Ms.
Josephine Scarlett
Office
of the Chief Counsel
National
Telecommunications And
Information Administration
Room
4713 HCHB
1401
Constitutional Avenue, NW
Washington,
DC 20230
RE: Docket No. 011109273-1273-01, Comments on
Deployment of Broadband Networks & Advanced Telecommunications
Dear
Ms. Scarlett:
I am writing on behalf of the
National Rural Electric Cooperative Association (NRECA) in response to the
Notice, Request for Comments on Deployment of Broadband Networks and Advanced
Telecommunications (Notice) published in the Federal Register of November 19, 2001 and the Correction published
in the Federal Register of November
26, 2001. We would like to thank the
National Telecommuni-cations and Information Administration for this
opportunity to provide comments on these important issues.
NRECA is the not-for-profit, national service organization representing 930 rural electric systems that provide electric service to 35 million customers, or approximately 12 percent of the U.S. population. Rural electric cooperatives are found in 46 states and in 2,500 of the nation’s 3,128 counties. Many NRECA members, are, as are other electric utilities, providing telecommunications services to consumers. We firmly believe that widespread broadband availability will enable new and improved consumer products and services and business opportunities to reach the people and businesses in the communities served by rural electric cooperatives.
Our comments are limited to responses to questions
A, B, C, D, I, and K.
“Access for all” should be the primary consideration of a national policy on broadband. According to the NTIA’s study conducted with the Rural Utilities Service of the U.S. Department of Agriculture, “…Rural areas are currently lagging far behind urban areas in broadband availability” (NTIA/RUS Report)[1]. Experts agree that access to broadband services will be a key prerequisite to the well being of any community in the USA: urban, suburban or rural. Lack of access will ensure that the community will experience significant deficits. As the NTIA/RUS Report concludes, “The rate of deployment of broadband services will be the key to future growth of every region, particularly in rural areas that can benefit from high-speed connections to urban and world markets.[2] Some of the reasons broadband access may be of particular concern to rural communities include:
·
Economic Development – Access to broadband
services is now important to businesses of any substantial size (and to smaller
businesses as well). Broadband
telecommunications access has become a necessary amenity for many businesses. If a given community does not have broadband
access, many businesses seeking to relocate will simply move on to
consideration of a community that does.
Often broadband access is not only important to the
business seeking a location, but also to the employees of such businesses who
may be relocating from areas where broadband access (at home, at their
children’s schools, etc.) was readily and pervasively available. The unavailability of broadband
telecommunications service (at home) may make it more difficult for a
relocating employer to convince skilled employees to locate (or relocate) for
employment purposes to a given community.
Increasingly, home-based businesses and
professionals utilize (or at least want access to) broadband telecommunications
services. Many small business entrepreneurs
and highly paid professionals might wish to spend more time at “weekend” or
“vacation” homes in rural areas if broadband communications service were
available in these locations to facilitate their ability to work from these
locations. It stands to reason that the
more time these part-time residents spend in their (rural) weekend or vacation
homes, the greater economic (and possibly social) contribution they will make
to these rural communities.
·
Education and Distance
Learning –
Opportunities for advanced or specialized education and training may be limited
in (or proximate to) many rural communities.
Interactive distance learning utilizing broadband communications
channels can be used to widen the scope of educational and training
opportunities available in rural communities.
·
Telemedicine – Most hospitals serving
rural communities cannot support the expert medical staff needed to provide
many types of specialty care. Absent
other alternatives, residents of rural communities requiring such care are
faced with the further inconvenience (and perhaps additional risk to their
health, in some) of having to travel long distances to receive the diagnosis
and treatment that they need. Low speed
data access does not readily support the transmission of high resolution
medical images and the sort of real-time, high-quality video teleconferencing
that is needed to provide quality care (i.e. by bringing the needed medical
expertise to bear remotely). For
example, available evidence suggests that lower resolution medical imaging
leads to diagnostic mistakes in surprising number of cases.
