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CONTACT: Amy Smorodin
July 21, 2009
(202) 289-8928
U.S. Broadband Policy Unfairly Criticized
Ferree Files Reply Comments Regarding National Broadband Plan

WASHINGTON D.C. - Despite claims to the contrary, U.S. broadband markets are effectively competitive and the current regulatory regime has been generally successful in encouraging broadband deployment, states Kenneth Ferree in reply comments filed today with the Federal Communications Commission.  Moreover, because of the dynamic nature of the broadband market, any regulatory action should be narrowly targeted.

"Fortunately, the sky is not falling and reports of our national broadband demise have been greatly exaggerated," states PFF President Ferree in the reply comments filed in response to the FCC's National Broadband Plan notice of inquiry.  He disputes claims that markets are not competitive, citing a FCC market analysis which found that over 90 percent of zip codes in the U.S. are served by three or more providers.  Also, Ferree takes issue with claims that a duopoly in landline broadband markets would necessarily be, by nature, market failure.  Instead, because of the high fixed costs associated with networked industries, price competition between too many providers could impair investment.

Ferree also questions claims that the U.S. is lagging in broadband deployment, stating that the most frequently cited statistics do not take into account commercial connections and tend to cast countries with higher population density in a more favorable light. 

Finally, Ferree disputes claims that there has been an absence of policy governing broadband.  Instead, he explains, the Commission's policy of regulatory restraint was a deliberate strategy to create investment incentives, which has lead to rapid deployment and innovation in the market.  Ferree advises the government to continue the policy of regulatory restraint and "1) focus on demand-side issues; 2) work to establish broadband 'anchor' institutions in unserved communities; and 3) stimulate private sector investment in new broadband networks."

"As virtually all parties to this proceeding have recognized, the broadband markets are too important to the future of this country, and too much is at stake, for rash action," Ferree concludes. 

The comments are available on the PFF website.

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.



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