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ILEC Internet Gatekeeping Will Crush Competition


IMAGINE A SCENARIO IN WHICH

a customer making a phone call to an individual not on his or her service providers approved list would have to pay extra to complete the call. Far-fetched? Well, its the exact model some network owners have proposed applying to the Internet. You can thank the FCC for creating a regulatory environment that would enable this to happen.

By now, weve all read the recent statements made by Bell company executives of their intent to extract additional revenue from Internet content sent over their networks. So, why arent policymakers rushing to prevent such a scenario from becoming a reality? Perhaps because its hard to imagine a world where were not able to access whatever content we choose at any time on the Internet. Why is it so hard to imagine? Because we all have grown up taking for granted the common carrier rules that made the Internet possible. By removing those rules, the FCC has set the stage for monopoly or duopoly control of our nations communications networks.

Do not be fooled by the Bells rhetoric that consumers would benefit from the creation of Internet fast lanes controlled by the network operator. The Bell companies are essentially saying they will relegate unaffiliated providers to poorer service than what they provide themselves and affiliated providers. For an additional fee, however, unaffiliated providers can, at the discretion of the network operator, be provided with faster, more reliable service. In doing so, the Bells are simply building on the practice already followed by the cable companies with their broadband service. Under the cable model the Bells are seeking to adopt, consumers have to pay twice for the same thing. If customers do not purchase the Bell or cable companys affiliated broadband content or service, then those customers have to pay extra to access the desired information or provider using the Bell or cable company network.

The recent comments made by SBC Communications Inc. (now AT&T Inc.), Verizon Communications Inc. and BellSouth Corp. are a direct result of the FCCs decisions to classify cable modem and reclassify DSL broadband as an information service, thus removing them from common carriage rules. Competitive carriers and consumer groups warned the commission that the agency was empowering the Bell and cable companies to become gatekeepers to the Internet, and now the Bells are openly outlining their intent to become just that.

The commission has created a regulatory environment that enables network operators to discriminate against Internet portals, Internet service providers, Internet retailers, competing broadband service providers and even consumers.

The Bell companies alleged Internet fast lanes clearly would restrict consumer and business access, stifle innovation, raise prices and disadvantage America in the world economy.

The United States now ranks 16th in the world in terms of broadband penetration, behind such countries as Canada, Finland and Norway. Research has shown that high retail pricing is the most important contributor to consumers choosing not to migrate to broadband. Now, imagine if consumers were asked to pay even higher prices for fast, reliable service. Is the United States ready to see its place in the world fall even further?

As President and CEO of COMPTEL for almost a year now, I have been a staunch advocate for competition and a zealous proponent of innovation. Our association represents the innovators and entrepreneurs who are right now creating the future of communications.

The revolution in broadband and IP services, including VoIP, never would have taken place without the competitive industry. Our members were the first to introduce packet switching, DSL,VoIP and businessclass IP services. COMPTEL always has held firm in its position that transmission networks should be open and accessible on a nondiscriminatory basis at just and reasonable rates and conditions.

The cable companies never have allowed competitive access to their broadband networks, and the Bells have a long history of blocking competitive access to their facilities. Allowing these incumbents to become Internet gatekeepers will crush competition, diminish innovation and, in the end,may pave the way for one or two Bell companies to remonopolize the nations communications networks.

Since the FCC has let down competitive carriers and consumers, it will be up to Congress to restore the competitive framework. COMPTEL will play a key role in advocating for this framework as lawmakers consider legislation to update and revitalize our nations communications laws.

Clearly, weve seen the communications industry experience drastic transformations over the years. The marketplace has changed from what it was in 1996, when Congress last addressed fundamental revisions to the telecom laws.

Yet the pro-competitive policies outlined in the Telecommunications Act of 1996 are as important today as they were 10 years ago. Any legislation that proposes hindering competitive access to transmission services and facilities would be devastating for consumers and for our economy.

For 25 years, COMPTEL has stood as the association of choice for competitors in the communications industry. Our member companies represent the best of the entrepreneurial spirit and are dedicated to bringing new and innovative technologies to the marketplace. American consumers have reaped the enormous benefits of the cutting-edge technologies and services the competitive industry has brought to the marketplace. COMPTEL will continue to fight the recent trend of anticompetitive decisions that threaten access to the transmission services and facilities needed to maintain and enhance competition throughout the communications industry.

Earl Comstock is CEO of COMPTEL, a Washington, D.C.-based trade association representing facilities-based carriers, providers using unbundled network elements, global integrated communications companies and their supplier partners.

Links
AT&T Inc. www.att.com
BellSouth Corp. www.bellsouth.com
COMPTEL www.comptel.org
FCC www.fcc.gov
Verizon Communications Inc. www.verizon.com

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