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CWA'a Good Ideas For U.S. Telecom
Saturday, 20 December 2008 18:38

The Communications Workers' union is being "pragmatic" in actual policy debate, but has a long record of progressive stands. From their website, some sensible ideas.

"Universal, Affordable Service. Every resident and business must have affordable access not only to telephone service, but also to high-speed communications networks." A sensible goal, I strongly support.

Universal is easy, because a look at the U.S. networks show it would cost very little to reach 95+% of U.S. homes with 50+ megabit service. Modest sums, extending cable networks and fiber where appropriate, can reach 98%. Improving satellite for the 1-2% brutally expensive to reach by land can also be done at modest cost.

We need to think hard about how to make service  "affordable." Since U.S. competition will not be strong, we need a policy that works with only limited market effectiveness.

Strong competition that holds down prices is a great system, but prohibitively unlikely to occur in the U.S. in the next decade. That would require 5 to 8 viable companies in most of the country, while investor analysts think even a third would be hard to fund. Telecom is a business of scale; without decent market share companies mostly fail. Greater than 10% share is not proving enough for Sprint and T-Mobile, who are rapidly falling behind AT&T and Verizon despite a growing mobile business. When AT&T Wireless and Nextel were absorbed, the U.S. fell from 6 to 4 major wireless carriers. The long-run trend of declining prices ended, and by some measures wireless prices in the U.S. are actually rising.

The CWA is almost certainly opposed to any policies that would allow new entrants to take 20-40% of the market away from the carriers currently employing CWA members, primarily the Bells. That would cost tens of thousands of their members' jobs. So if the CWA wants affordable service, they need to suggest a way to achieve that. Viable competition takes away so many member jobs that can't be their answer. How to do right by consumers when competition is weak is the most important problem in U.S. telecom policy. It's the general reality, and the policy people don't have decent answers for where competition isn't working well.

I'm not naive about the problems of regulation, which means there is not an easy answer. The Bush administration failed miserable on "affordable broadband," despite making it a key plank of the 2004 Presidential campaign. A way needs to be found, just as Vivanne Reding is directly bringing down some mobile rates.

"Quality Service, Quality Jobs. Consumer and service quality protections should cover all residential and business customers no matter where they live, which carrier they choose, or what technology they select to provide their services.  Telecommunications services should meet the highest standards of quality, reliability, and safety."

On target. Despite extraordinary technical advances that should have improved networks, overall the quality of service in the U.S. has gone downhill.

"Quality service depends primarily on sufficient investment in telecommunications infrastructure and adequate staffing provided by trained, well-compensated career employees" is partially true, although up to data equipment is also essential.

The CWA doesn't say that here, but I'd suggest making it easier for non-union communication employees to come together would be a major move forward. Unionizing Comcast, Time Warner, and the remaining wireless carriers would give employees more negotiating power as they struggle against some of the most powerful companies in the world.

However, strong requirements for the companies to provide better service are also necessary. CWA locals have been leading the effort against the deliberate policies of Verizon and others to cut back on maintenance and service.

"Financial Equity and Transparency. Communications providers must meet the highest standards of ethics in their corporate practices, including financial transparency and accountability." Yep. How often have the heads of the companies answered questions from the press or even from the regulators they nominally obey? There's $billions ripped off in USF/ICC, but I can't get the details

"Current Policies Are Failing Unfortunately, current federal and state policies are taking us in the wrong direction."

"The Digital Divide is Deepening. Millions of Americans — especially in rural areas and low-income urban areas — do not have access to high-speed broadband because it does not yet pay for providers to invest in these areas."

Serving everyone is important, but saying that's mostly because of profitability problems is off-target. It invites some of the wild over-subsidy we see in other programs. The FCC Inspector-General recently reported almost a $B in improper USF payments, and there are even more to discover.

Actually, most of the unserved can be profitably reached. Some of the 5-10% without what CWA calls high speed access are profitable, just less so than other places when carriers have cut capex. AT&T and the RLECs have instead used tens of billions for increased dividends and stock buybacks.

Carriers like Charter and Qwest in deep financial trouble who can't make even profitable investments also yield unserved homes. Some homes are served by carriers too small or technically incapable. Many - possibly the largest part - are in areas of large carriers who do not service all their customers. Verizon and AT&T stopped virtually all investment for ten million or so homes because they wanted to sell those territories. When no one would pay the price, they are now re-evaluating what to do. Most carriers refuse to fix network problems (bad wiring in parts of New York City, pairgain equipment that blocks broadband, etc.) in areas they supposedly "serve."

