Ben Scott, Policy Director at Free Press, testified before the United States Senate Committee on Commerce, Science and Transportation on April 24, 2007

Testimony of Ben Scott, Policy Director at Free Press, on behalf of Free Press, Consumers Union, and the Consumer Federation of America before the United States Senate Committee on Commerce, Science and Transportation Regarding Communications, Broadband and Competitiveness: How Does the U.S. Measure Up?
April 24, 2007

Free Press, Consumers Union, and Consumer Federation of America appreciate the opportunity to testify on broadband competitiveness. As consumer advocates, we strongly support policies that will bring more broadband competition to American households. The current broadband problems we face are severe and the consequences of resting on the status quo unacceptable. Recent broadband policy at the FCC has not embraced a free market approach to enabling competition, but rather supported the entrenched incumbency of a rigid duopoly. Going forward, we must break out of this box and reassert the principles of public interest communications policy enshrined in the Communications Act-to bring essential communications services at affordable rates to all Americans.

We recommend this Committee undertake a sweeping inquiry into a variety of broadband policy options and begin moving toward a comprehensive national broadband policy. Step one in this process will be a thorough confrontation with the problems in the current broadband market. It is important that we set aside the myths and excuses we have used to justify our broadband troubles up to now. The reality is that the US broadband market has significant failures in the three metrics that matter most: availability, speed, and value (cost per unit of speed). Despite years of promoting universal availability, there are still roughly 10% of American households that lack a terrestrial broadband provider. We pay more for a lot less bandwidth than our global competitors. Finally, we do not have a competitive market that is pushing speeds up and prices down at a rate sufficient to raise our stature relative to the rest of the world. In a study released this week by the Organization for Economic Cooperation and Development, the US has dropped from 12th to 15th in broadband penetration among the 30 member nations in the last 6 months. Our growth rate relative to the other OECD nations over the past year ranks at 20th place. Tackling these challenges will take bold, aspirational leadership. To begin, we need to improve the depth and breadth of the data the FCC collects from broadband providers so that we better understand our problems and our progress. We must then undertake a variety of policy initiatives to bring competition to the marketplace including: ensuring spectrum auctions produce real competitors not vertical integration; opening the TV white spaces for unlicensed use; protecting the rights of local governments to offer broadband services; guaranteeing the interconnection of networks on nondiscriminatory terms; transitioning USF programs to broadband; safeguarding the Internet's free market for goods, services and speech through network neutrality rules; and investing in programs that bring equipment and training to underserved communities.

We rely on the market forces of a duopoly to produce robust cross-platform competition at our peril. When the chief supporters of the status-quo, wait-and-see approach to the arrival of a third competitor to DSL and cable are the incumbents themselves, we should understand that they do not expect it will happen. Further, we can see that most of the global leaders in broadband performance have embraced so-called "open access" network rules, policies that bring competition both between and within technology platforms. This combination of "intermodal" and "intramodal" competition is the key to regaining our once-lofty stature as the world's technology leader. We must not sacrifice the long term economic and social interests of the country for the short term interests of a duopoly marketplace that has long shielded itself from free market competition. This is a paradigm shifting moment for American telecommunications. It is imperative that we choose wisely. We look forward to working with the Committee as it moves forward.

Download Full Testimony