Public sector agencies are the nation’s largest telecom customers. A community with a population of 40,000 purchases an estimated $1.1 million dollars annually in telecom services – costs offset by use of I-Nets. Imagine the devastation on local budgets when state video franchising laws eliminate I-Nets as compensation for use of public right-of-way. It’s rumored that a cable operator can charge a California community $45,000 a month to use a thirty-drop I-Net that, prior to passage of the state video franchising law, had been part of payments for use of public rights-of-way.
FCC Decides Not to Collect Key Data For No Good Reason
The FCC does not have a good sense of what is happening outside DC in terms of broadband availability and data. This has been a conscious choice - it has refused calls (even those made by the FCC itself) to collect useful data that would lead to data-driven policies to encourage the investment we need.
Not only has the FCC refused to collect data, it refuses to take action as companies like Time Warner Cable refuse to tell potential subscribers what the cost of service is. We have first hand experience along these lines - our goal was to document actual consumers prices for Internet access beyond promotional pricing. When we asked Time Warner Cable sales reps for prices after introductory deals expire, they would not quote a price. They would not give an estimate or provide any examples.
If you are looking for evidence of a failed market, we submit that when a seller can refuse to quote the price that one will pay in 7 months for the service, or even ballpark it, with impunity, the market is busted. Time Warner Cable isn't worried about driving customers away - it many areas of the country it is only real option for not too slow Internet access. So it does as it pleases.
We also contacted the FCC and asked staff where we could find information on the actual prices of broadband. The person on the other end sounded defeated as her voice dropped. "Oh, we don't collect that," she said, "We don't know any one who does. Have you tried calling the providers?"
Call us old fashioned, but we think it's crazy. Even though Time Warner Cable, AT&T, Verizon, CenturyLink, etc. are some of the largest corporations in our country, affecting the household finances of tens of millions of Americans, their prices for connectivity are masked in a Cloak of Invisibility with the tacit approval of the regulatory body charged with protecting the public.
The Free Press documents a recent missed opportunity to rectify past decisions that have led to a data black hole:
On Thursday, the Federal Communications Commission approved changes to its broadband data-collection practices in an order continuing the mapping efforts begun by the National Telecommunications Information Administration. The FCC, however, declined to adopt its own prior proposal to collect broadband pricing information, ignoring strong recommendations from the Justice Department and the National Broadband Plan that it do so. In 2011, when the Commission last proposed collecting broadband pricing data, then-Commissioner Mignon Clyburn stated that the FCC needed this data to "better assess affordable and comparable prices."
Matt Wood, Policy Director, went on to say:
"We’re deeply disappointed that politics once again trumped the public interest at the FCC. The Justice Department, the National Broadband Plan, numerous prior FCC proposals, the current acting FCC chairwoman, Commissioner Jessica Rosenworcel and the incoming FCC chairman have all identified the need to collect broadband pricing data. But because powerful broadband companies oppose the collection of any information that would show just how uncompetitive this market is, the FCC is once again refusing to collect the basic data it needs to do its job. "Data-driven, informed policymaking should not be political. In his confirmation hearing, incoming Chairman Tom Wheeler agreed that the Commission needs broadband pricing data to carry out its oversight duties. All eyes will be on Mr. Wheeler to see if his actions match his rhetoric. If the FCC continues to fail to collect vital broadband pricing data,we’ll know that industry capture is here to stay at the agency."
As a consumer and a researcher, I say its time to lift that Cloak of Invisbility and provide the info consumers need for the real situation on competition and price. The only reason not to collect this data is because the industry is embarrassed at how poorly it is meeting the needs of communities. So its lobbyists put strong pressure on the FCC to help it hide the evidence.
The revolving door in DC between industry and regulatory bodies confuses those entrusted with protecting the public, leaving them more sympathetic to industry concerns than what markets need to function and consumers need to make rational decisions.
Communities can opt out of this broken system by making local investments and no longer depending on failed federal agencies to protect the essential services a modern economy needs. Publicly owned networks are regulated by the local public even when DC regulators, protecting local businesses and residents from the predatory practices of the distant cable and telco duopoly.