inquiry Concerning Deployment of Advanced Telecommunications Capability to All Americans, in a Reasonable and Timely Fashion, And Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of the Telecommunications Act of 1996, September 24, 2001 at p. 15.

[10] See Advanced Telecommunications in Rural America, NTIA Report April 2000, at ii.