§ Community Development and Well Being – The “aging” of many rural communities is an observable phenomenon. The kids grow-up and move to more urban or suburban communities where employment opportunities may be greater and different amenities are available. If broadband service is unavailable in a rural community, it is one more, perhaps key or critical amenity which is lacking. Many are worried about this “digital divide” further eroding the viability of the communities they live in and cherish.
We agree with the recent policy objectives set forth by Michael K. Powell, Chairman of the Federal Communications Commission, that “The Nation should commit to achieving universal availability of broadband.”[3] And, we concur with Chairman Powell that “the universal service goals of ubiquity and affordability remain paramount” and that economically sound ways should be pursued to reach these objectives.[4] As the NTIA/RUS Report also noted, the rate of deployment of broadband “has implications for the welfare of Americans and the economic development of our nation’s communities.” Therefore, policies that support the primary goal of “access for all” are those that remove barriers – regulatory, financial and otherwise – and encourage the widespread deployment of broadband service in an expeditious manner.
There is no single, agreed
upon definition of broadband. Defining
broadband is important in so far as it defines eligibility for funding programs
or triggers regulatory requirements. As
FCC Chairman Powell has recently noted, battles are being waged over how to
define broadband. It would be a great
disserve to the nation to dwell on philosophical or technical debates on a
definition to the point that implementation of federal policies that enable
broadband availability for all Americans is unnecessarily delayed. Assuming that the definition of broadband
finally adopted is sufficiently broad and inclusive of multiple technology
platforms, applications, and service providers, a consistent or at least
compatible definition across all federal agencies would provide necessary
clarity. Defining broadband is very
important to electric cooperatives seeking to participate in bringing broadband
to the communities they serve when this definition determines eligibility of
the service for funding under various programs promoting broadband service deployment which are
administered by federal agencies. And,
a definition is likely to form at least a partial basis for regulatory or
filing requirements.
Broadband has been defined by some as any technology that allows a user to connect to the Internet at speeds faster than a 56K modem and which can be connected to the Internet 24 hours a day without prolonged interruptions. The FCC uses a general definition for “advanced telecommunications capability” that is: any connection that allows 200,000 bits per second (200 kbps) of information to be sent to a user’s computer from the Internet Service Provider (i.e. “downstream”) and from the user’s computer to his/her Internet Service Provider (i.e. “upstream”). This two-way requirement of 200 kbps is presently a barrier to the growth of certain high-speed services to rural America. As noted by the National Rural Telecommunications Cooperative (NRTC) in recent comments to the FCC[5], Ku-band satellite Internet service now available and being deployed is a “necessary first step for rural telecommunications providers and subscribers before the Ka-band services arrive.” And as NRTC also noted in its comments, the FCC’s definitions have influenced other agencies in their development of policies to promote advanced telecommunications services.[6] As this illustrates, a definition that relies solely on a data speed rate, while having the clarity of a “bright line” test, may unnecessarily exclude promising technologies that can deliver faster than dial-up service to consumers.
FCC Chairman Powell recently characterized a wider definition
of broadband in the following way:
·
It
is a medium that offers a wide potential set of applications and uses;
·
The
“broad” in broadband should be recognized as meaning more than the “fat, fast
pipe.” It should represent the nearly
infinite possible uses and applications that might be developed and that a
consumer might use.
·
Broadband
should be viewed holistically as a technical capability that can be matched to
consumers’ broad communication, entertainment, information, and commercial
desires.
·
The
indispensable components of broadband functionality are:
–
A
digital architecture,
–
Capable
of carrying Internet Protocol (IP) or other multi-layered protocols,
–
Has
an “always on” functionality,
–
Capable
of scaling to greater capacity and functionality as uses evolve and bandwidth
hungry applications emerge.
