Copyright 2002 Globe Newspaper Company The Boston
Globe
May 23, 2002, Thursday ,THIRD EDITION
SECTION: BUSINESS; Pg. C1
LENGTH: 843 words
HEADLINE: DTE
CHIEF SEES NO CRISIS IN BROADBAND VASINGTON ENDORSES HIGH-SPEED NET SERVICES
DRIVEN BY FREE MARKET
BYLINE: By Peter J. Howe,
Globe Staff
BODY: Massachusetts' new
top telecommunications regulator said yesterday that there is "no crisis in broadband deployment" and urged government officials to depend on
the free market to promote wider, better-priced access to high-speed Internet
services.
Testifying before the US Senate in
Washington, D.C., Paul B. Vasington, named chairman of the state Department of
Telecommunications and Energy by Acting Governor Jane M. Swift this month, said
the latest DTE figures indicate Massachusetts has more high-speed Internet lines
per resident than any other state, trailing only the District of Columbia in
broadband access. Citing company confidentiality, the DTE did not release the
exact number.
Broadband advocates
bemoan the fact that barely 10 million US homes have signed up for high-speed
Net service. But, Vasington said, "The so-called problem is that most people do
not want to pay what it costs to deliver the services because they don't see the
value as being equal to the cost," typically $46 to $50 a month.
"The question we should be asking is: Are there customers
willing to pay what it costs to serve them who can't get services? If so, we
should look for the barriers that are keeping suppliers from these customers,"
Vasington said. He added that "if the issue is just that people are not willing
to pay for services that we think they should want, then there is little role
for government."
Verizon Communications has said it
will not expand availability of digital subscriber line Net access beyond the
current 60 percent of Massachusetts phone lines unless Congress curtails
requirements that the company share its upgraded networks with competitors.
AT&T Broadband has outlined plans to add cable modem service in Boston and
13 suburbs this year, but has yet to upgrade dozens of cable franchises for
high-speed Net service, citing a lack of capital.
The
Massachusetts Software and Internet Council and the Mass. Tech Collaborative, a
quasipublic agency in Westborough, have been pushing a "Mass. Broadband"
initiative for months to try to speed the rollout of high-speed Net services to
unserved areas of the Bay State, particularly rural parts of Central and Western
Massachusetts, where the collaborative wants to create a buyers' cooperative as
it has in Berkshire County.
As the US Senate's
Commerce, Science, and Transportation Committee continued hearings on broadband
policy, ranking Republican John S. McCain of Arizona - authorized to call just
one witness - tapped Vasington.
While some consumer
groups and Beacon Hill Democrats welcomed Swift's replacement of former DTE
chairman James Connelly with Vasington, saying they expected Vasington to be
more fair-minded, his Capitol Hill Washington testimony confirmed Vasington's
longstanding description of himself as a free-market Republican.
Vasington said he does not see the recent spate of bankruptcies of
small Verizon Communications competitors as "demonstrating the failure of
competition" as promised by the 1996 federal telecom act.
While the number of competitive local exchange carriers, or CLECs,
operating in the state has plunged in the last two years, Vasington said CLECs'
overall market share has continued to grow, to 21.1 percent of all wireline
phone lines in the state as of December.
"The problem
may be that we are trying to judge the success of competitive markets based on
our expectations from our long experience in a regulated environment," Vasington
said. "Markets . . . are characterized by creative destruction. There is
turbulence, customer dislocation, business failure, supply rushing ahead of
demand and vice versa."
Vasington said he does see some
roles for state and federal policy makers: creating "a sound economic
foundation" at the macroeconomic level, cutting taxes on telecom services,
making it easier for phone companies to build wireless towers and lay cables,
and improving access to airwave "spectrum" for new wireless services.
On the issue of Baby Bells pushing for deregulation that
would limit requirements they share their networks with broadband service
competitors, Vasington backed as "legitimate" the current rules requiring phone
companies to make their existing copper phone lines available to competitors who
provide high-speed Net access over digital subscriber lines.
But, Vasington said, "There is a legitimate concern about the next
generation of broadband services, most likely fiber-based - which will be
capable of delivering much higher speeds to customers. Unless the prices charged
for access to this new infrastructure adequately cover the risk of the
investment, network companies will be reluctant to provide next-generation
broadband services."
Vasington said regulating rates
for access to old phone lines but imposing no rules on new infrastructure "is a
compromise that could form the foundation for a policy that truly promotes local
telecommunications competition as the means to greater broadband deployment."
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