1401 Constitution Avenue, N.W. Room 4713 HCHB
Washington, DC 20230
Request For Comments on Deployment of ) Docket No. 011109273-1273-01
Broadband Networks and Advanced )
Telecommunications Services )
I. STATEMENT OF INTEREST
The National Black Chamber of Commerce (NBCC) wishes to take this opportunity to submit the following Comments in the above referenced proceeding. The NBCC is a nonprofit, nonpartisan, nonsectarian organization dedicated to the economic empowerment of African American communities. The NBCC represents more than 64,000 Black-owned businesses with 201 affiliated chapters located in 40 states, and eight countries. The NBCC also operates an informative website (www.nationalbcc.org).
The NBCC seeks the removal of barriers to growth and expansion of African American businesses. The delay in the deployment of broadband infrastructure is such a barrier that continues to disproportionately impact under served rural and urban communities where many small, woman and minority–owned businesses are located. The NBCC views the lack of a national broadband policy as major deterrent for many businesses to make the necessary capital investments to deploy broadband and advanced telecommunication services.
The NBCC likely shares the sentiment of many commentors that stress the importance of a technology neutral national policy. The Telecommunications Act of 1996 (1996 Act) intended to spur competition between alternative broadband platforms. To its credit the 1996 Act successfully fostered competition between the telephone and cable industries for broadband services. However, the current regulatory paradigm restricts telephone companies (incumbent local exchange carriers, or ILECs) from entering certain markets. Presently, telecommunications regulations limit the ability of ILECs, potentially the most capable broadband providers, to build broadband networks. Requiring these local phone companies to give competitors access to new infrastructure, a rule originally intended to ensure competition in voice telephone communication, constitutes a huge disincentive to investing in broadband. Cable companies, the biggest suppliers of broadband services, do not face similar regulatory impediments. Cable modems account for 70% of total broadband lines deployed versus the 28% of digital subscriber lines (DSL) deployed by telephone companies. What is particularly troublesome is that cable companies are simply not choosing to pick up the slack in underserved communities, nor creating a competitive market.
“Access for All” or Ubiquitous Broadband
The NBCC encourages NTIA to implement a policy goal of “access for all” to broadband services. Although most American businesses and 50 million households are now connected to the Internet, relatively few have broadband access. One result is a new digital divide: between big companies with the resources to implement broadband on their own and the seven million small and medium-sized businesses that depend on outside vendors to build the infrastructure and deliver the service. The disparity in broadband access is particularly troubling for minority entrepreneurs. New technology has enabled them to leapfrog societal barriers to grow, increase sales opportunities, create new business relationships, and enhance productivity. Ubiquitous broadband access is critical to keeping them on prosperity's road.
Absent a national policy that encourages competition and deployment, traditionally underserved communities, from inner city African-American households to residents of rural areas, remain without access to high-speed Internet connections. Many innovative tools for advancement and education – such as online government services and improved education and learning sites – remain frustratingly out of reach.
As a result, most small and medium-sized businesses do not have a choice of high-speed Internet providers, and many have no high-speed access whatsoever. This problem is magnified for minority-owned businesses, which are more likely to be based in neighborhoods with fewer computers and lower incomes, making them relatively unattractive to cable-based broadband providers. A recent study by the market research firm Horowitz Associates found cable service concentrated in areas with the greatest density of computers and the highest disposable household incomes.
1996 Act Reduces ILECs’ Incentives to Invest in Broadband Facilities and Services
Under the current regime, ILECs have only disincentives to investing in high-speed Internet infrastructure, which they would then have to sell piecemeal to competitors, and they are required to hand off all “long-distance” Internet data traffic, whether a customer is sending it from Chicago to Peoria or to Los Angeles. Placing geographic restrictions on Internet traffic makes neither technical nor economic sense – and even less sense in light of the urgent need for investment in broadband infrastructure.
ILECs must complete a costly - in terms of time and money- application process before they are permitted to provide broadband services in the states in their market. This state-by-state approval process forces millions of consumers across the country that are eager for high-speed Internet access to suffer further delays. Underserved communities, including minority businesses that bring economic development opportunities into these areas, will be among those most disadvantaged.
According to recent statistics, fewer than 9% of American homes are signed up for high-speed Internet connections, compared with more than 30% of Korean households. Broadband deployment, Intel Chairman Andy Grove states, “is a strategic issue that has an impact on U.S. security and the growth of the U.S. economy.” (Fortune Magazine, How to Get Broadband Moving Again, December 10, 2001) The NBCC could not agree more.
A national broadband policy is needed. NTIA should assist in the development of such a policy that guarantees high-speed Internet access to most of the country within three years, and to the rest within five. This policy should remove counterproductive regulation, which in turn would deliver more competition and choices for high-speed Internet to small businesses and consumers. Such a policy would be technology neutral and have broadband access for all as its key tenet. With more bytes and bandwidth, minority-owned and other small businesses could take advantage of the best in technology to maximize productivity, growth and job creation. They deserve that opportunity. The chance to compete fairly and be the best that you can is the promise of America. NTIA should extend this philosophy to broadband deployment policy.
Harry C. Alford
President & CEO