In a room full of broadband providers and vendors, a conversation about the effects that Washington policy discussions could have on their business was timely and relevant.

On the third and final day of the Fiber to the Home Conference and Expo, Tom Cohen, the Washington DC Counsel and Advocate for the FTTH Council North America, led a discussion on current topics in telecom regulation and legislation. The session provided an excellent overview of various discussions and debates in Washington, including Net neutrality, broadband classification, Universal Service reform, and more.

Cohen opened up his comments by giving a very recent history lesson that included the release of the National Broadband Plan, the Comcast ruling by the Supreme Court, and subsequent comment periods opened up by the FCC. Cohen described the Supreme Court ruling as the single biggest event to affect current moves by the FCC towards more regulation. Following the ruling, the FCC’s authority was called into question, which led the FCC to explore other avenues for regulation of broadband services.

So what does the currently proposed “Third Way” for broadband classification really mean for broadband providers and vendors, and what effect could it have on their business? The answer was overwhelming. As Cohen explained, classifying broadband under Title II would create uncertainty for investors, which would in turn lead to less capital for investment and inhabit continued broadband deployment.

Cohen continually pointed to a filing by the Fiber to the Home Council in response to a recent Notice of Inquiry by the FCC, which states, “Reclassifying broadband Internet service as a Title II service offering would measurably increase the risk associated with investing in newly-regulated markets where regulatory requirements are uncertain and where proposed regulations are certain to be subject to many years of litigation.” The filing can be read here. The bottom line – increased regulation leads to increased risk for investment, which then leads to uncertainty. Why mess with a good thing.

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We can all certainly agree on one point–the Internet has built a virtual bridge connecting billions of people worldwide. This technology has helped create new jobs and even in the currently slumped economy, has still allowed for growth and innovation. The industry is a bright light in an otherwise dimmed economic arena. And placing brick walls of unneeded regulation on this super highway has the potential to slow growth, stymie innovation and slash jobs. This is not the right direction for our economy.

Take a look at two opinion pieces that discuss this very issue.

Robert Ficano, a Wayne County executive from Michigan, wrote the following in a Detroit Free Press opinion piece:

“These regulations, known as net neutrality, would inhibit the flow of investment capital into the marketplace. Regulating the Internet could prove disastrous. Applying these regulations to businesses could create hurdles for investments to overcome before making it to market, making it less possible for telecom employers to create or sustain jobs, impeding ability of those companies to make broadband available in more areas, specifically rural and low-income areas.”

The Oregon Business Report has an opinion piece by Tom Gurr asking if the FCC really needs to “rescue” the Internet:

“The Internet has transformed our lives, and improved nearly EVERY aspect of our day to day operations. It has improved education, provided better public safety and delivered life saving healthcare procedures to remote communities previously unreachable. Additionally, the Internet and new technologies that use it to bring services to Americans and create thousands of jobs. The FCC has estimated it will take $350 billion to bring high-speed Internet to all Americans. Public policies should encourage more investment to connect people to the benefits of the Internet, not distract from its continued growth or destroy its success.”

But these aren’t the only voices in opposition to increased broadband regulation. Continue to follow NextGenWeb as we highlight important consumer advocacy, local government, academic and entrepreneurial voices.

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Jason Alden has an article in Thursday’s Washington Post that discusses how we ended up at the Net neutrality cross roads and explains why we need to take the road most traveled and work with legislators.

“The FCC stands poised to reclassify broadband service providers as content carriers, a category that would subject them to the same sort of regulation that telephone companies are saddled with, even giving the FCC the ability to set rates. The agency’s chairman says that the FCC won’t use this power — but this could change in another administration. Such a move would be a serious step backward.”

After over a decade of “understood” Internet regulation, the FCC decided it should be the new regulatory body. This stemmed from a lost legal battle where a court ruled the FCC had no authority over Internet service providers. After all the recent debate, Alden still sees a compromise playing out in this order:

“… legislative enactment of something like the Google-Verizon plan, with an emphasis on transparency about decisions that providers are making. Giving the FCC the authority to nudge things in the right direction will be a good first step.”

Click here to read the entire article

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Although Verizon EVP Tom Tauke intended to discuss broadband policy issues during his address to the Technology Policy Institute’s Aspen Forum, instead he focused on clarifying the Verizon-Google deal, or as he called it, “the elephant in the room.”  After being at opposing ends of the debate on net neutrality, Google and Verizon have crafted a compromise position, which, as Tauke points out, meets public and government calls for openness and transparency.

John Eggerton of Broadcasting & Cable shared more from Tauke’s speech:

Tauke pointed out that the accord included signing on to the FCC’s openness principles and adopting a fifth nondiscrimination principle “is much tougher than any other non-discrimination principle that had been put on the table publicly before.”

