USTelecom Welcomes Further Study of Open Internet Proceeding September 1st, 2010

Background:  Today the Federal Communications Commission issued a public notice seeking comment on two complex issues involved in the open Internet proceeding. The first seeks input on treatment of specialized broadband Internet services, and the second asks whether open Internet rules should apply to wireless broadband services.

The following statement is from USTelecom President & CEO Walter B. McCormick Jr.:

We welcome Chairman Genachowski’s request for further comment as being pragmatic and wholly consistent with his commitment to employ a data-driven approach to regulation.  Broadband continues to be a bright spot in the economy.  It has been a source of consistent investment and job creation throughout the downturn. Since there are no imminent threats to the open and robust Internet that consumers enjoy today, it is prudent for the Chairman to make sure that the Commission proceeds in a way that is fully-informed, measured, and avoids doing any harm to this dynamic sector.  We look forward to participating in the process, and to continuing to work with both the FCC and Congress on a policy consensus that will safeguard consumers’ Internet freedoms, while promoting continued innovation, investment and job growth.

FCC Workshop on Special Access Services July 20th, 2010

Yesterday the FCC held a workshop to discuss approaches for evaluating “special access” pricing flexibility rules. Special access services are just one of several types of high capacity dedicated transmission links used to distribute voice and data traffic. These services are sold by wireline, cable and fixed wireless companies directly to businesses and other communications services providers that need to transport large volumes of voice and data traffic.

For some time, the FCC has been gathering input on this issue. Yesterday’s workshop grew out of a suggestion in the National Broadband Plan, which recommended the Commission bring together experts to discuss the analytical framework the FCC should use to assess the effectiveness of its existing special access rules.” The workshop featured presentations from four economists:  Dennis Carlton of Compass Lexecon; William Taylor of NERA Economic Consulting; Bridger Mitchell of Charles River Associates; and Lee Selwyn of Economics and Technology, Inc.

From USTelecom’s viewpoint, high-capacity services are only becoming increasingly competitive, as industry strives to accommodate the considerable growth in demand for high-capacity services. We believe that the FCC, before considering any rule changes, must perform a thorough data collection and analysis to determine the effectiveness of its current rules.  We believe such an analysis will show ample competition in the vast majority of the country.

Watch a replay of the workshop.

FCC Report on Broadband is Misleading July 19th, 2010

Background:  Based on news reports today, the Federal Communications Commission will release a report to be delivered to Congress concluding that broadband is not being deployed in a reasonable or timely manner.

The following statement is from USTelecom President & CEO Walter B. McCormick Jr.:

“It is puzzling that the Commission would take the data from its own National Broadband Plan showing U.S. broadband deployment to be an unprecedented American success story, turn it on its head, and conclude that broadband deployment is neither reasonable or timely.

“The Commission’s analysis strains credulity. Its own data show that access to wired broadband has expanded from 8 million Americans to 200 million Americans in the past decade; that 95 percent of the US population lives in housing units with access to wired broadband infrastructure capable of supporting download speeds of 4 Mbps; that it is likely that 90 percent of the country, a country of over 300 million people covering a land mass of 3.8 million square miles, will have access to advertised download speeds of more than 50 Mbps by 2013; and that 77 percent of the US population live in an area served by three or more 3G wireless service providers. In addition, a recent FCC survey of consumers shows that 91 percent are satisfied or very satisfied with their broadband service. Clearly, our country is in the middle of a broadband explosion.

“It is absolutely appropriate for the Commission to be concerned about the remaining small percentage of Americans who may not yet have access to wired broadband. Identifying important communications objectives for Congress is the right thing to do, and we support efforts to bring the benefits of broadband to everyone.  However, it is inconsistent with the Commission’s own data to conclude that deployment is not progressing in a timely and reasonable manner.”

FCC Faces High Bar on Broadband Regulation USTelecom Tells Commission July 15th, 2010

WASHINGTON, DC — Federal regulators face a high bar in demonstrating the public interest benefits and legal sustainability of applying a long outdated regulatory framework on the operation of broadband networks, USTelecom said in comments filed with the Federal Communications Commission. Responding to the Commission’s Notice of Inquiry on its proposals, USTelecom questions the need for regulation, given the ample evidence showing the broadband market is thriving.

The following statement is from USTelecom President & CEO Walter B. McCormick Jr.:

“For the commission to assert such expansive regulatory jurisdiction is not necessary to achieve the goals the FCC has set in its National Broadband Plan, and threatens jobs and future investment in broadband networks.”

