US commission leans towards deregulated broadband

The US Federal Communications Commission (FCC) has proposed to define high-speed broadband connections as information services,...

The US Federal Communications Commission (FCC) has proposed to define high-speed broadband connections as information services, which would free providers from the regulation that surrounds telecom services.

The issue of defining broadband services is one of a handful of proceedings the FCC is considering that collectively will shape how broadband technology is regulated.

Limiting the risk and uncertainty of regulation and lowering the cost of infrastructure investment are two goals that will govern the FCC's actions regarding broadband, said FCC chairman, Michael Powell.

"We must now clarify the regulatory classification and treatment of these new services, so companies - incumbents and competitors alike - know what to expect and can make prudent decisions to build and enter these new markets," Powell said.

By refraining from painting broadband services with the same regulatory brush as telecommunications services, the FCC would attempt to create a level playing field for service providers in this market - whether they be incumbent local exchange carriers (ILECs), competitive local exchange carriers (CLECs), or cable network operators, one policy analyst said.

"I think this could be an important first step in terms of creating parity between different providers of similar broadband services," said Adam Thierer, director of telecommunications studies with public policy group, Cato Institute. "Hopefully this is the first step on the road [away from] FCC efforts to pigeonhole new technologies into old regulations."

However, some analysts observe that CLECs could see the FCC's policies as leaning towards a deregulated environment, which would come as blow to them.

"Any time the ILECs gain something, the CLECs feel that they've lost," said Scott Cleland, an analyst with the Precursor Group.

CLECs have had trouble taking market share away from incumbent carriers, which were formed by the break up of AT&T into regional operating companies and that still own the vast majority of local phone customers as well as the local telephone networks.

Before the FCC makes a new rule, a notice of proposed rule-making was made, and is to be followed by a 60 to 90 day comment period. At the end of that period, the FCC can chose to make its proposal a rule, take different action, or do nothing.

In this case, however, it's doubtful that the FCC would take no action, since Powell has repeatedly stated that widespread broadband adoption is the commission's number one goal.

"I think [promoting broadband] is all necessary. Right now the whole industry is at a standstill. It could go a long way toward building the economy and establishing a desperately needed new paradigm for telecommunications," said Gartner analyst, Ron Cowles.

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