DSL

DSL Prime Editorial: NRC vs. Tauzin

SBC is pretending to like the report from the National Research Council in the hope that you will not read it—and find out how the nation's scholars oppose Tauzin-Dingell in principle and in detail.

by Dave Burstein DSL Prime [December 5, 2001]

"Universal service goals of ubiquity and affordability remain paramount." —Mike Powell

The wise men of the National Research Council, the most prestigious group ever to look at broadband, Thursday specifically refused to support the Tauzin-Dingell (T-D) bill, when directly questioned for an opinion.

MIT's Dave Clark, one of the world's most respected computer scientists instead said "Compare what we are saying with the actual provisions of the bill." I've done that below—the conflicts are massive.

Clark continued "This committee believes no change is necessary in the requirements of the Telecom Act for the existing copper loops. We believe that new equipment, especially remote DLCs, should be unbundled in a different fashion, unbundling the logical loop rather than the physical subloop in the field. This changes the place of the unbundling and reduces costs, but allows access to competitors on reasonable terms."

Jayant, Clark, Noam, Cioffi and the committee instead recommend patient, slow going, recommending only a technical change in how unbundling is accomplished, one likely to be included in forthcoming regulations. For new remote terminals only, they suggest a much more practical "logical" connection at the CO rather than the difficult physical connection in the field. This is the intent of the forthcoming NPRM. Done right (quality service, fair pricing), nearly the entire industry is ready to support that change, and is the substance of Verizon's "Tauke Plan."

The report is far more than a devastating critique of the particulars of the current legislation. 200 dense pages demonstrate that broadband speeds must dramatically increase beyond current offerings to actually enable the new applications that matter; unbundling remains crucial for competition, only facilities based competition is truly significant; new applications will be drivers, the economic issues are far more complicated than the recent public discussions, and that many of the most important questions are difficult or impossible to decide without more research and experience.

NRC Wise Men on our future
Mapping the report against the language of Tauzin-Dingell
Dave Clark advised me to "map the committee's reccommendations against the language of the bill in order to understand our position." The contradictions between the committee report and the telco deregulation proposals are striking. While advising a "prudent strategy" and "to be patient", in the first paragraph the committee also points out "the federal government may need to step in to help improve service where broadband availability is lacking or to address any abuses of market power." That's absolutely counter to the ban on government action called for in Tauzin-Dingell.

Here's particulars of committee recomendations that directly conflict with the language of Tauzin-Dingell.

NRC "Broadband should be defined in a dynamic and multidimensional fashion"

T-D instead fixes broadband as any service "not less than 384 kilobits per second in at least one direction",The committee pointed to key applications that require much higher speeds, and that speed in both directions is important, as in current regulations. DSL Prime has previously editorialized against the "one-way Internet".

NRC "goals of universal access to important capabilities and customer satisfaction remain"

T-D calls for deployment that is not merely far less than universal, but actually less than Verizon, SBC, and BellSouth already planned to do for business reasons —and is four years later than the telcos own commitments. (Seidenberg of Verizon projected 90 percent for 2002, Whitacre 80 percent for 2002, BellSouth 70 percent for 2001 and universal in North Carolina. T-D only covers about 60 percent of customers, of whom at least nearly all are already served. Specifically, of the remaining 40 percent of customers to cover, perhaps 5-7 percent would be provided for under T-D, in the smaller COs.) Nearly half the unserved customers are behind remote terminals—all of whom were previously scheduled by Verizon and SBC for service. They are now not promised service.

Any requirement for "customer satisfaction" or service is specifically prohibited by T-D.

Germany, Japan, Belgium, and Korea are already close to 90 percent coverage. Canada is over 70 percent, expecting 90 percent shortly. None required subsidy, all have strong unbundling and competition requirements. They also charge about half what the U.S. does for generally better service.

NRC unbundling changes should be "subject to appropriate mechanisms to address market power"

T-D specifically forbids any regulation of that market power or pricing by the FCC or any state government

NRC "different forms of intervention will be required in different areas"

T-D prohibits any regulation by states

NRC "incumbents have considerable advantage"

T-D does not allow new government rules nearly everyone—including most FCC commissioners—which we consider essential to overcome such an advantage.

NRC "develop metrics to permit independent evaluation and rating of performance"

T-D specifically prohibits regulations requiring reports on the actual performance of the system. Many services, including competitive voice over DSL and video on demand, cannot be delivered without reliable performance. T-D prevents the government from requiring reliability.

NRC "Is subscriber access to certain Internet content or services being blocked or impaired (as compared with other content)"

Being able to access all content on the Internet is one of the most important freedom of speech issues of the new century, which will be a much greater concern now that video speed are practical. More people watch television than read newspapers, and the coming "Third Internet" will be fast enough to watch.

Unfortunately, SBC, in negotiations with ISPs, has been claiming Internet content at video speeds is not part of their service, looking instead to offer video speeds only to their own selected (and high-paying) content partners. Just like today's cable systems, this can severely limit outlets of expression.

Preventing this chokepoint on the Internet would require many technical regulations (peering points, etc.) that could be prohibited by T-D's incredibly broad language. Will Verizon and SBC deliver my church video programming over their networks? This question will become crucial as the technology enables thousands of channels and individually selected programming. Right now, @Home and SBC are specifically blocking almost all video content. Crucial First Amendment issue, shouldn't be preempted by this legislation.

NRC "Anticipate that facilities-based competition will not occur in all places, and fashion appropriate policies to address these gaps"

T-D assumes competition is able to substitute for regulatory polices, hence prohibits them. The NRC accepts the reality that important areas will not have effective competition.

NRC "Establish a Federal and State policy framework supportive of local initiatives" "Increase local capacity to promote broadband deployment" "support planning grants for localities" "Federal rules should continue to bound the range of outcomes, but in many cases local decisionmaking based on local needs is appropriate." 4 related recommendations

T-D prohibits many state and local policies that would be required to make this effective

NRC "ADSL works to 18,000 feet"

T-D "15,000 feet". British Telecom's field experience is that with proper testing shows most customers out to 18,000 can be served. The difference between 15,000 feet and 18,000 measures is similar to the number of customers who would be served if DSLAMs were put into all the remaining offices. This "minor detail", therefore, affects more people than the most extreme requirements of the T-D bill.

We are journalists, not investment advisers; invest at your own risk and do further research.

Copyright 2001 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

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—A.J. Leibling

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