A report says small ISP businesses, not phone and cable companies, have driven the pace of innovation in the United States, even as the corporations tried to prevent lone entrepeneurs from succeeding.

by Patricia Fusco Managing Editor of ISP-Planet [July 5, 2002]

The Consumer Federation of America (CFA), a pair of state-based ISP associations, and EarthLink say that the Federal Communications Commission must allow smaller ISP businesses to compete on a level playing field or Internet innovation will cease.

The CFA, in its report The Importance of ISPs in the Growth of the Commercial Internet, accuses the phone and cable companies of hindering independent ISP deployment and resale of broadband services is a foreclosure on innovation for Internet access worldwide.

In contrast to the narrowband Internet, which experienced a constant stream of innovations adapted for the mass market, there have been few (if any) innovations exploiting the unique functionality of high-speed services.

David Robertson, Vice President of the Texas ISP Association (TISPA) and President of the San Antonio, Texas-based ISP, STIC.NET, provided an example of innovation the independent ISPs spurred onward in recent history. The example is DSL access.

"ISPs were playing about with copper pairs three-and-a-half years before the RBOCs (regional Bell operating companies) started to deploy DSL access," Robertson said. "At the time, the RBOCs called this 'dangerous' and something that would destroy their networks. But later, when the RBOCs figured that this innovation could provide super-fast Internet access, they did everything they could to make sure no one else could provide DSL access until regulators stepped in and made them."

Public commons
To a certain extent, Stanford Law School Professor Lawrence Lessig echoes these thoughts on the innovative role independent ISPs have played his book, The Future of Ideas.

Lessig explains how the explosion of innovation we have witnessed in the Internet environment originates from an ideal as old as the nation. The Internet's very design, built upon an open, neutral platform—akin to free speech and freedom from religious persecutions—has created a new, global "public commons."

Lessig believes that the legal architecture surrounding the Internet should be protected as a free and open space so that culture and information—the exchange of ideas in our era—can continue to flow freely. But this structural design is changing—both legally and technically. As a result, this shift will destroy the opportunities for creativity and innovation that the Internet originally engendered.

"The change that is happening in the context of wires has a particular form. We are in the midst of a radical change in technology; that change threatens existing interests; those interests have an interest in minimizing the threat that this change presents; they can minimize that threat by reestablishing choke points on the system that emerges. They can, in the world of Gerald Faulhaber, use the architecture to regain strategic control."

While much of Lessig's observations involve intellectual property and copyright concerns, it's clear that the open, competitive nature of the Internet propelled innovation forward, and that independent ISPs reside at the core of the open market on innovation—not the capital-cumbersome RBOCs or cable companies.

Spirit of innovation
We witness this again today in fixed wireless broadband deployment. Based on findings from INT Media Research (also operated by our parent company INT Media Group, Inc.), one-third of independent ISPs in the U.S. are deploying or have already deployed fixed wireless broadband access to the masses. This is something that Sprint and AT&T have failed to provide U.S. consumers.

It's a simple, documented fact that the spirit of innovation is deeply ingrained in independent ISPs that have managed to connect small, often rural or remote businesses to the outside online world by deploying 802.11-based fixed wireless broadband services. While larger carriers cannot achieve an "economy of scale" to support fixed wireless ventures, independent ISPs have scaled up broadband services to entire towns, counties, and municipalities—and have scaled down to serve communities that the phone companies claimed were so unprofitable that the federal government would have to pay the phone companies' costs in order to connect them.

Even though the FCC gives every appearance of listening to all parties concerned by meandering through its routine, bureaucratic triennial review of the 1999 fair competition orders, the Commission does not appear to hear what independent ISP operators are saying:

If the Commission eliminates independent ISPs' access to broadband facilities, federal regulators will have unilaterally suppressed Internet-based innovations for years to come. Now is the time for the FCC to think outside the platform and embrace an open, unencumbered broadband Internet access policy.

The FCC needs a policy that allows independent ISPs to perpetuate future innovations, not snuff out the next great broadband transformation, a policy that embraces the small communities of America as well as the large, that embraces lone entrepeneurs as well as corporations, a policy that embraces the individualistic spirit of the nation, not the monopolistic trends of money politics.

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