For the past eight years, I have seen a movement away from critical open access, and toward a monopolized Internet. It’s time for change.
In 1996, during the end of Clinton’s first term, congress passed the 1996 Telecom Act, opening voice and data communications to competition. This historic event ushered in early innovators such as Covad Communications, one of the first competitive carriers, and one of the first telecom companies to offer DSL service. Cable, telecom, and ISPs all engaged in years of competition and innovation, resulting in the relatively widespread availability of broadband access and services we see today.
But for the last four years, the FCC has subscribed to a different mandate, and there has been a huge roll-back. It’s a philosophy called the “multi-modal competition model”, and the basic premise is that less competition is good. While it makes little sense, that philosophy has informed key decisions by the FCC that affect the quality, price and innovation of Internet access that consumers can purchase today.
The multi-modal concept simply says that “One choice of Cable Internet versus one choice of DSL Internet is enough competition”, and that eliminating the common carriage wholesale requirements will free these two giants to make investments and grow availability. In other words, if you can get Internet in any form from just two providers, the market will probably take care of itself. There was some thought that wireless and powerline based Internet would also be in the mix, but neither of these have been relevant. So, what we’re left with is a duopoly. Ever seen vibrant innovation or really competitive pricing in a duopoly?
Under this multi-model concept, the FCC first decided that Cable companies would be free from the requirement that telecom carriers had to wholesale services to ISPs. Then, when telecom carriers appropriately pointed out the inequity in that, they eliminated the requirement of them too. This leaves ISPs without the ability to sell services to customers, and hands the entire ISP business to the Cable and Telco firms.
The Telecom Act is intact, but barriers to entry are very high. This takes the typical ISP who buys wholesale services out of the picture, leaving behind only regulated competitive carriers. (Sonic.net has formed a telco carrier for this reason in order to remain a going concern.)
I visited the FCC myself to speak to staff about these issues. It was clear that the democratic minority appointees to the FCC understood the need for competition, but that the issue was being decided by the administration. I think it’s time for a change to that administration.
McCain’s close ties to large telecom firms promise four more years of this broken non-competitive concept at the FCC, and I believe that’s inherently bad for consumers.
Obama on the other hand has addressed the issue head on, and has a stated goal of open access. This includes honoring the principals of network neutrality, and hopefully, vibrant competition again instead of simply giving the Internet as a whole to the monopoly Cable and Telco.
For more on the history of our country’s march backward on broadband competition, see:
FCC v. Brand X
FCC forbearance on Fiber wholesale
FCC forbearance on DSL and Broadband wholesale