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President Bush’s Broadband Access Plan Fails to Address Real Issues

Monday, April 26, 2004
Contact: Chris Murray, (202) 462-6262

President Bush’s Plan for Affordable Broadband Access Fails to Deal with Real Issues: ‘Hidden’ Taxes, Lack of Choice

(Washington, D.C.) – President Bush’s plan unveiled today to provide affordable high-speed Internet access to all Americans by 2007 fails to address a primary hurdle cited by consumer groups to achieving that goal: a “hidden tax” the administration allows cable operators to impose on customers by forcing them to buy the services or packages they create to get access to the Internet.
“We are encouraged to hear the President set a national goal of affordable high-speed Internet for all, but unfortunately, he is not focusing on the most important policy change necessary to achieve that goal – eliminating the hidden tax the administration allows cable operators to impose on consumers for broadband access,” said Gene Kimmelman, public policy director of Consumers Union, publisher of Consumer Reports.
Kimmelman is referring to the Federal Communications Commission’s policy of allowing cable operators to charge customers $55 to $75 a month if customers want to use their own Internet Service Provider (ISP), rather than the provider selected by the cable company in their broadband cable package. About 13.7 million consumers currently receive their service from cable companies. Since 2001, the cost of buying the services that connect a cable customer to high-speed Internet access have increased three times the rate of inflation.
“This policy of allowing cable operators to force consumers to buy their services is absolutely contrary to the President’s goal of offering consumers affordable Internet access,” Kimmelman said. “This Administration policy produces neither genuine consumer choice nor dynamic innovation, both of which are necessary to ensure affordable access to the Internet for all Americans.”
Bush outlined his Internet policy in a speech today in Minneapolis. The President will direct federal agencies to make it easier for broadband companies to use federal lands to expand broadband infrastructure, and urged Congress to make access to broadband permanently tax-free.
“Given that about 80 percent of Americans today do not have broadband service, we applaud President Bush for promoting affordable access, but that goal cannot be met unless the Bush Administration shifts course and starts attacking, rather than coddling, cable monopolies,” Kimmelman said. “The President’s initiatives will do almost nothing to make broadband more affordable for consumers.”
To read a joint letter to the Administration on its broadband policies by Consumers Union and Consumer Federation of America, click here