This is Part 2 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.

In Part 1 of this post, I focused mainly on the complaints filed by the National Cable & Telecommunications Association (NCTA) against FTTHC’s Race to the Top proposal. While there was nothing new in those arguments (we see them all the time from industry spokespeople), I wanted to highlight their errors in light of this promising proposal to promote community networks. This post will focus on some of the more technical arguments which further demonstrate the industry’s false assertions.

NCTA attacks the FCC’s authority to implement Race to the Top, claiming that neither Section 254 (addressing universal service) nor Section 706 (addressing “advanced telecommunications capability”) of the Telecom Act authorize such a program.

The cable lobby’s argument against Section 254 authority hinges on the statute’s requirement that universal service funds only support services in small and rural markets that are “reasonably comparable” to those available in the rest of the country. Therefore, NCTA argues, Race to the Top would “enable a small number of communities to receive faster broadband speeds than the vast majority of Americans in urban areas have chosen to purchase.”

NCTA essentially believes its members get to dictate American broadband policy. If the majority of Americans “choose to purchase” only single-digit Mbps (megabits-per-second) broadband because that’s the only affordable option in their area, then the FCC cannot subsidize faster networks, anywhere. Or so argues the NCTA.

Even more tortured is the NCTA’s argument against the FCC’s Section 706 authority to implement Race to the Top. Section 706 instructs the FCC to regularly assess the deployment of “advanced telecommunications services,” and when it finds that such services are not rolling out fast enough, the FCC must make efforts to accelerate deployment.

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.

Bill Schrier, Seattle's Chief Technology Officer (informally, Chief Geek), recently explored the ways in which limited competition in broadband has kept prices too high for many Americans and suggests high prices should be a cause for concern on the level of network neutrality. He is right not only in noting the problem, but noting that there is no solution to it forthcoming from the states or feds. However, communities can take control of broadband prices by building their own networks. Not only can they guarantee lower rates, they effectively force lower rates from incumbents (and often increased investment) by merely increasing local competition. Due to limits in law and FCC policy, building a network is really the only power of local governments to ensure the community has the broadband access it needs to succeed. I have long found it amazing that local governments have the power to set a limit on the lowest tier of cable TV prices but no ability to require a basic tier of Internet. What is more important to communities? Cable TV or broadband?

The City of Seattle – and other cities and counties – can regulate cable TV to a limited extent. Therefore we can demand cable companies provide a low cost basic service – $12.55 in Seattle for Comcast, for example, and there’s even a discount to that low rate for low-income residents – more details here. The State of Washington – and other States – can regulate telephone service, and require telephone companies to provide a low cost basic phone rate, e.g. $8 a month for 167,000 households. But NO ONE regulates broadband/Internet access. Consequently ISPs can charge whatever the market will bear. So in our present monopoly or duopoly environment throughout the nation – that is little choice for most of us – prices are at $30, $40 or more for even moderate speed access. Higher speed access is $100 or more. And that means low-income, immigrant, seniors and other households cannot afford access to the Internet. So they and their children are denied what is probably the most important pathway to education, information, jobs and higher income – access to the Internet. Even middle income households or neighborhood businesses cannot get affordable truly fast (e.g. 5 megabits per second symmetric) broadband.

Bill's post is well-linked and worth reading in its entirety.