Saturday, March 14, 2015

Levin's Law of Internet Infrastructure Inertia may prevail over FCC universal service mandate

This week’s report and order by the U.S. Federal Communications Commission that imposes a universal service requirement on Internet infrastructure providers may do little to over the next decade to ensure all premises have access to landline Internet connections.

As they did soon after the Communications Act was amended in 1996 requiring telephone companies to share their network infrastructures with competitive providers, the large telephone companies -- joined by cable companies – could challenge the rule in the courts and drag their feet implementing it.

They might also argue that they cannot afford to provide universal service within their service territories because there are insufficient subsidies given this week’s draft order defers enforcement of Section 254(d) of the Communications Act requiring telecommunications carriers to fund universal service.

With a generation of progress toward connecting all American premises with fiber already squandered, the associated delays could buy the big incumbent telephone and cable companies another 10 years or more of business as usual, allowing them to continue to cherry pick communities, neighborhoods and roads and streets they prefer to serve and redline those they reject.

That would leave Levin's Law of Internet Infrastructure Inertia* intact and the resulting entrenched disparate access to landline Internet service that leaves about one in five U.S. homes and small businesses unable to order service.

*Blair Levin, a former U.S Federal Communications Commission official and lead author of the FCC’s 2010 National Broadband Plan observed in 2012 that the major landline ISPs had no plans to improve and build out their infrastructures. “For most Americans, five years from now, the best network available to them will be the same network they have today," Levin stated.

3 comments:

InfoStack said...

What most don't realize or understand in the net neutrality debate is that the IP stack lacks settlements both north-south (app to infrastructure) and east-west (network/app to app/network). As a result, important price signals and incentives are missing. In today's age of mobile first and unlimited app supply and demand, there is really no need for universal service. The market can, for the most part develop it. Where taxes and subsidies are applied (should be less than 2-3% of the endpoints) they should be done so evenly, across all networks, technologies and demand segments.

Fred Pilot said...

@InfoStack: "In today's age of mobile first and unlimited app supply and demand, there is really no need for universal service. The market can, for the most part develop it."

So far the market has not because in a monopolistic last mile market, price signals and incentives are absent. End users are thus price takers and must accept whatever price ISPs charge, assuming they are even are offered service in the first place.

InfoStack said...

@Fred

Agreed.

See my comments on big failure of FCC vis a vis interconnect and how market forces should be able to push scale out to the edge, ex ante.

Michael

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