Fiber Group Urges Video Franchise, Muni Net Support

Telecom Policy Report, August 15, 2005

Early last week, shortly before the Texas Legislature acted on telco video franchising (see related story in this issue), the Fiber-to-the-Home Council (FTTH) weighed in on what it called "the two major barriers to next generation broadband deployment" in the United States: the lack of a streamlined cable-television franchising process and restrictions on the ability of municipalities to provide broadband services.

An Aug. 9 letter to the U.S. Congress from Joe Savage, senior vice president of the FTTH Council North America (representing about 100 fiber-system supplier and services companies), urges federal lawmakers to eliminate the barriers. As politics and lobbying would have it, the FTTH position essentially means the group would welcome the Texas action on franchises, yet it would oppose Texas lawmakers' (and those from other states) past efforts - although unsuccessful - to restrict or ban municipally owned and -operated Internet access/communications networks and services (TPR, June 6).

"We strongly believe the time has come for Congress to remove these barriers and adopt legislation encouraging the deployment of next generation broadband networks," Savage wrote. He also suggested the group's efforts on these issues are being expanded internationally via such sister organizations as the FTTH Council Europe and the FTTH Council Asia-Pacific.

His letter primarily was addressed to the four key Capitol Hill members handling telecom law: Reps. Joe Barton (R-Texas) and John Dingell (D-Mich.), chairman and ranking member, respectively, of the House Committee on Energy and Commerce; and Sens. Ted Stevens (R-Alaska) and Daniel Inouye (D-Hawaii), chairman and ranking member of the Senate Committee on Commerce, Science and Transportation, respectively.

New Stats Prove FTTH Growth

Telling federal lawmakers that there has been significant progress in FTTH networks and technology deployment since 2001, Savage reaffirmed figures compiled as of May by research house Render, Vanderslice and Associates, which has had a long-standing relationship with the FTTH Council; Render, Vanderslice estimates FTTH installations grew 83 percent between October 2004 and May 2005, now reaching 398 communities in 43 states. Savage claimed FTTH is finding increasing favor with communications providers because of an inherent capacity of optical fiber to make networks relatively "future-proof," that all-optical networks are the most secure access network alternative, and that all-optical network operation costs are lower than copper-based architectures.

While showing increasing deployment rates in the country, Savage, nevertheless maintained "it is also evident that real barriers stand in the way of accelerated deployment" - such as the franchise and muni net issues. On franchising, Savage said the business now has the prospect of traditional telcos, municipalities, real-estate developers, rural telcos and others entering the video market to compete with traditional cable TV and satellite companies.

"This is a very positive development, as it will provide competition, create new services and offer lower prices for the consumer," he wrote. "But there are many thousands of municipal franchising agencies in the United States and, currently, new entrants typically must negotiate with each of them on a case-by-case basis to obtain a cable-television franchise. If the franchising process is not streamlined at the federal level, it will take far too long for the new entrants to bring next generation broadband networks to market."

In addition, Savage wrote the FTTH Council is "also sympathetic to communities throughout the country which are unable to obtain acceptable broadband services from incumbent service providers or hold the rates in check through competition. Typically, this occurs in rural areas and small towns, although it can even occur in larger cities."

The group backs muni rights to provide advanced broadband services to citizens, according to Savage, because telcos and cablecos may not focus their broadband investment on all communities of subscribers. "Municipalities who want to invest in their broadband future should be free to do so," he said. "To restrict that access to next generation networks puts those Americans at a distinct disadvantage in terms of economic benefit and community welfare."

The Council And The Congress

The FTTH Council appears to be sensitive, in part, to the "Broadband Investment and Consumer Choice Act of 2005" (S.1504, aka BICCA) offered by Sen. John Ensign (R-Nev.) and co-sponsored by Sen. John McCain (R-Ariz.); it would mandate that local governments effectively give private-enterprise service providers the "right of first refusal" in bidding processes before embarking on their own official projects.

More onerous to the group, however, would be the tersely worded "Preserving Innovation in Telecom Act of 2005" (H.R. 2726) - which was proposed in the House in June to implement a national-level ban on such local community network services. Sponsored by Rep. Pete Sessions (R-Texas) after a state proposal in his home state failed, the bill appears relatively sweeping in that its muni-network prohibition covers several potential definitional bases used among legal and regulatory circles to govern the carrier and service-provider business. It also only forbids the community-funded services in geographic area within governing jurisdictions where corporations or other private entities are offering a substantially similar service.