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Federal Communications Commission



Message to NCTA

May 13th, 2010 by Julius Genachowski - Chairman, Federal Communications Commission.

Cable’s story is a great American story.  It’s a tale of visionary entrepreneurs and pioneers who recognized the potential in a new technology, took big risks, and helped build an industry that in many ways has reshaped our nation.

Pioneers like Ralph Roberts, who, in 1962, thought it would be a good business idea to buy a 1,200-subscriber cable system in Tupelo, Mississippi; Charles Dolan and Gerald Levin, who had a crazy notion that people would pay for television; and Ted Turner, who saw a market for a “superstation” and later a 24-hour news network.

Taking advantage of opportunities that Congress and the FCC created, these leaders galvanized the larger cable industry to invest billions of dollars.  Cable soon emerged as America’s most popular entertainment platform, eventually attracting 62 million video customers and supporting 1.5 million jobs.

But it didn’t stop there.  A new generation of cable pioneers saw the future, and it was broadband.  Identifying a new world of technology solutions and business opportunities, and spurred by government measures that promoted the development of a competing satellite TV platform, cable innovators developed the cable modem, providing consumers high-speed access to the Internet. 

Since 1996, the cable industry has collectively invested many billions of dollars in broadband access networks, which itself has spurred telephone companies and others to invest massive sums in broadband, while also unleashing Internet companies, large and small, to invest massive sums in content, applications, and services that consumers access through broadband networks. 

Today, broadband is the indispensible infrastructure of the 21st century economy.  It is rapidly becoming our primary platform for innovation, economic growth, and enduring job creation.  A vibrant, ubiquitous, high-speed Internet — characterized by openness and freedom — is vital to our global competitiveness, to U.S. global leadership in innovation, and to our ability to design, develop, and distribute new Internet-fueled products here in the United States and export them to the rest of the world.

Broadband is vital also for helping solve pressing national challenges like education, health care, energy, and public safety – if  all Americans are connected, whether they live in rural towns, urban cities, or in between.  Broadband can give every American child real opportunity in our 21st century economy – if we ensure that all of our children have the digital tools, training, and broadband access they need.  Broadband can lead to better health care and reduce health costs – if all doctors, clinics, hospital, and patients are connected with broadband of sufficient speed to allow for remote diagnostics and the transfer of MRIs and other bandwidth-consuming information and applications.  Broadband can help accelerate a clean and lower cost energy future – if universal broadband is integrated with smart grids and powers universally accessible applications that reduce energy use.  And broadband can save lives – if our first responders finally have a mobile broadband communications network and we otherwise pursue policies to promote public safety and protect Americans in a broadband world.

Broadband is vital for free speech and for our democracy, for speakers to reach audiences without censorship and for expanding participation in the marketplace of ideas.  And broadband is vital for an improved and efficient e-government in the 21st century, providing better services to American citizens at lower costs.

I recognize and applaud the cable industry for its investment in America’s broadband future.  The existence of the cable broadband plant in the United States, in addition to the telephone companies’ infrastructure, provides us with the potential for a significant global competitive advantage. 

Still, we are not yet where we need to be when it comes to broadband.

The United States is lagging other nations according to key measures of network speed and adoption, threatening America’s global competitiveness. Some studies of network speeds place the U.S. as low as 18th globally, and the overall U.S. adoption rate of 65% compares to over 90% in some other countries.  Many communities in America are lagging even further behind in broadband adoption, including rural Americans, minorities, low-income citizens, and Americans with disabilities. More than 93 million Americans don’t have broadband at home, and 14 to 24 million live in areas where they couldn’t get it if they wanted it.

Meanwhile, the rest of the world increasingly recognizes the power of ubiquitous, high-speed Internet access to spur innovation and job creation in their countries.

One illuminating and alarming study looked at broadband and several other key metrics relating to competitiveness and innovation.  It placed the U.S. 40th out of 40 industrial countries ranked in “the rate of change in innovative capacity.” 

For the U.S., when it comes to broadband, to stand still is to fall behind.

For these reasons, I was pleased that Congress entrusted the FCC with developing a National Broadband Plan, which the FCC released in March.  The Broadband Plan ranks among the most important projects in FCC history.  Broadband networks are our 21st century communications networks.  As the Commission said unanimously in its Joint Statement on Broadband: “Working to make sure that America has world-leading high-speed broadband networks—both wired and wireless—lies at the very core of the FCC’s mission in the 21st Century.”

