USIIA MOUs WITH VERIZON AND SBC DRAW ISP CRITICISM

“There is no ISP industry,” McClure said, at least not one that is uniform in its thinking. ("I know about 5,000 ISPs who would take issue with that,” Colleton responded.) USIIA has long maintained that ISPs should avoid becoming CLECs or offering transport -- “they simply cannot deploy this technology by themselves,” McClure said -- and instead ISPs should morph into value-added service companies that offer niche content and customer service. “That’s just about the only place ISPs can go to survive,” McClure said, and MOUs are way to ensure existence of ISPs after likely deregulation of Bells on DSL provisioning. But Colleton expressed frustration that FCC would be told that agreement had been reached with ISPs when “I have never in my years of doing this talked to an ISP” that supported USIIA’s position on deregulating Bells.

Both SBC and Verizon filed copies of their 2-page MOUs with FCC in their reply comments on wireline rulemaking last week. Verizon’s promised that “in a deregulated market Verizon is willing to commit that, at a minimum, commercial agreements for broadband services used to provide Internet services will be available and negotiated between Verizon and ISPs based on volume, terms, points of interconnection and other established market forces.” SBC’s MoU contains similar language on deregulated market with commitment that “high- speed Internet access will be available and negotiated between SBC and ISPs with connection at either Layer 2 (ATM) or Layer 3 (IP) (including converged Layer 2/3 networks) for the provision of Internet services to end users.” Colleton said “that’s a lot of words… a lot of air,” adding that all ISPs really needed was enforcement of existing rules. “It’s hard enough now with clear terms” to hold Bells accountable and gain interconnection, she said.

McClure did admit it was possible SBC and Verizon might “break” MOUs they had signed. “There certainly has been some history of that,” he said. When asked whether SBC and Verizon’s signing MoU with Internet group of which they were members wasn’t like signing MoU for CLEC access with their trade group USTA, McClure saw parallel, but said USIIA signed MOUs “on their behalf,” referring to ISPs, not its Bell members. He said USIIA had to act because ISPs had failed “to look at what happens the day after tomorrow,” and between “consolidation and decimation” many independent ISPs either couldn’t afford to belong to Washington lobbying groups or didn’t recognize importance of such membership.

SBC touted USIIA as “an association of nearly 300 diverse Internet providers, including ISPs,” but there was some question as to what extent USIIA represents ISPs. “I think we're as representative of ISPs as anyone else,” McClure said, and USIIA membership “is a broad cross-section of the Internet industry. We don’t lay claim to be an ISP association.” Asked about fact that most members listed on its Web site were hardware or software companies, not ISPs, McClure said “we leave off” some ISPs “because they get harassed” by ISPs opposed to USIIA’s positions, including backing Bell deregulation bill by House Commerce Committee Chmn. Billy Tauzin (R-La.) and ranking Democrat John Dingell (Mich.). Along with BroadNet, American ISP Assn. also has ISP members.

“We think deregulation [of Bells] is coming regardless,” McClure said, and ISPs that want to stay in business should be ready for that eventuality. He said President Bush in recent technology speech (CD June 14 p1) essentially said FCC Chmn. “Powell is doing a good job” and endorsed Powell’s deregulatory approach. But Colleton said ISPs weren’t seeking special treatment from FCC on broadband: “We just want them to enforce the rules.”