NCTA, Verizon Clash on Broadband Policy

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The cable industry and a giant phone company are clashing on whether the Bush
administration should endorse a deregulatory model for all broadband
providers.

The conflict emerged Wednesday in comments filed with the National
Telecommunications and Information Administration, the Commerce Department
division that is studying broadband deployment in the United States on behalf of
the White House.

At least one phone company -- Verizon Communications, the nation's largest
local telco, with 63 million access lines -- is pushing for a uniform national
policy under which all broadband services would be deregulated, allowing the
market to drive investment decisions.

The National Cable & Telecommunications Association warned against a
'one-size-fits-all' policy that applies the same broadband rules to cable
operators, phone companies and satellite carriers.

Without explicitly calling for continued common-carrier regulation of
broadband services offered by phone companies, the NCTA asserted that the NTIA
had to be mindful that different industries shoulder different forms of
regulation due to their different histories, even when they offer the same
services.

'Cable and DBS [direct-broadcast satellite] are a good example,' the NCTA
said, noting that unlike cable operators, DBS carriers do not need local
franchises or pay franchise fees.

Regarding the phone companies, the NCTA said they are regulated differently
depending on whether they are incumbents or new entrants and depending on
whether they are Baby Bells or small incumbent phone carriers.

The NCTA suggested -- but didn't actually state -- that establishing
regulatory parity between cable and incumbent phone carriers in the broadband
arena would be misguided because the phone companies deployed high-speed
facilities 'under a regulatory regime that shielded them from competition and
funded their investments with captive ratepayer charges.'

The association added that cable operators did not enjoy those same
protections.

Verizon said it favored a regulatory scheme that regulated based on the
services offered, rather than on the type of company offering the services.

'This is the surest method of preventing narrowband-voice rules from being
applied inappropriately to the broadband-data world,' the telco
added.

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