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Regulation

FCC Continues Dance With Incumbents

The U.S. Federal Communications Commission (FCC) is still sparring with North American incumbents -- or is it?

In early March, AT&T Inc. (NYSE: T), Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC) and Verizon Communications Inc. (NYSE: VZ) joined organizations such as CTIA and Broadband for America in sending a letter to the FCC, saying that the FCC is not sufficiently following President Obama's order to review, and if necessary, cut regulations.

The group asked FCC Chairman Julius Genachowski for a "far more rigorous and comprehensive effort to ensure that the governing regulatory framework is appropriately tailored to today's broadband marketplace, and that outdated and needlessly burdensome rules do not stand in the way of continued investment and innovation."

In the beginning of April, the FCC ruled that -- per the new rules approved by its commission -- AT&T and Verizon Wireless must let smaller competitors use their networks for mobile Internet service. The agency voted to require large wireless carriers to strike commercial agreements with smaller carriers. (Such agreements are voluntary now.) The rule extends to data traffic the network-sharing arrangements that already are mandatory for voice calls. The measure has been opposed by AT&T and Verizon. (See FCC Issues Data Roaming Rules.)

To add to the excitement, the U.S. House of Representatives voted in mid-April to strike down the FCC's net-neutrality rules that were approved in December of 2010, though President Obama has threatened to veto the legislation should it pass through Senate. (See House Shoots Down Net Neutrality Rules.)

But -- perhaps as a way to extend an olive branch toward incumbents -- the FCC's Consumer and Governmental Affairs Bureau (CGB) recently issued a Public Notice asking for comments on the kinds of "need for speed" information that will be most useful to consumers in choosing their Internet service. (See FCC Wants Broadband 'Need for Speed' Comments.)

The CGB stated in its announcement that the current marketplace for broadband "is a confusing one for consumers"; that most people "don't understand megabits-per-second in the way they understand miles-per-gallon"; and that in an FCC survey from 2010, 80 percent of people with broadband didn't even know what speed they were getting from their service.

The FCC says this public notice will provide a way for ISPs, the technology community and the public to help develop clear guidelines that will help everyone understand how to get the service they need. The document also notes that consumers may have very different needs for broadband service depending on what they use it for: People who use the Web primarily for email, for example, may be better served by a smaller and less-expensive service than an avid video viewer would need; while online gamers may be especially concerned about factors such as signal latency. The notice also acknowledges the importance of collecting input from a broad range of stakeholders on broadband speed and performance.

So it appears the FCC is trying to better understand broadband consumers' habits and needs. But does the Commission intend to use this information to work with the incumbents, or to push back and stand their ground? We'll be keeping an eye on the outcome of this process.

— Sarah Wallace, Staff Analyst, Heavy Reading

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