Cable’s leadership in broadband is no secret and in fact is one of the great telecom success stories in recent years. After all, the cable industry alone has invested some $170 billion in private capital to build broadband networks that are now available to 93 percent of U.S. homes. And the speed of cable’s broadband offering continues to increase – often at no cost to consumers – so that most cable broadband customers are enjoying a connection of 10 Mbps or higher, and some are utilizing the ultra-fast connections that exceed 100 Mbps. This is all great for U.S. consumers, our economy and global competitiveness.

But we are starting to see a very disturbing meme spread by some folks who think that the government should disrupt this success and inject rate regulation and price control over broadband networks. One such fierce advocate is Susan Crawford, a smart and respected former Obama Administration official who now is a law professor and commentator on broadband policy issues. Crawford took to the opinion page of last weekend’s New York Times to lay out her rationale, but it’s one that we find full of faulty analysis, leading to a disastrous prescription.

In a blog post titled, “Susan Crawford’s Broadband Blinkers“, Richard Bennett of the Information Technology and Innovation Foundation provides a thoughtful and important rebuttal that shouldn’t be missed. Here’s a sample:

Crawford’s particular style of analysis is heavy on vague generalizations and light on substance. She talks about “high-speed connections” without ever specifying a rate, and refers to a number of common applications – such as filling out job applications on-line – as if they required massively reengineered networks when they clearly don’t.

Both columns are worth reading to understand where this debate is going, but let’s make sure that we have a firm understanding of the facts before we rush to conclusions that could devastate one of America’s few thriving industries.

Broadband access to the Internet has become a fact of life for many Americans.  We use it to find critical information.  We use it to stay in touch with friends and loved ones.  And we learn and study with it.  It has, in many ways, revolutionized how we teach and learn, on the job, at school, and at home.

But what about the one-third of American households that hasn’t yet adopted broadband at home?  Research from the Federal Communications Commission (FCC), the Pew Internet Research Center, and other groups shows there’s no single reason why people don’t sign up.  It might be a lack of digital literacy, little or no understanding of the relevance of broadband service, no computer at home, or affordability.

That’s why a new public-private partnership announced recently by cable’s leading broadband providers and the FCC seems so important.  The “Connect to Compete” (C2C) program unites a number of non-profit and private partners in a coordinated, community-based program that is dedicated to a common purpose – promoting adoption among certain families with school-age children that have not yet hooked up to broadband.

Cable broadband providers reaching 86 percent of U.S. households with broadband service have committed to participate in C2C or some other complementary program. They’ll offer a discounted promotional rate of no more than $9.95 a month (plus tax) for high-speed Internet access to qualifying families with kids in grades Kindergarten through 12 who receive free lunch under the National School Lunch Program.  Participating companies will waive installation fees in the case of standard or self-installation.  They’ll throw in a cable modem free of charge during the length of the program, or offer to sell one for a deeply discounted fee.  And those who sign up for the program will enjoy, at a minimum, download speeds of up to 1 Mbps, while some may receive faster speeds.

The program will launch in 2012, in the back-to-school period for the 2012-13 school year.  There will be a sign-up window of three years.  And any family that qualifies and signs up can stay in the program for up to two years.

C2C is the latest step in cable’s long journey of commitment to education.  That commitment to the value of broadband in education actually began more than 20 years ago when we started to wire and connect tens of thousands of schools and libraries, first for cable TV, and then to the information superhighway we now call the Internet.  Our efforts continue today, led by the industry’s non-profit education foundation, Cable in the Classroom, to promote and distribute educational content and help teachers and students use broadband technology and services safely and responsibly.

The program is also part of our legacy to promote broadband adoption.  We’re fiercely proud of being the first industry to bring broadband to American homes. Today, our companies provide broadband service to more than 45 million American homes.  We’re convinced that C2C will enable even more homes to adopt broadband – providing tremendous educational benefit to more American families.

The cable industry is the largest provider of broadband in America with our high-speed networks available to 93% of U.S. homes. And even though 77 million U.S. consumers are using broadband to communicate, educate and conduct commerce, it’s clear that  simple availability of this game-changing technology isn’t enough of an inducement for some families to subscribe. Numerous studies have shown that if they don’t understand the relevance of broadband, or how to use the service, those remaining consumers may just choose not to connect.

For that reason, we applaud FCC Chairman Julius Genachowski’s announcement today of a new group called Connect to Compete, a “digital literacy corps” which will actively engage with consumers so they understand how high-speed Internet will enable them to find jobs, increase their skills and open up new opportunities.

We’ve addressed the issue of broadband adoption before (“Bringing Broadband to Low-Income Families” and “Increasing Broadband Adoption”), making this point that pertinence, and not just cost, has repeatedly been identified as a significant barrier to broadband adoption. In other words, as we said in this post:

…we’ve seen firsthand that some consumers simply see no benefit in broadband…that is until they start using the service and then they can’t stop.

The cable industry has been a leader in developing public-private partnerships as an avenue to increase broadband adoption. Many cable companies are deeply involved in community-based programs designed to overcome barriers to adoption, improve accessibility to broadband services and provide training and education on digital and internet literacy.

Comcast, Time Warner Cable, Cox Communications, Charter, Cablevision Systems, and Bright House Networks are just some of the cable operators that have launched community-based broadband adoption initiatives. (You can see more details on these efforts here, here and here.)

In addition, Discovery, one of cable’s premier programming companies, will contribute premiere educational content from Discovery Education, including video clips and digital lessons, to help bolster student achievement.