…. Pointing out that many businesses use virtual private networks to allow them to access benefits and services, Tauke said consumers should not be denied the same opportunity to access other services in addition to the Internet…”

The idea that Tauke had to switch his speech from addressing broadband deployment and adoption to net neutrality can be seen as a metaphor for the broadband conversation at large.  Let’s not forget to focus the dialogue on getting and keeping Americans connected!

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While the U.S., in general, has seen a good deal of economic downturn, one industry is playing a critical role in financial recovery while also creating new jobs – the communications industry. In a CNN online editorial, Michael Mandel, founder of Visible Economy LLC, called for “countercyclical regulatory policy” in order to ensure that this positive economic development continues. Mandel writes:

“The communications sector is one of the few bright lights in an otherwise dismal economic picture. Facebook just reported its 500 millionth member; Droids are flying out of stores; and the iPad is the latest “must have” in technology. To enjoy the new toys, Americans are paying for more powerful mobile connections, too…

This strength signals that the broad communications sector can help drive recovery, because businesses that hire during a recession usually carry that strength into the subsequent upswing. If history is any guide, these job leaders may grow at least twice as fast as the rest of the economy during the next expansion.”

Because of this positive trend, Mandel argues, government should do everything it can to maintain a regulatory environment that promotes investment and innovation. He calls on Washington policymakers to “hitch a ride on the communications sector and find ways to stoke the jobs and spending engine a little bit.” But, Mandel states, “Proposals to regulate Internet activity now before the Federal Communications Commission would do the opposite.” So what do we need in order to continue this unprecedented growth?

“What’s needed from regulators now is some creativity and humility — in the form of “countercyclical regulatory policy.” This gives innovators a bit of breathing space at the start of an economic recovery, but sets the stage to tighten regulations later on if excesses develop…

This approach does not mean regulators can go to sleep nor does it mean they can raise the flag of laissez-faire. What’s needed is the nuanced judgment of sentries posted at a tense border spot. With watchful eyes, regulators must practice thoughtful restraint that allows space for job leaders to innovate and hire, while remaining ready to aggressively confront violations of law or abuses of consumer rights if they take place.”

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Larry Downes focused his most recent paper on the “7 Deadly Sins” the FCC is embarking upon while it continues to push outdated 1934 style laws on a stable, well-working broadband Internet platform. A few weeks ago, in a San Francisco Chronicle opinion, Downes draws the conclusion that, “reclassification would impose onerous “common carrier” rules on network operators, rules that predate the invention of computers. It would open the door to micromanagement of the broadband industry, new consumer taxes and the chance state and local regulators have been waiting for to get into the rule-making game.”

In the newest of Downes’ documents, he takes an even closer look at the proposals in the FCC’s Notice of Inquiry (NOI) finding some rather alarming details for an even broader agenda to regulate the Internet. He calls the FCC proposal the “most dangerous expansion of federal power since the end of the Civil War.” Below are the “Seven Deadly Sins of Title II Reclassification (NOI Remix)”:

Pride: As the FCC attempts to define what services would be subjected to reclassification, the agency runs the risk of both under- and over-inclusion, which could harm consumers, network operators, and content and applications providers.

Lust: The agency is reaching out for additional powers beyond its reclassification proposals — including an effort to wrest privacy enforcement powers from the Federal Trade Commission and putting itself in charge of cybersecurity for homeland security.

Anger: The “Third Way” may dramatically expand the scope of federal wiretapping laws, requiring law enforcement “back doors” for a wide range of products and services.

Gluttony: Reclassifying broadband opens the door to state and local government regulation, which would overwhelm Internet access with a deluge of conflicting, and innovation-killing, laws, rules and new consumer taxes.

Sloth: As the FCC looks for a legal basis to defend reclassification, basic activities — such as caching, searching, and browsing — may for the first time be included in the category of services subject to “common carrier” regulation.

Vanity: Though wireless networks face greater challenges from the broadband Internet than wireline networks, the FCC seems poised to impose more, not less, regulation on wireless broadband.

Greed: Reclassification of broadband services could vastly expand the contribution base for the Universal Service Fund, adding new consumer fees while supersizing this important, but exceedingly wasteful, program.

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So what does all the current chatter about Net neutrality and the future of the Internet really mean? According to a recent piece in CNET, and cross posted on CNN Tech, it’s much ado about nothing. Most of the ongoing debates about Net neutrality are theoretical, about a potential threat that could possibly appear in the future. But if that’s the case, then why haven’t these threats appeared yet? The answer, according to the article by Marguerite Reardon titled, “Debunking the Internet apocalypse,” is market forces. Reardon writes:

“The truth is that if Verizon and AT&T wanted to cannibalize their broadband business with premium broadband services, they’d already be doing it. But they aren’t, because there hasn’t been a market for it.

