If Only Our Broadband Markets Could be Like Europe's

The New York Times

published an interesting Op-Ed this week in which a few U.S. economists looked at telecommunications regulation in Europe, and held up EU policy as a model for what they believe American telecommunications policy should be. The economists stressed transparency in lieu of more “extreme” regulations, saying that in Europe, “providers are required to inform customers of any limitations that they impose on access, or on the use of services and applications.”

But they missed the most important detail: In Europe, open access regulations are the norm. Open access means that facilities-based network operators allow other companies to use the facilities to offer competing service, charging reasonable rates for access. The incumbent broadband industry lobbies against such policies, both in the United States and abroad, because they want monopoly control over the facilities. European lawmakers didn’t just take “no” for an answer, though, so they didn’t remove broadband regulations when the United States did. And the result of open access policies throughout much of Europe is that subscribers now have a meaningful choice among competitive, affordable, high-quality broadband service options.

In France, for the equivalent of around $33 a month, you can get true high-speed broadband service (100 Mbps download speed), high-definition television service, and phone service with free long distance and some free international calling. Here in the United States, we face a near-term future where by 2012, only 15% of subscribers have the “luxury” of two providers offering high-speed broadband connections comparable to those already available in much of Europe and Asia.

Europe’s telecommunications industry didn’t simply evolve on its own as an open and competitive network. Lawmakers made specific choices along the way to ensure they were creating a robust, 21st-century system. Contrary to what these economists and the broadband industry would lead you to believe, telecommunications regulation in Europe is far more heavy-handed than in the United States. And the prospect of the FCC reclassifying broadband to Title II status – an action many in the industry are ballyhooing as over-the-top – would not nearly equalize the two, especially because the FCC likely will not even apply all of the statutory provisions of Title II. Read more about this development here.

As the Washington Post points out, the FCC has not ignored transparency by any means. Transparency is the sixth principle of the FCC’s proposed open Internet framework, and it’s an essential component of promoting reasonable pro-consumer behavior. Of course, the industry has resisted even that, supporting the “concept” of transparency while simultaneously insisting that they should not be subject to any mandatory rules for standardized disclosure and that the FCC lacks jurisdiction to impose a transparency mandate.

To point to Europe as an example of deregulatory broadband policy is ludicrous. In Europe, open access is the standard; transparency is mandatory; and the broadband industry works with, not against, the government regulator. Here, the public interest and the public sector are just trying to establish baseline, common-sense rules of the road to protect innovation, investment and consumer choice – but the broadband industry is massively increasing its lobbying to stop this from happening.

In this country, the broadband incumbents will always object, even to reasonable, pro-competition, pro-investment regulation. Public interest groups are hoping, pleading and even demanding that the FCC apply a “Europe-lite” form of regulation, because the American broadband market has serious problems – problems that are directly impeding the nation’s goal of universal, affordable and open broadband Internet access. We need the FCC, charged by Congress with authority over all communications by wire and radio, to take a stand and not take the industry’s knee-jerk “no” for an answer.