Our Co-Chairman Bruce Mehlman had a piece published in The Street yesterday highlighting the fact that data collected by the FCC shows special access services are, in fact, highly competitive. An excerpt:
[L]et’s look at the facts. Based on an analysis of the FCC’s own data, it turns out that 25% of buildings that have a connection only to an incumbent local exchange carrier’s (ILEC) special access services are only 17 feet away from the nearest competitive provider’s fiber network; 50% are 88 feet away, and 75% percent are within 456 feet. The mean distance for all relevant buildings is 364 feet.
For comparison, 364 feet is about the length of a football field with the end zones. Seventeen feet? There are canoes and snakes that long. Eighty-eight feet? That’s shorter than an NBA court and less than Yadier Molina throws every night to get a runner out at second base. What about 456 feet? Well, with the Kentucky Derby coming up, that’s more than 200 feet shorter than one furlong. And it’s the same height as a roller coaster in New Jersey.
Over at Multichannel News, our own Rick Boucher has written a piece examining Netflix’s admission that it has reduced video speeds for the customers of two wireless providers. An excerpt:
Netflix’s stunning admission that, for five years, it reduced the video speeds of customers of Verizon Wireless and AT&T Wireless — while not doing so for customers of Sprint and T-Mobile — is little short of breathtaking. It was an exercise in hypocrisy to claim that broadband providers were degrading the quality of its video when, in fact, Netflix — without notifying its customers — was doing precisely that.
Recall the history here to understand why Netflix’s actions were so brazen and deserving of governmental review. Traditionally, peering agreements among content networks and last-mile Internet-service providers (ISPs) were never regulated, but were always negotiated between private parties.
For Netflix, arm’s-length negotiations posed a problem, because as the share of total bandwidth taken by its content grew (up to 37% at peak hours, according to one survey in March of 2015), its position became ever more untenable. It wanted ISPs to build more bandwidth to consumers for Netflx’s use, but it didn’t want to help pay for that. It didn’t want its own business model constrained.
This week the FCC allowed parties to release some aggregate data in the broadband market collected as part of the ongoing special access proceeding. And this data, even though partial, confirms what I and others have been saying all along: virtually all businesses have access to real, facilities-based competition today. And to the degree that some individual businesses don’t have that access today, it’s because the current beneficiaries of special access regulation have an incentive not to invest to connect their business customers to the closest competitive fiber networks that are readily available in the market.
In all, 95% of Census blocks where demand for special access exists have competitive facilities available. And those Census blocks include 99% of all businesses in the country.
With grades like these, let’s give an A+ to the competitive providers that are bringing modern fiber to American businesses. This definitely includes cable companies that are rapidly expanding their services to businesses of all sizes.
On the other hand, it’s clear from the data that the CLECs have customers in many office buildings that must continue to rely on antiquated copper facilities and their slow data speeds because their CLEC provider refuses to build out fiber connections to nearby fiber networks. Apparently, it’s easier to call for FCC action than it is to build out networks even 1000 feet to compete with the competitive carriers.
As US Telecom notes, the calls for more FCC intervention are “a matter of convenience, not competition.” But a business strategy of rent-seeking-rather-than-investing is not evidence of market failure. It’s evidence instead of regulatory failure. Because so long as the FCC’s special access policies serve to protect the business models of CLECs, who decline to invest, then why invest? Why spend shareholders’ or investors’ money when the government forces others to subsidize you? Nice work if you can get it, but it does nothing to promote innovation or, for that matter, competition. Government-enabled competition isn’t really competition.
But now that at long last we have some data publicly available, the right policy is even more clear: There’s simply no reason for the FCC to intervene in this market even more than it already has. The decision by some companies not to invest in the future should not be a basis for increased regulation.
Yesterday, FCC Commissioner Jessica Rosenworcel and I traveled to Philadelphia to tour String Theory Charter Schools’ Vine Street Campus (5th grade through 12th grade) and make classroom visits to see the application of modern technology in a next-generation, “Apple Distinguished School” setting.
Commissioner Rosenworcel has championed changes to U.S. Internet and Wi-Fi policies to provide American students greater access to 21st century broadband technologies. She coined the term “Homework Gap” that now commonly refers to the difficulty students experience completing homework when they lack high-speed Internet access at home.
