ISPs face Fed fight

Telcos and Cablecos are preparing for a fight as regulators begin work Wednesday on a national broadband strategy that could bring major changes to how Internet services are delivered to American homes.

The $787 billion government stimulus package requires the FCC to provide a plan for how potentially billions of future taxpayer dollars should be spent to build or upgrade Internet access across the US.

The agency will map out how the US can ensure that every American not only has access to broadband, but has service that runs much faster than what's available today. It will also look at how to update policies that haven't kept pace with the way Americans get phone, cable TV and Internet services in their homes.

Implicit in the review is that the federal government plans to invest more money in broadband infrastructure than the $7.2 billion promised through the economic-stimulus plan. Rules for how companies can apply for those stimulus funds are expected in the next month or so.

The FCC plans to examine issues ranging from how to define faster, next-generation broadband to what sort of rules should be applied to guarantee delivery of Internet traffic. It will examine competition between Internet-service providers and what can be done to provide incentives for building broadband infrastructure.

The FCC is required to turn in its plan next February, and will begin Wednesday by opening up the issue for comment.

The plan will raise thorny issues about what sort of requirements, if any, should be imposed on Internet-service providers to share the networks they have built with government help. Phone and cable companies argue that such requirements would likely stifle investment and be counterproductive.

Phone and cable companies, which provide a vast majority of the Internet access in the US, plan to lobby the agency and Congress to ensure that the FCC's plan doesn't require more stringent rules, particularly on how they manage their networks.

Internet-service providers want to control their systems so that big users don't hog bandwidth and slow service for others. But consumers and companies that want to offer services such as online video don't want those services blocked or hobbled.

Future federal funding for expanding broadband access likely would come through changes to the Universal Service Fund, a $7 billion annual program designed to subsidize phone service in rural areas and to low-income Americans. The Obama administration says the fund should provide money for broadband, not just phone service. But any changes to the program are sure to be controversial; rural phone and wireless companies could receive significantly less revenue from the fund if changes are made. Stimulus funding, meanwhile, is an important first step to getting broadband out to more areas where there is little or no Internet service. Most of the $7.2 billion set aside for high-speed Internet in the stimulus plan will have been spent before the FCC produces its wider plan for how the US. should invest in broadband. (info from The Wall Street Journal)