Incumbent telcos warn feds: Let us have our way, or the consumer gets it

New Study Projects Investment Declines under Title II | USTelecom

Incumbent telephone companies have warned the U.S. Federal Communications Commission (and indirectly, the Obama administration) that they will tie up in the courts for years any move to regulate Internet services as a Title II common carrier telecommunications service available to all customer premises without discrimination.

Now they are citing a study to back up their threat that they will also significantly pare back construction of new infrastructure. In other words, if you don't let us pick and choose which neighborhoods we want to serve, we'll leave the 19 million premises the FCC estimates are not served by landline Internet service twisting in the wind. Ditto those on increasingly obsolete, legacy DSL service provided over aging copper cables.

That's monopolist speak for if you don't leave us alone, the consumer gets it.

How high cost telecom subsidies might work if Title II common carrier regulation was “Obamacare for the Internet”

President Obama’s call this week to the U.S. Federal Communications Commission to regulate Internet service providers as common carrier telecommunications providers provoked Sen. Ted Cruz of Texas to disapprovingly dub it “Obamacare for the Internet.”

A political shot to be sure. But what if the high cost of building fiber to the premise infrastructure to all American homes and businesses were subsidized using tax credits such as those used to make individual health insurance more affordable to low and moderate income households under the Patient Protection and Affordable Care Act?

Instead of directly subsidizing Internet providers to build infrastructure in high cost areas using the FCC’s Connect America Fund – which many providers have spurned or only selectively accessed – customers in high cost areas would receive the subsidies and not providers.

Providers would be able to charge higher rates (not based on bandwidth use or connection speeds) for fiber connections to homes and businesses in high cost areas. Owners of these properties could then use the telecom tax credits to offset the higher cost of getting them connected.

That would create incentive for these premises to get online while also reducing the business risk of the current subscription-based models that are heavily dependent on how many customer premises sign up for service and which act to inhibit infrastructure construction in higher cost areas of the nation.

What do you think? Share your comments.

US Telecom Association wants 'archaic' regulations gone | TheHill

US Telecom Association wants 'archaic' regulations gone | TheHill: Steve Davis, chairman of the board of U.S. Telecom, said some of the regulations cited "don't apply to cable companies or any of our competitors, and to the extent that they ever served a purpose, that purpose has long since evaporated."

The group pointed to a number of regulations they want to avoid, including requirements that companies "separate local and long-distance business, and requiring traditional phone companies to continue the provisioning of obsolete technology."

The group cited a speech Wheeler gave in February in which he noted that a large percentage of investment recently by telephone companies went to "maintaining the declining telephone network, despite the fact that only one-third of U.S. households use it at all."

"The future regulatory environment should be one that is based upon the world as it exists today," the group’s president and CEO, Walter McCormick, told reporters. "That is sort of like the overall theme we think public policy should move towards. This petition is a little tiny baby step in that direction."

The world of POTS (Plain Old Telephone Service) is still very much alive in much of the United States, where some 19 million homes and small businesses still rely on the publicly switched telephone network (PSTN) and dialup wireline Internet service. As long as it exists, regulators will be hard pressed to scrap rules designed for POTS without a firm transition plan in place.

The Incumbent Local Exchange Carriers (ILECs) could potentially get more than they wish for in making this request. The Federal Communications Commission could respond by effectively saying, "OK, if you don't want to comply with outdated POTS rules, you are hereby subject to Title II of the Communications Act and thereby must deploy advanced telecommunications infrastructure throughout your service territories."

FCC reports contradict ISP claims that build out requirement would deter infrastructure investment

Broadband CEOs to FCC: We're not a utility - CNET: The main argument from the CEOs is that reclassifying broadband services so that they're regulated like the telephone network rather than the light regulatory approach the FCC currently takes with the Internet would kill future investment in broadband networks. They argue that the current regulatory framework is why broadband and wireless companies invest more than $60 billion a year in their networks. They claim this more than $1.2 trillion investment over the years has resulted in great improvements in broadband networks every year.

If this is in fact true, consider that the U.S. Federal Communications Commission (FCC) found insufficient deployment of Internet infrastructure in annual progress reports mandated by the 1996 Telecommunications Act. In 2011, the FCC concluded a "significant and persistent deployment gap" in Internet telecommunications infrastructure deprives as many as 26 million Americans of Internet access.