PSC Once Again Tells FCC to Let Market Take Lead on Broadband While the Market Continues to Fail Customers

In comments submitted to the FCC on Monday, the New York State Public Service Commission (“PSC”) , along with the state’s Chief Information Officer/Office for Technology (“CIO/OFT”) told the FCC in their comments that it should let the market decide broadband availability issues. This position should come as no surprise since the agencies took an even firmer stance against governmental intervention in comments submitted to the FCC in June regarding broadband deployment.

Specifically, on August 31st the PSC and CIO/OFT wrote:

“While faster speeds may be achievable in more densely populated areas, thresholds should not be set so high as to make it economically infeasible in rural areas. The FCC should consider the appropriate balance between regulation and reliance on competition. We recommend that the FCC rely on the market in the first instance and that government intervention be tailored to addressing important public policy issues that the market has not addressed.”

While the agencies did submit that the New York State Universal Strategic Broadband Roadmap, which was released in May 2009 by the state’s Council for Universal Broadband, calls for a minimum statewide speed of 1 Mbps, they acknowledged that this speed is not available in all areas today. Despite the failure of the market to bring this non-remarkable speed to rural as well as urban areas around the state, they continued to maintain that no governmental intervention should be necessary at this time. However, maybe the PSC and CIO/OFT actually believe that the “first instance” has already occurred and now due to market failures, the time has come for the government to “address[] important public policy issues.” While their actions indicate otherwise, PULP can think of two public policy issues that are ripe for consideration today: consumer protections and affordability.

For the past seven years, I have had DSL service at my home which is provided by Verizon. The company charges a “reasonable” $29.95 a month for 1.5 mbps download speed. From time to time – including this week – there have been problems with the service, ranging from inconsistent speeds to a total lack of access. When these occur, I must place a call to a toll-free number at which point I am sent from one robotic voice to another before I can speak with a tech who can test my line. Invariably, the trouble can not be repaired remotely and a service rep must be called to my home. I am then transferred to the dispatch desk and am informed that someone can be at my house in three days “sometime between 8 am and 6 pm.” Oh, and an adult must be in the home waiting to receive the magical call that the technician is on his way. Attempting to challenge the delay in repair is fruitless (as is demanding a credit for the days out of service) as there are no consumer protections in place for broadband customers in New York State. The option of leaving to a competitor (if there is one) is not even a remote possibility for most people as the provider realizes that the customer is not going to the trouble of changing e-mail addresses over a “minor” technical glitch.

When I was home the last time a service rep made his trip to my house, I was informed that my technical problems will go away as soon as FiOS, Verizon’s fiber-to-the-home offering, is available in my neighborhood. For years, Verizon has touted how network reliability improves exponentially with fiber over copper (See: Verizon Service Quality Performance Lags). Assuming this is correct, there is also a higher cost associated with this improved service, due to the greater speed and reliability. While this may be a viable solution for my situation, it begs the question of affordability – if New Yorkers are struggling to afford $29.95 a month for 1.5 mbps every month (which studies show is the case for about half the population), how are they going to afford FiOS? See The Broadband News Is In, but it Isn’t All Good; Is There a Need for a “Broadband” Universal Service Fund?

Today’s marketplace for broadband is one which lacks high speed, consumer protections and affordability. Yesterday a person attempting to telecommute from the Adirondacks checked his internet speed and found that Frontier’s vaunted “high speed” premium DSL service was downloading at only 528 kb rate, little more than half the state agencies’ overly modest goal of 1Mbs service. This is what the PSC’s “hands off” approach has wrought for New York’s consumers. See Test Your Internet Speed at CWA Website and Compare it with Broadband Speed in Other Countries, PULP Network, July 10, 2009.

What we need is a commitment to universal high speed broadband, and enforceable protections for broadband consumers – modeled on the state’s Telephone Fair Practices Act – as well as a mechanism to help low income families access broadband. We will not get there if the PSC and the CIO/OFT continue to push against governmental action, a hands-off policy that has caused the U.S. to decline to 15th in the world in broadband use, well behind other countries that have a real policy in this area. We need to examine these “important public policy issues that the market has not addressed” today.

Lou Manuta