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