December 19, 2001
The Computing Technology Industry Association’s Comments: Response to the Department of Commerce National Telecommunications and Information Administration’s Request for Comments on Deployment of Broadband Networks and Advanced Telecommunications [Docket No. 011109273-1273-01] RIN 0660-XX13
Introduction
The Computing Technology Industry Association (CompTIA)
represents over 8,000 members worldwide in the converging computing and
communications markets. A
substantial portion of CompTIA’s membership consists of voice and data
resellers.
These companies provide telecommunications services
either directly to end users, or indirectly, by servicing companies that provide
direct end-user telecommunications services. CompTIA’s communications resellers
depend on competitive broadband services to stay viable. For CompTIA, the widespread deployment
of, and access to, high-speed services also means something further -- through
ubiquitous broadband, more Americans will be able to share in the rich benefits
that information technology (IT) has to offer.
The best way to advance the deployment of high-speed
broadband services remains full, and vigorous enforcement of the
Telecommunications Act of 1996 (the Act).
A regulatory environment that allows competitors access to essential
network facilities is the most effective means to deploy high-speed broadband
technology.
Using The Act Against Itself Thwarts
Competition
The Act’s Conference Report notes that the law was
crafted to:
“[P]rovide for a pro-competitive, deregulatory national
policy framework designed to accelerate rapidly private sector deployment of
advanced telecommunications and information technologies and services to all
Americans by opening all telecommunications markets to
competition…”
Toward this end, the Act has thus far met with modest
success. Billions of dollars have
been invested in competitive broadband infrastructure. High-speed services have begun in
earnest to make it into homes and small businesses. Many schools, libraries and hospitals
across the nation are now tied to the Internet.
But, nearly six years after the Act’s, the results still
remain mixed. Though a newly
competitive market has sprung into existence, one needs only look to the spate
of recent telecom company failures to see that something is not working. In this regard, CompTIA believes a trend
has emerged: The Act could truly work but for the continued foot dragging of the
Regional Bell Operating Companies (RBOCs).
According to industry and FCC estimates, broadband has
yet to penetrate much more than 10% of the market, even though additional
studies indicate that 85% of American households have broadband services
available to them. Where it does
exist, broadband cable and competitive DSL push, prod and poke the RBOCs into
making similar service offerings available. The RBOCs – which serve nearly 90
percent of all American access lines – have clearly and consistently thwarted
Congress’ goal of promoting rapid private sector deployment of advanced
telecommunications and information technologies to all Americans. Their main tool in delaying deployment
is the Act itself.
For Broadband To Proliferate, The Act Must
Work
The Act sets out a balanced “carrot and stick” approach
that was intended to spur local competition. Section 251 of the Act affirmatively
requires all local incumbent providers to open their networks to
competitors. Section 271 of the Act
allows the RBOCs into in-region, long-distance service once their markets have
been sufficiently opened to competition.
Because the RBOCs then controlled more than 85 percent of the local loop,
this comprehensive scheme was designed to give RBOCs what they wanted – i.e.,
in-region, long distance services -- only after they had given the market
what it needed – i.e., real and meaningful competitive access to the local
loop.
In crafting the Act, Congress recognized the myriad
barriers to competitors. As the
Act’s Conference Report states, “it is unlikely that competitors will have a
fully redundant network in place when they initially offer local service,
because the investment is so significant.” To mitigate these obstacles, Section 251
provides competitors with three primary entry tools: resale of incumbent
services; interconnection of a competitor’s own facilities onto incumbent
networks; and the lease of unbundled networks elements (UNEs) from incumbents.
Because full duplication of an incumbent’s network is
expensive and largely unnecessary, interconnection of competitive facilities,
combined with UNE leasing, has emerged as the most important manner for
competitors to provide access to unique, service-oriented, and flexible
competition to business, residential and rural customers. Purchasing network elements – such
as the “loop” used for voice and DSL provision; switch ports; switching
transport; signaling systems; and databases (e.g., OSS) – at reasonable,
cost-based pricing has furthered the goals of the Act.
If competitors are denied UNE, the only other
alternative is for each competitive local exchange provider to invest
significant capital to duplicate the “last mile” of the RBOC network. Such an investment is unrealistic,
inefficient, and contrary to the purpose of the Act. The existing RBOC networks took nearly
100 years to develop as a government sanctioned monopoly. Any regulatory reversal of full and fair
access to the last miles is an abandonment of the core principles set forth in
the Act, and therefore requires formal congressional approval.
The duties imposed upon incumbents take into account the
evolving nature of technology.
Importantly, nothing within the law limits the Act’s effect to “legacy”
networks only. Incumbent bottleneck
facilities that allow the provision of high-speed services must also be provided
to competitors through the Section 251 process.
Furthermore, crafting separate policies for voice and
data is antiquated. The future of
communications services is digital.
Creating separate policies for voice over “legacy” networks or data over
broadband is obsolete. DSL is
evidence that data can be carried over legacy networks and “voice over IP”
technology is an example of the future of digital voice transmission. Developing separate policies for voice
and data and/or their networks is misguided and
unrealistic.