·
Broadband
is not limited to a specific technological foundation (i.e. copper, coaxial
cable, wireless).[7]
Others
have suggested that what most residential and small business users are most
interested in when they speak of “broadband” is fast access to the Internet,
for example High Speed Internet service. Recently the New York Times stated that a growing number of consumers are
pursuing a third path for high-speed Internet service: fixed-wireless technology
which uses radio signals rather than copper wire, cable or fiber to send data.[8]
A square antenna on top of a house enables high-speed access to the
Internet. This suggests that a
definition of broadband should include the different types of technology and
uses or applications that are or may soon become available. This type of definition, while less simply
stated, provides the type of flexibility needed to foster variety in the types
of broadband technology platforms that are deployed.
NRECA agrees with FCC Chairman Powell’s suggestion
that broadband progress and success should be measured by access or
availability (supply) and not by adoption rates (demand).[9] Our comments focus on the supply side of
this question. As noted by Assistant
Secretary of Commerce Nancy J. Victory at the recent NARUC Broadband Summit,
broadband service over cable and DSL (combined) platforms is currently
available to 50%-60% of rural homes and businesses.[10] It should be noted that many rural
communities have no cable service at all.
A fairly recent study suggests that 72% of communities over 250,000 have
some type of cable-based broadband, but less than one-fifth of one percent
(<0.20%) of communities under 1,000 have cable modems deployed.[11] Even in those areas of rural America where
there is some cable service, it may not extend to the entire community (i.e.
the areas “outside of town” where densities are very low).[12] If there is no cable service, there can be
no broadband cable service. A
reasonable conclusion is that absent significant increases in density, rural
populations, which are presently not served by a cable company, are unlikely to
be served in the future. In part this
may be due to competition from satellite service providers and or telephone
companies who can provide multi-channel TV services and broadband services to
customers now or in the very near future.
The Regional Bell Operating Companies (RBOCs) or other large telephone companies serve the majority of telephone customers in rural America. Recently, the RBOCs and other large Incumbent Local Exchange Carriers (ILECs) have been aggressively deploying and promoting DSL in certain portions of their service territories. As a matter of economics and business focus, their efforts to deploy and promote DSL have centered principally within their large population centers. In August 2000 a study suggested that for DSL, in regions served by the largest ILECs, 86% of communities with 250,000 residents or more have some amount of DSL deployed while virtually no communities under 1,000 residents have DSL service available.[13] Absent a regulatory push, most rural communities of 5,000-10,000 customers or less which are served by one of the RBOCs or a large independent ILEC are unlikely to have ILEC-provided DSL service anytime in (at least) the next couple of years.
The picture is somewhat different relative to rural
communities served by telephone cooperatives or small, locally owned telephone
companies. Many of these providers are
making a substantial effort to make sure that DSL is available in at least some
portion of the territories they serve, even though it may not be profitable for
them to do so. Many smaller companies have
invested in infrastructure that was funded through the Rural Utilities
Service. One condition for receiving
RUS funding is that the network built with such funds must be capable of
supporting advanced services such as DSL.
Since 1993, RUS has funded more than $2 billion in rural
telecommunications infrastructure for smaller ILECs. The relatively recent National Exchange Carrier Association cost
study[14]
found that rural ILECs are rapidly deploying broadband technology. According to this study, ILECs will have
upgraded 65% of their access lines to be capable of providing DSL by the year
2002. In November 2000 the National
Telecommunications Cooperative Association reported from a survey of its members
that: approximately 55% of respondents were offering some form of high-speed
service to residential customers and 61% were offering some form of high-speed
service to business customers. [15]
D. Should government adopt as a goal “access to all” to
broadband service? What would be the
costs of such a goal? What policy
initiatives, if any, should be considered to achieve that goal? Are there areas or persons that are unlikely
to be served through marketplace forces?
