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From the Wall Street Journal: http://online.wsj.com/article/SB125850641299752981.html

By AMY SCHATZ

WASHINGTON — Federal regulators are considering whether the government should take greater control of the Internet and ask consumers to pay higher phone charges in order to provide all Americans with cheaper access to broadband Internet service.

The Federal Communications Commission Wednesday will lay out the case for expanding broadband Internet service, outlining current obstacles to making it widely available. The agency is considering whether to force Internet providers to share their networks with rivals and raise fees charged on consumer phone bills to pay for the broader access.

The Federal Communications Commission is mulling whether to force Internet providers to share their networks with rivals and raise fees charged on consumer phone bills to pay for expanded broadband access. The proposals have drawn criticism from telecommunications and cable companies.

The proposals, which have sparked criticism from telecommunications and cable companies, represent a reversal from the Bush Administration, when regulators cut back on government control of Internet and telephone service.

The new commission, controlled by Democrats, is considering whether more government control is needed to ensure competition and more affordable Internet service.

The FCC staff will float possible solutions in December and make formal recommendations in February, when it is set to release its National Broadband Plan, a blueprint for improving broadband speed and access. Congress asked the FCC for the plan earlier this year.

FCC officials estimate it could cost anywhere from $20 billion to $350 billion to connect all American households to high-speed Internet service, depending on speed offered.

They haven't yet said how much of that investment might come from taxpayers.

The agency is looking at three politically charged proposals to reach its goal of universal broadband access.

One is to as much as double a $7 billion federal phone-subsidy fund, called the Universal Service Fund, which subsidizes phone service in rural areas for low income Americans, and expand it to subsidize construction and operation of broadband networks in rural areas. Money for this fund comes from a small charge tacked on to consumer phone bills.

Previous efforts to overhaul the fund have run into significant resistance in Congress, particularly among congressman and senators who represent rural areas where phone cooperatives and small phone companies don't want to lose the federal subsidies they get to provide service.

FCC staff also are studying whether to revive "open access" rules, which would require Internet providers to lease their networks to rivals at government-regulated rates.

Similar rules are in place in Europe and some Asian countries — and some consumer advocates say open access is one reason why Internet service is cheaper and faster in those countries.

FCC officials have made no decisions yet on whether to adopt any of these proposals. The five-member FCC board will be the final say and they haven't been presented with any options yet.

Still, large phone and cable companies are against any effort to allow open access, arguing they will have little incentive to invest billions in networks if they are required to offer below-rate access to rivals.

In recent weeks, they have resisted efforts by the FCC's staff to gather data for pricing models. They are concerned the data-gathering might be used to help justify government rate setting, according to industry executives. FCC officials say they wanted the data for different purposes.

Consumer groups say open-access rules will spark competition and lead to more choice and lower Internet prices.

"It provides a way to bring more competition into the broadband marketplace which could drive down prices for consumers," said Joel Kelsey, policy analyst at Consumers Union, publisher of Consumer Reports.

The issue bubbled up last month, when Harvard University's Berkman Center for Internet & Society released an FCC-commissioned study which concluded that other countries have faster and cheaper Internet access because of open-access rules.

“ I think that nationwide high speed Internet access is just as important today as rural electrification was in the 30's. ” — Rick Beesinger

On Monday, AT&T told the FCC that the Harvard study's conclusion, "that open access is the talisman for success in broadband, is nothing short of astonishing."

The Harvard study "seems to assume throughout that we should apply the lessons of the past to the future," wrote Link Hoewing, a Verizon assistant vice president for Internet issues, on the company's policy blog. He argued it didn't make sense for the FCC to look at applying old rules, which were designed for the traditional phone system, to the fast-evolving Internet. Verizon declined to comment.

The National Cable & Telecommunications Association said the FCC shouldn't reach a "false and foregone conclusion" that such rules would increase the availability of high-speed Internet service "when a clear preponderance of empirical evidence reaches the polar opposite conclusion."

The FCC's third option for broadening Internet access, floated last month, has already stirred controversy.

The agency suggested that it might reclaim some airwaves from TV station owners and auction them off to wireless companies for more high-speed wireless Internet services.

Broadcasters, including PBS executives and station owners from Texas and other states, have been up in arms, streaming into the FCC over the past two weeks to lobby against the plan.

"The political realities of this are huge," said Gordon Smith, a former Senator from Oregon who recently became head of the National Association of Broadcasters on Tuesday. The FCC's proposal has "a long way to go," he predicted.

Phone and cable companies are already concerned by a separate FCCinitiativewhich would prevent Internet providers from favoring some Internet traffic. These net-neutrality proposals are opposed by Internet service providers, who argue that they need flexibility to manage their networks and potentially offer premium services to customers willing to pay more for faster delivery.

