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<h1><b><font size=3 color=black face=Verdana><span style='font-size:12.0pt;
font-family:Verdana;color:windowtext;font-weight:normal'>One disquieting thing
about the report below is what is NOT referenced – which is “open”
(shared, muti-provider) fiber-to-the-premise networks (either public or
public-private partnerships). This model is logical and proven – elsewhere
in the world, esp. Europe, but not in the <st1:place w:st="on"><st1:country-region
w:st="on">United States</st1:country-region></st1:place>.<o:p></o:p></span></font></b></h1>
<h1><b><font size=3 color=black face=Verdana><span style='font-size:12.0pt;
font-family:Verdana;font-weight:normal'>It would be a shame for the nation to
fail to move toward new structural arrangements such as open networks at this
rare, opportune, moment</span></font></b><span style='font-weight:normal'>.</span><font
size=3 face=Verdana><span style='font-size:12.0pt;font-family:Verdana;
font-weight:normal'><o:p></o:p></span></font></h1>
<p class=MsoNormal><font size=3 color=black face=Verdana><span
style='font-size:12.0pt;font-family:Verdana;color:windowtext'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 color=black face=Verdana><span
style='font-size:12.0pt;font-family:Verdana;color:windowtext'>It is
unfortunate, although not surprising, that “the usual suspects” –
those who have the budgets for swarms of lobbyists -- are busily crafting
their limited notion of what constitutes a solution, and selling it to those
who are not aware of viable options.<o:p></o:p></span></font></p>
<h1><b><font size=3 color=black face=Verdana><span style='font-size:12.0pt;
font-family:Verdana;color:windowtext;font-weight:normal'><o:p> </o:p></span></font></b></h1>
<h1><b><font size=3 color=black face=Verdana><span style='font-size:12.0pt;
font-family:Verdana;color:windowtext;font-weight:normal'>Carroll Cagle <o:p></o:p></span></font></b></h1>
<h1><b><font size=3 color=black face=Verdana><span style='font-size:12.0pt;
font-family:Verdana;color:windowtext;font-weight:normal'><o:p> </o:p></span></font></b></h1>
<h1><b><font size=5 color=black face=Arial><span style='font-size:16.0pt'>Internet
Providers Move to Shape Broadband Push<o:p></o:p></span></font></b></h1>
<p class=MsoNormal><font size=3 color=black face=Verdana><span
style='font-size:12.0pt;font-family:Verdana;color:windowtext'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 color=black face=Verdana><span
style='font-size:12.0pt;font-family:Verdana;color:windowtext'>Wall Street
Journal<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 color=black face=Verdana><span
style='font-size:12.0pt;font-family:Verdana;color:windowtext'>December 30, 2008<o:p></o:p></span></font></p>
<h3><b><font size=4 face="Times New Roman"><span style='font-size:13.5pt'>By <a
href="http://online.wsj.com/search/search_center.html?KEYWORDS=AMOL+SHARMA&ARTICLESEARCHQUERY_PARSER=bylineAND">AMOL
SHARMA</a><o:p></o:p></span></font></b></h3>
<p><font size=3 face=Verdana><span style='font-size:12.0pt;font-family:Verdana'>President-elect
Barack Obama's call to improve the nation's broadband infrastructure has cable
and phone company lobbyists maneuvering to get a leg up.<o:p></o:p></span></font></p>
<p><font size=3 face=Verdana><span style='font-size:12.0pt;font-family:Verdana'>Lawmakers
in Congress want a plan that will create jobs over the next two to three years
while also tackling the longer-term goal of improving the availability and
quality of high-speed Web access in the <st1:country-region w:st="on"><st1:place
w:st="on">U.S.</st1:place></st1:country-region> The <st1:country-region w:st="on"><st1:place
w:st="on">U.S.</st1:place></st1:country-region> has slipped to 15th from
fourth place since 2001 in broadband penetration, according to the Organization
for Economic Cooperation and Development. Advocates say broadband deployment is
critical to the competitiveness of the <st1:country-region w:st="on"><st1:place
w:st="on">U.S.</st1:place></st1:country-region> economy.<o:p></o:p></span></font></p>
<p><font size=3 face=Verdana><span style='font-size:12.0pt;font-family:Verdana'>Among
the issues are what speed Congress should define as broadband and whether
government money should be funneled only to areas that have no broadband
access, or if it should also subsidize upgrades to existing networks.<o:p></o:p></span></font></p>
<p><font size=3 face=Verdana><span style='font-size:12.0pt;font-family:Verdana'>Policies
under serious consideration are corporate tax credits to build new wireless or
landline infrastructure, government-backed broadband "bonds" and
grants to companies or local governments, legislative aides and lobbyists close
to the process say. There also is strong agreement that low-income consumers
need to be encouraged to sign up for broadband -- for example, through vouchers
to purchase computers or discounts on monthly service.<o:p></o:p></span></font></p>
<p><font size=3 face=Verdana><span style='font-size:12.0pt;font-family:Verdana'>Senate
Finance Committee and Commerce Committee members are drawing up a few options,
as are House members such as California Rep. Anna Eshoo and Massachusetts Rep.