As we note in our response to Question A, the
government’s primary policy goal should be “access for all” for broadband
services. While it is important to
answer the question of what the price tag will be to accomplish that goal, the
deployment cost is not meaningful without considering that figure in context:
what is the cost to society and the national economy if “access for all” is not
the foremost objective? As discussed
above in our response to Question A, the deployment of broadband to rural areas
can address a number of important social and economic problems. These policy concerns were echoed in the
NTIA/RUS Report, which states: “the government also has a special obligation to
ensure that all Americans, including Americans living in rural communities,
have the opportunity to be full participants in the Information Age.”[16]
As the NTIA/RUS Report
documents, the deployment of broadband services to rural America presents a
considerable challenge. Specifically,
this report notes that rural areas with the lowest population density are likely
to be the last to be served.[17] These are the areas that typically are
served by rural electric cooperatives.
In its second report to Congress, the FCC identified consumers in
sparsely-populated, rural regions as one of the groups that may be “particularly
vulnerable” to not receiving timely access to broadband services.[18] This was also the conclusion of the panel of
experts convened at the NARUC Broadband Summit on October 26, 2001.[19] The panelists agreed that the business case
simply can not be made for deploying broadband services, particularly via
wireline technologies, in many rural areas.
Markets will not work in many cases and creative, local solutions may
need to be found. Some examples of such
local solutions, such as community-based aggregated demand, were highlighted at
the NARUC Broadband Summit. However, it
remains to be seen whether these types of initiatives will be able to
facilitate widespread rollout of broadband in a timely fashion in all rural
areas.
It appears then to be well documented that for many
rural areas, markets will fail to provide broadband services in the near
future. This is not unlike the
situation faced by rural America in the 1930s with regard to electricity. NRECA agrees with the findings of the
NTIA/RUS Report regarding broadband: “Competition leads to lower prices, more
customer choice, rapid technological advances, and faster deployment of new
services. Given the unique challenges
of rural Americans, however, other government policies must be considered as well.”[20] The NTIA/RUS Report advocated a number of
government policies that should be advanced to accomplish the goal of ensuring
that all Americans, including those in rural areas, have access to broadband
services. NRECA supports these policies
and encourages the NTIA to work with other federal agencies and the states to
expand existing governmental programs that promote broadband deployment. NRECA further urges that programs be
developed, such as universal service and other funding mechanisms, and research
and development projects that advance promising technologies for broadband
deployment in rural areas. As noted in
our response to Question B above, the definition of broadband needs to be such
that program eligibility extends to multiple providers of various technology
platforms –including rural electric cooperatives– who can bring a diversity of
choices to rural Americans that most urban areas already enjoy.
I.
What problems have companies
experienced in deploying broadband services via wireless and satellite?
The main impediment to the deployment of wireless or
satellite broadband services has been the FCC’s definition of “advanced
telecommunications capability” because it tends to overlook the importance of
current-generation Ku-band services, which do not provide 200 kbps upstream. Congress and other federal agencies have
frequently used the FCC’s definition to determine carrier eligibility for
proposed tax incentives, grants, guaranteed loans, and other forms of relief to
promote rural broadband deployment.
While Ka-band satellites promise tremendous improvement in two-way
advanced telecommunications capability for rural America, an important
opportunity has been largely missed.
Despite this impediment, rural satellite Internet providers offering
Ku-band services have gained valuable experience in the techniques necessary to
provide broadband service to the most rural areas of the United States. Their experience will be extremely valuable
when applied to the deployment of the faster Ka-band services in the coming
years.
Consumers generally benefit when
there are multiple service providers.
In rural areas, that will likely require a mix of technologies. The limitations placed on Ku-band providers
by the FCC definition has constrained whatever competitive pressures might have
been placed on other technologies to provide timely access to broadband service
in rural areas.
K. Would it be appropriate to establish a single regulatory regime for all broadband services? Are there differences in particular broadband network architectures (e.g., differences between cable television networks and traditional telephone networks) that warrant regulatory differences? What would be the essential elements of a unified broadband regulatory regime?
