Internet Access -- A Right? A Privilege?
CONSUMER GROUPS RELEASE STUDY URGING OPEN ACCESS TO HIGH-SPEED "BROADBAND" INTERNET
Consumer Action and the Consumer Federation of America (CFA) jointly released September 21 a major public policy study demonstrating that open access to the high-speed "broadband" Internet is essential to preserve the Internet as a vibrant medium for communications and commerce.PUBLIC POLICY ANALYSIS CLAIMS ANTI-CONSUMER IMPACT OF PRIVATE REGULATION OF THE "BROADBAND" INTERNET
"This analysis makes it clear that neither the cable companies nor the telephone companies should be allowed to pick and choose which Internet service providers (ISPs) may provide consumers access to high-speed Internet connections," said Ken McEldowney, Executive Director of Consumer Action, and President of CFA. "The effort to impose private regulation on the Internet in the form of exclusive, discriminatory access is a dagger pointed at the heart of the Internet, which has thrived by allowing all content providers to have equal access to the wires that connect people to the network."
The 100-page report, titled Transforming the Information Highway into a Private Toll Road, explains the harm to consumers inherent in efforts to close the on-ramps to the nation's information superhighway, including:
- preventing competition for cable TV programming;
- reducing competition for broadband Internet services;
- abusive pricing and bundling of cable TV and Internet services;
- diminished creativity, innovation, and diversity of content; and
- restriction of universal service.
"AT&T has set out to amass a monopoly over U.S. cable TV systems and to extend the cable TV business model to the Internet," said Dr. Mark Cooper, CFA's Director of Research, and principal author of the study. "That model includes price increases over three times the rate of inflation, denial of consumer choice through forced bundling of programming, and restriction of innovation through preferential treatment of affiliated programming."
"Local phone companies must also live up to their duty under the Telecommunications Act of 1996 to provide open access to their high-speed networks," McEldowney added. "They should not use the efforts of cable companies trying to close off their broadband 'pipe' to unaffiliated ISPs as an excuse to push policymakers to eliminate telephone company obligations to run an open network. The potential end result will be a disaster for consumers - two private toll roads and no open access lanes on the information superhighway."
The report notes that local cable TV franchising authorities in Portland, Oregon, and Broward County, Florida, have ordered AT&T to provide open, non-discriminatory access to the cable network as a condition of the transfer of cable TV licenses to AT&T, and that scores of others currently are taking up the issue. To promote the same pro-consumer outcome, Consumer Action will be filing the study before numerous cable franchise authorities in the Los Angeles area, as well as in San Francisco, which is developing its policy on open access.
"The local governments that have been insisting on open access have stepped up to defend consumer interests by filling a void left by federal regulators," McEldowney said. "Congress and federal regulators have been promising the American people for years that competition will break the monopoly power of cable TV and local telephone companies-and they have been wrong. Our report shows that the Federal Communications Commission has erred again, by not imposing an open access requirement, especially with one company dominating so much of the infrastructure and programming for both cable TV and broadband Internet service."
The report details the technological and economic mechanisms that already are being used to restrict competition in a closed, discriminatory cable network.
- documents the technological capability to discriminate against unaffiliated ISPs;
- enumerates the current anti-competitive and anti-consumer practices of cable TV and local telephone companies;
- identifies key elements of the closed access business model planned for the broadband Internet;
- reviews the extremely negative experience of consumers in the 15 years that the cable TV industry has operated as a closed access network; and
- analyzes the failure of cross-technology competition to break the cable monopoly.
"To maintain a vibrant Internet, ISP access to consumers must be open and non-discriminatory, regardless of whether the connection is made via a cable or telephone company's network. Consumers and the country cannot afford the development of private networks for broadband Internet service. A small number of private networks will not provide adequate competition to prevent the abuse of economic power in the commercial market, or to ensure the free flow of information in the marketplace of political ideas," Cooper concluded.
Full text of the report is available at http://www.consumerfed.org/broadbandaccess.pdf.
Consumer Federation of America, founded in 1968, is the nation's largest consumer advocacy group. Consumer Action is a non-profit, membership-based organization that was founded in San Francisco in 1971.
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