Hands off the Internet... No Broadband Regulation! Jae Jung Adam Leader Deidra Ritcherson Steve Ringer

Broadband Competition - No Open Access! b Gov’t Regulation is Unwarranted/Bad Policy b Gov’t Regulation Would Hurt Consumers b Open Access is Technically Difficult b Sufficient Future Intermodal Competition

Gov’t Regulation is Unwarranted b Gov’t Regulation Only If: Essential public service, e.g. utilityEssential public service, e.g. utility One provider of the public serviceOne provider of the public service b FCC Studies says investment is robust Evidence shows future choice of broadbandEvidence shows future choice of broadband b No Historical Precedent Regulation should be remedial, not preemptoryRegulation should be remedial, not preemptory It’s far too earlyIt’s far too early

Gov’t. Regulation Will Hurt Consumers b W/out profit incentive, cable companies won’t invest in infrastructure b Will slow overall broadband deployment. Consumers -- and FCC -- more concerned about rapid deployment than ISP choice b No choice = better for consumers

ISP Decision Factors Source: USA Today

Open Access is Technically Difficult b Speed of deployment/competition tradeoff b Multi-access to cable infrastructure unavailable b Will slow or HALT broadband deployment b Who will pay for FCC-mandated multi-access infrastructure? b Cable modems are proprietary -- big consumer switching costs

Future Sufficient Intermodal Competition b ADSL, Cable, Satellite, Wireless b Ability to choose between types of broadband delivers benefits of competition b FCC report: Balanced investment in all broadband technologies

Today’s Wall Street Journal Why Laissez Faire is the Washington Line “Antitrust enforcement is somewhat predictive, but it’s supposed to be rooted in facts, and the facts on cable driven broadband aren’t in. The Bells are gearing up to offer their own…version of high speed access, striking deals with AOL and other online-service providers. And again, wireless and satellite concerns hope to provide alternatives.”

Today’s Wall Street Journal Why Laissez Faire is the Washington Line … “What we wanted was for AT&T to do exactly what they’ve done: to have an alternative network that will offer competition to the Bells.” -- Reed Hunt, FCC chair during implementation of the 1996 Telecom Act

No Broadband Regulation! Rebuttal

Broadband Competition

Comparisons with the Act Comparisons with the 1996 Telecommunications Act b Need to make distinction between voice, broadcast, and data networks. b Comparing pre-Act telephone cos. (voice) to current cable cos. (broadband) is comparing apples and oranges. b Local telecom cos. had fully deployed infrastructure, current cable network cos. are just starting deployment

ISP content is not an important factor for consumers b recall market survey of factors impacting consumer choice of ISP (content is important for < 10% of residential users) b marginal value of ISPs’ content is minimal b consumers value quality of service and cost of service above all. competition between broadband technologies (not ISPs) will promote thiscompetition between broadband technologies (not ISPs) will promote this

Open Access will NOT foster competition at facilities level b ILECs are making ADSL investments because of competition from cable companies NOT from CLECs.