Access Champ Blasts FCC Broadband Report

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A leading proponent of open access declared the FederalCommunications Commission's recent Broadband Monitoring Report "intellectuallybankrupt" last week.

David Olson, director of franchising for Portland, Ore.,said the report was skewed in favor of a cable industry that wants to keepInternet-service providers off its broadband networks.

Olson, who also heads the Mt. Hood Cable RegulatoryCommission, accused the FCC's Cable Services Bureau of ignoring material detrimentalto the argument that open access would delay investment and deployment of broadbandtechnology.

It was the MHCRC -- a group that advises Oregon'sPortland and Multnomah counties on cable-related issues -- that triggered the unbundlingdebate last year by urging the two jurisdictions to demand open access in exchange fortransferring their Tele-Communications Inc. franchises to AT&T Corp.

Among the material overlooked by the FCC were Wall Streetreports from Merrill Lynch & Co. and Goldman, Sachs & Co. determining that cableoperators "will actually make more money, and not less, as a result of openaccess," Olson said.

"But not a word was mentioned [in the FCC report]about this material," he added. "You would never know that it ever existed.Instead, the citations were apparently designed to support a pre-existingconclusion."

Olson said the report also does not identify localfranchising authorities, or participants in a series of "invitation-only" focusgroups, who presumably contributed to the document's conclusions. "They'rebasing their conclusions on evidence we can't check," he added.

The National Cable Television Association said the reportwas proof that "competition among telephone, cable, satellite and wireless-broadbandproviders is speeding broadband deployment."

NCTA officials noted that for every city that embraces openaccess, hundreds have voted to reject it. Moreover, while some municipal groups lobby infavor of the concept, the National Governors Association and County Executives of Americahave panned the idea.

FCC chairman William Kennard defended the report as an"objective and detailed snapshot" of a developing industry where"regulatory restraint continues to be warranted at this time."

Kennard added, "I'm sure the report will prove tobe a valuable resource to those seeking to understand the many competing issues andinterests that must be balanced to ensure that American consumers soon will be able toreceive advanced services at competitive prices."

The report found that despite having just 3 percent of themarket for Internet access, cable-modem service is already encouraging deployment ofasymmetrical-digital-subscriber-line services by the regional Bell operating companies.

It also concluded that market forces will ultimately forcecable operators to negotiate access deals with unaffiliated ISPs, thereby reducing thethreat of a monopoly over the Internet.

But that's the rub, according to some localregulators.

Jane Lawton, cable administrator in Montgomery County, Md.,said the FCC seemingly hopes that "not too much damage will be done" beforeoperators open their networks.

"That's craziness," she said. "[The FCCis] not giving us any reassurance that they're looking at this issue below thesurface."

Lawton, former president of the National Association ofTelecommunications Officers and Advisors, said she was "disappointed" that theFCC report failed to break new ground at a time when calls for open access are gainingmomentum.

In Montgomery County, for example, local officials and arearesidents have begun asking staffers "where we stand on this issue," she added.

That could be bad news for cable. The county is part of theWashington, D.C., region, where 60 percent of all adults are already hooked up to theInternet, making the area the top spot in the nation for online services.

Meanwhile, NATOA board member Brenda Trainor questioned thetiming of the report's release, noting that the FCC characterized the document as"preliminary."

"If it's 'preliminary,' and theyhaven't gotten both sides, why are we releasing it now?" she asked. "Localfranchising authorities, as far as I know, haven't been interviewed for this. I thinkit's another case of local governments being shut out of the process."