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Will Reclassification Derail FCC's Broadband Plan?

LONE TREE, Colo. -- Some at the top level of the Federal Communications Commission (FCC) may believe a new legal framework for its authority over broadband services will help keep its ambitious National Broadband Plan afloat, but some cable industry policy pundits wonder if the move might produce the opposite effect.

The FCC's reclassification effort could "totally sidetrack [the Commission] from getting some pieces of the broadband plan done," warned Steve Morris, VP and associate general counsel of the National Cable & Telecommunications Association (NCTA) , a speaker Thursday afternoon here at a "Future of Cable" conference hosted by the Colorado Cable Telecommunications Association and Silicon Flatirons, a law and tech center based at the University of Colorado. (See NCTA Reacts to FCC NOI.)

Those comments came mere hours after the FCC, in a 3-2 vote, opened a formal notice of inquiry (NOI) as the Commission looks to reestablish its authority over broadband rules and policies. The FCC is asking for options, but it's already outlined three initial possibilities: to retain broadband's current Title I classification as an information service; go for Title II (telecommunications) status; or try a "Third Way" that takes a Title II posture but doesn't necessarily enforce every aspect of that much stronger classification. (See FCC Looks to Reclaim Its Broadband Mojo .)

Fellow panelist Kyle Dixon, a partner at Wilkinson, Barker and Knauer LLP and a former media bureau deputy chief at the FCC, wondered whether it's prudent for the Commission to declare war on broadband classification when it's also counting on industry support and cooperation for the broadband plan.

"I think [the decision to look at reclassification] is significant, but I don't think it's World War II yet," Dixon said. [Ed. note: The pursuit of Title II broadband classification is sometimes called the "nuclear option."]

"But they've invaded Belgium," quipped moderator Raymond Gifford, who's a partner at the same law firm and an adjunct fellow at Silicon Flatirons.

Even with the NOI afoot, the cable industry is generally in favor of the FCC's plan, the NCTA's Morris said, noting that the industry is particularly positive about the plan's position on universal service reform and pole attachment rules. The latter is seeking rules that make it easier for companies to access utility poles for the purpose of their network buildouts. (See Pole Vaulting .)

"We embrace largely what is in the broadband plan," noted David Don, senior director of public policy at Comcast Corp. (Nasdaq: CMCSA, CMCSK), which remains concerned about "unjustified regulation" but is pleased that the FCC is considering several options as it looks at possibly reclassifying its legal footing on broadband. (See Comcast 'Encouraged' by FCC NOI .)

"I don't think [the National Broadband Plan] is necessarily a call for regulation. But it does lead to more attention to our business. We don’t have a broadband gap; we have a broadband availability gap," Don added, citing recent studies showing that 95 percent of US homes have access to wired broadband, but only 65 percent of Americans are adopting it. The FCC's plan is calling for adoption rates to jump to more than 90 percent by 2020. (See FCC Seeks 1-Gig Speeds at 'Anchor Institutions', FCC Chair Sets 2020 Broadband Vision , and Big Cable Joins the Broadband Stimulus Fray .)

However, the NCTA and other cable interests remain wary that the plan could lead the government to stimulate competing telcos that don't need the subsidies. "There are some tensions there," Morris said. He added that the cable industry must try to ensure that the FCC "doesn't treat us as a monopolist," because cable does work in a competitive broadband marketplace.

"We have to do a better job with the message that there's not a problem with broadband," Don insisted. "This [broadband] is a part of the economy that is succeeding."

Debating universal service reform
Scott Wallsten, VP for research at the Technology Policy Institute and a former member of the FCC's broadband task force, wondered why the cable industry is generally in favor of universal service reform that could see the voice service subsidization morph over to broadband.

"I can't see why cable supports this. They don't seem to get much out of it," he said, adding that it's rural LECs that are likely to be the ones getting that money.

Morris said the NCTA is staying clear of universal service reform simply because it needs fixing, as it shifts its focus to broadband.

"How it's implemented now does not work, and we don’t want to see it [as-is] extended to broadband," he said, noting that the FCC, for the first time, is looking to reduce the amount of universal service dollars going to incumbent telcos. "The problem with the current fund is that companies get this money and there's no obligation to do anything with it, so it's just free money."

On that point, Morris hopes reform will make subsidies look more like a "contractual arrangement" than they are under the current system.

— Jeff Baumgartner, Site Editor, Light Reading Cable

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