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                                                                                                   Part Two in a Series
                 Debunking "The Broadband Market Failure" Myth
 Net Neutrality proponents justify their call for new regulation by claiming insufficient broadband competition.
 Broadband is a young, fast-growing, and dynamic eight-year-old market replacing monopoly dial-up service.
   The facts prove a competitive market: choice is expanding, real prices are falling & supply is increasing.

Choice of broadband providers is expanding rapidly: According to the most recent FCC data*:
    ·   81% of U.S. zip codes offer 3 or more broadband choices, up from 61% in 2003, and 32% in 2000.
    ·   53% of U.S. zip codes offer 5 or more broadband choices, up from 35% in 2003, and 15% in 2000.
    ·   Zip codes with 10 or more broadband choices have exploded nine-fold since 2000 from 2% to 21%.
            o * http://www.fcc.gov/Bureaus/Common Carrier/Reports/FCC-State Link/IAD/hspd0705.pdf

Real Prices for broadband are falling!
    ·    Real DSL prices have fallen ~50% as speeds have roughly doubled over the last 2 years; introductory
         DSL prices have fallen ~70% in ~3 years; average monthly DSL prices fell ~15% from 2004-2005.
    ·    Real cable modem prices have fallen ~70% as speeds have increased from 1.5Mbs to 5+Mbs over the
         last two years with no price increase. Cable modem prices as part of a bundle have also fallen.
    ·    The real price of broadband satellite service has fallen substantially through rebates/promotions.

Supply of new broadband competitors continues to increase.
    ·    Wireless broadband is the fastest growing broadband option:
             o Verizon, Sprint and AT&T now offer wireless broadband service in most of the country.
             o T-Mobile broadband service offers 8,000 WiFi hotspots with coverage in all fifty states.
             o McCaw's Clearwire-Intel WiMax offering is in 30 cities with plans to go more national.
    ·    Several hundred U.S municipalities are in the process of installing city-wide WiFi networks.
    ·    Broadband over Powerlines (BPL) is now a feasible third wire to the home; ~99% of cost of BPL is
         already paid for to supply electricity. Google-backed Current Technology is rolling out BPL in Dallas.

Net Neutrality is a smokescreen hiding an anti-competition policy bias.
    ·   The proof that net neutrality proponents pessimistically do not believe in competition policy, is none of
        the pro-net neutrality bills include any sunset provisions for when sufficient competition develops.
            o Snowe-Dorgan S.2917, Markey Bill HR.5273, Sensenbrenner bill, HR.5417 are all permanent.
    ·   A reason they offer no sunset language is that any objective measure of competition would show that
        sufficient broadband competition already exists for most all Americans, and is increasing every day.
    ·   Snowe-Dorgan would impose new and highly-intrusive regulation on cable, satellite, wireless, WiFi,
        WiMax, and BPL -- all broadband technologies, which have never had net neutrality regulation before.

Broadband duopoly allegation is a gross misrepresentation of this dynamic marketplace.
    ·   Those who allege a telco-cable duopoly egregiously omit the factual context that they both used to be
        monopolies and that bipartisan competition policy has successfully de-monopolized these markets.
            o As the data in the first section prove, competition has been increasing steadily for several years.
    ·   Broadband is a young eight-year-old market characterized by falling prices, increasing supply of
        competitors, faster speeds, heavy investment/new deployments, differentiated offerings, and innovation.
    ·   Fact: Satellite broadband is most widely available broadband technology, not DSL/cable per FCC data*.
    ·   Fact: 35% of the latest new broadband adds were wireless, not DSL or cable modem, per FCC data*.

NETCompetition.org is an e-forum to debate the merits of net neutrality. It is funded by broadband telecom, cable and
wireless companies who believe in free and open Internet competition, not Net regulation. See www.netcompetition.org.