Here are some highlights in the filing:

• “Regulating the Internet under a Title II framework would be a profound mistake with harmful and lasting consequences for consumers, the Internet and our economy. Adoption of such an approach by the Commission would indisputably mire all aspects of the Internet in years of investment-deterring, innovation-stunting legal uncertainty while the Commission and the courts sort through a new generation of mind-glazing statutory characterization disputes. This consensus is shared by leading economists.”
• “In it Notice, the Commission proposes to: (i) separate the transmission component from a functionally integrated broadband Internet connectivity service; and (ii) classify that broadband transmission component as a “telecommunications service” subject to regulation under Title II of the Communications Act, while purportedly not regulating the Internet. However, broadband service and networks are an integral part of the Internet, and regulating them is the same as regulating the Internet.”
• “In an attempt to justify its proposed regulatory scheme, the Commission engages in semantics, drawing arbitrary regulatory lines between “Internet connectivity service” that it seeks to regulate from what it claims is the “Internet” that will be unregulated — applications and content, as well as a host of other facilities and services such as the backbone, content delivery networks (CDNs), over-the-top video services, or voice-over-Internet-Protocol (VoIP) telephony services. But this approach ignores countless and well-established definitions of what constitutes the Internet. Almost every available definition of the Internet settles on the premise that – whatever the Internet ‘is’ – it includes the broadband networks and Internet connectivity service that the Commission seeks to regulate.”
• “Ultimately, the Commission is creating more problems with the proposal to bifurcate broadband Internet connectivity service from the Internet than its proposal purports to solve. Rather than creating certainty in the broadband marketplace, the proposal, in effectively calling for the Commission to change its existing definition of Internet connectivity, would introduce new complexity and confusion regarding what exactly constitutes broadband Internet connectivity service, and how such service can be distinguished from the Internet.”

USTelecom Letter on Title II Regulation April 28th, 2010

WASHINGTON — USTelecom today filed a letter with the FCC by Supreme Court litigator Seth P. Waxman, which says classifying broadband service under Title II authority would be “fundamentally at odds with principled agency decision-making and with the proper role of administrative agencies within our constitutional system.”

Key points in letter:

• The FCC has a longstanding policy of keeping a light regulatory touch on broadband Internet services.  During the Clinton administration, FCC officials treated broadband Internet services as a Title I “information service” that would not be subject to Title II common carrier regulations.
• The Justice Department affirmed this view in arguments before the Supreme Court in 2004.
• Now questions are being raised about whether new, stricter regulations are needed. Solving that question by imposing a new Title II regime on broadband services would be a regulatory power grab, one with no legal precedent.

USTelecom Filing Emphasizes Success of Internet April 26th, 2010

Background: USTelecom filed comments today in the Federal Communications Commission’s Open Internet proceeding.

The following are some key points in the filing:

• Today’s Internet ecosystem is benefiting from massive investment, substantial consumer usage and remarkable innovation throughout the network under the current regulatory framework.
• The Commission has played a critical role in the success of the Internet with its light-touch regulatory approach.
• USTelecom urges the commission to carefully examine its legal authority before proceeding to implement any further regulation of the Internet.

USTelecom Filing Highlights Broadband Investment and Innovation Success Under Current Policy Framework January 15th, 2010

Investment, Competition, Usage, Employment and Innovation Thriving Across Broadband Services, Content and Applications

WASHINGTON, D.C.—USTelecom has joined scores of other broadband stakeholders in filing comments in the Federal Communications Commission’s rulemaking to safeguard an open Internet. The 50+ page filing lays out a wealth of economic and market data highlighting the value that today’s broadband networks are delivering to consumers under the current regulatory framework. The filing also describes some of the changes occurring on today’s dynamic broadband networks and cautions against imposing new rules on how those networks operate and innovate to meet the consumer demands of today and needs of tomorrow.

“What the Commission does in this proceeding will have a dramatic impact on the future evolution of the Internet. It is essential that the Commission do no harm to this unparalleled source of innovation, job creation, and economic growth.” said USTelecom President and CEO Walter B. McCormick, Jr.

“USTelecom and its member companies strongly agree with the FCC on the merits of an open Internet,” added McCormick. “We simply disagree with those who suggest that there is a need for new rules and expanded government regulation. Today consumers enjoy a free and open internet, competitive offerings, and abundant choice. Broadband service providers are investing, creating new jobs, and growing our economy. The Internet is an American success story. The Commission needs to be very, very careful in tinkering with this dynamic and robust sector of the marketplace.

