After years of proclaiming that government should not pick market winners, four Congressmen place their bets on the phone network.
Congress was loathe to define "broadband" when it passed the Telecommunications Act of 1996. The job was handed to the Federal Communications Commission (FCC), which used flimsy evidence in its final report in docket CC 98-146, "Inquiry Concerning the Deployment of Advanced Telecommunications Capability," to decide that a speed of 200 kbits/sec fit the bill. But the FCC's report made two important caveats. The speed applied to communications from the consumer to the provider, as well as from the provider to the consumer, has to be a minimum of 200 kbits/sec. The report reads, "We define 'broadband' as having the capability of supporting, in both the provider-to-consumer (downstream) and the consumer-to-provider (upstream) directions, a speed (in technical terms, 'bandwidth') in excess of 200 kbits/sec."
This minimalist definition was derided by the fiber-optic industry but had a saving grace. The FCC left open the possibility that its definition could be temporary. The report states, "We have initially chosen 200 kbits/sec....[W]e recognize that as technologies evolve...we may find in future reports that evolution in technologies, retail offerings, and demand among consumers has raised the minimum speed for broadband from 200 kbits/sec to...a certain number of megabits per second." The cautious and temporary nature of the agency's findings was supported by FCC Commissioner Gloria Tristani, who said of the report, "I hope that we can build on this experience and improve our data and analysis for next year's report. To the extent the record compiled in this proceeding is inadequate, I hope we can ask more pointed questions in our next...inquiry."
Now come two loftily named bills to undo the FCC's caution and eliminate next year's report. HR 1685, "Internet Growth and Development Act of 1999," and HR 1686, "Internet Freedom Act," are jointly sponsored by Congressmen Bob Goodlatte (R-VA) and Rick Boucher (D-VA). Goodlatte describes HR 1686 as ensuring "that the Internet will reach its economic and entertainment potential." Boucher sees HR 1685 as leading to "greater broadband deployment and an increase in the speed by which people connect to the Internet from their homes and their places of work." Unfortunately, each bill defines broadband as "transmission capability in excess of 200 kilobits per second in at least one direction," thus allowing for the other direction's speed to fall well below 200 kbits/sec and thereby departing from the FCC's definition that each direction's speed be at least 200 kbits/sec. This broadband definition will take years to change if it becomes law.
The bills are one more attempt by the supporters of digital subscriber line (DSL) technology to get the federal government to front for them and mire the economy in the local telephone companies' poorly performing local loop. If this communications farce is perpetrated on the public, the companies can run for cover by saying "the government made us do it."
Here is Boucher's description of HR 1685: "Telephone companies will be required to file plans with state public service commissions for the deployment of DSL services in all local exchanges where the deployment is both technologically feasible and economically reasonable. Today, only 50,000 subscribers nationwide have DSL service. Our legislation will result in those numbers increasing dramatically....We also seek to encourage competition in the provision of DSL services by reducing the regulatory burden on the offering of DSL for telephone companies which agree to make reconditioned loops for the provision of DSL services available in a timely fashion to competitors."
Boucher's legislation raises an important question about the expectations for DSL's performance. Apparently DSL supporters are preparing for a nationwide scenario where upstream communications will hobble along at very much less than 200 kbits/sec, despite Goodlatte's claim that his bill "encourages competition through increased high-speed Internet access to consumers." With expectations like this, it is obvious why Microsoft invested $5 billion in AT&T's cable network rather than wait for the dialup network to improve.
HR 1685's open support for a broadband definition that neatly fits DSL's weakness slaps around the Telecom Act of 1996, which defined "broadband telecommunications capability...without regard to transmission media or technology." Imagine what would happen if Boucher's bill required telephone companies to deploy "fiber optics" instead of DSL. It would be denounced as "technology bias" and its sponsors would be severely criticized for making national policy fit their bias.
Goodlatte and Boucher want their colleagues to give DSL technology a congressional blessing, but Congress should take a lesson from the late Ron Brown, Commerce Secretary. In a letter to Lightwave (see December 1993, page 4), he wrote, "I distanced myself from the concept that Congress should legislatively appoint fiber optics as the technology of choice for national information infrastructure....The national information infrastructure should be driven by user needs, not by technological imperatives imposed by government." That sentiment should also apply to DSL.
The House bills have companions in the Senate, S 877, "The Broadband Internet Regulatory Relief Act of 1999," sponsored by Senator Sam Brownback (R-KS) and S 1043, "Internet Regulatory Freedom Act of 1999," sponsored by Senator John McCain (R-AZ). S 877 is marginally better than the House bills because it defines upstream speed as communications "from a consumer to a provider at a rated speed of 128 kilobits per second or above for access to the Internet or other interstate information and data services." The Kansan openly advocates DSL technology: "The most promising technology employed by telephone companies for residential high-speed Internet access is DSL technology."
Brownback supports DSL because he believes it is more likely to reach his rural constituents than the cable industry's hybrid fiber/coaxial-cable network technology. On the Senate floor he said, "Cable penetration is much lower in rural areas, whereas the ubiquity of the telephone network makes telephone penetration rates close to 100%, even in rural areas. Thus, for many rural consumers, including those in Kansas, high-speed Internet access may only be available in the next several years through the telephone network."
Brownback's justification for DSL as a rural panacea is mistaken. Low population density does not mean an area is more suited to DSL. Far more important is the distance from the telephone company's central office to the consumer's premises. A loop longer than 12,000 to 14,000 feet is not likely to provide steady DSL service, even at rated speeds of 128 kbits/sec. The greater the distance, the poorer the performance. This problem affects urban areas just as much as it affects rural areas. On the other hand rural towns where customers fit that limit are likely to get just as good a DSL service as urban customers. Thus, Brownback's reasoning is a death knell to suburban sprawl regions where housing developments are far away from the central office.
The purpose of McCain's bill is "to provide freedom from regulation by the Federal Communications Commission for the Internet." The bill says nothing about broadband speed, and McCain's supporting statement for the bill does not mention DSL. However, his reasoning and goals are the same as Brownback's-telephone ubiquity means the telephone companies should be unleashed to deploy DSL everywhere. "Our nation's local telephone company lines go to almost every home in America, and local telephone companies are ready and willing to upgrade them to provide advanced high-speed service," says McCain. "High-speed Internet access through cable modems is a comparatively costly service, about $500 per year....[T]he local telephone companies operate under unique legal and regulatory restrictions....This legislation will get rid of this unnecessary regulation, thereby facilitating the buildout of the advanced data networks necessary to give more Americans access to high-speed Internet service at a cheaper price."
Still wrong - McCain's reasoning is just as wrong as Brownback's. Neither one understands that they are buying a pig-in-a-poke, that DSL will nickel and dime users to death while falling far short of providing advanced services to "all Americans," as the Telecom Act requires. The legislation proposed by McCain, Brownback, Goodlatte, and Boucher embrace the absolute refusal of local telephone companies to rebuild the loop by laying new cable or drops.
The companies haven't recognized the opportunity given to them when AT&T paid $5400 per subscriber for MediaOne. Surely a new local system could be rebuilt for less than $5400 a subscriber, and if it can't, then maybe the price of the Internet revolution is too high for all of us.
Stephen N. Brown writes on public policy in telecommunications. He can be contacted by e-mail at firstname.lastname@example.org or telephone: (615) 399-1239.