The FCC is Obscuring Intent with the Third Way

Today is my final review of the "Third Way" as proposed by Julius Genachowski, FCC Chairman. While we have discussed Sections 201 and 202, I do not plan to spend time examining the impact of Section 208, which gives carriers, businesses, and consumers the ability to complain to the FCC if an incumbent carrier has violated the rules outlined in sections 201 and 202. It seems somewhat obvious. Nor do I wish to analyze Sections 222 and 255, which address customer privacy issues and conformance to the Americans with Disabilities Act of 1990, respectively. Instead, I see Section 254 as the regulation where the FCC may attempt over reach again and negatively impact the IP community.

Section 254 deals with the Universal Service Fund (USF) and potentially Inter-Carrier Compensation (ICC). Previously, the FCC has ruled that section 254 applied to telecommunications carriers and that did not include Internet service providers (ISPs) and broadband carriers. However, it is clear with the release of the National Broadband Plan (NBP) that altering this situation is a priority.

The USF is used to expand telecommunications into "unserved" areas of the country, and while this has been a good way to address primarily rural geographies and the infrastructure of telecom networks as it applies to phones, it has not been effective with regard to the Internet and broadband. The FCC has determined the USF's goals must be expanded to include the delivery of broadband and wireless networks to markets that cannot naturally support the cost or services. With regard to broadband, I disagree with this position.

Applying Section 254 to broadband carriers, the ISPs and ITSPs, such as Broadvox to support changes to the USF is premature. As I discovered in reviewing the true current state of broadband in the US, our priority should be improving broadband access in "underserved" areas and improving the speed of broadband. This effort would position a vast majority (90%) of the country to be more competitive regionally, nationally and globally. This effort would benefit the economy by providing jobs, supporting the deployment of new services and applications and excite a new generation of entrepreneurs. It is not surprising the only the Republican members of the FCC, Commissioners Robert McDowell and Meredith Baker, oppose applying this and the other five sections to address net neutrality and the USF. In the case of Section 254, I believe they are right. However, the FCC changes proposed to ICC rates may be workable and improve the atmosphere for new investment by the carriers.

Section 254 is desired by the FCC to implement a new carrier regulatory scheme to support what I believe is an incorrect conclusion. In another five, 10 or even 20 years, perhaps using government to push the expansion of broadband into weak markets may be appropriate. However, today, it is the wrong thing to do. We are not leading the world with the speed of available broadband, adoption rate, nor access. First, we should address the needs of the nation as a whole and then the feel good efforts associated with ubiquity.

See you on Monday with that recipe for fantastic cannelloni. Have a great weekend!