With the Act, Congress created a foundation to open up
the local loop. However, nearly six
years and many court challenges later, the incumbent industry still largely
thwarts competitive access to the benefits of Sections 251 and 271. One needs only look to the long-distance
entry of RBOCs to see how far local competition has come. To date, the RBOCs can provide
in-region, long-distance service in only eight states. In 42 other states, Section 271’s
14-point competitive checklist – what the RBOCs should already be accomplishing
through Section 251– remains unfulfilled. Quite simply, for broadband to
proliferate, the Act must be made to work.
Further erosion of the Act’s market-opening obligations will lead to
fewer competitors on incumbent facilities.
The FCC Needs More Enforcement
Authority
The FCC has been charged with implementing and enforcing
the Act’s requirements. Instead of
weakening its competitive entry rules, the FCC must vigorously enforce
compliance. Each year, incumbent
local providers pay many millions of dollars in fines for violations of the
Act. According to Michael Powell,
Chairman of the FCC, “For many large carriers the penalties could be absorbed
as the cost of doing business.” In Powell’s estimation, rules guiding
competitive entry are “meaningless without a credible enforcement effort to
back them up.”
In this regard, Powell has called on Congress to give
him more enforcement power.
Local competition for legacy and high-speed services will be better
served by rigorous enforcement of existing law.
H.R. 1542 Will Stop American Broadband
Deployment
One proposal that will discourage high-speed deployment
is H.R. 1542 (Tauzin/Dingell), a bill sponsored by Representatives Billy Tauzin
and John Dingell. Ostensibly
designed to promote the spread of broadband, H.R. 1542 would significantly
undermine the Act by shutting down competitive UNE access to incumbent
high-speed infrastructure. In addition, H.R. 1542 would allow the Bell companies
to provide long-distance, high-speed services in their territories without first
opening their local markets to competition. In short, both actions would eviscerate
the strong incentive for the RBOCs to open their networks to competitors.
For nearly a decade the RBOCs had access to high-speed
technology, such as DSL, but failed to deploy it. Not until the Act was implemented and
competition injected into the marketplace did the RBOCs offer DSL. Telecommunications competition has
resulted in more choices, lower prices, and better services for American
consumers. Today, competitors carry
60% of the Internet traffic at rates 10-50% percent below RBOC rates. It will drive up costs and drive out
innovation by drying up the competitive provision of
broadband.
As
noted above, CompTIA's members -- particularly its small and medium sized IT
solution providers -- depend on a competitive broadband market to help them sell
their IT wares to end users.
America depends on competitive broadband, too. Hundreds of billions of dollars of our
economy flow through high-speed networks.
Competitive broadband means this will grow, fostering new and exciting
gains that will benefit all consumers in our IT-dependent economy.
Broadband cable, competitive DSL, and other emerging
high-speed technologies have pushed this growth along. Though still small, approximately 10
million Americans have some form of high-speed services in their homes or small
businesses. Competitors have been
able to stake a modest claim to the market because of a relative lack of
regulation. This asymmetry was
purposely built into the Act as part of the “carrot and stick” approach thought
best to push competition, wherever, and in whatever technological form, it
took. H.R. 1542, if passed, would
upset this balance, jeopardizing the nascent Internet economic environment by
forcing competitors to erect prohibitively expensive and redundant
networks. This likely outcome would
inhibit severely the spread of competitive broadband throughout
America.
Passage of the landmark 1996 Telecommunications Act was
significant in several ways.
One important characteristic of the Act was that it was the end product
of comprehensive deliberations that occurred in both chambers of Congress over
several years. These comprehensive
and open deliberations resulted in a balanced product on which all members were
able to vote. CompTIA strongly
objects to any regulatory effort to implement the provisions or intentions of
H.R. 1542 without these policies having been fully debated and approved in
Congress.
Dramatic rewrites of the telecommunications act, such as
(H.R. 1542), should not be adopted at all, much less through regulatory actions
without the approval of Congress.
Such a process of policy implementation lacks integrity and undermines a
fair and open debate.
Rural Broadband
In promoting the deployment of high-speed services in
rural, insular and low-income communities, one way of achieving this goal is
through Internet broadband tax credits. Such an approach has been taken in
both Senate and House legislation, to promote greater deployment of high-speed
facilities in rural and low-income areas.
Tax credits for current and next generation high-speed services could
push high-speed deployment into served areas without undermining the 1996
Telecommunications Act.
Conclusion
In sum, the best way to promote the widespread provision
of high-speed services remains full, vigorous and uncompromising enforcement of
the Act. Granting the FCC greater
enforcement abilities, allowing for the passage of an Internet Broadband Tax
Credit, and refusing to import current universal service policies to the
high-speed marketplace will also help accelerate private sector deployment of
advanced telecommunications and information technologies to all
Americans.
Any questions regarding these comments please contact
Thomas Santaniello, Public Policy Manager (703) 812-1333 ext. 204 or email tsantaniello@comptia.org