As the FCC moves forward in this proceeding, USTelecom’s filing urges the Commission to embrace five key concepts in evaluating any new rules that it considers:

• Balance: The filing strongly cautions about tipping the balance among Internet companies by singling out one set of companies for regulation while leaving others unregulated. A level playing field is essential to preserving the dynamism that has brought us Internet innovation.
• Flexibility: Rather than issuing blanket prohibitions, the filing urges that if the FCC adopts any new rules, they be built on flexible standards focused on preserving consumer choice and competition, not particular business models. The fact is that constant change in broadband networks, applications and services are likely to outpace any rules. The filing cites the Amazon Kindle, which allows consumers to download books and other content without a monthly Internet subscription as the kind of pro-consumer innovation that overly broad rules could unnecessarily jeopardize.
• Transparency: USTelecom endorses consumer-focused disclosures concerning broadband networks and calls on industry, public interest groups and other interested stakeholders to join together to develop workable best practices.
• Managed Services: USTelecom supports a broad exception for managed services, which can provide substantial consumer benefits, including greater competition and increased broadband deployment and adoption.
• Flexible Network Management: USTelecom agrees with the FCC that network operators must have the flexibility to deal with challenges like traffic congestion, quality of service and spam. But rather than create a list of acceptable network management practices, rules should be broadly flexible and structured to protect consumers.

Echoing concerns of the Department of Justice, USTelecom cautions that an imbalanced approach could harm an investment climate that has seen broadband providers’ capital expenditures, by some accounts, exceed half a trillion dollars this past decade. The filing also notes that the U.S. is a world leader in broadband investment and consumer Internet usage. Further, the filing points out that our nation also stands out in having multiple, widely-available competitive broadband infrastructures: “Competition among network platforms creates strong incentives to fill networks with content and applications that consumers want and provides a competitive check against network providers limiting consumer access to particular content and applications.”

“We need to fully recognize the concrete economic and social benefits that we as a country are reaping from broadband investment and innovation,” McCormick said. “The extraordinary innovation and economic opportunities that a continually evolving and improving Internet is delivering into our lives means we must think carefully before changing the regulatory status quo under which we have achieved this level of broadband success.”

Read USTelecom’s filing here.

Media Veteran to Join USTelecom Team January 12th, 2010

Anne Veigle To Join Association as Media Affairs VP

WASHINGTON, D.C. – Today, the United States Telecom Association (USTelecom) announced that Anne Veigle will be joining the group as Vice President – Media Affairs on February 1.  As the former Associate Managing Editor of Communications Daily, Veigle brings extensive media relations and journalism experience to her new role serving as the spokesperson for the premier broadband trade association.

“Anne Veigle is a highly respected journalist whose stature, broad Washington experience and telecommunications expertise will further the professionalism of our association and its media affairs work, and she will a tremendous asset to the USTelecom team,” said Walter B. McCormick Jr., President and CEO of USTelecom.

Prior to her most recent position as the Associate Managing Editor of Communications Daily, Veigle served in the Office of the U.S. Trade Representative as the Office of Policy & Communications Editor.  As a former Business Editor of the Washington Times and an award-winning staff writer for the Times Picayune, Veigle also brings extensive journalism experience to her work at USTelecom.

“I’m happy to be joining the USTelecom team during this pivotal time for our nation’s innovation agenda, and look forward to being a part of a dynamic industry,” Veigle stated.

Connected Americans Among World Leaders in Internet Use December 22nd, 2009

U.S. Among Top Nations in Volume of IP Traffic per User, New Analysis Shows

WASHINGTON, D.C.—While the debate rages on about the merits and limitations of various international broadband rankings that attempt to examine network performance and other factors, USTelecom today released fresh insights into an often-overlooked aspect of the national broadband debate—actual usage by Internet consumers.  The analysis, based on data from Cisco’s Visual Networking Index and Internet World Stats, shows that the United States is among the top nations in the world in volume of Internet consumption per online user.

“This is a critical and missing perspective in the national broadband debate, so we are pleased to make this contribution,” said USTelecom President and CEO Walter B. McCormick, Jr.  “This underscores the strength of our broadband networks at delivering value to Internet consumers.  It shows that once U.S. consumers make that initial leap to the Internet, they are really among the best in the world at putting the Internet to use and making it something of real value in their daily lives—whether in education or health care, job searches or starting a small business, and that our broadband networks are delivering for Internet consumers.”

The analysis, conducted by USTelecom analyst Pat Brogan, takes country and regional Internet traffic data from Cisco’s Visual Networking Index for 2009 and divides it by the number of Internet users from Internet World Stats to get a rough measure of the amount of IP traffic per Internet user.  This analysis of actual bandwidth consumed shows that the U.S. consumes more bandwidth per user at 14.25 GB per month than Western Europe at 13.35 GB per month and Japan at 9.90 GB per month.  The U.S. is on par with France and uses more bandwidth per user than Germany, Italy, and the United Kingdom.  Only South Korea appears to consume a substantially larger amount of bandwidth per user at 24.5 GB per month.

