Small Business, Broadband and Tom Wheeler

FCC Chairman Tom Wheeler will testify before the House Small Business Committee today. According to a recent FCC report, broadband and telecommunication service is essential to 97 percent of small businesses. So Chairman Wheeler’s testimony is a great opportunity to highlight the vital role that competition in the broadband market has played in boosting small business – the engine that powers the American economy.

Broadband has enabled small business to think bigger, act bigger and grow bigger.

As broadband providers upgrade their networks to the latest IP technologies, competition is the best way to ensure that small businesses continue to reap these benefits.  Competition has brought new innovations to market –such as VOIP, Ethernet and the Cloud.

In our recent Broadband Innovation paper, Driving Small Business Forward, we focus on the 27.9 million small businesses in the United States. While individually small, these businesses are aggressive adopters of new broadband services, and big IT spenders. From investing in cloud solutions to creating telework opportunities, small businesses are at the forefront of business broadband innovations.

In fact, small firms that adopt broadband and internet services are the fastest growing segment of the small and medium sized business market. They spend $293 billion of the $326 billion spent annually on IT budgets. It’s an investment in reliable, scalable broadband that allows small and medium sized businesses to be the growth engines of our economy.

At the Library of Congress this past June, the Broadband Coalition and COMPTEL launched Customers for Competition and paid tribute to the 1996 Telecommunications Act that unleashed a wave of competition. At the event, one of our highlighted customers, Pantheon Software, detailed how building a fiber line to their small business helped propel future growth while reducing costs.

Today, this same wave of competition continues to bring choice, better customer service and affordable offerings to small businesses across the nation. We look forward to hearing even more examples from Chairman Wheeler today.


Windstream Letter a Game Changer.

It’s always easier to see both sides of an issue when you have one foot in each camp. That is the case for Windstream, a Broadband Coalition member who has business operations split nearly evenly between incumbent and competitive local exchange carrier operations.

In fact their CEO, Jeff Gardner, recently served as the chair of United States Telecom Association (USTelecom), the trade association that advocates for incumbent providers including AT&T and Verizon. He was also thekeynote speaker at the COMPTEL Plus show for the competitive industry this spring.

This deep understanding of both the incumbent business and the competitive marketplace is what makesWindstream’s recent letter to the FCC such a game changer in the debate over the Technology Transition and the IP Transition specifically. After close examination, Windstream called AT&T’s IP experiment proposal for communities in Florida and Alabama, flawed. 

Flawed, as in should be rejected flawed.

Now, Windstream makes it very clear the FCC should speed the transition from TDM technologies to IP technologies – an area where the company has taken a leadership role. They note that carriers like AT&T should not be allowed to invoke the IP transition as a pretext for shedding pro-competition requirements and an excuse to raise prices on business customers.

In urging the FCC to reject AT&T’s trial outright, Windstream notes:

--AT&T has no plan for wholesale customers. Zero.

--The trials as proposed violate the FCC stated core values: competition, public safety, widespread and affordable access and consumer protection.

--AT&T’s plan will lead to fewer providers, less innovation, and lower standards of service for consumers and business customers.

In their letter, Windstream hits on a key point in the debate: last-mile access.

“In the post-IP world, competitors still will need equivalent access to last-mile facilities and services to continue offering business services to millions of customers.”

Windstream recognizes that competitors can’t make a viable business case to replicate last-mile connections, except to serve the very largest customers. This is because of a variety of factors, including high sunk costs of constructing last-mile facilities (i.e., costs, once incurred, cannot be readily recovered), local government regulations that delay and raise costs for new deployments, and building owners’ refusing access to new carriers or seeking to charge competitors extending networks into their buildings.

Rather than working to cut off last-mile access, like AT&T is proposing, Windstream’s letter calls on the FCC to take immediate action to ensure that, at a minimum, the status quo for wholesale access is not undermined by incumbents seeking to invoke the IP transition as a pretext for dramatically raising the costs of the companies that are their biggest rivals in the business service marketplace. Without this reform, businesses, schools/libraries, hospitals, and government entities all will see their communications bills increase – as competitors’ will be forced to increase prices in response to higher last-mile access costs, and competitors’ prices will no longer provide a meaningful check on incumbents’ price hikes.

On Friday, during their June meeting, the FCC is scheduled to receive a presentation updating the commissioners on the IP Transition and AT&T’s IP experiments proposal. As a recent article in TelecomCompetitor suggested, the Broadband Coalition hopes Windstream’s letter, along with concerns raised by Granite Telecommunications, XO Communications, tw telecom, COMPTEL, Sprint and Level 3 (read here and here) caught the eye of the FCC.  

After all, the migration to IP networks is happening in the marketplace. This is a step forward for technology, a step forward for consumers, and a step forward for innovation. The Broadband Coalition members have been at the vanguard of this transition, rolling out IP-based services for over a decade. But as Windstream notes, we can’t afford to “flunk” a test along the way. And AT&T’s trials, absent a viable wholesale plan for last-mile access, threaten to disrupt technology advancements toward an all IP network. 


Competition Key to Upton, Walden Update

WASHINGTON DC (Dec. 3, 2013) – Today, House Energy and Commerce leaders Chairman Fred Upton (R-MI) and Subcommittee Chairman Greg Walden (R-OR) held a Google Hangout where they announced plans for an update to the Communications Act in 2015.  The House leaders indicated the process would include a number of hearings and white papers leading up to 2015.