"The Vital Public Network is Deteriorating. The vast majority of Americans still relies on the public switched telephone network (PSTN) for basic voice communications and will continue to do so for the foreseeable future.  This vital network is deteriorating because carriers increasingly divert capital resources to build more profitable high-speed networks for the businesses and communities that can most afford them." Yep, although I'd think the diversion is mostly to dividends, stock buybacks, and overpayment when buying each other ($20B overpaid for BellSouth and Alltel, based on the value of BellSouth earnings.)

"Good Jobs are Disappearing. Some communications carriers take the low-road to competition, replacing good, career oriented, and well-compensated jobs with jobs — often provided by outside contractors — with less pay, little or no benefits and no job security." Yep.

"We Need a Telecom Policy For the Future

The following policies will enable our nation and our states to lead the way in achieving the goals of universal, affordable, high-speed telecom services with high quality jobs provided by responsible corporate citizens.

Strong Consumer Protections. Policymakers should require and enforce strong consumer protections on all carriers of voice service including traditional wireline, wireless and VoIP/cable telephony providers.  Critical consumer protections applying to all carriers include, at a minimum: protections against slamming, cramming and other unfair and deceptive practices; public safety requirements to provide 911 and E911 services; requirements to provide advance notice of termination of service, contract disclosures and privacy protections; and requirements to ensure that customers with special needs continue to receive services that render telecommunications accessible including Lifeline and relay services for the hearing impaired." Sounds good to me. It's a pity no one with power has done much of this for a decade.

"High Quality Services. Policymakers should strengthen service quality regulation, applicable to all  carriers.  State and federal regulators should adopt standards requiring all broadband providers to report actual speed and reliability of broadband service.  Policymakers should require carriers to provide a free domestic telephone service center to resolve problems or initiate an inquiry.  Service standards should be reinforced with penalties to be paid by carriers for substandard service and should apply to all providers regardless of the technology used to deliver the services.  Increased competition doesn't warrant the removal or relaxation of service quality standards.  If competition improves service quality, then providers have nothing to worry about.  However, if competition fails, then consumers are protected." Yep. A key conserative tenet in strong markets, which require good information to sustain.

"A Reliable, Secure & Well Maintained Network. The traditional network is eroding ..." Yes, again

"Protect Basic Rates. State commissions should continue to regulate the rates, terms, and conditions of basic telephone service.  This will ensure that all consumers have access to basic telephone service at just and reasonable rates and that they are provided in a safe and reasonable manner.  In addition, Lifeline and Link-Up programs that enable low-income residents to afford telecommunications services should be strengthened." Yes, although "basic" needs to be better defined, including broadband as suggested below.

"Universal High Speed Broadband. Policymakers should adopt the following policies to accelerate deployment of universal affordable high-speed networks serving all regions and all consumers.

  • Establish a Universal Service Fund to support universal broadband access to underserved high-cost areas and low-income households.  All providers of voice and data service should contribute to the fund. "  Yes, but make sure most of the money isn't wasted. The latest FCC report shows a $B in improper payments.

  • "Establish reasonable deployment timetables for investment in high-speed networks in underserved, high-cost rural areas and low-income communities." Yep. I think "reasonable" here should mean within perhaps three years of service being provided to similar areas elsewhere. Since 80% of Japan has 100 meg service in 2007, I think Comcast, Verizon, and AT&T should match that in all but the hardest to serve areas in 2010.

  • "Establish a state broadband authority to collect data on the state of broadband deployment throughout the state, reevaluate technologies and programs to encourage broadband services, facilitate public-private partnerships to aggregate demand making build-out more economical, and to provide financing in the form of loans to credit-worthy projects that provide broadband access to underserved areas." I don't know if adding bureaucrats solves the problems.

  • "Provide tax credits and subsidies for broadband deployment. The amount of the tax credit could be on a sliding scale, with larger credits to carriers that invest in high-speed networks delivering upwards of 10 mbps and to carriers that invest in high-cost rural areas or low-income communities." Elsewhere, CWA is requiring 100 meg. That makes much more sense.

  • "Rationalize tax and fee structures in a revenue neutral manner. Currently, different taxes and fees apply to wireline, wireless and video providers. However, carriers providing similar services should be taxed at an equal rate. The state would then collect the taxes and fees and disburse revenue back to the localities in a revenue neutral manner." The CWA seems to be calling for a major increase in taxes in some areas to cover the decrease in others. Is that politically practical, I wonder?

  • "Leverage funding in other public programs for broadband deployment.  Many states give extra points in competitive bidding for the federal low-income housing credit to developers that commit to build broadband networks in their housing projects.  Similarly, the state could explore ways to use public health, education and job training dollars to support broadband access to more efficiently deliver publicly funded health care, education or job training." Sure.

  • "Require public reporting of speed and reliability of broadband networks.  Consumers must have access to this information to make educated decisions among competing broadband providers." Right on.