Cable has been a pioneer in proposing national partnerships, including the Adoption Plus program a few years ago, which included many elements that have been embraced in the FCC’s new initiative.

In addition, through Cable in the Classroom, the cable industry provides a variety of tools and resources to educators to encourage broadband adoption and enhance digital citizenship among the nation’s youth.

We’ll be continuing our efforts to encourage adoption and will also continue to engage in discussions with government policymakers and private sector partners to identify new ideas that will substantially advance our common goals.

Last week, FCC Chairman Julius Genachowski gave a speech at LivingSocial’s Washington, D.C., headquarters about the economic impact of broadband. LivingSocial is a great example of a start-up company that has been empowered by broadband, becoming one of the leaders in the social-buying category and transforming the way consumers discover and buy goods and services.

The Chairman highlighted the economic force that broadband has become in the American economy, especially as a technology that powers job creation, and he cited a recent report by McKinsey which shows that broadband now creates 2.6 jobs for every one lost.

As cable was America’s first broadband provider, I welcome the Chairman’s remarks and enthusiasm about how broadband is sparking a renaissance in America’s economy.  But the irony of the entire speech is that not a single broadband company was even mentioned nor did we hear about the millions of jobs created by broadband providers which have built the networks that are the “indispensible infrastructure for America in the 21st Century.”

Sure, it’s to more fun talk about garage start-ups or cake delivery success stories, but let’s not forget who brought us to the dance.  Broadband is not some mystical force of nature. Broadband is the result of hard work and private investment, first from the cable industry and now many others.

The cable industry launched residential broadband service in the late 1990s and after $170 billion in construction and network upgrades, our broadband service is available to 93 percent of U.S. households – more than 123 million homes.  Cable’s broadband networks offer speeds of 5 Mbps or faster to more than 90 percent of U.S. households. Cable is also now providing next-generation wideband service, with speeds of 50 Mbps or more (in some cases, over 100 Mbps) to more than 90 million American homes.

Currently, 45 million customers rely on cable for their broadband Internet connections. As Chairman Genachowski notes, those broadband connections have become indispensible.

I know it’s been 15 years, but it’s important to remember that it was cable that brought broadband to life and gave birth to everything we delight in today.

But we also help impact the economy. Just this past March, we released the latest study by Bortz Media and Sports Group, Inc. on the economic impact of the cable industry. The study found that the U.S. cable industry supports nearly 1.8 million jobs representing gross economic output amounting to more than $251 billion.

Since 2002, direct and indirect employment attributable to the cable industry has increased by 638,000 jobs.  The industry added 4,700 jobs over the last three years at a time when the U.S. economy’s net loss of jobs was more than seven million.

We deployed broadband first; we offer some of the fastest speeds in the marketplace; we help keep American employed. When you think of the economic impact of broadband, don’t forget the critical role that cable has played.

For years, the Department of Agriculture Rural Utilities Service’s (RUS) broadband loan program has been repeatedly criticized by independent auditors, members of Congress and others for providing funding to areas where broadband services already existed, or weren’t exactly rural (like suburban golf course communities).

Now, a new study, which NCTA commissioned and which was prepared by Jeffrey Eisenach of Navigant Economics, shows that flaws in RUS lending practices have extended into the similarly inefficient high-cost Universal Service Fund (USF), creating a double whammy for both taxpayers and companies that are trying to compete against these heavily government-subsidized operations.

Before jumping into the results of the new study, it’s important to state emphatically that the cable industry is absolutely committed to ensuring that Americans have access to telephone and broadband Internet service – goals that we have been working on for decades. While government funding may be necessary to ensure that these goals are achieved in some high-cost areas, the current systems of providing this funding are in need of serious reforms.

First and foremost, resources ought to be devoted specifically to extending broadband access to unserved areas.  Government funding programs, like USF, should be used to provide funding for the building of networks where it doesn’t make sense for private investment.

We’ve previously discussed the critical changes that need to be made to government funding programs. For examples, see this 2009 post on broadband stimulus funding or this 2010 post on how to connect America to broadband in an affordable fashion. In February of this year, we talked about the necessary principles to consider for USF reform. Just last week, we argued that USF funds must be spent in an efficient manner.

The key points of the Navigant Economics study released today can be deduced from its title: The Rural Utilities Service Should Reassess Its Reliance on Universal Service High-Cost Support to Leverage Broadband Loans. To cite a few examples from the document:

• Inefficiencies in the two programs have created a vicious cycle in which consumers finance both the RUS loan and the universal service revenues that underwrite the loan, and where the burdens keep expanding as new RUS borrowings leverage higher USF payments from the high-cost fund, which in turn are used again to justify even more RUS lending.
• Despite the fact that fundamental USF reform – which would reduce the level of USF support received by RUS borrowers – has been on the table for 15 years, and is well-known to be a top priority of the current Federal Communications Commission, the RUS has continued to treat USF subsidies as a stable source of revenue for repayment for loans with maturities of 20 years, an assumption that is highly questionable and seems unrealistic under the circumstances.

The study recommends that RUS should temporarily suspend new loans to recipients of USF funds and stop leveraging USF support to qualify applicants for RUS loans. It also suggests that after the FCC concludes its USF reform proceeding and new rules are in place, Congress and RUS can reassess whether a loan program continues to be needed and if so, how that program can be better coordinated with the USF program to eliminate the problems inherent in the current RUS regime.

The time for reform is here, but let’s make sure we do it right and don’t let past traditions guide future mistakes.