PITTSBURGH, June 9, 2009 - Web-based content and service providers that succeed in forcing broadband providers to pay subscriber fees for their Internet content will cripple the national effort to deliver affordable broadband access to every U.S. household, the American Cable Association said in comments filed at the Federal Communications Commission yesterday.
Media giants are in the early stages of becoming Internet gatekeepers by requiring broadband providers to pay for their Web-based content and services and include them as part of basic Internet access for all subscribers. These content providers are also preventing subscribers who are interested in the content from independently accessing it on broadband networks of providers that have refused to pay.
"The FCC and parties involved in the Net Neutrality debate should be concerned that Web-based content and service providers -- such as the Walt Disney Co., Google, Skype, and others -- will drive up the retail cost of broadband access and drive down new adoption rates," said ACA president and CEO Matthew M. Polka. "Immediate attention should be given to this matter by the FCC and others that support open networks, like Free Press, to prevent Web-content providers from hijacking the Internet."
"This is particularly troublesome for small and medium-sized operators who often find themselves paying higher fees than larger providers for the same content," Polka added. "In smaller markets and rural areas where Congress and the FCC are most focused on increasing deployment and adoption, these wholesale practices mean higher costs for operators and consumers."
ACA's comments flagged the broadband-content issue early in the FCC's preparation of a national broadband plan for Congress by Feb. 17, 2010. Under the American Recovery and Reinvestment Act of 2009, the FCC's broadband blueprint must include methods of ensuring that high-speed Internet technology is both ubiquitous and affordable nationally.
In its comments, ACA noted that Disney withholds ESPN360 from the customers of broadband access providers who have not paid Disney an access fee. The fee is based on the provider's total number of subscribers, not on the actually number of consumers that want ESPN360.
"Disney's refusal to have a one-on-one relationship with broadband customers who are fans of ESPN360 means there will be many consumers who will be forced to pay for content they don't want. Wholesale content arrangements that are emerging on the Internet will mean less consumer choice and much higher broadband retail prices at a time when Americans are feeling pinched by the recession," Polka said.
Meanwhile, ACA urged the FCC that in order to put rural America on the path toward best-in-class broadband access, it needed to implement a series of recommendations from independent cable operators, which have been broadband deployment leaders despite the economic challenges inherent in serving the most rural communities.
"By adopting ACA's proposals, the FCC would stimulate private sector investment in broadband, particularly in rural, high-cost areas where ACA members have been steadfast participants for decades," Polka added.
In its comments, ACA proposed numerous ideas for greatly improving broadband price and service options in rural America.
ACA said the owners of middle-mile broadband facilities should be required to provide small cable broadband providers with non-discriminatory access at just and reasonable rates.
ACA members that have deployed broadband often find that they can't provide their consumers with top download speeds because their connection to the Internet backbone is limited to a low-capacity facility whose owners charge excessive rates because of the absence of effective competition.
"The middle-mile is a price and technology bottleneck that, once removed, will provide the economic incentive to build last-mile broadband facilities in a greater number of sparsely populated communities," Polka explained.
In other comments, ACA called on the FCC to set non-discriminatory pole attachment rates; complete a broadband map to identify and confirm areas without broadband and middle mile; and establish a new broadband universal service fund (USF), separate from the existing one for rural telephone companies, that would permit cable operators to receive financial support.
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About the American Cable Association
Based in Pittsburgh, the American Cable Association is a trade organization representing more than 900 smaller and medium-sized, independent cable companies who provide broadband services for more than 7 million cable subscribers primarily located in rural and smaller suburban markets across America. Through active participation in the regulatory and legislative process in Washington, D.C., ACA's members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business. For more information, visit http://www.americancable.org/
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