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The Phone Company Threats To The Obama Stimulus

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Now that the stimulus bill has been passed and signed, the news cycle has moved onto other things - bipartisanship, the economy, banks, car companies, Afghanistan, whatever failing the punditocracy lately perceives from President Obama.

Not so fast. It would be a mistake to divert attention from the stimulus now. Buried in the massive stimulus law are some important new protections for the Internet. That's the good news. On the other hand, the possibility exists that a key part of the new law could be co-opted by the big telecom and cable companies. If they succeed, then the future of broadband deployment in the country, and particularly to rural areas, could be in jeopardy.

First, the good news, on what is in the law and what isn't. For the first time, Congress passed a law that recognizes the essential neutral nature of the Internet - that it is an open platform that shouldn't be controlled by companies that provide the on-ramps. It took a nifty bit of legislative drafting, particularly from the dedicated Senate staffers to get it done, but some times that's how things have to happen.

Under the section of the law dealing with the $4.7 billion in grants that the National Telecommunications and Information Administration (NTIA) will give out, is this:

"The Assistant Secretary shall, in coordination with the (Federal Communications) Commission, publish the non-discrimination and network interconnection obligations that shall be contractual conditions of grants awarded under this section, including, at a minimum, adherence to the principles contained in the Commission's broadband policy statement (FCC 05-15, adopted August 5, 2005)."

In other words, in order to receive the grant money, companies will have to adhere to fundamental principles of an open network. They can't discriminate and they must allow connection with others. There will be a public process to determine what those non-discrimination conditions are, and it's a good bet that the telephone and cable companies will participate with their usual full force, and with the full force of their Congressional hand-maidens, to get them watered down to near nothing. The other alternative is that they boycott the process entirely, and not apply for grants. Even if they don't apply in the program, the fact that all their lobbying muscle wasn't enough to get that provision out of the bill must have been galling to an industry used for the past eight years or so to getting its way.

But that's life in Washington. There is never only one opportunity to cause mischief or to bring pressure on an issue. There are multiple chances, not only through the legislative process, but then the follow-up administrative procedures that implement the law. Sophisticated lobbyists and companies know this, and know that most of the time, the press stops caring, if it cares at all, once a bill leaves Capitol Hill and enters the netherworld of the bureaucracy. So that when NTIA does whatever it will do, in terms of public comment or events, those concerned about the Internet ecology assume that the industry will try to work its will again.

On the other hand, there is the Obama administration's official tech agenda, carried over from the Obama campaign. Item No. 1 is fairly straightforward: "Protect the Openness of the Internet: Support the principle of network neutrality to preserve the benefits of open competition on the Internet." The industry will have to weasel a way around the administration's top priority. They can try, but it will be a big burden. That policy is one reason why the language got into the bill in the first place.

The other part of the grant appropriation, about $2.5 billion, given to the Rural Utilities Service, also includes the provision that priority should be given to projects that "will deliver end users a choice of more than one service provider." For rural areas, that may not always be possible

In addition to the grant funds in the stimulus law, there is also $350 million to compile a map of high-speed Internet deployment across the country. The NTIA has two years to develop this "comprehensive nationwide inventory map," which would then be put online.

Now, guess who is behind much of the broadband mapping? It's a group called Connected Nation, and it is run by the country's telephone and cable companies. Connected Nation, which started life as Connect Kentucky, and has since been de-funded by the Commonwealth of Kentucky, has so far insinuated itself into several states across the country that have already started broadband mapping programs on their own. There's no question, and the CN folks will readily concede, that they work on behalf of the industry.

States have already ceded to Connected Nation the ability to collect what data it wants, on the terms it wants, to display on maps it wants, without any way to verify it by examining the information. They use restrictive non-disclosure agreements (NDA) to protect information they don't want disclosed, such as what speeds of service are available from what carriers in any particular area, and that Connect, not the state, owns the information. Several states, ranging from Ohio, Minnesota, Tennessee and others invited Connected Nation in and paid it lots of money to produce maps that disclose what the industry wants disclosed. In North Carolina, a Connect North Carolina operation was set up by AT&T purposely to conduct a mapping operation parallel to the e-NC Authority, one of the better home-grown state broadband agencies in the country. While Connected Nation can charge states anywhere from $1 million to $165,000 to do a mapping job, it did the North Carolina one at no cost to the state.

It is possible for states to do their own broadband mapping, and to duplicate for very little cost much of the Connected Nation work. But J. Brent Legg, CN's vice president for state initiatives, takes a dim view of such public-run operations. At a recent panel discussion in Washington, Legg said: "The question would go to provider cooperation in this process. And unless there is legislation that passes in the individual states that mandates the collection of this information, there is a lot of things that can happen that the provider community might not want to participate. They may not want to provide [the information]. It is not just as easy as the states utilizing the resources they have; there is the other consideration to consider, and that is provider participation in the process."

He added: "It may be, and I am not saying that this is good or bad, and providers definitely do not definitely want to provide their proprietary information to a state agency, that [carriers] could tie this up in the courts for a while, too. And that is something that would have to play itself out." Sounds like a threat, no?

In order for any broadband mapping project to be credible, it has to be done by a government agency, on behalf of the public, with transparent and verifiable information. In other words, not by Connected Nation. That's just another way for the industry to hijack broadband policy. Add it to the list.