HIGH-TECH DIVIDED ON HOW FCC SHOULD ADDRESS BROADBAND

High Tech Broadband Coalition (HTBC), which includes TIA, has been active at FCC. Coalition -- which includes Business Software Alliance (BSA), CEA, Information Technology Industry Council (ITI), National Assn. of Mfrs. (NAM) and Semiconductor Industry Assn. (SIA) -- submitted filing June 17 arguing that cable modem service providers sometimes imposed subscriber agreements that restricted consumer use of broadband, although they didn’t call for open access provisions to be imposed on cable. On June 4, TIA Pres. Matthew Flanigan wrote Powell urging him to expedite agency’s triennial review on unbundled network elements (UNEs). But June 26 saw significant collection of lobbying firepower, as Flanigan, Seiffert, Intel CEO Craig Barrett and Communications Policy Dir. Peter Pitsch, Alcatel Americas Pres. Mike Quigley, Catena Networks CEO Kim Hjartarson and Regulatory Dir. Douglas Cooper, ITI Pres. Rhett Dawson, BSA Pres. Robert Holleyman and CEA Pres. Gary Shapiro met with Powell, his chief of staff Marsha MacBride and several FCC staffers to drive home point that Commission should refrain from imposing unbundling obligations on new last-mile facilities, adding that bundling reform should be agency’s top priority.

“We have been perceived as taking sides” with Bell companies “but that’s not the case,” Seiffert said. Telecom equipment providers are in depression, he said, with 500,000 layoffs in TIA’s member companies in last 2 years. “Our whole conclusion is to focus on facilities-based competition” to encourage purchase of more networking equipment, he said. Seiffert said High Tech Broadband Coalition wasn’t seeking to eliminate unbundling rules for copper lines, it just wanted to enable the Bells to have the incentive to build out fiber DSL plant without having to share it with competitors. CLECs still can compete in DSL, Seiffert said, and TIA companies will be happy to sell them equipment, but “unless they're building out their own infrastructure, we don’t see a model” to support that. It isn’t only telecom equipment providers that are supporting Coalition’s approach. Four Microsoft lobbyists -- Craig Mundie, Tren Griffin, Pierre De Vries and Marc Berejka -- met with FCC Comrs. Kevin Martin and Kathleen Abernathy June 26 to support Coalition’s June 17 filing.

ISPs See Bells as an Obstacle

Numerous groups representing ISPs have taken different approach in their reply comments in proceeding on broadband access over wireline facilities, which are due today (July 1). ITAA argued that Commission was taking “myopic” view of broadband by focusing on transport, Uncapher said. ISPs, he said, are not carriers, they're customers of Bells: “They don’t have alternatives.” ISPs until now have driven Internet access, but they won’t have role to play in broadband if they're frozen out of Bell infrastructure, he said. Uncapher acknowledged that Powell hadn’t been too concerned about fate of individual companies, or even industry sectors, focusing instead on providing consumers with multiple outlets to broadband. But he said “the chairman has had a clear set of preferences, and other commissioners have expressed their own opinions.” He said Comr. Copps certainly had shown his independence, Martin and Abernathy had their own opinions, and should Senate Majority Leader Daschle (D-S.D.) staffer Jonathan Adelstein be added to FCC he might be favorable to ITAA’s view. “We've talked to Chairman Powell,” Uncapher said, adding that more ex parte visits to 8th floor were in the works.

In its reply comments, ITAA said ISPs “remain critically dependent on ILECs for wholesale broadband telecommunications service necessary to serve their customers.” Cable systems aren’t viable alternative, it said, with no cable operator yet offering standalone transmission to any ISP requesting it. Wireless and satellite providers also aren’t option because they involve higher costs, limited geographic availability and technical limitations. ITAA also rejected calls by SBC and BellSouth that ISPs should have to contribute to Universal Service Fund, given that they were users of telecom services, not providers. On same principle it rejected Verizon’s suggestion that ISPs be required to contribute to schools and libraries portion of Fund.

ITAA’s position was echoed in comments filed by AT&T. Company accused Bells of seeking to evade their Sec. 251 unbundling obligations “for all of the unspecified services that they can lump into the amorphous category of ‘broadband.'” Integrated Internet service is information service, AT&T said, but “the standalone broadband transmission services that the Bells provide today to both affiliated and unaffiliated Internet service providers (ISPs) -- and to business customers nationwide -- are telecommunications services.” As result, AT&T said, Bells under Title II should be required to unbundle broadband equipment. Referring to Bells, AT&T said “their principal contention -- that the existence of retail competition in the market for broadband services has deprived them of any market power over ISPs -- is demonstrably false. And, in light of the Bells’ persistent market power over both broadband and narrowband ISPs, only the continuing application of the Computer Inquiry’s requirements, and not their abrogation, will foster information service competition and thus increase investment and innovation in this area.”

BroadNet Alliance will file with FCC today (Mon.) White Paper titled “The Importance of a Broad Net,” explaining how key FCC policies over last 2 decades had ensured ISPs nondiscriminatory access to Bell facilities, echoing many of points made by ITAA and AT&T. Exec. Dir. Maura Colleton told us that her “shoestring” grass-roots group couldn’t afford attorney to draft formal reply comments so it chose to file White Paper instead. Troubled carrier WorldCom is one of 2 major funders of BroadNet, along with Earthlink, and its members include state ISP associations in Cal., Ill., Mass., Va., Wash. and Wyo. along with about 100 small ISPs.