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Bells hang up on broadband

Guest commentary, Ken Boehm, Farm Business Council

Editor’s note: The concerns expressed in this commentary about broadband service and Qwest are relevant to Summit County.

Bringing the fruits of information-age technology to small towns and rural areas has long been a goal for those of us who work in the agricultural community.

Making high-speed Internet services more widely available, for example, would improve rural life in many ways, both from an economic and social perspective. With more broadband services, farmers and ranchers would be better able to bring products to market, and our children would have access to many new educational tools via the Internet.



With that goal in mind, our hopes were buoyed when Qwest and the other Bell phone companies began talking about accelerated deployment of broadband technologies throughout their territories. But our hopes were soon dashed, as the Bell companies now seem to be walking away from their promises and turning their backs on the communities they vowed to serve.

What happened? You’ll have to ask them, because I certainly am at a loss to explain their waffling and backtracking on their commitments. It couldn’t be because regulators didn’t seek to aid them with their mission, for, in fact, regulators gave them exactly what they wanted with regard to use of their broadband infrastructure.



The promises to deploy more fiber optic cables and associated facilities to more businesses and homes were made amidst intense lobbying campaigns before Congress and the Federal Communications Commission (FCC).

The current rules that were under FCC review in recent weeks concerned requirements that the Bell companies – Qwest, BellSouth, SBC Communications and Verizon – must lease portions of their networks to other phone companies.

These four companies have complained to anyone who would listen that network-leasing rules are unfair and should be lifted. They claimed the rates set for leasing were unfairly low.

But the U.S. Supreme Court and just about every state public utility commission that has delved into the economics behind these rates said they were fair and they allowed the Bell companies to recoup costs, and then some.

All this might sound like an arcane squabble between big companies and a government regulatory body except for the fact it has serious potential effects for rural Americans.

In states where the utility commissions set fair network-leasing rates, consumers benefited because it allowed new companies to enter the market.

Consumers and small businesses benefited through lower prices and more service offerings tailored to their individual needs. What’s really amazing is rural consumers have benefited disproportionately from these new choices. Statistics show that rural folks take advantage of this competitive choice at higher rates than their urban and suburban counter parts.

Nevertheless, Qwest and the other Bell companies kept hammering away at these rules, saying they had no incentive to invest in new networks if they were forced to lease that network to competitors.

As an inducement to change the rules, these four companies told the FCC they would rapidly accelerate their deployment of new fiber networks and similar advanced facilities if only the FCC would put those new networks off limits to competitors. After much debate, the FCC agreed.

Then within a matter of days – some say hours – of the FCC decision, a number of Bell company executives began to hedge their comments, equivocate on their commitments and finally flat out say they weren’t going to make the investments after all.

The reason offered was the FCC didn’t give them what they wanted with regard to use of their old, existing network by other phone companies.

We should – and do – expect more from these four companies.

Next time someone from one of the Bell companies drops by with a promise, we’re likely to take it with a grain of salt. And that’s too bad. But then they brought it on themselves.

Ken Boehm is a director at the Farm Business Council, based in Arlington, Va., a nonprofit advocacy and public policy organization dedicated to free market solutions to problems confronting rural America and the agricultural community.


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