FCC Approves Broadband Policy Statement, Not National Broadband Plan

The FCC approved Tuesday by a unanimous vote a brief statement of principles on broadband. FCC Republicans Robert McDowell and Meredith Baker were sharply critical of some aspects of the plan itself, which was not put up for a vote before being submitted to Congress. Both found lots to like in the plan but said it must not be used as a lever for imposing more regulation. Agency officials said the FCC will offer a list in coming days of more than 40 rulemakings that will be begun as a follow-up to the plan.

Chairman Julius Genachowski had asked commissioners to endorse a “mission statement” that ran almost four-single spaced pages, and was more of a summary of the plan. It would have been bound with the plan when it was sent to the Hill, starting Tuesday, we've learned. Instead, commissioners approved a “policy statement” that was half as long, negotiated among them over the past weekend, which is not part of the plan. Commissioners were reluctant to do more because the plan was written by National Broadband Plan staff, without the eighth floor give-and-take which occurs during the construction of major orders, agency sources said.

"The plan opens the door to classifying broadband services as old-fashioned monopoly era, circuit-switched, voice telephone services under Title II of the Communications Act of 1934,” McDowell said. “Broadband deployment and adoption have flourished in the absence of such regulations. Not only do I doubt that such a reclassification would survive appeal, I don’t see how foisting a regulatory framework first devised in the 19th Century would help a competitive 21st Century marketplace continue to thrive."

The plan also “implies” that the commission should mandate the unbundling of fiber and other network elements that have been deployed since the agency deregulated some of these components, McDowell said. “As a result of that deregulation, fiber deployment has spiked in recent years,” he said. “Rather than reverse course, the commission should ensure that any future actions will not create regulatory uncertainty and litigation risk that could scare away capital investment.” McDowell told us the plan is “vague” on this issue but he cited Sect. 4.7 of the plan, which discusses reimposing unbundling obligations. “It’s clear that it opens the door on that,” he said.

McDowell also questioned why the plan didn’t address recommendations made at a workshop on capital investment in the broadband sector tax incentives to spur more broadband deployment and adoption. “Helping to elevate that discussion could lead to new ideas that could further our goal of greater broadband ubiquity,” he said. McDowell also questioned whether FCC intervention is needed to reach a key adoption goal: “Unless the government provides disincentives to investment, the Plan’s goal of reaching 100 million households with 100 Mbps services should be attained well before 2020 if we allow current trends to continue in an unfettered manner."

"What has been accomplished is we have started a process that will lead to a debate that could lead to consensus on some ideas and therefore more rules,” McDowell said after the meeting. “What I mean by consensus is at least three votes.” He cautioned that the plan did not come from commissioners but from the staff of the Omnibus Broadband Initiative. “It embodies their ideas, and not having a commission vote on the plan gave them freedom to float any ideas they found worthy,” he said.

Baker agreed that competition is thriving without government intervention. “The plan finds that over 80 percent of households have access to more than one broadband provider today providing service over 4 Mbps,” she said. “In difficult economic times -- approximately two-thirds of Americans now subscribe to a roughly $40 per month service.” Under the light-touch regulatory regimes of the two previous FCC administrations, she said, “We have gone from a narrowband dial-

up world to a multi-platform broadband world by crafting a regulatory framework that promotes facilities-based competition in lieu of prescriptive government requirements."

Baker said she’s concerned about any move to enhanced net neutrality rules. “We should … avoid re-opening settled regulatory battles or changing our market-based regulatory framework mid-course in a manner that could chill the private investment we so desperately need in our broadband infrastructure,” she said. “We should reject calls to revert to monopoly-era Title II regulation for broadband services that ignore the track record of success under Title I, and rebuff fiber unbundling and copper retirement proposals that seem to selectively forget our long and checkered history with government-manufactured competition."

"The plan speaks for itself,” FCC Chairman Julius Genachowski said during a news conference, when asked about criticisms by the two Republicans. “The focus of the team, as you have heard, is on a plan that encourages investment, that encourages innovation, that recognizes our statutory and important duty to promote competition. I encourage you to look at the plan on all of these items.” He questioned whether the U.S. would reach a goal of 100 million households with high-speed service without a push. “You've probably seen in response to that goal some people have said that meeting it is within our grasp, others have said it’s wishful thinking and a pipe dream,” he said. “Getting to affordable 100 Mbps to 100 million households in the United States will be a real challenge."

Commissioner Michael Copps said the plan is long overdue. “Since walking through the door of this building as a newly-minted commissioner in 2001, I have called for, hoped for and dreamed about this -- a national plan to ensure that every American has high-speed, opportunity-creating, affordable broadband,” he said. “For too many years, government was asleep at the switch and the results showed as your country and mine dropped way down the rankings in terms of broadband penetration among” Organization for Economic Co-operation and Development economies. Copps highlighted parts of the plan focusing on digital inclusion. “Broadband must leave no American behind -- African-Americans, Hispanic-Americans, Asian-Americans, disabled Americans, poor Americans, rural Americans, inner city Americans. It must also include the original Americans -- Native-Americans,” he said.

In some cases government intervention will be needed to spur broadband growth, said Commissioner Mignon Clyburn. “We must not succumb to the threats of special interests or the familiar blanket assertions that all government involvement is negative,” she said. “Now is the time to be bold, and we owe it to all Americans to step up to the challenge and seize the moment."

The statement approved by commissioners ran only one and a half pages and does not endorse the conclusions in the 340-page plan. “The statement speaks for itself and I'm very pleased that all the commissioners supported it today,” Genachowski said.

