How to Speed Up Broadband
If you want America’s broadband providers to put their foot on the gas, you need to have regulators take their foot off the brakes. FCC regulations still require telephone companies to build and operate obsolete copper-based telephone networks, even though the traffic on these networks has been quickly diminishing toward nothing. A recent study covered by the Washington Post explained why this is a problem.
Broadband platforms can do everything that the old telephone networks can do -- plus high-speed Internet, messaging, apps, and video. Duplication of networks means a duplication of costs, which means less investment in broadband and higher costs for consumers.
Anna-Maria Kovacs, the author of the report, found that telephone companies were required to spend more than half of their $154 billion investment in their communications networks between 2006 and 2011 on "maintaining fading legacy networks." Ninety-nine percent (and rising) of all U.S. communications traffic is now carried over Internet-based platforms -- wireline, cable, wireless, and satellite networks.
Until regulators modernize their rules to reflect the realities of the marketplace, outdated regulations will continue to have adverse impacts on telephone consumers. As the study suggests, "Regulation, however well-intended, changes too slowly for the fast moving digital world. It distorts the market and hinders innovation."
A good example of how cutting the regulatory red tape can benefit consumers can be found in Kansas City, where Google has begun to deploy a superfast fiber network. Unlike the telephone companies, Google has no regulatory obligation to maintain a copper-based network or provide voice services, and it can select its own "fiberhoods," allowing it to build out fiber at its own pace. The result is the potential for "gigabit" services for consumers. It would appear that allowing Google to experiment with innovation and investment serves the public much better than the regulatory "father knows best" approach.
To this end, the FCC recently opened a rulemaking proceeding to encourage company trials for cutting over to an all IP-based network. Congress is also considering rewriting the Communications Act to reflect the changing times. These are positive developments that could bring about better, faster, and cheaper services for consumers, but only if the new regulations don’t get in the way themselves.
Perhaps policymakers can learn from the Google example, speed the IP transition, and soften regulatory barriers to investment to all competitors. Indeed, it would be a shame to let another six years pass without action by the FCC, which may result in another $81 billion being dedicated to abandoned copper networks that only a small fraction of U.S. consumers will be using.
If we want to speed up investment and innovation, regulators need to get their foot off the breaks. Speeding up the IP-based transition will be a great benefit all American consumers.
Steve Pociask is president of the American Consumer Institute Center for Citizen Research, a nonprofit educational and research organization.