The FCC hasn't formally proposed any open-access rules, which require companies to lease space on their networks to competitors, and may decide not to do so. "We're looking at lots of things in the entire ecosystem. It would be premature to suggest we're moving in a particular direction," said Blair Levin, a former telecom analyst who's overseeing development of the National Broadband Plan for the FCC.

He said that the Universal Service Fund, which is financed by fees charged on consumer phone bills, is flawed because it only covers phone service and not broadband as well.

If the agency heads down the open-access road, it would be returning to policies the FCC adopted in the wake of the 1996 Telecommunications Act, which opened the local and long distance phone markets to more competition.

Congress required phone companies to lease part of their networks to competitors, but it took the FCC the better part of a decade to write rules that withstood legal challenges from the telephone companies. The FCC exempted broadband lines from such regulation in 2002.

Write to Amy Schatz at Amy.Schatz@wsj.com

The Massachusetts Broadband Institute (MBI), WesternMA Connect, and
Senator Stan Rosenberg, Senator Ben Downing,
Rep. Steve Kulik, Rep. Smitty Pignatelli and Rep. Denis Guyer
cordially invite you to attend a community meeting about expanding
broadband internet access in western Massachusetts

For your convenience MBI will conduct two sessions in the region.
Both sessions will include a presentation about the latest efforts of the MBI and
an opportunity to participate in discussion on this important issue.  

Please email broadband@masstech.org or call (508) 870-0312 x 1645
to indicate which session you plan to attend.

Berkshire Session
Friday, June 19, 2009, 3:00-4:30 PM
Berkshire South Regional Community Center
Robbins Meeting Room
15 Crissey Road
Great Barrington, Massachusetts

Directions to Berkshire South Regional Community Center, 15 Crissey Road, Great Barrington, MA.
The Community Center is located at the end of Crissey Road, off Route 7 (Stockbridge Road) in Great Barrington.  Crissey Road is located north of The Price Chopper Shopping Center and south of the Jenifer House Commons.

From Stockbridge and Points North:  At the intersection of Route 102 & Route 7, take Route 7 South towards Gt. Barrington. You will pass the intersection to Route 183 on your right. After you pass Jennifer House Commons on your left, make your first left turn onto Crissey Road. Berkshire South is located at the end of Crissey Road.

From the Intersection of Route 7 & Route 23 and Points South:  Take Route 7 north through the town of Gt. Barrington. Crissey Road is the first right hand turn after the light at the Price Chopper Shopping Center. Berkshire South is located at the end of Crissey Road.

From Route 22:  At the intersection of Routes 22 & 23, turn onto Route 23 east. Proceed east on Route 23 passing Catamount Ski area and the town of South Egremont until you reach the intersection of Route 23 and Route 7. Turn left on Route 7 north and follow the directions above.

From the Massachusetts Turnpike:  Take Exit #2 off the Mass Turnpike and follow Route 102 toward Stockbridge. Follow directions above.

Bus:  Let the driver know, and BRTA Bus Route #21 will stop at the front door of Berkshire South. Route #21 runs from Great Barrington to Lee.

The Communicators: Broadband and the Obama Stimulus Plan
Sharon Gillet, Commissioner of the Massachusetts Dept. of Telecommunications & Cable, and Joanne Hovis, Nat’l Assn. of Telecommunications Officers & Advisors, Board Member, give their perspectives on the current provisions for broadband included in the House and Senate stimulus bills. Guest host is Jeff Silva of RCR Wireless News. Program from Saturday, Feb. 7, 2009.

Rural fiber developers are fed up with the line that folks in the heartland aren’t ready for broadband. They gave Ars an earful at a conference in Washington, D.C.

By Matthew Lasar | Last updated May 10, 2009 6:32 PM CT

They came from across the country, invited by the Benton Foundation to extol the virtues of independent broadband at the National Press Club HQ in Washington, D.C. And a collegial bunch they were: crack developers from ISPs in Oregon, Vermont, and Minnesota, happy to talk up their achievements in building fiber and DSL networks for rural areas and small towns.

They all knew each other and seemed to be old pals, so Ars settled in for a pleasant afternoon of mutual self-congratulation. Then somebody from the audience spoke up.

"This is a question for the rural end of the table," he asked. "One of the studies that we see most frequently is one from Pew which contends that there isn’t very much demand [for broadband] in rural areas, [which] is why it hasn’t been built out." What did the panelists think of that?

A sore point had been raised, and suddenly the collegial smiles were gone.

"It clearly is a myth," declared Gary Evans of Hiawatha Broadband Communications, a rural ISP based in Minnesota. "We are not a low priced provider in any community that we serve, but we are a broadband provider." In one rural region, Evans noted, 60 percent of the population signed up with the company "before we put a shovel in the ground."

