US official: Broadband regulation may be needed

The U.S. Federal Communications Commission should consider regulations for broadband providers in an effort to increase competition, an official with U.S. President Barack Obama's administration said.

In most areas of the country, there's been slow progress toward "vigorous competition" among broadband providers, wrote Lawrence Strickling, assistant secretary for communications and information at the U.S. Department of Commerce and administrator of the National Telecommunications and Information Administration (NTIA).

"We urge the Commission to examine what in many areas of the country is at best a duopoly market and to consider what, if any, level of regulation may be appropriate to govern the behavior of duopolists," Strickling wrote in comments to the FCC about its upcoming release of a national broadband plan.

While the FCC should avoid price regulation, the commission should consider net neutrality rules that would prohibit broadband providers from selectively blocking or slowing some Internet traffic, said the letter, released late Monday. Obama has long advocated for new net neutrality rules, and the FCC in October, released a set of proposed net neutrality rules.

Large broadband providers have generally opposed major new net neutrality rules, but the NTIA filing seems "pretty sensible," said Jonathan Banks, senior vice president for law and policy at USTelecom, a trade group representing large telecom carriers. Strickling's letter seems to call for general rules to prevent anticompetitive or anticonsumer behavior, instead of creating rules against specific activities that may provide benefits to consumers, he said.

USTelecom has objected to one proposal in the FCC's net neutrality notice that would prohibit broadband providers from charging Web content or application providers for "enhanced or prioritized access." But such a prohibition could hurt consumers; that would seem to prevent broadband providers from offering several services, including supplying online gaming vendors with low-latency bandwidth, Banks said.

"The concern from all the broadband providers is, instead of rules that prevent anticompetitive things or bad things for consumers, we're going to get rules that say, 'no discrimination is allowed,'" he said. "The concern here is that the commission is going to do blanket rules that prohibit a huge category of activity, regardless of whether it's anticompetitive or procompetitive."

The NTIA letter also questions whether fourth-generation, or 4G, mobile broadband services will provide a "viable" alternative to wireline broadband. "Although early projections from the [mobile] industry are encouraging, it is premature to predict when, or even whether, these wireless broadband services will provide the competitive alternatives that can benefit consumers of all services, including wireline," Strickling wrote.

Two of the largest providers of mobile broadband service, Verizon and AT&T, also are among the largest wireline providers, the letter said. That raises a question "of whether these providers will market these services as replacements for wireline services," the letter said.

Some opponents of net neutrality and other broadband regulations have pointed to upcoming competition from mobile broadband as reasons that regulations aren't needed.

CTIA, a trade group representing mobile carriers, does seem some customers using mobile broadband as an alternative to wireline broadband, said Christopher Guttman-McCabe, the group's vice president of regulatory affairs. But like USTelecom, CTIA has few complaints about the NTIA filing, he said.

"I don't think anyone can answer that question" of whether mobile broadband will replace fixed broadband, he added. "I'm not saying it's a substitute. I'm saying it's different, but consumers will make the choice."

Copyright © 2010 IDG Communications, Inc.

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