August 10, 1999
Mr. Kenneth S. Fellman, Esq.
Chairman, Local and State Government Advisory Committee
Kissinger & Fellman, PC
3773 Cherry Creek North Drive
Denver, CO 80209
I am writing to express my appreciation for the highly productive meeting of the Local and State Government Advisory Committee that you convened on July 23. FCC staff that were in attendance have briefed me on the concerns raised by LSGAC representatives, particularly with respect to the "open cable" issue. I know that my staff and I have benefited from LSGAC's perspective on the challenges faced by local communities following the Portland decision, and I hope the information and materials provided by the FCC staff helped LSGAC in understanding our perspective.
In particular, I wish to respond to LSGAC Advisory Recommendation Number 15, which called for a Notice of Inquiry Regarding Access to Broadband Networks. I am pleased that the Recommendation recognizes the national importance of this issue. As you know, the broadband access issue is at the top of my agenda. I share the goal of consumers and many local governments--an open Internet. In the traditional dial-up environment, consumers have become accustomed to non-discriminatory access to the Internet service provider (ISP) of their choice, and I believe that high-speed broadband networks must and will offer consumers that same choice. I also believe we must pursue the goal of open access in a manner that encourages investment in the deployment of these networks. My hope is that consumers will have multiple pipes into their homes with a multiplicity of options and a diversity of service choices.
Although broadband is in its infancy, we are taking steps to ensure that there are many competitors in this marketplace - not just cable. We've made more spectrum available to wireless operators. We've made it easier for emerging competitive local phone companies to plug into the existing phone network in order to provide high-speed Internet access using digital subscriber line (DSL) technology. And we've decided to allow the cable companies to go ahead with their efforts to deploy broadband access without preemptive regulation.
Our policy of encouraging the marketplace to develop has already produced impressive results across the country. The increasing deployment of cable modem service by cable operators has prompted local phone companies to speed up their rollout of DSL service. And charges for DSL service continue to drop as the competition intensifies. ISPs and others are also exploring the potential of satellite and wireless technologies as promising sources of broadband access. These developments will maximize consumer choice and welfare more effectively and more quickly than government intervention could hope to do.
While some consider cable to have a lead at this time, it is premature to conclude either that such a lead will last or that its current position amounts to a monopoly. Of the nearly 40 million Internet users, only one million are cable broadband subscribers. There is no monopoly or even duopoly in broadband. In fact, when it comes to this very new market, there is a "no-opoly."
For these reasons, I continue to believe that the initiation by this Commission of a formal proceeding focused exclusively on broadband access would undercut our goal of accelerating the deployment of broadband networks. A formal proceeding would chill investment in cable modem service, which in turn would reduce the competitive pressure on local phone companies and others who are currently investing in alternative means of providing consumers with access to broadband.
Let me stress my appreciation for the role that many local governments have played, and will continue to play, as we pursue our mutual goals. As you know, representatives from local communities have participated in the ongoing broadband monitoring sessions convened by our Cable Services Bureau. At these sessions, we have also heard from public interest groups, investment analysts, cable and phone companies, ISPs, academics, and others. Further, broadband issues are relevant to the Commission's annual inquiry, conducted pursuant to section 706 of the Telecommunications Act of 1996, to assess the deployment of advanced telecommunications. We will be seeking public comment on our next section 706 report this Fall, and I look forward to the input of local governments in that proceeding. In addition, our Office of Engineering & Technology has focused on the technical aspects of broadband deployment, and has monitored recent experiments and developments in broadband capacity. I encourage state and local officials to contact our staff to discuss these issues.
Under your leadership, the LSGAC has been an excellent forum for an exchange of information and views between representatives of local, state, and federal government. It is through vehicles such as these that local governments have a vital role to play in shaping national policy. By contrast, the prospect of thousands of different regulatory authorities independently establishing separate regimes regarding broadband access will frustrate the rapid deployment that we should be encouraging.
Let me again thank you and the other members of the LSGAC for your thoughtful consideration of these issues. I look forward to our continued work on these matters.
William E. Kennard