The National Broadband Plan is guided by a set of three principles aimed at realizing the transformative power of broadband and grounded in experience.

First, the private sector must play the leading role in extending broadband networks across our nation, and a healthy return on investment is both desirable and necessary to spur risk taking and capital investment in broadband.

The United States is one of few nations where cable is the major broadband provider. And because of the investments in DOCSIS 3.0 upgrades, cable’s networks offer fast and increasingly faster speeds in many markets.  And just as satellite TV was a positive competitive spur to cable’s development of the cable modem, the cable broadband infrastructure has been a positive competitive spur to the telephone companies’ development of fiber and other competitive high-speed networks.  The Broadband Plan sets ambitious goals of 1-gigabit service to at least one public anchor institution in every community, and affordable 100-megabit service to 100 million households.  Cable and telco broadband infrastructure are essential to achieving those goals.

As with broadband deployment, the private sector has an equally essential role to play in spurring broadband adoption.  The costs of digital exclusion are high and getting higher.  Broadband access is increasingly necessary for finding and applying for jobs, and digital skills are increasingly necessary for being eligible for jobs.  Broadband access is increasingly necessary for education, for health care, for basic safety.

I commend NCTA and the cable industry for its “Adoption-plus” initiative and for its leadership role in the Digital Adoption Coalition, a public-private partnership working to invest in making discounted equipment, service, and training available to lower-income urban and rural areas.  These are strong first steps.  I look forward to energetic implementation, to working together, and to achieving results.  Everyone wins if we can increase broadband adoption from 65% to the National Broadband Plan’s 90% goal for 2020, and ultimately to universal adoption.
   
The second principle is that smart, but restrained government policies can have a positive impact on industry growth.

Historically, cable has been a beneficiary of pro-investment, pro-competition policies.  In the 1970s, the government pushed through opposition from competing industries and adopted policies to remove barriers and accelerate cable television service, including creating low-cost opportunities for cable pioneers to deploy their infrastructure on utility poles nationwide.  In the 1980s, the government nurtured and incentivized cable’s growth by ensuring that competition to cable would be fair and healthy.  And in the 1990s, the government green lit cable’s entry into the local voice business, and telephone’s entry into video. These and other smart government policies fueled cable’s explosive growth, ensuring the construction of the wired broadband infrastructure we have today. 

The National Broadband Plan builds on this history with recommendations to lower the cost of broadband deployment, for example by cutting red tape around pole attachments and rights-of-way.

It also calls for a once-in-a-generation transformation of the Universal Service Fund from supporting yesterday’s telephone service to tomorrow’s broadband access service – doing it in a way that reforms and wrings savings out of the existing fund, as we put in place a new Connect America Fund that will efficiently support broadband service.

Finally, the National Broadband Plan is guided by the principle that competition in a free market is essential to drive innovation, encourage investment, and spur consumer benefits. 

A specific area where the plan includes recommendations to unleash competition and innovation is in the smart video device market.  Just as a shopping mall presents customers with numerous retail outlets, smart video devices can offer viewers a single window into pay-TV content, Internet content, and content that a viewer has already bought or archived.  Consumers want devices that can navigate the universe of video programming, from multiple sources, in a simple integrated way.  But there is not enough competition driving innovation.  Last month the FCC launched a proceeding to establish new standards and spur competition.  The NCTA’s consumer principles are playing a constructive role on policy development relating to the integration of traditional TV and the Internet experience, and I’m pleased that cable’s leaders have embraced our goal to drive innovation in this area.

I’m also pleased that last week the Commission took an important step involving selectable output controls to enable a potential new business model for content creators and cable companies, in a reasonable way that enhances consumer choice and guards against piracy. 

I believe that to spur competition we need an Internet that is both open and trusted, that meaningfully protects consumer freedom and choice, incentivizes innovation both in the core of broadband networks and on the edge, and ensures that businesses can develop business models that provide a real return on investment and protect intellectual property.

The National Broadband Plan also includes recommendations to promote transparency to broadband subscribers, and otherwise provide basic protections to consumers, innovators, small businesses, and new entrants from all regions and all communities.  And it recommends steps to address vital public safety and cybersecurity challenges raised by our country’s shift to broadband communications networks.