NRECA is generally skeptical of “one size fits all” approaches to regulation given that the costs of regulation to small businesses are disproportionately large compared to larger firms.[21] Too often, the “fit” is especially poor for smaller and not-for-profit enterprises, like rural electric cooperatives. For rural areas, the use of different technologies, or hybrid systems combining different technologies, may be necessary to overcome rural areas’ triple challenge of density, distance and terrain. Therefore, regulatory regimes that have the effect of dictating technologies, because different regulations create different burden levels, should be avoided. Further, regulatory regimes that foreclose opportunities for some broadband service providers, namely smaller or not-for-profit providers such as cooperatives, are equally undesirable. However, to the extent a single regulatory regime can promote a multi-faceted approach to broadband deployment, that is, encourage multiple providers and multiple technologies, then such a regime may have merit. Generally, NRECA supports FCC Chairman Powell’s call for broadband service existing in “a minimally regulated space.”[22]
Again, we commend NTIA for providing
this forum for expressing our views and concerns on the deployment of broadband
services.
Respectfully
submitted,
Wallace
F. Tillman
Executive
Vice President, Energy Policy
&
General Counsel
Michael
J. Ganley
Manager, Economic & Policy
Analysis
Tracey B. Steiner
Corporate
Counsel
NATIONAL
RURAL ELECTRIC
COOPERATIVE ASSOCIATION
4301 Wilson Boulevard
Arlington, VA 22203
[1] Advanced Telecommunications in Rural America, the Challenge of Bringing Broadband Service to All Americans, NTIA and RUS, April 2000 at Executive Summary p. ii.
[2] Id.
[3] Michael K. Powell, Chairman, Federal Communications Commission, Press Conference, “Digital Broadband Migration” Part II (Oct. 23, 2001).
[4] Id.
[5] NRTC Comments at p. 1, In the Matter of Inquiry Concerning the 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, FCC Docket No. 98-146 (Sept. 24, 2001).
[6] NRTC Comments at p. 3.
[7] Michael K.
Powell, Chairman, Federal Communications Commission, Remarks at the National
Summit on Broadband Deployment, Washington, D.C. (Oct. 25, 2001).
[8] Eve Tahmincioglu, For High-Speed Access to the Web, a Dish-to-Dish Route, N.Y. Times, Oct. 11, 2001, at G-9.
[9] See note 7.
[10] Nancy J. Victory, Address to NARUC Broadband Summit, regarding information gathered during NTIA’s Oct. 12, 2001 Broadband Forum (Oct. 25, 2001).
[11] Brian Staihr, The Broadband Quandary for Rural America, The Main Street Economist, Center For The Study Of Rural America–Federal Reserve Bank of Kansas City (Aug. 2000) available at http://www.kc.frb.org/RuralCenter/mainstreet/MSE_0800.pdf.
[12] NTIA/RUS Report at pp. 18-19.
[13] See note 9.
[14] National Exchange Carrier Association Rural Broadband Cost Study: Summary Of Results (Jun. 21, 2000).
[15] National Telephone Cooperative Association Members Internet/Broadband Survey Report (Nov. 2000).
[16] NTIA/RUS Report at p. 41.
[17] NTIA/RUS Report at p. 17.
[18] FCC, Deployment of Advanced Telecommunications Capability: Second Report, FCC 00-290 at p. 6 (Aug. 2000).
[19] Panel: Facilitating the Business Case for Rural Broadband Deployment, NARUC Broadband Summit, Washington, DC (Oct. 25-26, 2001).
[20] NTIA/RUS Report at p. iv.
[21] Most rural electric cooperatives meet the Small Business Administration’s small business size regulations, i.e. entities which provide electric services are “small entities” if they dispose of 4 million MWH of electricity or less per year. 13 C.F.R. § 121.201.
[22] See note 3.