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Lessons the FCC Can Learn from the Past!




dreamstime_2519812I think the FCC has to look back at how Broadband proliferation occurred from its beginnings to understand how to move it forward today. By researching and studying The Cable Communications Act of 1984, the Cable Television Consumer Protection and Competition Act of 1992, , and the Telecommunications Act of 1996, the federal arm of our telecommunications regulatory system can learn valuable lessons about hoping to create a (well oiled infrastructure) with plenty of competition.

The Cable Act of 1984 created the linear programming we have come to enjoy, and at the same time, hate to pay for. In essence, the act created content, the crux of the now issue; how to share it with everyone at a reasonable price. The Consumer Protection and Competition Act held that companies could not hold customers hostage for programming, in that programming tiers must be created to allow a choice on what consumers must pay to receive, and that any competitor could challenge an incumbent operator.

While they can be somewhat expensive, tiers are what consumers must pay extra to obtain for their favorite programs, while accepting many others they do not want. Competition in wire-line overbuilds never really materialized to any significant degree due to the high cost of infrastructure build-outs, programming, and overhead. DBS came along with the answer to that problem with terrestrial Satellite programming that consequently filled the gap of the underserved while creating the only programming competition wire-line operators have seen to date.

The Telecommunications Act of 1996 created, more than anything else, the sharing of networks by incumbent phone companies. They had to sell their network connections to competitors thereby creating competition in the local and long distance markets. Now that land-line communications has been replaced by a mobile industry, the ATT’s, and Verizon’s are finally upgrading their networks to enter the Broadband and Content arenas. However, this is proliferating at a woefully slow pace without a significant dent in the overall market.

Fast forward to today, and due to years of deregulation, you have a closed infrastructure consisting of a few large operators, Comcast, and Time Warner Cable with the ATT’s and Verizon with both comprising an insignificant market share of wire-line competition in the highly populated suburban areas. But you can’t blame cable companies for taking steps to eliminate competition and protect their territories; Wall Street demands it.

To solve the problem the FCC will have to look at (network sharing), and with a current closed network which is under built to handle a shared capacity, or more significantly, their current customer demands. Maybe the FCC can look at a Broadband (Super Highway), like our Interstate Highway System, making a pipeline to share with all competitors, but who would build it out, and at what cost. A competitive infrastructure is the right solution.


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