Free-market think tank Phoenix Center circulated a policy bulletin Monday, warning that limits on network management could actually expand the digital divide. Another think tank, the American Consumer Institute (ACI), in a "consumergram" warned about applying new formal network openness rules to wireless as well as wired networks. FCC Chairman Julius Genachowski and his Democratic colleagues plan to propose those rules at next week's open meeting.
"Network management restrictions that effectively force operators to 'invest their way out of congestion' are more burdensome to operators facing relatively high capacity costs," said the Phoenix Center. Those operators are the ones in rural areas that the government has identified for special help via grants through the National Telecommunications & Information Administration and USDA broadband stimulus grant/loan program.
"On the one hand, the government is trying to encourage broadband deployment," said Phoenix Center President Lawrence Spiwak in releasing the bulletin. "On the other hand, it is making broadband more expensive to deploy. The inevitable consequences include less broadband, less competition and the need for more subsidies."
In its e-mail message, ACI said that according to its analysis of the current state of the wireless industry, there is "little basis in fact, and none from competent consumer welfare analysis, to justify rate and service regulation of wireless networks, which by standard performance measures, and comparisons with other countries, are performing admirably."
Genachowski has said that he thinks network openness rules of the road are important as the FCC maps out a route to universal broadband deployment and adoption. He says that those rules will include allowing for reasonable network management, and that he understands the commission will have to take into account differences between the wired and wireless markets.
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