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Jules Genachowski takes over after the worst six months for broadband coverage since 1998 when things began.  The big four companies that control 75% of the market report added virtually no new coverage. AT&T won't even give me a figure for their deployment, which currently is about 5 points lower than their CEO suggested on Wall Street years ago. The U.S. and Canada have by far the worst DSL availability in the developed world, even when just rural or urban areas are compared. Obama talks about broadband for all, but his first six months have been all talk.

By the best available data, fewer new homes became servable since the election than in the prior six months. Almost everyone halted their existing plans, hoping to do the same thing a year later with massive subsidies. Since few expect deployment to start up before the end of 2009, we almost certainly will have the worst year in a decade. AT&T, Comcast, Verizon, Cablevision, Cox and most others are spending their budget on upgrades to existing areas.  Almost all of the companies in this industry are spending substantially less on capex than depreciation. DOCSIS 3.0 and FiOS are great, but they aren't getting to everyone.

I am not objective about this administration. I've written Obama will be the best president of my lifetime, and readers need to know my bias. I know many of the appointees; they are the best and brightest in the industry.

Although the data isn't perfect or always comparable. the trends are pretty clear. I can manipulate the numbers so that the U.S. is 10th, 15th or 20th in broadband take rate, for example.Whether 10th or 20th, we're far behind the leaders or our position a few years ago. The situation isn't desperate: we're somewhere in the broadband middle overall, behind France but ahead of Italy. We can do better.

Numbers never have all the truth, but they are a good start at the evidence we need to make policy. In the last few years, U.S. prices have gone up for basic services,  consumer long distance, and most broadband. They are flat and occasionally up in wireless, although wireless networks have doubled efficiency. On quality and speed, we are far from the best, except for Verizon's FiOS. That's only 15% of the country.

Meanwhile, most results in telecom are dismal.While no one is looking, the USF fee is going up 20%. That's $2B while the U.S. is running the largest deficit. While costs are coming down, Verizon and AT&T are pushing through price increases for basic service. The latest is a 9.5% increase in their primary product in Alabama. Prices in the U.S. for comparable service are twice what they are in France. Inspector General Kent Nilsson found over $1B in improper payments in USF last December, $800/hour payments in the relay service for the disabled, and statistiscal anonmalies almost impossible to explain except as fraud. The result: Nilsson soon left, with rumors flying that he retired against his will. 20% of U.S. telecom revenue pays for ICC/USF subsidies, most to a handful of companies; if the money only went where needed, we could reach the unserved and still reduce the tax.

When Kevin Martin took the chair, he said he hoped when he left people would think him "a fair judge." I told him soon after he was wrong. His job was to bring better services to the American people, not to refine FCC procedures. George Bush said we'd have "affordable broadband for all Americans by 2007." Martin called that his first priority, but failed miserably. 97-99% availability was easy achievable, according to experts like AT&T CEO Ed Whitacre (twice.)

Jules is telling friends he wants to move cautiously. Kennard, Powell, and Martin made the same decision, with the latter two doing relatively little until the end of their term. Both were deeply disappointed, with Powell telling people in his last year he was going to have some extraordinary things to say when he left office. Martin's last year was misery. The lobbyists clobbered some very good proposals, and the infighting at the FCC held back others. Jules has the intelligence and skills to do better; I hope he has the courage.

The buck stops here, Mr. Chairman.

Here's my original 2006 article, The Buck Stops Here, Mr. Chairman, addressed to Kevin Martin.

Kevin Martin is responsible for fulfilling the President's universal broadband pledge. If he has the backbone, he will demand actual deployment as part of the merger conditions, and maybe even threaten to enforce the conditions of previous mergers.

The buck stops here, Mr. Chairman
100 percent Broadband to AT&T's Half of the United States
In 1999, Ed Whitacre promised 80 percent coverage with Project Pronto in 2002, and "all our customers" in the next few years after that, using whatever technology proved most effective. Instead, SBC stopped below 76 percent and refused to even reveal the number. If Kevin Martin has the backbone, 100 percent availability will be part of the coming AT&T/BellSouth merger. AT&T would huff and puff, but Martin faced them down before on UNE-P.

