Congress’ rejection of open access/net neutrality rewarded with new private broadband investment

February 19, 2009

Markets and competition work!

  • Comcast and Verizon separately announced major investment/deployment plans for broadband within days of Congress’ rejection of calls for open access/net neutrality regulation and dictated broadband speeds in the just-passed $800b stimulus package.

Congress wisely appreciated that encouraging and respecting private investment and inter-modal broadband competition is critical to:

  • Spurring economic growth and job creation,
  • Keeping the communications sector a healthy engine of the economy; and
  • Getting the fastest broadband service to the most Americans soonest.

Even in a severe recession, Comcast and Verizon are proof that companies will make private investments to expand broadband speeds and access, if their capital is welcome, and the government does not discourage investment and deployment by forcing open access network sharing and mandated net neutrality in the absence of any definable or measurable problem.

Comcast announced today that it “plans to reach more than 30 million homes with faster speeds,” and is “doubling speeds for most existing customers for no additional charge” in 2009.

  • Comcast is continuing to offer tiered pricing so users have the choice of how fast a high speed connection they want.
  • This is in contrast to the mandated “one-size-fits-all” vision of net neutrality proponents, which would force most users to pay for more speed than they need and force most average users to heavily subsidize a small percent of bandwidth hogs.

Verizon announced yesterday “detailed plans to build America’s first next generation Long Term Evolution (LTE) network” to meet demand for higher bandwidth, low latency service, mobile applications, and to provide 4G technology competition to WiMax.

  • In respecting market forces in all but the narrow segment for unserved or under-served users, Congress continues to encourage private investment in inter-modal technology competition and innovation, policies which have made the U.S. broadband market the most competitive in the world.

Bottom line:

Congress was wise to respect the Internet’s Golden Goose — encouraging private broadband investment capital.

  • Congress appreciates that there is roughly $20 of private broadband investment needed for every $1 of public broadband investment in the economic stimulus package.

The single most important thing the FCC and the relevant Internet congressional committees can do now — is to do no harm — i.e. not chill private investment or undermine competition by promoting unnecessary and inappropriate monopoly-era regulation on a vibrantly competitive marketplace.

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