Recommendations For Broadband Regulation And Open Access

Open Access

Section 322 (2) asks a fairly narrow question, should a broadband provider with its own internet provider be required to offer access to other, unaffiliated internet service providers? Much of the information gathered and comments filed in U-12855 address broader questions about broadband deployment, regulatory equal treatment, and access to telecommunications networks. The issue of access for ISPs is more complex but directly related to the more commonly debated issues of network unbundling and interconnection.

Presumably, the question for ISPs is raised because of concerns that broadband network providers, whether cable, telecom or wireless, could prevent access by unaffiliated ISPs and therefore limit choices for customers and ultimately the number of ISPs serving customers. The telecom broadband network providers may also wish to see the question addressed because they, but not their cable competitors, are subject to what they perceive as unfair government imposed obligations for unbundling and interconnection. The issue of equal regulatory treatment is important to those providers.

The issue of open access is being hotly contested in the courts, in Congress, in the state legislatures and before regulatory agencies. The FCC, which has primary jurisdiction over the internet, over access to cable networks and related issues has chosen not to impose open access requirements on cable networks while imposing competitive access on telecom networks, which as a practical matter includes access by ISPs. Many competitive local exchange providers have acquired licenses for the primary purpose of interconnecting to the local incumbents to reach their own or client ISPs.

Cable broadband providers oppose government mandates for access, pointing out that the market will provide choice and highlighting some efforts by cable providers such as AT&T and Time Warner to offer access to multiple ISPs, at least on a trial basis.

The incumbent local telecom companies decry the uneven playing field for their DSL broadband services which are subject to regulation while the cable broadband services are not. The competitive telecom companies want to make sure that whatever is done does not adversely effect their access to the incumbent's networks, which they need to reach the end-user customers, including ISPs.

The majority of respondents to the PSC staff surveys believe that broadband network providers should not restrict access to internet service providers. Most citizens and government officials favor choice and competition. The more difficult issue is whether there is a distinct need for government to mandate such open access. The FCC says no, it is opposed to internet regulation and is not convinced open access needs to be legally mandated. The United State Congress says not now, passing and then extending laws which require moratoriums on most aspects of internet regulation. The presence of numerous ISPs in most markets suggests that they are not being squeezed out by ISPs affiliated with the broadband networks. Further, were a state inclined to pass a law to require such open access, it is arguable that the Federal Telecommunications Act would conflict with and supercede such a state requirement. For the reasons that there is not a compelling case for mandating ISP open access to broadband networks; regulation may inhibit what is still a nascent broadband industry; and state authority may be proscribed by federal jurisdiction; it does not appear that a legislative initiative to force open access at this time is warranted. The Legislature may wish to distinguish the issue of unbundled access to broadband networks from the interconnection of those networks.

Other Recommendations

Because the staff research, survey results and comments of contributors to the U-12855 docket suggest that other issues may be more vital to the economic future of Michigan than that of ISP access to cable networks, a review of those issues is in order.

There is little dispute that access to broadband by consumers and the business community is desired but is not yet commonly available. There also seems to be a significant amount of broadband infrastructure out there, although its location and capacity may not be effectively inventoried. In addition, the infrastructure is not interconnected and there is a severe shortage of last mile infrastructure, the fiber that connects the residences and businesses to the broadband highways. A further problem is unequal government treatment of broadband industry segments in terms of taxation, right-of-way permitting or regulatory requirements.

Very recently, the Michigan Economic Development Corporation published a report entitled "Link Michigan" which lays out many of the impediments to broadband deployment and recommends a number of government initiatives to remove those impediments. We support those initiatives and will not repeat those here but suggest a few additional measures for legislative consideration.

The Legislature may wish to allow the PSC to order the funding of a detailed study of the technical and policy issues associated with the physical interconnection of the various broadband network components. True open access requires that consumers be able to reach the entire network and all ISPs and other providers located at any point on that network, whether wireline, wireless or cable. Some parties argue that such universal interconnection cannot be accomplished due to technical impediments.

Second, the Legislature may wish to allow the PSC the authority to collect information, subject to necessary privacy and confidentiality protections, that would give those responsible for economic development and public policy the data they need about the communications infrastructure, including broadband. Such information is generally not available currently on any centralized basis.

The above steps may be desirable before informed decisions can be made about mandating by law open access, interconnection or unbundling, beyond that which is already required by the Federal Telecom Act or Michigan Telecom Act.