Broadband Regulation and Rural America

Wally BowenExecutive Director

Mountain Area Information NetworkAsheville, N.C.

24 May 2010

Why should rural America care about “Net Neutrality”?

Without NN, broadband providers can . . .

* engage in discriminatory practices . . .

* favor the data of a Fortune 500 client (e.g., Bank of America) over a locally-owned business (e.g., Hometown Bank)

* approve an application or device from GE,

while banning the same from Joe's Electronics.

Without NN, broadband providers can . . .

* charge rural subscribers higher access rates

* route rural broadband traffic onto secondary channels, while reserving “express” channels

for corporate clients.

Consider the U.S. Postal Service

* treats first-class mail the same whether it originates in Miami or Minot, SD

* same rates for express-mail everywhere

Net Neutrality protects our freedom . . .

* to roam the Web without gatekeepers

1891 – Almon Strowger patents the first telephone switch in Topeka, KS, leading to “common carrier” rules

* to tinker, innovate and connect devices without ISP approval.

1958 – Texas cattle-rancher Tom Carter builds and markets the 'Carterfone.' AT&T bans the device.

1968 – FCC approves the Carterfone rules.

Net Neutrality opponents argue that . . .

* NN regulations will limit network investment, broadband deployment, and competition;

* instead, competition and the market's “invisible hand” will protect consumers.

But broadband competition is rare in rural America.

Is Broadband a Utility?

Utilities are natural monopolies (e.g. water, electricity, natural gas)

Distribution technologies (wires and pipes) prevent competition.

Is broadband a utility?

Is Broadband a Utility?

* “Middle-Mile” fiber is clearly a utility

* “Last-Mile” wireless could support competition with spectrum reform.

“Rethinking Spectrum Policy: A Fiber Intensive Wireless Architecture”

Aspen Institute, March 16, 2010

Good News and Bad News

* Digital network technologies are affordable, scalable, and easily adapted to rural areas.

* Rural electric & telephone co-ops are proven models for rural broadband networks

* Local/regional networks reverse the IT “brain drain” from rural communities

* Boost local economies by keeping IT dollars and jobs local.

Good News and Bad News, cont.

* Create local opportunities for innovation, job- training, and small-business incubation

* Unleash competition and market forces to enforce open networks and net neutrality

* Rebuild the Internet's original, decentralized architecture, reducing exposure to cyber-attacks, and

strengthening national security.

Good News and Bad News, cont.

However, the National Broadband Plan . . .

* treats rural co-op networks as an historical artifact (Rural Electrification Act of 1936)

* focuses on creating incentives for commercial carriers to serve rural areas

* proposes licensing spectrum to ISPs for “advertising-supported” broadband.