Stearns was elected in 1988 to the U.S. House of Representatives, his only elected office. Stearns is the Republican Leader on the Communications, Technology and the Internet Subcommittee (formerly the Telecommunications and the Internet Subcommittee). He is active on the subcommittee in reforming antiquated laws that hinder the development and expansion of new products and services. In addition, he is a leader in opposing Internet regulation (net neutrality). He’s also a strong advocate for privacy and is working with his Democrat counterpart on enacting consumer privacy legislation.
We’re pleased to have the opportunity to have Rep. Stearns write for our blog below. -- David Valdez, Senior Director, Public Advocacy, CompTIA
U.S. Rep. Cliff StearnsWhat frustrates me most about recent debates over broadband deployment is that unfounded pessimism is threatening to create a self-fulfilling prophecy. Approximately 95 percent of the country has access to broadband and more than two-thirds subscribe, according to the Federal Communications Commission (FCC). Thanks to deregulatory provisions in the 1996 Telecommunications Act, as well as deregulatory actions at the FCC under both Democrat and Republican chairmen, the number of residential users has skyrocketed to 200 million from 8 million just 10 years ago. Yet despite these statistics, a disproportionately loud few suffering from regulatory withdrawal would have us turn back the clock.
Now is not the time to drag us back toward regulatory policies designed for a 1930s world with a single phone company and no Internet. The prevailing view of the era was that building competing networks was not realistic, efficient or desirable. In return for a regional monopoly and a guaranteed profit, providers agreed to submit to rate and service regulation intended to approximate the effects of competition. Today’s broadband is not our grandparents’ communications system and unless we want to turn it into the monopoly service of days gone by, we should not regulate it as such.
But that is literally what some propose to do. I speak primarily, of course, of the fabricated network neutrality crisis that many are using as an excuse to return to antiquated rate and service regulation. In the latest and most insidious incarnation, self-anointed “public interest groups” have badgered FCC Chairman Genachowski into considering reclassification of broadband from a deregulated information service into a regulated common carrier service under Title II of the Communications Act.
This is designed primarily to evade the recent decision by the U.S. Court of Appeals for the D.C. Circuit that the FCC has failed to demonstrate authority to impose network neutrality regulation on information services. Reclassifying broadband as a monopoly-era common carrier service would be the surest way to stifle innovation, investment, and job growth. There is overwhelming, bipartisan opposition on Capitol Hill to the proposal, and it would be highly inappropriate for the FCC to transmogrify broadband service by regulatory fiat.
Making the situation worse, we have already squandered more than five years on this farce. Our time would have been far better spent on the real and far more important issues of finding additional spectrum for mobile broadband and reforming the universal service fund. Ironically, Republicans on the House Communications, Technology, and Internet Subcommittee—of which I am the Ranking Member—largely agree with the recommendations of the National Broadband Plan and the FCC on these issues. Were it not for the distraction of network neutrality, we could have made—and still can make—a real, positive impact on these issues.
We currently are witnessing an explosion in wireless broadband services, as evidenced by the popularity of the Apple iPhone and iPad. But as quickly as these services are growing, demand for them is growing faster. Thanks to the DTV transition legislation we ushered through Congress with Rep. Barton when we were last in the majority, fourth generation wireless services are starting to come on line using cleared spectrum. But we will start feeling a significant spectrum pinch within the next five years if we don’t take substantial additional steps soon.
That is why I support incentive auction legislation that would encourage licensees in other services to voluntarily relinquish some of their spectrum for a share of the auction proceeds. This would not only help meet growing wireless broadband demand, it could also raise substantial revenue to address the deficit. It might also help us reach some of the five percent of the country that still lacks access to broadband, since wireless service may be a more economical way to reach those remote, often rural parts of the country than running wires great distances and over mountains.
This ties in to the second issue: reform of the universal service fund (USF). There is bipartisan consensus that the universal service fund is broken. Nearly everyone in the country has access to phone service and we have more competition and better technology than ever before. Yet instead of shrinking, the USF has ballooned to more than $8 billion a year, about twice what it was in 2000. Approximately $4.5 billion of that comes from the high-cost program’s subsidies to rural carriers, more than three times the $1.3 billion spent on that program in 1997. And when the price tag for universal service goes up, subscribers bear the burden. The FCC projects that almost 13 percent of the monthly long-distance bill in the fourth quarter of 2010 will be USF fees, up from 5.7 percent in 2000.
Some suggest we should now convert the fund from a traditional phone program to a broadband program. While I might be able to support such a proposal, I can only do so if it is paired with substantial reform that caps, and preferably shrinks, the size of the fund. The FCC’s high-cost rules—developed in large part to support monopoly-era local phone companies—do not reflect the dramatic changes in the marketplace, including multiple facilities-based providers entering markets throughout the nation. Originally conceived to provide telecommunications services where high costs made it uneconomic for even one carrier to provide service, the program has expanded to subsidize multiple networks.
If we are going to spend scarce taxpayer dollars on broadband, the money should be narrowly targeted to the comparatively small number of unserved households that are otherwise uneconomic for the private sector to reach. Funding additional deployment in areas that already have access will not expand broadband availability. And existing providers in remote, sparsely populated areas already have difficulty covering the high costs of deployment. Splitting their subscriber base by subsidizing a new competitor will only make it harder to recover broadband investments, putting jobs in jeopardy rather than creating them.
I am concerned that we may soon see illustrations of that as a result of the approximately $7 billion earmarked in the 2009 stimulus legislation for broadband. The haste with which the broadband provisions of the stimulus package were drafted and enacted, as well as the short timeframes it provided the relevant agencies to implement the programs, create the real risk that taxpayer dollars are once again being wasted on a set of ineffective government initiatives. Furthermore, the legislation neglected to provide for ongoing agency oversight once the multi-year awards were granted, making congressional oversight of the programs starting next Congress even more important.
Unlike the pessimists who cling to regulation, I am far more optimistic that free markets will do a better job of serving America. If we had a little more faith, intervened only in the face of clear evidence of market failure, and targeted any intervention narrowly, I am confident we would see much better results. Broadband investment is one of the few bright spots in our economy still driving innovation and job growth. If we encourage rather than squelch it with regulation, it could turn out to be the tip of the spear in our nation’s march toward financial recovery.
