CWA CALLS FOR CHANGE OF POLICIES TO BOOST BROADBAND DEPLOYMENT

CWA Exec. Vp Larry Cohen called for changes in policies to eliminate the digital divide in the U.S. and promote broadband. “We need to update our universal service policies to make sure that all Americans have access to and can afford high-speed, high-quality Internet service at home,” he told a broadband forum in Washington Fri. sponsored by the Alliance for Public Technology.

“The problem today is not lack of local competition,” Cohen said: “Competition is not a vision. The free market does not work perfectly.” He urged regulators to “establish a meaningful competition policy, one that does not discourage investment.” He criticized the FCC’s unbundling policies, saying the Bells had cut $30 billion in capital spending the past 2 years, and “CWA employees cut almost 70,000 jobs. We need policies that encourage job-creating investment. That means investment in alternative technologies, networks, and services -- not resale competition.”

However, Irene Wu of the FCC International Bureau said competition had been “key to driving broadband deployment” in the top 10 OECD countries -- including S. Korea, Taiwan, Canada, Denmark and Japan, which outpaced the U.S. in broadband deployment. Cal. PUC Comr. Carl Wood expressed concern that a lack of competition in his state was the reason of high DSL prices. He said SBC was the only carrier providing DSL to most residential consumers in Cal.: “We don’t have price competition, [so] the price on DSL is very high.” Wood said another problem with expanding broadband deployment in his “diverse” state was “not only technological, but also cultural and educational… It’s developing cultural content that reflects multiplicity of ethnicity in California.”

With the U.S. ranked 11th in the number of households with high-speed Internet service by the ITU worldwide, Wu said it made sense “to look at the international markets” and learn from their experiences. One thing that could be done in the U.S. similar to other countries was for the FCC to conduct surveys of consumers. She said the FCC was relying on voluntary contributions from industry and consumers when collecting information, including on broadband: “Other regulators in some countries actually conduct surveys of consumers… particularly on information problems consumers might be having. This is not something that we do at the FCC… This is something that could be done… particularly for the broadband market.”

Another practice that could be borrowed from countries successful in broadband deployment was establishing “a national goal with timetables to deploy affordable truly high-speed Internet access to all Americans,” Cohen said. He said CWA supported a high-tech community call for 10-100 Mbps service to 100 million homes by 2010. “They've set this policy in Korea and Japan -- we must do the same in this country,” he said. Cohen said the U.S. should also “create a framework to ensure build-out of high-speed digital networks to all Americans, and delivery of high-speed Internet services at affordable rates.” One way to do that, he said was to “establish timetables for deployment for the local telephone companies -- the only carriers with universal service obligations. Let’s say, ‘If you commit to these timetables for deployment, then we'll… take off unbundling obligations, provide tax incentives and public subsidies.'” Cohen also suggested to “cap prices and target subsidies to low-income and high-cost areas… If the cable or wireless companies commit to a universal network and affordable regulated prices, they can tap into public subsidies to build and then support affordable high-speed Internet service on their platforms.”

Cohen said as the industry was moving toward VoIP, it was “very important” not to “abandon universal service and other social obligations just because a voice telephone call is delivered with Internet protocol. We must ensure that all carriers, regardless of the technology” meet social policy obligations: “We can either extend current telecom regulation to other technologies, or we can reduce unnecessary regulation. However, we can’t have 2 different regulatory schemes for the same service, like we have today with deregulated monopoly cable modems and regulated DSL.” Japanese Telecom Attache Yasu Taniwaki said VoIP should “not be recognized as the replacement of the PSTN-based telephone. Rather, it should be considered that the existing demarcation among services be completely dismissed.”

Cohen said the U.S. was “behind the rest of the world” in broadband deployment: “Fewer than 7 out of 100 U.S. households have a broadband connection, and the bandwidth is not truly broadband; 500 kilobits per second is now standard for DSL, and one to 3 megabits per second for cable modems.” Citing a 2002 Commerce Dept. report, he said there was also a “wide digital divide” in the U.S.: Only 1/3 of Americans earning less than $25,000 per year had narrowband Internet access at home, compared to 80% of those with incomes over $75,000. He said only 1/3 of Hispanic and African American households had Internet access at home, compared to 55% of Caucasian households: “20% of the country can’t even get broadband service, because there is no deployment.”

Of Japan’s broadband triumphs, Taniwaki said “the market structure in the U.S. and Japan are completely different,” and “Japanese policy implications may not be applicable to U.S. policies in some cases.” He said one of the main reasons for DSL growth in Japan, which has about 14 million of households with broadband services, was “establishment of interconnection rules such as collocation and unbundling rules for DSL service providers planning to provide their services using access networks of the dominant regional telecom carriers.” He said the interconnection rule for DSL, enacted in 2000, had meant about 50 new DSL service providers, reducing the DSL market share of the incumbents to less than 40%, which he said was “quite different from DSL markets in other major countries.” He said the Japanese govt. -- which encouraged broadband infrastructure deployment through incentives, such as loan systems with low interest rates and tax deductions for investment -- expected to reach nationwide fiber-to-the-curb deployment by 2005: “The installation of fiber is evidently the role of the private sector. The role of the government is only limited to ease the financial burden of the common carriers.”