July 20, 2010

FCC To Criticize Internet Providers On Broadband Eligibility

U.S. regulators are expected to rebuke high-speed Internet providers this week, in a report that omits language that has previously said that they are rolling out broadband to all areas in a "reasonable and timely fashion."

According to a Reuters' source familiar with the contents of the Federal Communications Commission report, the paper will be the first time the phrase has been omitted since the report was issued in 1999.

The FCC issued a broadband blueprint in March to try and boost Internet speeds and deploy broadband services to all Americans including the 14 million to 24 million Americans currently without high-speed access.

"The conclusion is going to be for the first time the FCC will find that broadband deployment is not timely and reasonable," the source told Reuters.

The source said that the 2010 report, which could be issued as early as Tuesday, "is saying we are no longer on the right track."

Telecoms industry officials do not agree with the report's conclusion, but a senior FCC official said the report is not meant to be critical of the carriers.

"Congress requires the FCC to assess whether broadband has been reasonably and timely deployed to every American -- no matter where they live," said the official who declined to be identified.

The broadband report is similar to a May report on the wireless industry, in which the FCC failed to describe the wireless industry as having "effective competition" for the first time since 2002.

It is likely to fuel criticism from public interest groups that competition is lacking in the industry.

"Until now, the Federal Communications Commission (FCC) has issued reports finding the state of broadband was acceptable," Gigi Sohn, who heads Public Knowledge, a public interest group, told Reuters.

The latest report could advance the agenda of the broadband plan, which includes a recommendation to refocus the U.S. telephone subsidy program to subsidize broadband.

Carriers have resisted deploying broadband to some areas because of the cost of investing.

USTelecom, a trade group for broadband providers, disagreed with the pending report, saying the U.S. is in the middle of a broadband explosion.

USTelecom President Walter McCormick told Reuters that it was appropriate for the commission to be concern about the remaining small percentage of Americans that have yet to gain high-speed Internet.

"However, it is inconsistent with the commission's own data to conclude that deployment is not progressing in a timely and reasonable manner," McCormick said in a statement.

Qwest Communications International Inc. said there were some remote areas where broadband could not become available because of the high cost of deployment.  However, it applied for federal stimulus funds to bring broadband to many of these primarily rural communities.


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