"Now, I would suggest to you that if there’s no demand out there, that simply would not be the case," he insisted.

"Where do these Pew guys get their money?" grumbled another panelist.

Not interested?
It’s unclear which Pew Internet and American Life study everybody was talking about. One of the most frequently mentioned says that about two thirds of folks who don’t have broadband don’t want it. They’re "not interested," they told Pew, or they can’t get access, or it’s "difficult," or they feel that they’re "too old to learn."

Another survey reported that, at the end of 2005, broadband penetration in rural America lagged behind the rest of the country by about 15 percent. A lack of access explains this phenomenon, Pew explained, noting that rural residents with high speed Internet tend to use it as much as city dwellers. But, reading the document, one could also surmise that a demand issue is also at play.

"Rural Americans are, on average, older, less educated, and with lower incomes than people living in other parts of the United States," the Pew survey observed, "all factors associated with lower levels of online use."

A recent comment sent to the Federal Communications Commission by the broadband mapping outfit Connected Nation very explicitly makes this point. "Stated simply, the business case for broadband deployment is difficult in many rural areas where computer ownership and computer use skills are low," the group’s filing said.

There’s no offense intended by any of these observations. But lots of rural ISP boosters are getting pretty touchy about the "broadband to nowhere" line—that people in the countryside are too spread out, illiterate, old, or just too plain out of it to demand high-speed access.

Baloney, these panelists declared. "Rural America is both hungry for broadband and anxious to use it," Evans insisted. "It’s nonsense," added Tim Nulty of ECFiber, a Vermont ISP. "I don’t know where they get it."

"When we started our project," Nulty continued, "the towns in question each had to have a referendum to join the project. Twenty-two towns [in total]. The worst vote we got was 78% percent in favor. Eight towns were unanimous."

Nulty is a fiber-to-the-home developer who hopes to have his network of rural subscribers completely fibered up by 2010, and will offer speeds of up to 100 Mbps. We’re talking access to 900 square miles with about 55,000 people here.

"The standard traditional wisdom is ‘Oh no you can’t do that; impossible,’" Nulty noted. "’Can’t make fiber work in rural areas. You’ve got to use some half-baked technology like WiFi or something like that." Au contraire, he told the audience. "It’s actually significantly easier and cheaper to do fiber today than it was to do copper when our forefathers did it in the thirties."

It was definitely bragging time at the event. Hiawatha’s Evans came with stats about what his Winona, Minnesota based fiber-to-the-home ISP has accomplished: 35 percent penetration by the end of its first year (1999), a host of other small towns following suit, new businesses, wired hospitals, and dramatic residential growth, "in some instances, reversing six decades of population decline." HBC hopes to tap into that 7.2 billion in broadband stimulus money to extend its reach another 900 miles, Evans says.

Neighboring Jaguar Communications brought high speeds out to a south Minnesota area of about 12,000 square rural miles, and has 10,000 customers who live in Blooming Prairie, Owatonna, Waseca, and six more townships with similar names. Its board chair, Donny Smith, described the ISP as "a group of local people who decided to do it. Nobody else would do it, so we decided to do it ourselves."

You can’t download anything
These guys think that rural America’s broadband penetration lag needs a lot less explaining and a lot more fixing. Rural areas may have some non-adopters, but they’ve also got plenty of people who want to get on the high-speed boat ASAP.

Nulty told the story of a rural Vermont repairman whose garage was packed with chainsaws, snowmobiles, and other motorized equipment. "I can’t fix any of them if I can’t get an exploded diagram, a shop manual, a parts list, and order parts."

"Right now I’ve got 14k on my dialup, when it works!" the machinist lamented. "You can’t download anything at 14k. It runs for two hours and gets halfway through one page and stops!"

A half hour later, the discussion was still on a roll, with stories about rural diabetics being treated from home via video conferencing, and shots being lobbed at a Microsoft FCC filing that suggested that the government should prioritize its broadband stimulus money for wiring schools, libraries, and hospitals.

Sure, those institutions are important, Donny Smith agreed, "but the problem with focusing on just those is that they become single-purpose networks that do not serve the whole area. If [broadband] is owned by the municipal library, it’s not going to have services going out to Joe Johnson’s house down the street."

It’s hard to argue with studies suggesting that a variety of factors are holding rural broadband back: lack of service, education, skills, and even awareness of the possibilities. But these entrepreneurs call them overblown. Their neighbors know what will happen, they say, if high speed Internet doesn’t come to their neck of the woods, and soon.

Without broadband, Nulty warned, "People move out. You can’t sell houses. People won’t come. Kids can’t do homework. This isn’t about games or seeing HBO. This is about community survival."

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