Since the plan was delivered to Congress in March, the breadth and depth of the support and praise has been encouraging, and a real testament to the FCC staff who worked so hard to run a fair, open, and data-driven process, and to develop ideas to drive toward U.S. leadership in broadband.  In a space where consensus can certainly be elusive, more than 3,000 companies throughout the broadband ecosystem, nonprofit organizations, and others have applauded the FCC staff’s work.

Unfortunately, the D.C. Circuit’s recent decision in the Comcast case raises serious questions about whether the legal framework the FCC chose nearly a decade ago is adequate to implement key provisions of the National Broadband Plan, including universal service reform; basic protections for consumers, innovators and entrepreneurs; public safety and cybersecurity; and others.
 
The court decision has not changed our broadband policy objectives one iota. But it did damage the legal foundation underneath these objectives.  I was comfortable with the Commission’s prior approach. We defended it in court; we argued that Title I gave us the authority we needed. But the court disagreed. This decision creates uncertainty, and risks compromising our common goals of pursuing world-class broadband for all Americans. 

We’ve now got to fix the legal foundation.  The design concept for the solution we’ve proposed is simple:  let’s find a solid legal foundation to move forward on key policy outcomes previously identified without doing anything more than necessary to achieve that purpose.

Last week, I proposed a narrowly tailored approach to do that.

It rejects both extremes – the extreme of doing nothing, and the extreme of imposing massive regulations on broadband.

Under this light touch approach, the FCC would invoke only the handful of provisions in the Communications Act necessary to achieve limited but essential broadband goals.  This is not about unbundling and price regulation. It’s about fixing the basic legal foundation – having a narrowly tailored path to move forward on previously identified policy outcomes.  We’re going to continue to rely on competitive markets.  

This Third Way approach is modeled on approaches that have worked and continue to work -- for example, the regulatory framework for mobile voice communications, which involves select application of a small number of Title II provisions and broad forbearance.  That approach, in place for many years, has provided certainty and confidence, and I am committed to ensuring that it provides the same certainty and confidence as applied to broadband access.  Indeed, today over 800 rural telephone companies voluntarily provide broadband access under a Title II framework that is less clearly delimited than the Third Way I have proposed.

Will this approach serve as the basis for a broad restructuring of how broadband providers do business?  No.

Will it serve as the basis for regulatory creep?  No. And we’ve suggested ways to have clear and lasting boundaries against regulatory overreach.

The American people rightfully expect a reasonable and solid legal framework to promote broadband everywhere, to protect fair competition, to protect consumers, and to preserve the freedom and openness of the Internet and its ability to remain a platform for innovation, job creation and free speech.

I will ask my Commission colleagues to join me in soon launching a public process on the issues raised by the court decision and inviting new ideas.  This process would begin with a Notice of Inquiry and Notice of Proposed Forbearance that seek public comment on our proposed approach, along with any other approaches, for restoring the pre-Comcast status quo framework.

I call on the cable industry and all stakeholders to work with us productively to secure a solid legal foundation for our broadband future, and to implement policies that will promote the kind of innovation, investment, and entrepreneurship exhibited by cable’s pioneers. 

The Comcast decision has created a problem.  Let’s approach it with the philosophy of the business community: let’s work together to solve it.  Together, we can ensure that the U.S. has world-leading broadband deployment and adoption, and that our country can realize the benefits of broadband’s transformative power to fuel our economy and improve the lives of all Americans.

3 Responses to “Message to NCTA”

  1. Rural and Dial-up User says:

    In the time now of days broadband companies don't want to take a Risk to get there service into places like rural areas or small towns because they see it not profitable enough. Were I live the DSL provider up here is Verizon and before I moved up here during the house buying boom last year and when I got up here and settles the limited DSL connections were all full so I had to settle with Dial-up because with Satellite"max 17GB Cap" or 3G" 5GB Cap" is Bandwidith limits and I would use up the bandwidth limit so quick on the upload and download so quick with 3G I would reach max in 3 days and satellite I would run out in middle of month.