In response to the announcement, Chip Pickering, a spokesperson for the Broadband Coalition and a former Republican Member of Congress from Mississippi who helped draft the Telecommunication Act in 1996 as a Senate staffer, released the following statement:

“By design, the focus of the Telecommunications Act was competition, not technology. The rockets of innovation that have launched since the ‘96 Act have literally changed the world as we know it.  From Amazon to EBay, Twitter to Tumblr and Google to Facebook.

“The policy architecture put in place in the Telecommunication Act of 1996 is still working to this day, hatching new markets, new ideas and most importantly new jobs.

“Chairman Upton and Walden are both strong advocates for open markets and I would encourage them to keep competition policy as their guide and not be swayed by arguments that would favor one technology over another.

“New FCC Chairman Tom Wheeler has the tools he needs to protect and promote competition and innovation. We support his data driven approach, which removes politics and lobbyists from critical decisions about competition and market penetration. 

“We are confident the data being collected for the special access proceeding at the FCC will show that AT&T and Verizon have retained bottleneck control on business broadband service. AT&T’s current rate hike request before the FCC is exhibit 1A of their market power.”


Small Business Saturday and the Broadband Ladder to the Top

Small businesses have many nicknames: America’s economic growth engine, mom and pop, pre-IPO, or startup. But no matter what you call them they are an indispensable ingredient to our economy.  Besides employing half of the private sector workforce in our country, the U.S. Small Business Administration says that these employers also create seven of every ten new jobs. 

On Small Business Saturday we thank them with our support, and join them in serving our communities. Over 50 percent of the dollars you spend at a small business stay in your neighborhood. And when you tweet about your purchase using the #Shopsmall hashtag, you both shop locally and share globally.

Twitter is a great example of a broadband fueled start up. The company that encourages expressions of 140 characters has thrived on access to ubiquitous and affordable broadband platforms – successfully completing its IPO earlier this month.  Without broadband we have no Twitter (or YouTube, or Pinterest, or Scribd, or…well you get the picture). 

The Broadband Coalition recently released a report called “Broadband Driving Small Business Forward.” Whether your company HQ is based in your home, garage, dorm room or an office park, the report details examples of how broadband makes the wheels of commerce turn.

But like with all other expenses, there is a disproportionate telecom cost for small businesses versus large businesses.  And to help curb those costs, we need to ensure that there is a properly competitive telecom marketplace that is responsive to the needs of our small businesses and helps to drive down the cost of this critical resource. 

Since their birth of the competitive telecom marketplace over a decade ago, when “broadband” meant a T-1 connection and speeds of 1.5 megabits per second (Mbps), competitive providers have been on the cutting edge of innovation, nimbly tailoring their services to the small businesses that are well below the radar of the big telecom megaliths. 

These competitive startups brought innovations like VOIP, Ethernet and the cloud to market. Today many have grown into household names by helping small business tailor their growth needs - providing telephone, high speed data and cloud computing. Competitive broadband makes it their business to serve businesses. 

Today, thanks to competition-fueled innovation, we talk about bandwidth speeds in the tens, if not hundreds, of megabits.  And thanks to the pro-competitive framework that Congress passed in 1996, many businesses that have their choice of providers.

But the big guys don’t always like the small guys. In the broadband industry, competition laws are always under assault. Just Monday, AT&T told the FCC it’s going to raise rates for high capacity business connections by 15 to 25 percent. The FCC only has until Dec. 10th to stop AT&T’s rate hike. If you are a small business and would like to help, please tweet and sign our petition at now.

AT&T’s rate hike will put the 29 million small businesses across America at risk. Less competition means fewer choices as your business grows. It’s pretty simple. When there is true market-based competition, prices for broadband go down and small businesses can move up the ladder of success. 


Wheeler Hits the Ground Running on Technology Transitions

Broadband Coalition Releases Statement in Support of FCC Chairman’s Goals 

WASHINGTON DC (November 20, 2013) – Yesterday Tom Wheeler, Chairman of the Federal Communications Commission (FCC) posted comments on the FCC blog entitled, “The IP Transition: Starting Now.”

In response to Wheeler’s comments, Chip Pickering, a former Member of Congress and spokesperson for the Broadband Coalition, released the following statement:

“FCC Chairman Tom Wheeler has hit the ground running, and he’s got competition, innovation and access on his relay team.

“The competitive broadband community brought IP technology to the small business market.  These innovations have both created jobs and transformed how America does business.

“We welcome immediate FCC action built on the principle of competition. We welcome any test that fosters innovation. We welcome any policy reform that keeps our customers connected to services that are both flexible and affordable. 

“The ‘Network Revolution’ that Chairman Wheeler describes is about the future, but any game plan for the IP transition without measures focused on ensuring competition would simply be an AT&T time capsule from the past.

"We know what the world looked like before Congress opened our telecom markets to competition, ending a 100-year old Bell monopoly system.

"What followed redefined the telecommunications landscape -- for the better -- and we must never go back.  The FCC has the tools to ensure competition and Tom Wheeler has the vision to effectuate it.”