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Surprise! Industry Lobbyists Oppose Gigabit Community Race to the Top Proposal – Part 1

| Written by ILSR Admin | No Comments | Updated on Sep 30, 2013 The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/surprise-industry-lobbyists-oppose-gigabit-community-race-to-the-top-proposal-part-1/

This is Part 1 in a two-part series discussing comments submitted to the FCC in response to a petition filed by Fiber-To-The-Home Council proposing a new Gigabit Community Race to the Top program.

The Fiber-To-The-Home Council (FTTHC) recently submitted a proposal to the FCC to create a Gigabit Communities “Race to the Top” program. The proposal suggests granting unclaimed portions of universal service funds (USF) to qualifying entities in small and rural markets willing to build gigabit networks. While the proposal may need some adjustments, the idea holds potential for encouraging community owned networks and we hope the FCC takes the next step by opening an official rulemaking proceeding.

What makes this proposal so promising for community networks is that it may not require grantees to qualify as “eligible telecommunications carriers” (ETCs), a technical requirement placed by the FCC on USF recipients. This requirement virtually assures that USF funds go to already established telcos and not to upstart community networks.

Instead, Race to the Top lays out its own qualifying criteria which opens the door for a broader variety of recipients, including co-ops, nonprofits and municipalities, taking a similar approach as the federal stimulus BTOP program. Furthermore, Race to the Top has the potential to improve on BTOP in one major aspect by focusing on last-mile networks, which BTOP grants largely shied away from.

The FCC comment period for this initial proposal has closed and the majority of submitted comments are supportive. But I want to highlight some of the misleading comments submitted by a few industry lobby groups – National Cable & Telecommunications Association (NCTA), Rural Broadband Association (NTCA) and USTelecom. This post will focus on the NCTA, the main lobbying apparatus of the massive cable corporations. A future post, Part 2, will discuss the others.

NCTA opposes the petition on multiple grounds which jump out in bold headings like “Funding Gigabit Networks is a Poor Use of Federal Subsidies” and “Overbuilding of Existing Networks Is Wasteful.” These comments rely on the illusion that cable service is already adequate in rural areas, and where it is not, cable companies will fill the gaps (eventually). A skeptic could also read these comments as a cry for market protection, a plea to not increase competition.

These assertions strike at the heart of why community owned networks are so important – they reflect community self-determination. Communities should not have to wait for a profit-driven corporation to meet local needs; certainly not when it comes to critical infrastructure like broadband.

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NCTA’s aversion to any form of competition is clear from its request that the FCC “not devote limited USF resources to… markets that already have broadband service.” Keeping in mind that industry incumbents consider “broadband service” to mean anything as slow as a few hundred kbps (kilobytes per second), NCTA essentially believes universal service funds should play no role in providing alternatives to outdated networks.

NCTA’s self-serving definition of “broadband service” disregards other statutory requirements of universal service including “quality” and “just, reasonable and affordable rates.” 

NCTA alleges that Race to the Top “relies almost entirely on speculation about the economic and social effect” of subsidizing gigabit networks. Anyone who has been paying attention knows it is not speculation that community owned networks help local governments, schools, businesses and residents save money (I count at least six stories highlighting cost savings on MuniNetworks.org in the past month alone). We have also featured stories about how community networks improve educational opportunities, spark local entrepreneurship, expand community infrastructure, and protect user privacy.

NCTA points to cable-offered “‘business class’ broadband throughout… their hybrid fiber-coax networks” and “Metro Ethernet and other fiber-based services that offer speeds of 1 Gbps or even 10 Gbps.” What NCTA fails to mention is that in many small and rural markets where a cable incumbent offers these services, it is often the only provider of such services, which results in high prices and limited adoption (see this letter for an example of the hoops Redhat had to go through to get advanced services from Time Warner Cable).

The flaw in NCTA’s argument is that it solely treats availability as the ultimate end, completely ignoring affordability. In contrast, affordability is one of Race to the Top’s stated objectives. Time and time again, we see how community owned networks introduce much needed competition which drives prices down and adoption rates up. Race to the Top can help more communities achieve the same result.

Additional comments made by NCTA and the others attack the FCC’s power to implement Race to the Top and the idea of including entities aside from “eligible telecommunications carriers.” I will discuss these comments in Part 2.