BUSH ADMINISTRATION UNDECIDED ON BROADBAND POLICY
FCC has primary responsibility for encouraging broadband penetration and FCC Chmn. Powell “is whipping the snail as fast as he can whip it,” said Bruce Mehlman, assistant Commerce Secy., Office of Technology Policy, at Fiber-to-the-Home Council meeting in Reston, Va., Wed. Powell, meanwhile, was hosting “international policymakers” discussion on broadband at Commission hq, hoping to whip up interest.
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It’s still undetermined whether Bush Administration will create national broadband policy, Mehlman acknowledged in response to question: “We are doing a lot of stuff on broadband. Whether to have a national policy is being discussed vociferously.” He said developing broadband policy had gotten some support, but President hadn’t signed on yet: “It’s not for a lack of interest. There is still a lot to be hashed out.”
FCC, as “expert agency,” has major role in sorting out competing broadband demands, Mehlman said: “We put the best people we can think of at the FCC.” Tauzin-Dingell bill almost certainly won’t clear Congress because of Sen. Hollings’ (D-S.C.) heated opposition, Mehlman agreed: “It’s just a full employment act for lobbyists.” As result, he said, “the game is at the FCC.”
Mehlman said his “biggest fear” was impact of economic depression in telecom sector: “They may have fallen and can’t get up.” If that were true, he said, it could “drag the whole economy down.” Mehlman cited telecom sector’s debt overhang, reluctance to invest in new fiber networks, “Enron-itis,” RBOCs’ reduced incentives to invest in broadband data since there was less competition from financially-ailing CLECs, perceived overcapacity in medium-haul and long-haul fiber markets, although not in fiber to home.
Instead of focusing on fiber to home, Mehlman said broadband companies should work on delivering fiber to small businesses, which can be big consumers. Current DSL and cable modem take rate of 10-12% is “not such a problem that the government needs to step in,” he said, but govt. can encourage investment through such things as R&D tax credit, accelerated depreciation, Internet tax moratorium. Other govt. roles should include “leading by example,” partnering with industry to provide network security and educating and informing, he said.
Bush Administration still believes private sector is best able to solve digital rights management (DRM) issues, which some believe are limiting broadband demand, Mehlman said. He said Hollings’ plan for National Institute for Standards & Technology (NIST) to set DRM standards might not work because “that’s not the way NIST normally operates.” Mehlman acknowledged that DRM issue was “nasty,” but said “we're still hopeful… I don’t think the Administration will step in yet. I personally believe technology will find a way.”
Asked whether industry-owned content distribution companies such as Movielink might raise antitrust concerns, Mehlman said he usually deferred antitrust questions, but added: “The combination of distribution and content can create great opportunities for business and mischief.”