“We believe that the amount that Internet users are actually using their broadband connections to pull value from the Internet—whether for education, government services or entertainment—is an important mark of how successfully a country’s broadband networks and regulatory environment are providing consumers with what they want,” the analysis observes.

Nearly 1,400 U.S. broadband providers invest approximately $60 billion annually to upgrade and expand the nation’s high-speed Internet infrastructure.  The U.S. also is unique in the world for having two robust and competing wired broadband platforms with a national footprint, delivering a choice not only of service providers, but technologies, to more than 4 out of 5 U.S. households—before considering wireless and other emerging options.

“We believe that such analyses and rankings would paint a more accurate picture if they took into account these factors,” the analysis notes.  The findings can be reviewed on the USTelecom website.  They were filed today with the Federal Communications Commission as part of its ongoing proceeding aimed at developing a National Broadband Plan.

Intercarrier Compensation, Universal Service Reform Essential to Successful National Broadband Plan December 7th, 2009

USTelecom Filing Identifies Areas of Growing Consensus Where Timely FCC Action Can Stabilize Climate for Broadband Expansion

WASHINGTON, D.C. – As the Federal Communications Commission pursues its ambitious effort to develop a National Broadband Plan, USTelecom filed comments today highlighting the essential role that intercarrier compensation and universal service reform will play in the success of the FCC’s efforts.  While acknowledging the complexity of these two issues, the association urged timely action in a number of specific areas that have attracted industry consensus and that can deliver tangible, near-term improvements to the climate for U.S. broadband investment.

“These are highly complex policy challenges that have eluded the Commission, in some cases, for almost a decade,” explained USTelecom President and CEO Walter B. McCormick Jr.  “Our goal with this filing is to help the FCC identify where the industry has been able to forge some hard-won consensus around steps that can be taken now to make a meaningful difference.  The National Broadband Plan presents an historic opportunity to seize the moment and begin breaking up the logjam on these issues.  It is perhaps the most challenging—and essential—component of what we all want to help create, which is a successful and constructive National Broadband Plan that helps drive advanced broadband opportunities to all Americans.”

The filing advises that “the National Broadband Plan most constructively should suggest concrete steps forward that could be undertaken in the next twelve month or less.” The filing specifically urges the FCC to address intercarrier compensation and universal service reform in tandem in order to achieve the Commission’s goals of economically rational reform, reduced dependency on legacy revenues that can deter migration to broadband platforms and increased certainty for investment going forward.

With regard to modernizing intercarrier compensation, the filing states that the outmoded regime “is a substantial hurdle to maintaining and increasing broadband investment.  By pricing similar functions at very different levels depending on artificial regulatory categories, it distorts competition and investment while promoting arbitrage and sometimes outright fraud.”  Specifically, the filing suggests moving intrastate access rates to interstate rates to combat costly arbitrage schemes and argues for a “fair, equitable and deliberate” reduction of access charges (along with a carefully sized and managed transition fund to ease the impact of such a significant and necessary move).

The filing also urges the elimination of arbitrage schemes that drain the resources of network investors, state regulators and the courts.  Specific steps there include: (1) Explicitly confirming that all traffic that terminates on the PSTN – including IP-originated traffic – is subject to existing access charge and reciprocal compensation mechanisms; (2) Adopting USTelecom’s proposal for the elimination of “phantom traffic;” and (3) Addressing “access pumping,” which “obscenely” overcompensates arbitrageurs that exploit rates established to fairly compensate those serving rural high-cost areas that have traditionally low traffic volumes.

Similarly with universal service, the filing identifies reforms that could be quickly implemented to help drive greater broadband availability and adoption.  The filing notes widespread industry agreement for the prompt movement to a streamlined contributions system based on numbers and connections.  As the FCC pursues the use of universal service funds to expand broadband access, the filing cautions that such a move “must be done with great care.”  Among other recommended steps, it notes that “substantial savings can be realized by eliminating excessive payments to mobile competitive ETCs” by ending funding based on wireline ILEC costs and moving to a competitive bidding process.  While lauding the goal of government helping low-income consumers purchase computers and other connected devices, the filing urges a direct approach, such as the DTV coupon program that helped support equipment purchases.

“While it’s true that most of our broadband progress will be made by the private sector, it is equally true that the policy climate in Washington will impact how much investment is available to fuel that progress,” McCormick said.  “These reforms are one pivotal area where Washington can play a constructive role helping this industry step into the broadband future in a healthy and orderly way.  This will create jobs, advance our economy and benefit all consumers.  These steps are a long time coming.  If taken, they would represent a substantial achievement for this still-new FCC.”

You can read USTelecom’s comments here.