Martin says his most important task is broadband, and his President has promised "affordable broadband for all Americans in 2007." 25 percent of SBC customers don't have that choice, and if Martin doesn't step in right now the number will be almost as high on December 31, 2007. At very modest cost, AT&T could build out a profitable DSL or WiMax service to well over 90 percent, and restructure their satellite offering to make it comparable in price for the handful remaining. Equipment is now so cheap the deployment would almost surely be profitable, although not as much as some other AT&T investments. Martin knows that current satellite choices are too slow and too expensive, not honestly "affordable broadband" by today's definition. The key to making this work would be an enforceable commitment from Big Ed of affordability defined as price similarity to their main DSL offering.

Martin also can avoid another crisis seemingly inevitable this fall, when AT&T turns on their HD service and creates a prima facie antitrust violation. AT&T is blocking customers from all but six Mbps of the 20 to 25 Mbps Lightspeed connections. They refuse to sell higher speeds at reasonable or even unreasonable prices.

In England, France, Germany, Holland, and Japan, carriers are now routinely selling "up to 24 Mbps" service that delivers over 10 Mbps to most customers. The 10 to 20 meg Mbps is typically less than AT&T is charging for 3 to 6 Mbps. AT&T DSLAMs and network are designed to offer 20 Mbps or more to most customers.

The only logical reason to block off the bandwidth is to prevent folks like Disney or the Mormon Church sending video that people might prefer over AT&T's walled garden.

Not selling more than 6 Mbps effectively blocks anyone else wanting to distribute programming, because live HD TV requires 8 to 10 Mbps. If you want to watch the Southern Baptist Conference Church Service, rather than SBC's chosen programming, you can't. If MGM or Common Heritage.org wants to sell HD programs, they can't.

Antitrust law calls this an "essential facility," with decades of precedents that clearly apply. The SBC/AT&T merger agreement also demands openess, and Martin told Copps and Adelstein he would enforce that agreement. AT&T preventing consumers from watching their choice of HD television programs couold be the "Madison River" test of "access to content of your choice." Expect extreme sophistry about service plan choices and speeds obscuring the first big violation of network neutrality, with clear implications for freedom of speech and religion. Comments in Congress that "no problem is imminent or likely" are disingenuous. Not merely did Ed Whitacre and Randall Stephenson say they want a tollbooth, they are already telling reporters they will limit speeds with the result that live HD video can't challenge Lightspeed.

If Martin shows fortitude, Whitacre will back down after blustering because he wants the merger to go through. A brave judge just ruled that antitrust rules should have been more strictly applied in AT&T's last merger, after which BellSouth announced the shareholder vote will almost immediately take place. AT&T can do a bulk buy of satellite capacity cheaply, or launch one, and make sure the price is in the DSL range without losing money.

Net neutrality requires a more robust network, but the costs (even with an unlikely rapid move to video over the net) are about 3 percent of his broadband revenues. Martin can also attribute his reluctance to a need to reach consensus and avoid a 2-2 vote with Democratic opposition. Whitacre himself suggests McDowell, the third Republican, may have to recuse himself because he often fought SBC in court as a private attorney. If McDowell steps aside, Martin can appear a diplomat trying to get the merger approved. Michael Copps or Jonathan Adelstein, true battlers, can be the foil.

Martin, like Powell, Kennard, and Hundt, is smart, dedicated, honest, and hardworking. He has potential to be a great chairman, because he's spent the last decade studying the industry at a depth beyond his predecessors. I've watched him spend two days at an optical conference listening and asking intelligent questions, wanting to learn.

Martin understands technical issues better than any non-engineer I've met at the FCC except for Robert Pepper. (There's only one Pepper. He tells me he's happy roaming the globe on behalf of Cisco, but the FCC has no one who can replace his skills.)

No matter how much I respect Martin, I have to accept the consensus that he's not getting results. His preferred strategy, getting government out of the way and letting competition solve problems, often fails in a real market with two, not 5 to 10, companies involved.

"Competition doesn't work without competitors."

25 years of "deregulation" has left the FCC Chairman with very few levers. He can't pass up opportunities like this if he wants to get things done. The buck stops here, Mr. Chairman.