MCTA submitted a report
in response to the study of broadband network unbundling. In this report,
MCTA objects to the regulation imposed on broadband service and suggests that
facilities-based competition, market-driven and cooperative open access is
the best way to promote delivery of broadband services in Michigan. Their
arguments are as follow:
Only facilities-based
providers could trigger competitive response to broadband deployment because
providers will only make investment to roll out broadband service in a region
where other alternatives are available and represents a threat. Forcing
cable companies to share their cable plant with existing dial-up ISPs does
not achieve the goal of delivering broadband Internet access to new homes
and business.
Cooperative open access
is a better way to solve the technical issues and other challenges related
to the implementation of open access than mandated open access. Mandated
open access which demands any cable system open its plant to any ISP has
no specify as to technical details of network interconnection points and
resolution of other issues. On the contrary, cooperative open access is
agreed upon by negotiation between broadband providers and ISPs or other
content providers. The agreement can specify all the details of the relationship
so that serious technical issues can be attacked by the ISP and the cable
providers as a team.
Much of the Open Access
movement is supported by competitive interests not consumer interests. Therefore,
such support is not a valid argument for regulatory intervention. MCTA also
raised concerns specifically related to the cable company. They argue that
the cable company is not classified as a telecommunication provider thus
should not be subject to the regulatory regime designed for Baby Bells.
They also argue that the current cable customers already have access to
an open system because any websites that are available on the public web
are accessible via cable modem. Therefore, cable broadband system is not
a gatekeeper.
MCTA used Canadian
broadband open access regulation and California electricity deregulation
as examples of regulatory intervention failure. Though federal communication
authority in Canada did promulgate rules calling for open access to broadband
cable facilities, it is not the case that anything like pure open access
has been implemented. The case of electricity regulation in California which
asks for open access to allow competition in the power supply is similar
as the intervention in the broadband market, and the result was disastrous.
MCTA argued that the
broadband Internet access is still in its infancy, thus any attempt to impose
open access by regulation will present a complex burden for regulators and
investment. Imposing regulation when the technology is not ready will require
constant supervision, vigilance and response by regulators. The uncertainty
created by new regulation would also likely shift investment dollars to
other states.
MCTA also argued that
the exact shape of the demand for broadband access is not known, so we should
let the market to meet the need for broadband Internet access on its own.
The FCC has consistently
stated that it has jurisdiction over broadband Internet services, and that
it will step in with regulation should market failure occur. The regulation
of broadband Internet access is a matter for its purview, not that of states
and localities.