"High-speed broadband is beginning to reshape every sector of our economy and many aspects of American life. Broadband service can be an indispensable engine for unleashing innovation and investment, spurring job creation and economic growth, and ensuring our country’s global competitiveness,” the statement said. “Working to make sure that America has world-leading high-speed broadband networks -- both wired and wireless -- lies at the very core of the FCC’s mission in the 21st Century."

The statement lists six “common beliefs” shared by commissioners. Among them are that “Every American should have a meaningful opportunity to benefit from the broadband communications era -- regardless of geography, race, economic status, disability, residence on tribal land, or degree of digital literacy” and that “Our Nation should harness the tools of modern communications technology to protect all Americans, including by enabling the development of a nation-wide, wireless, interoperable broadband network for the Nation’s first responders."

"This document, which we're very, very proud of, does speak for itself and we look forward to people reading and reviewing it,” said broadband plan Executive Director Blair Levin of the plan. “This plan is in beta, and always will be. Like the Internet itself, the plan should change in light of new developments. … We welcome any improvements that the notice and comment process that develops. But evaluation is no excuse for paralysis. The important point now is to act."

Levin, FCC chief of staff when the commission implemented the 1996 Telecom Act, said the commission now faces the most work it has had to do since that period. “In some ways it’s more and in some ways it’s not, but it’s a lot of work,” he said. The broadband team only included in the plan part of the research done since last summer, Levin said. “There is a huge amount of analysis that went behind all of this that we simply stripped out,” he said. “People are going to read it and say that’s a lot of footnotes and that’s a lot of analysis, but believe me it’s just the tip of the iceberg of what was done."

"We will be, over the next few weeks, releasing a schedule of proceedings for the next 12 to 18 months to begin implementation,” said Phoebe Yang, chief counsel to the team that wrote the plan. “More than half of the plan’s roughly 200 recommendations are directed at the FCC” and the agency will begin about 40 proceedings as a follow-up to the plan. About half focus on “promoting competition in consumer value through broadband network devices and application policy changes, infrastructure policy changes and unlocking the value of the 500 MHz of spectrum. Another quarter are focused on the critical task of universalizing broadband service for all Americans through [Universal Service Fund] and intercarrier compensation reform. The majority of the rest focus on how the FCC can promote public safety and protect critical infrastructure."

The National Association of Manufacturers was mostly positive on the plan. “We are pleased to see the FCC put forth its comprehensive broadband plan that aims to increase broadband accessibility and speed to a wide population including manufacturers and consumers in rural areas,” President John Engler said in a written statement. “Manufacturers’ access to high-speed voice, video and data provides limitless opportunities for advancing innovation and job creation."

"I am pleased the commission has addressed many of the crucial broadband and spectrum issues that are critical to innovation and confronting the looming broadband crisis,” said Gary Shapiro, president of CEA. “The National Broadband Plan, in addition to recent work in Congress, is key to our national competitiveness and the future of technology innovation.” The plan “has the potential to help create jobs and spur economic growth, unleash new waves of innovation and investment, improve education and health care, and enhance the vibrancy of our democracy,” Intel said.

"Until now, the United States has been the only industrialized country without a plan for high speed broadband as the engine for job growth, economic development and empowerment of its citizens,” said CWA President Larry Cohen. “The FCC’s proposed plan is far-reaching, and it needs to be for the U.S. to reach the global standards.

Several comments focused on an expansion of net neutrality rules, which McDowell called “the elephant in the room” as commissioners discussed the broadband plan.

"There will be an elephant in the meeting room that will not get nearly as much attention -- that is, whether the FCC actually has the power under the Communications Act to enact major parts of the plan,” said Gigi Sohn, president of Public Knowledge and an advocate of reclassifying broadband as a Title II service. “Without a ‘cop on the beat,’ the fate of broadband consumer protection regulations such as privacy, transparency and emergency communications will be at risk, as will other initiatives to ensure great access to broadband and greater adoption of broadband by the disadvantaged."

"I am particularly pleased to read that the many contentious issues concerning the legal framework for the FCC’s implementation of the plan, including the ill-conceived request that the FCC simply re-classify all broadband Internet access services as Title II telecommunications services … are not explicitly included among the recommendations contained in the Plan itself,” said Barbara Esbin, senior fellow at the Progress & Freedom Foundation. NTCA and the Organization for the Promotion and Advancement of Small Telecommunications Companies had similar concerns about the universal service recommendations in the plan. Among them, the plan suggests phasing out the USF High Cost program, in favor of a new Connect America Fund, focused on broadband deployment.

"Of particular concern to NTCA are the plan’s current failure to allow rural broadband providers to adequately recover lawful costs related to universal service and intercarrier compensation, failure to account for vital costs associated with carrier of last resort obligations, and the recommendation to eliminate rate-of-return regulation for all carriers regardless of economies of scope and size,” the group said. “A 10-year transition … should give all carriers the opportunity to transition from the PSTN (public switched telephone network) to an all-broadband network,” said OPASTCO President John Rose. “However, it is very important for the FCC and Congress to understand that every carrier providing service in high-cost areas is different. Flexibility needs to be built into the implementation of this plan, and efforts need to be made to help these carriers address their losses due to phantom traffic and the elimination of access charges."

"Rightfully, universal service and intercarrier compensation reform are critical components of the National Broadband Plan,” said AT&T CEO Randall Stephenson. “Reforming universal service and ensuring affordable broadband for all Americans are the two most critical components of achieving universal broadband. At the same time, they are also the most difficult and perplexing issues the FCC has struggled with over the last 15 years. But we cannot shy away from addressing the hard issues if we are serious about achieving universal broadband deployment and adoption, and we commend the FCC Broadband Team for taking the first steps in this long but crucial journey.”