FCC: Net neutrality important to rural residents

The U.S. must preserve an open Internet in order to bring the full benefit of broadband to rural areas, a Federal Communications Commission report on rural broadband said.

Without net neutrality protections, broadband users won't see as much innovation as possible on the Internet, said the report, released today by FCC acting Chairman Michael Copps.

"The ... network effects of ubiquitous broadband will not be realized if consumers are all constrained by careful bundling, packaging, and discriminatory practices that whittle away the end-to-end structure of the public Internet," the report said. "'Openness' is not just another bromide, but a principle we must tenaciously preserve. The value of open networks is not a novel concept, but the Commission must act to ensure that the genius of the open Internet is not lost."

Net neutrality rules are particularly important for rural broadband subscribers who may have only one provider, Copps said in the report. The FCC should "establish a systematic, expeditious, case-by-case process for adjudicating claims of [network] discrimination," the report said.

A spokeswoman for Comcast, a large broadband provider, declined to comment on the report.

But Dean Brenner, vice president of government affairs at mobile chipset maker Qualcomm, praised the report, saying it correctly recognizes wireless broadband as a way to serve rural areas. The FCC estimates in the report that wireless broadband service covers nearly 96% of the entire U.S. population, but only 83% of the rural population.

The report also recommends expanding programs to provide voice service subsidies to poor people to include broadband devices, and Brenner applauded that recommendation.

"Overall, we think this is a terrific piece of work by the FCC," he said.

The number of rural U.S. residents without broadband is unclear, the report said, but a significantly smaller percentage of rural residents subscribe to broadband than urban or suburban residents. Broadband could be a major driver of the economy in rural areas, the report said.

"The benefits of broadband extend particularly to small businesses in rural areas," the report said. "With broadband, running a small Web-based business in a rural location becomes a reality. Craftspeople, particularly those with a national or international following, can deal directly with their customers -- quickly and without expensive middlemen. Local tourism authorities can more effectively market their attractions to potential visitors."

Rural broadband deployment will also help improve the national economy, as new broadband users will drive up the demand for telehealth, online music, online gaming and other Internet services, the report added. "Economic development in rural areas ... will foster demand for broadband subscriptions, broadband-delivered content, and broadband-capable devices," the report said. "As with the basic telephone network, the more people that connect to the broadband network, the more value the network has for everyone on it, including initial users."

The report also suggests that the U.S. government invest heavily in broadband deployment, comparing broadband to the heavily subsidized Postal Service, transcontinental railroad system, rural electrification efforts and the interstate highway system.

"At their inceptions, some of these projects were controversial," the report said. "Many considered them too expensive; others doubted their efficacy. Today, few would question their value, but each of these undertakings depended on a strong and coordinated national vision."

The report, required in the 2008 farm bill, should serve as a "prelude to, or building block for," a national broadband plan advocated by President Obama, Copps wrote. An economic stimulus package passed earlier this year includes $7.2 billion to deploy broadband to rural and other underserved areas.

The report also recommends that U.S. agencies working on broadband deployment coordinate better with each other and with state and local governments. In addition, the government should create Web sites that list all the broadband resources available, and it should work on completing broadband maps, the report said.

Copyright © 2009 IDG Communications, Inc.

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