[ale] Comcast Caps Data at 250G/Month

[Brian Pitts]

To avoid getting sucked into this further, I'll just say that I'm in
favor of Public Knowledge's Principles for an Open Broadband Future [0],
particularly

1. Open Competition Among Broadband Providers

*Principles:

a. Every consumer should be able to choose among multiple, competing
broadband networks, services, applications and content providers,
including municipalities.

b. Government policies should be technology-neutral and should forbear
from regulating broadband networks except where necessary to promote
competition.*

Every consumer should be able to choose among multiple, competing
broadband networks, services, applications and content providers.
Eliminating barriers to competitive entry in each of these markets has
many benefits. Open competition will provide network builders the
maximum incentive to provide consumers the best quality, service, and
price that it is possible to deliver. Competition has been shown time
and again to promote innovation and the development of new technologies.
As firms seek to win market share, they will develop the most efficient
technology possible. This incentive to innovate benefits the entire
American economy by spawning a healthy high-tech community of research
and entrepreneurship. Finally, competition promotes the first amendment
value of information diversity. Consumers benefit from an active
“marketplace of ideas,” in which the general public is permitted to hear
and voice their political, religious, and economic views. Promoting an
open competitive market for all aspects of broadband is thus one of the
highest values government policy can promote.

To reach this goal, government must carefully assess its role. Where a
vibrant competitive market for broadband already exists, government
should forbear from regulating as much as possible. Excessive government
regulation on broadband providers and suppliers can burden companies and
stifle innovation and investment. Government should instead ensure that
the market operates in a way that maximizes the flow of information and
encourages competition.

At limited times, however, affirmative government policies may be
required to open markets to competitive entry. Specific government
action may be especially necessary when the government itself erected
barriers to entry by prohibiting competition, or where a firm holds
market power or bottleneck control over an essential communications
commodity. For instance, transmission services provide the equivalent of
“raw material,” without which no information services, applications or
uses can be developed or deployed. Government must ensure that the
transmission path is open to competing service providers, application
developers, content providers and consumers in order to promote an open
market in which investment and innovation are stimulated. Otherwise, the
uses of the network will be skewed in the interests of those who own the
network.

In short, government policy must be limited, targeted, and effective.
Government policy should be smart, not smothering.

Congress should also explore new ways to stimulate competition to the
duopoly currently held by the cable and telecom companies.11 This is
especially important in the wake of the announced mergers of large long
distance companies with the two largest Bell companies (i.e., AT&T/SBC
and MCI/Verizon). One approach Congress should strongly consider is to
guarantee the right of municipalities to provide their own broadband
services. Competition from governmental entities could encourage private
sector entities to increase deployment, innovate and drive broadband
prices down. Indeed, municipal broadband networks provide a business
opportunity for small businesses and entrepreneurs. Municipalities that
build their own local broadband networks stimulate economic growth by
creating jobs, purchasing equipment and services from local businesses,
and attracting companies to locate offices in that city.12

Unfortunately, at least 15 states have adopted laws banning or limiting
these municipal networks. These laws are often anticompetitive and
contrary to the public interest. 13 While the citizens of certain
municipalities may decide that taxpayer dollars should not be spent on
broadband services, that is a decision that should not be taken away
from them by surreptitious legislation that places flat bans on
municipal broadband service. Therefore, Congress should preempt these
state laws and permit municipalities to serve the needs of their local
communities.

Another approach to promoting competition that Congress should consider
is codifying a national franchise for new entrants into broadband video
services, particularly where those new entrants are authorized to deploy
and already deploy a network. Those seeking to compete in the provision
of broadband video will be severely delayed if they must seek franchises
from 10,000+ local authorities throughout the country. The provision of
a national franchise need not deprive localities of any income - the
franchise can be conditioned on receipt of the same fee on revenues that
cable providers now pay. This fee can be passed down to the localities
where competitors seek to provide services. At the same time, Congress
should be cognizant of the important role of local authorities in the
provision of multi-channel video services, including, but not limited
to, ensuring universal access, promoting competition and community
media, and protecting public safety.

Until broadband competition matures, policy-makers should also take
action to prevent the dominant firms from extending their market power
into competitive markets. BellSouth, for instance, is requiring
consumers to purchase basic telephone service before the consumer can
purchase DSL. The FCC recently upheld this practice. Similarly, some
cable companies require consumers to purchase basic cable service to
receive their cable modem offerings. These practices make it more
difficult, if not impossible, for consumers to purchase stand-alone
broadband services.

Furthermore, markets work best if policies are technology-neutral and do
not favor one provider over another. To the extent practicable,
government policy should seek to promote all technologies and should not
artificially favor one technology over another. For instance, any
requirement of openness (discussed below) should be applied equally to
all broadband networks, regardless of their history or technology.

[0] http://www.publicknowledge.org/content/papers/open-broadband-future

-Brian