Govt. Should Keep Hands Off Video, Broadband, Panelists Say

The FCC’s hands-off role and its 4 principles of net neutrality were praised by John Kneuer, nominated by President Bush to become NTIA dir. (CD May 3 p12). “The Commission’s principles are a good start. I have a lot of faith that Chairman Martin will engage this” should there be problems, he said. The Bush Administration’s overarching goal is to deregulate “this competitive market,” said Kneuer.

Google, which wants net neutrality rules, was attacked by McCormick for being hypocritical. “Google wants to offer new services in the future, entertainment packages that may compete” with networks, McCormick said: “But Google doesn’t want to build networks for that… Google wants to raise the cost for everybody.” He said it wants customers to pay more for faster tiers of broadband service instead of paying to have bandwidth intensive content given priority on networks.

Govt. Internet intervention would cause more problems than it would solve, said McCormick and McSlarrow. A Google official’s warning on Capitol Hill 4 years ago that the Internet would be hurt by lack of net neutrality rules hasn’t been borne out, McSlarrow said: “Now their market cap is above $100 billion… I'm not exactly sure what the problem is.” Google didn’t immediately comment.

The one area where panelists differed sharply was on franchising. Bells want to offer video service to as many people as possible to snare so-called triple play customers, said McCormick, signaling rules aren’t necessary for full system buildouts to entire areas. Municipalities, who support competition, want to make sure there isn’t “cherrypicking” or “redlining” by telcos, said Libby Beaty, exec. dir. of the National Assn. of Telecom Officers & Advisors. “We agree the time is right for change,” she said: “If we're going to move to a brave new world, let’s do so in a more cautious fashion.”

Bells, some of whom have complained about franchising, don’t always start selling video even after getting local approval, said McSlarrow. He cited the case of Verizon, which he said took an average of 4 months to start sales after getting some franchises. “The franchise process isn’t stopping them from doing anything, because they weren’t even ready to deliver service,” he said. Verizon had no immediate comment.

Senate Commerce Committee Chmn. Stevens’ (R-Alaska) telecom bill, which gives cities 30 days to award a franchise (CD May 3 p1), means Bells can’t use the “excuse” it takes too long to get approval, McSlarrow told us after his speech. Asked whether he objects to a provision that would subject cable modem service to universal fund contributions, McSlarrow said: “We'll obviously be working with Senator Stevens… While we agree on the need to contribute,” NCTA is concerned.

Universal service block grants to states are a good idea, said several PUC commissioners at a lunch panel. “The block grant idea is a great idea,” said Colo. PUC Chmn. Gregory Sopkin. The proposal “has some merits to it,” said Mo. PUC Comr. Connie Murray. Congress would need to pass legislation allowing for it, said attorney Kathleen Abernathy, a former FCC commissioner: “Right now the money goes to companies. At least with the block grant idea, you might start moving away from the idea that some [companies are eligible and some aren’t.”

The 3 state commissioners on the panel agreed they'll need to make fewer rules because of increased competition. “The role of the commission will diminish,” said Larry Landis, comr. on Ind.’s Utility Regulatory Commission. “The individual state roles in regulating digital communication should be diminished over time,” said Sopkin. Internet protocol networks will spur change, Murray predicted: “If we regulate it, there will be technologies that get around it… The sooner we agree to it and get on, the better we will be.”

- Jonathan Make