Kerry Ally: Broadband Needs U.S. Aid

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A Kerry campaign consultant took a few swipes at the cable industry last Monday, urging government intervention to guarantee affordable high-speed Internet access to all Americans.

Charles Ferguson — whose new book, The Broadband Problem, is about to be published — complained that cable companies use their market power to fight new entrants and protect video programming revenue by capping data transmission speeds.

“The last thing that the cable industry wants is 50 Megabits-per-second Internet service to every home in the United States, which would mean that there would be actually no point whatsoever to subscribing to the cable television because you could get superior video quality over the Web,” Ferguson said in a speech at the New America Foundation here.

Ferguson, described by Kerry aides as an unofficial campaign consultant, made statements that did not seem to track with Kerry’s record of supporting incentives over regulation. He said the U.S. lags South Korea and several other industrial nations in broadband penetration because cable and phone companies lack sufficient competition. Both industries, he added, should face more aggressive oversight from the Justice Department.

“One could make a reasonable case that there is an argument to be made that the cable industry could benefit from a little antitrust attention, too,” Ferguson said.

Ferguson is a nonresident fellow at the Brookings Institution (which is publishing the book) and a business consultant. He is founder of Vermeer Technologies, which developed a program for making Web pages called FrontPage.

Ferguson called for policies that would force open broadband networks and for authorizations allowing federal and local government to finance and operate competing data networks. “Those two things would really have a major effect,” said Ferguson, claiming that the cable-telco broadband duopoly was shaving 1 percentage point from the gross domestic product.

Looking overseas, Ferguson pointed to China’s broadband market was flourishing.

“I think China is a pretty good foreign model not everybody in the United States is acquainted with,” he said. “I think it is notable that there is this supposedly rather backward country that already has more DSL lines than we do.”

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