The Internet Distinction

(Original at Huffington Post)

AT&T commemorated last week’s one-year anniversary of the Federal Communications Commission’s (FCC) National Broadband Plan in its own, unique way. Ending a week of celebrations, it bought one of the other four biggest competitors, T-Mobile, further shrinking competition in wireless broadband, further concentrating an already concentrated market. Now instead of the big four wireless companies, there are the bigger three.

The government hasn’t blocked a telecom merger yet, but this one should given these policymakers pause. And if they let it through, there should be some very strong conditions.

That $39 billion move was just the capper to the celebrations. It levied bandwidth caps on its customers. It then told its customers that it was a no-no to use data from their broadband data plan service to connect a Blackberry to a laptop. Not all data is created equal. Separate tethering plan required, it seems. That basically sums up the state of broadband in America.

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It’s a good thing that news organizations picked up the usage-cap story, because AT&T didn’t make it very clear in its new Terms of Service. This is what the company told customers: “Data Usage. For more information about the use of your High Speed Internet Service, data usage allowances that may apply to your service, how much data you use, and management of your data usage, please refer to www.att.com/internet-usage.” That’s very helpful.

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Los Angeles Times tech editorial writer/blogger Jon Healey commented that even if the cap doesn’t affect users now, “it’s troubling when a broadband provider that faces little competition summarily raises prices, particularly when the move hurts rivals in a separate market. AT&T’s pay-TV service competes with online video-on-demand offerings from Netflix, Amazon, Vudu, Apple and CinemaNow, to name just a few. If the bandwidth caps deter consumers from using those services, that’s a very bad thing.”

That’s the point. High-speed Internet access is still a market with little competition and the government has been trying to stress the need to convert to a broadband-based economy. There is nothing in the National Broadband Plan to address that crucial fact. Indeed, the plan’s writers ignored the study that addressed the issue of competition.

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How else is the National Broadband Plan being honored? In North Carolina, the same Time Warner Cable is on the verge of winning the legislative war to keep municipalities from offering their own competing Internet service. TWC has been trying for years to get the bill passed and now, with a friendly legislature, they have a good shot. The local groups who beat back the bill the last couple of years are fighting valiantly but they recognize it’s an uphill battle.

And up in Minnesota, cable company Mediacom is still fighting against a $66.5 million broadband stimulus project, filing a complaint with the U.S. Agriculture Department’s Inspector General against Lake County, Minnesota. Those companies trying to squash municipal networks should realize the local governments wouldn’t take on the challenge of a network if they got decent service from the private sector.

Somehow, the caps and the challenges seem at odds with FCC Chairman Julius Genachowski’s vision that “what matters is the full broadband economy – a broad and widely available ecosystem of fast networks, valuable applications, and innovative devices.”

By most measurement, U.S. consumers still pay more money for less speed than other developed nations. Nothing in the National Broadband Plan will address that situation.

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