The reality is that consumers are in control of what type of services are offered. If the public Internet can adequately deliver a service for free, then there’s no need to pay for it…”

Reardon also focuses on the fact that a vast majority of Americans not only have access to multiple broadband provides, but 91% of customers are “very satisfied” or “somewhat satisfied” with their broadband service. She continues:

“While it’s true some consumers have access to only one broadband provider, nearly 70 percent of Americans have access to at least two broadband providers, according to the Pew Internet and American Life Project.

In short, Verizon [or any other of America’s over 1,400 broadband providers] would be cutting off its nose to spite its face if it skimped on broadband capacity to feed its managed service business.”

To read the entire piece, click here.

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Even though its August, a historically slow month in Washington, DC, that hasn’t stopped the FCC from engaging in meetings with key stakeholders regarding Net neutrality and broadband classification discussions.

With those conversations taking place, NextGenWeb wanted to track down leading thinkers and important voices that have recently published opinion pieces on the issue of broadband governance and classification. Our search brought us to Hance Haney of the Discovery Institute.

Haney recently had a special opinion piece published in the Sacramento Bee where he laid out the negative consequences that increased broadband regulation would have on jobs. Referring to the FCC’s apparent inclinations to regulate broadband, Haney stated, “It’s an aggressive play that will almost certainly land in court, and the results will have serious long-term impacts to consumers and small businesses throughout the country, including future job growth.”

NextGenWeb caught up with Haney to further discuss his position. Click below to watch the interview.

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NextGenWeb continued it’s coverage of Supernova 2010 at the “Broadband Challenge” panel. Representing opinions from across the aisle and touching on a wide spectrum of issues, the panel was not lacking for fireworks. Panelists included Rick Whitt (Google), Harold Feld (Public Knowledge), Jonathan Banks (US Telecom), Rebecca Arbogast (Stifel Nicolaus), and John Leibovitz (FCC).

The title “Broadband Challenge” not only presented the panelists with the ability to go many directions with their comments, but also represented a unique way of stimulating debate. The term “challenge” in and of itself signifies a test to which there could be many different answers. Those varying answers were well-represented.

Harold Feld kicked things off with a challenge to the current administration. For the tech community, will this administration be the best or worst? Then Feld called for an intervention of the FCC on behalf of the tech community. He continued on about specific policies before being cut off by Kevin Werbach, founder of Supernova, for using too many acronyms and being “wonky.”

Jon Banks of USTelecom followed by providing some context to the “wonky” issues that Feld had previously highlighted. Banks asked an important question – when discussing the regulation of a fast-moving, ever changing medium like the Internet, does a bureaucratic, relatively slow moving agency like the FCC really make sense? He then illustrated what he saw to be the real broadband challenge – adoption. 35% of Americans are not connected to the Internet via broadband today, but only 5% don’t have access. That leaves some 30% of Americans who have access, but are not adopting. According to Banks, finding ways to transcend barriers to adoption such as digital literacy, computer ownership and perceived relevancy should be the main focus of broadband policy.

Rebecca Arbogast took the perspective of what she described as “outside the beltway investors.” She informs investors in telecom, media and tech sectors about outcomes and decisions in the courts and around Washington. While praising the current administration for focusing more on how broadband can be used to address other societal concerns, she offered the following warning – increased government regulation would lead to uncertainty for investors. In turn, uncertainty could lead to less investment in broadband networks by the private sector. Arbogast also discussed how recent policy issues, such as broadband classification, take attention away from the National Broadband Plan. She then turned to the issue of the broadband market structure, stating that it is a mature, stable and capital intensive market, and that hoping for the creation of 3 or 4 competing broadband lines to a home is unreasonable.

The FCC’s Jon Leibovitz spoke mostly about the spectrum issues the commission is currently focused upon. He provided 3 trends to look forward to – increased use of smart phones, new devices with embedded connectivity, and wireless becoming another entry point into the home for residential broadband. Rick Whitt concluded the panel by discussing the National Broadband Plan and the extraordinary amount of time that it will take to implement.

While the issue of the “Broadband Challenge” has many meanings, Jon Banks’ appeal to focus on issues such as adoption seem to resonate. Broadband can be a transformative medium, opening a new and opportunistic world for those who have access. But for those who don’t yet realize these benefits, communicating to them should remain a priority.

Click below to watch an interview with Jon Banks and NextGenWeb’s own Shana Glickfield.

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Most agree there is still more to be done to ensure all Americans have access to Broadband Internet. But forcing unneeded regulations on the Internet community is not the way to accomplish that goal. According to Manny Diaz, former mayor of Miami and current vice chairman of the Alliance for Digital Equality (ADE), “those most affected by these proposed regulations would be low-income communities that desperately need jobs and affordable Internet.”

Diaz believes broadband Internet is the key to future success in our great country. Access to such an amazing technological tool can help produce new jobs and economic opportunities to all communities, particularly those underserved. As the private sector continues to pour dollars into new and innovative broadband technology, the last thing the FCC needs to do is enforce unnecessary regulations to stifle this growth.

To read more, check out Manny Diaz’s opinion piece in the Miami Herald.

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