    I do so much normally like the Game Maps that I make are Min. 30MB each and with dial-up companies like mine"NetZero" now block 99% UDP ports so you can't even play small games like Unreal tournament GOTY or Battlefield 1942 that were made around the time were Broadband was slowly popping up and Dial-up was around. Also were I live"Phelan, CA" there is a Fiber optic line right by my house that link 2 citys with I think FiOS but I can't get it because I am not zoned so I can only get Dial-up and broadband not being available

  2. The Cable Pipeline - Len Grace says:

    Mr. Chairman,

    Thank you for your comments regarding and recognizing the importance of private investment as the tool that has proven successful in propelling broadband to where it is today. It is commendable that you have sought to address the concerns of many associated with the proliferation, access, adoption, freedom and investment in High-Speed Internet.

    Is broadband in America where we would like it to be today? No, and the plan to get us there must have the commitment and dedication from all parties involved to see the goals and objectives set forth by the National Broadband Plan come to fruition.

    You’re leadership role in this endeavor is critical as the primary regulator of the telecommunications agenda. Private investment and robust competition have proven time and time again to be the best solution to dynamic market economics and profitability, not heavy handed regulation. To that end, the realization of creating and maintaining a delicate balance of public and private roles, to reach a globally competitive broadband landscape, truly must be a collaborative and open process.

    You’re willingness to listen, collaborate, and ask for ideas in this process, gains my respect and admiration as a leader and promoter of a better life for all Americans.


  3. Gene B Griswold Ombudsman says:

    Dear Chairman Genachowski,

    Thank you for the opportunity to share my thoughts and feelings with you regarding the current business of the FCC and the Third Way proposal.

    I have watched patiently and quietly as you have, during your watch, taken control of the FCC and created a new and streamlined administrative communications commission which will carry us into the 21st century and beyond.

    On numerous occasions I have commented to my friends and associates, some of whom are in the broadband business, on what a fine job you are doing, and that you are the man on the move. The new website, www.broadband.gov, is very good and very informative. The work is outstanding.

    Unfortunately, now I am left with egg on my face as I learn of your plans to assume control of broadband under the Third Way proposal. I believe that you and your staff are capable of coming up with a better plan than that. I believe that possibly it is not even your plan but that of the Obama administration and people who don’t have a clue about broadband and information services.

    Maybe you cannot stand up for what is right. Maybe you really don’t know what is right. Listen to the people who built the Internet and the people who use the Internet.

    The Third Way is the Wrong Way.

    The Internet which your plan is so keen on preserving intact is a virtual “sewer system” containing every sickness, disease, perversity, virus, malware, and more, known to man. You want to insure that all of this is available to my daughter when she sits down at the computer. I have a problem with that.

    I keep reading about the “Comcast” case. How ridiculous. You, or anyone, using that incident as an excuse or foundational argument to justify your behavior at this time is akin to passing a Bill to re-pave all the streets inside the Beltway because a senior citizen tripped on a pothole in Arlington.

    America was built by free enterprise and the corporate community. The Internet was economically driven for the first 10 years of its existence by pornography and gambling related websites. You showed no interest in taking it over then.

    America’s corporate community created the Internet that America, and the world, know and use daily, at their expense of tens of billions of dollars. Not tax dollars but those of Investors, stockholders, and plain American citizens.

    The US Government, the Obama administration, the FCC, and not even you were involved to any material extent. Now you want to step in and take it over? I hear Dell has a pretty good computer business going. Why not go to California and kick them out and then you can be in the Computer business! Wait, maybe the FCC would really like to be in the cellular phone business. There is a fantastic company called Apple. Just kick out the management, void the shareholder agreements and Bango! That’s how we do it these days…. Right? That’s the new FCC way??? That’s the Third Way or Fourth Way or Fifth Way?

    Once upon a time, a monkey was very hungry and walking through the forest when he stumbled upon a jar of peanuts. The jar had a very narrow opening but he could squeeze his hand inside the jar and grab a fistful of peanuts. The problem was that with his hand full of peanuts his fist was too large to squeeze back through the mouth of the jar. He was so greedy he would not release his fistful of peanuts. If he had eaten the peanuts a few at a time he would have been full and happy. No, he had to have them all. He was a greedy monkey. He starved to death clutching that fistful of peanuts.

    You are all starting to look like “Greedy Monkeys”.

    This is upsetting a lot of people and a lot people are growing very tired of these shenanigans. 2012 will come and there will be another election. Everything is temporary. Even your job. Things change. Count on it.

    Signed:

    Gene B Griswold, Ombudsman

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