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Critics spotlight lack of competition in FCC's broadband plan

Less than a week after the release of the FCC's broadband plan, a chorus of criticism is growing. A top concern: there's not enough in there to increase competition.

Yochai Benkler, a professor of law at Harvard University, has extensively studied the impact of open-access policies in other nations and the impact that practice has had on competition. In short, he found that competition increased, and prices went down.

Those were among the findings Benkler presented in to the FCC last year, only to get lambasted by the telecom and cable industries. They picked apart his analysis in a letter-writing and lobbying campaign, and the agency's broadband task force ended up not including Benkler's open-access recommendation in its national broadband plan.

Too bad, Benkler said in a Op-Ed piece in the New York Times, over the weekend. Other recommendations to increase competition in the plan are good, but only kick the can down the road he said.

To get the $33-a-month rates for broadband, unlimited long-distance calling and high-definition television service that is offered in 70 other nations, the U.S. needed to include open-access policies, he said.

Open access policies would require cable and telecom ISPs to open their lines to competitors who would directly offer services to consumers on the networks of the biggest national providers. Local carriers who would be forced to share don't like the idea and say it's unfair for them to sink money into costly networks only to have competitors come in and take advantage of their networks.

But Benkler said options aren't black and white.

"And to be fair, it is expensive. But other countries are exploring creative ways for competitors to share the costs and risks of fiber investments, sometimes coupled with public investment, so that incumbent companies can accommodate competitors without unnecessarily hamstringing themselves," he wrote.

My Post colleague Rob Pegoraro goes after competition as well in a column Sunday.

If those measures work as planned, we should have more choices for wireless broadband. But wireless carriers may not charge any less and could exert the same control over which devices we can run on their networks.

For faster connections, most of us will continue to be stuck with the same two wireline providers: the phone company and the cable company. Which, in turn, means that the cost of connectivity -- what the FCC's own research identified as the biggest factor holding back broadband -- isn't likely to get much lighter.

The Washington Post's editorial board, meanwhile, argued last Sunday that the market seems to be doing just fine as it has brought broadband connections across America with lightning speed.

Certainly the FCC is right to monitor information about rates and accessibility and to explore how to make more efficient use of the airwaves. Government subsidies may become essential to fulfill public purposes, such as providing broadband to rural schools. It is useful to continue to mark America's standing in these matters in comparison to that of other nations. But it is hard to see in this field the signs of gross market failure.

By Cecilia Kang  |  March 22, 2010; 8:00 AM ET
Categories:  Broadband , FCC  
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Next: Ammori, law scholar, to FCC: What does future competition look like?


Right on, Rob & Yochai!

Posted by: Hattrik | March 22, 2010 3:24 PM | Report abuse

Of course there's no competition in it. It is a plan written by Democrats, for crying out loud. Look at what they are doing to the health care insurance market. Total "top down" solution, involving a hugh, honking bureaucracy. The same will be true of any broadband plan they come up with. These people have never run as much as a lemonade stand, yet they are trying to "command the economy" much like the old Soviets did with their ever changing "seven year" plans. The people left holding the bag will be middle class taxpayers. Some things just never change. When you elect socialists, you get more socialism. Shouldn't be too hard to figure out, you would think. But then, most voters are products of our failed education system, so what can you expect?

Posted by: moonwatcher2001 | March 22, 2010 6:30 PM | Report abuse

There's something that people don't seem to be taking into account. Americans abuse anything that's unlimited; we'll be gluttons of the digital age. Ever seen an American sitting next to a Frenchman in a buffet? The American would eat all the food then eat the Frenchman before he even got a bite! Higher consumption = higher costs. Can we increase competition? Yes. Can we match other countries' prices? Probably not. Let's at least try to put something in place.

Posted by: willdlarson | March 23, 2010 1:45 PM | Report abuse

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