Ed Markey, chairman of the telecommunications subcommittee. The Obama
transition team's point person has been former Federal Communications
Commission chief of staff Blair Levin.<o:p></o:p></span></font></p>
<p><font size=3 face=Verdana><span style='font-size:12.0pt;font-family:Verdana'>"There
aren't any quarrels about the need for more broadband," says Ms. Eshoo,
who outlined a series of broadband stimulus options in a memo to the House
leadership in October. "It's a matter of how we're going to do it and the
actual language."<o:p></o:p></span></font></p>
<p><font size=3 face=Verdana><span style='font-size:12.0pt;font-family:Verdana'>The
Obama transition team declined to comment.<o:p></o:p></span></font></p>
<p><font size=3 face=Verdana><span style='font-size:12.0pt;font-family:Verdana'>Large
cable operators are seeking to increase the FCC's definition of broadband
download speed to about five megabits per second, about 6½ times as fast as the
current definition, according to people familiar with the situation.
Internet-service providers building out "unserved" regions, where
service of that speed isn't available, would be given the full benefit of tax
incentives or grants.<o:p></o:p></span></font></p>
<p><font size=3 face=Verdana><span style='font-size:12.0pt;font-family:Verdana'>The
big cable providers also want to target "underserved" areas, where
there is only one broadband provider or the service isn't widely available. In
those markets, companies would get incentives to build out next-generation
services. The download speed that would qualify as next-generation would likely
be in the range of 40 to 50 megabits per second, people involved in the
discussions say.<o:p></o:p></span></font></p>
<p><font size=3 face=Verdana><span style='font-size:12.0pt;font-family:Verdana'>The
cable plan would disadvantage phone companies, especially smaller ones whose
digital-subscriber-line services are slower than cable modems. The Independent
Telephone and Telecommunications Alliance, which represents midsize phone
companies, is pushing for a slower broadband standard, in the range of 1.5 to
three megabits per second. Curt Stamp, the group's president, says the federal
largesse should be used to subsidize carrier investments in rural areas rather
than to finance upgrades to their existing networks.<o:p></o:p></span></font></p>
<p><font size=3 face=Verdana><span style='font-size:12.0pt;font-family:Verdana'>Wireless
services will likely be able to qualify as broadband at a slower download speed
than landline services. But if the mark is set above two megabits per second it
could be a boost for <a
href="http://online.wsj.com/public/quotes/main.html?type=djn&symbol=CLWR">Clearwire</a>
Corp., a start-up operator that is rolling out a WiMax network capable of
download speeds of two to four megabits per second. Other carriers weren't
planning major wireless upgrades until at least 2010.<o:p></o:p></span></font></p>
<p><font size=3 face=Verdana><span style='font-size:12.0pt;font-family:Verdana'>Equipment
makers such as <a
href="http://online.wsj.com/public/quotes/main.html?type=djn&symbol=csco">Cisco
Systems</a> Inc. and <a
href="http://online.wsj.com/public/quotes/main.html?type=djn&symbol=mot">Motorola</a>
Inc. stand to benefit if carriers undertake massive upgrades. Carl Russo, CEO
of <a href="http://online.wsj.com/public/quotes/main.html?type=djn&symbol=DSGX">Calix</a>,
which supplies equipment to phone and cable providers, says Congress should
define broadband as 10 megabits per second so the networks it builds now will
be able to support bandwidth-hogging applications of the future, such as
high-definition video.<o:p></o:p></span></font></p>
<p><font size=3 face=Verdana><span style='font-size:12.0pt;font-family:Verdana'>"Remember,
you only get to do this once, so you want to build the widest highway
possible," Mr. Russo says. The Telecommunications Industry Association,
which represents equipment makers, is pushing for a $25 billion grant program
for Internet service providers. Under another proposal that is being discussed,
grants could go to state and municipal authorities, which would build
high-speed networks and then open them up to competing service providers. That
would likely meet with considerable resistance from large carriers like Verizon
Communications Inc., which have challenged attempts by local governments to
build and operate their own wireless or high-speed fiber networks.<o:p></o:p></span></font></p>
<p><font size=3 face=Verdana><span style='font-size:12.0pt;font-family:Verdana'>Steve
Davis, senior vice president of policy for <a
href="http://online.wsj.com/public/quotes/main.html?type=djn&symbol=q">Qwest
Communications International</a> Inc., says the big phone company wouldn't
object to public broadband projects in areas that currently have no high-speed
Internet service, provided private operators have a right of first refusal in
building the networks. "The first place the government should look is to
the industry," Mr. Davis says.<o:p></o:p></span></font></p>
<p><font size=3 face=Verdana><span style='font-size:12.0pt;font-family:Verdana'>Meanwhile,
outside groups are offering various proposals to Congress. Consumer advocacy
group Free Press released a 31-page broadband-stimulus proposal that calls for
a $44 billion investment in Internet services over three years, much of which
would be funneled through the FCC's existing Universal Service Fund, which
subsidizes telephone services in rural areas and for low-income people.<o:p></o:p></span></font></p>
<p><font size=3 face=Verdana><span style='font-size:12.0pt;font-family:Verdana'>Public-interest
groups are clamoring for conditions to be imposed on carriers that receive tax
credits, such as pledges not to degrade any Internet traffic, a principle referred
to as "net neutrality."<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 color=black face=Verdana><span
style='font-size:12.0pt;font-family:Verdana;color:windowtext'><o:p> </o:p></span></font></p>
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