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ACA Chairman Steve Friedman Urges Broadband Policy Reforms Before Senate Panel

American Cable Association Chairman Steve Friedman said in April 27 Senate testimony that small cable operators are encouraging the federal government to initiate a number of vital policy reforms -- including more focused investment in middle-mile infrastructure and stable utility pole attachment fees -- to provide small cable operators with key incentives to maintain their leadership in the provision of broadband access services to millions of Americans residing in rural communities.

"We appreciate what Congress, the Federal Communications Commission, and other agencies are doing to support broadband expansion and growth in smaller markets and rural areas," Friedman said. "Our hope is that reasonable revisions to existing statutes, FCC regulations, and other rules will promote even greater private investment to ensure that Main Street America is equipped with the best Internet access technology possible."

Friedman testified on behalf of ACA members before the Senate Committee on Small Business and Entrepreneurship amid concerns that consumers and small businesses in rural areas where network deployment costs are high will lag the rest of the country as the importance of the Internet-based economy to future growth and prosperity continues to accelerate.

In his testimony, Friedman offered several policy recommendations to advance rural broadband service, including greater investment in middle-mile infrastructure, a critical link between local broadband networks and the Internet backbone.

Friedman explained that rural middle-mile facilities mostly owned by third parties are expensive to access and lack adequate capacity, which slows download speeds even for consumers connected to upgraded cable broadband facilities. Cable would deploy its own middle-mile facilities, Friedman added, except that the costs are too high for an ACA member with just a few thousand subscribers to absorb.

"The National Telecommunications and Information Administration's focus in the Broadband Technology Opportunities Program (BTOP) on the middle-mile issue is encouraging. But, certainly, NTIA's efforts, while significant, are only a small step. We are thus heartened by the FCC's focus on this issue in the National Broadband Plan (NBP). A key now is to ensure that the FCC expeditiously follows through and implements the proposals set forth in the plan," Friedman said.

In a related comment, Friedman stressed that the $7.2 billion broadband subsidy programs at NTIA and the Rural Utilities Service should target financial support on unserved areas and award funds to provider applicants in a competitively neutral manner that does not disadvantage small cable operators who have sought funding.

"Favoritism and disparate regulatory treatment are not a formula for success," Friedman said.

Friedman identified rising fees to attach cable wires and routing equipment to telephone poles owned or controlled by electric cooperative and municipalities as barriers to rural broadband investment. He added that ACA strongly supports the FCC's recommendation in the NBP that co-ops and local governments should no longer enjoy rate regulation exemptions under the Federal Pole Attachment Act of 1978.

"Pole attachment reform is one of the most critical pieces necessary to carry out the goals of the (NBP), and we encourage Congress to take action as requested by the FCC," Friedman said.

Lastly, Friedman called on the FCC to adopt a proposal announced last week that would allow all cable operators to offer low-cost, low‐functionality High Definition set-top boxes as a substitute for expensive CableCARD-enabled boxes mandated under regulations in effect since July 2007.

"If relieved from today's financially onerous set‐top box rules, smaller cable operators could free up bandwidth in their systems in a cost‐effective manner and provide their customers with faster broadband speeds," Friedman said.

Friedman is Chief Operating Officer of Wave Broadband, a cable, Internet and phone services company currently serving more than 175,000 customers in Washington, Oregon and California. Based in Kirkland, Washington, Wave employs more than 600 individuals and provides business-class Internet, phone and cable service to companies of all sizes, from Seattle to San Francisco.

The Senate Committee on Small Business and Entrepreneurship is chaired by Sen. Mary Landrieu (D-La.), and its ranking member is Olympia Snowe (R-Maine). Other witnesses at the hearing included FCC Chairman Julius Genachowski, RUS Administrator Jonathan Adelstein and NTIA Administrator Larry Strickling.

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