The Homework Gap is real—for one in five kids in our country, it’s a daily struggle that is standing in the way of them reaching their full potential. Affordability is a barrier to high-speed Internet access for low-income families. The FCC’s decision to add broadband to the Lifeline subsidy program last week is a significant step toward closing this digital divide.
According to Pew Research, seven in 10 teachers assign homework that requires Internet access, but five million of the 29 million U.S. households with school-aged children lack regular access to broadband. Unfortunately, a 2015 Consortium for School Networking (CoSN) survey reveals that three in four U.S. school districts report that they are not currently doing anything to address technology access outside of school.
After touring the digital accomplishments of the Vine Street Campus, Commissioner Rosenworcel and Jason Corosanite, Co-Founder & Chief Innovation Officer of String Theory Schools, joined String Theory educators, administrators, parents and local business supporters in a roundtable discussion focused on “Closing the Homework Gap: Technology Lessons Learned in Advancing Education.”
Commissioner Rosenworcel’s in-depth conversation on the Homework Gap generated thoughtful discussion and innovative ideas in response to the following issues:
• How is technology transforming education?
• Is wireless broadband sufficient for completing homework assignments?
• What are the major barriers to home broadband adoption?
• Are there any federal programs that can help bridge the divide?
• How can the public and private sectors, educators and parents, partner to help close the Homework Gap?
“Technology is pervasive in today’s world, and the educational environment should reflect that to keep kids interested and engaged, and enable them to be innovative and productive,” Corosanite stated during the panel discussion. “Rather than taking place in a vacuum, a well-rounded educational approach should train students to perform later in life. Kids without digital skills will fall behind.”
Very true. Half of all jobs now require some level of technology skills, according to the U.S. Bureau of Labor Statistics. Experts say that number will surpass three-quarters (77%) within the next decade.
Our thanks to Commissioner Rosenworcel and Jason Corosanite for taking part in the discussion. And thanks as well to all the bright students and faculty of String Theory Charter Schools’ Vine Street Campus.
A lot has changed since 1996. But one thing that hasn’t changed are so-called “Special Access” regulations. Here’s why the FCC needs to update the rules for today’s technology rather than rely on the regulations of the past.
IIA supports today’s FCC action to make 21st century broadband services accessible and more affordable for our nation’s low-income consumers. For too long, the FCC’s Lifeline program was limited to supporting only voice telephone service. Today’s reforms will not only bring vital broadband Internet service to more Americans, it will also advance administrative efficiencies in the program necessary to attract greater broadband service provider participation and expand competition and choice for eligible consumers. IIA is pleased to have been an active participant in the Lifeline reform process, and we congratulate the Chairman and his fellow Commissioners for their hard work and effort to make the Lifeline program more relevant and useful for low-income Americans in the broadband age.
In today’s world, seven in 10 teachers assign homework that requires Internet access, but five million of the 29 million U.S. households with school-aged children lack regular access to broadband. FCC Commissioner Jessica Rosenworcel coined the term “Homework Gap” to characterize the divide and shed light on the problem: Kids without broadband are falling behind.
How is technology transforming education? Is wireless broadband sufficient for completing homework assignments? What are the major barriers to home broadband adoption? Are there any federal programs that can help bridge the divide? How can the public and private sectors, educators and parents, partner to help close the Homework Gap?
These are just some of the questions that will be addressed on Monday, April 4 when FCC Commissioner Rosenworcel will join our own Co-Chairman Jamal Simmons for a school tour, classroom visits, and a roundtable discussion at the Philadelphia Performing Arts: A String Theory Charter School.
If you’re in the area and wish to join us, see the details below:
WHAT: School tour, classroom visits, and roundtable discussions with FCC Commissioner Rosenworcel, String Theory Co-Founder & Chief Innovation Officer Jason Corosanite, and IIA Co-Chairman Jamal Simmons
WHEN: Monday, April 4 from 10 am - 12:15 pm ET
WHERE: Philadelphia Performing Arts: A String Theory Charter School, 1600 Vine Street, Philadelphia PA, 19102
For more on the event, check out this story from the Philadelphia Inquirer on FCC Commissioner Rosenworcel’s trip to the city.
Privacy in our digital world is once again making headlines, from the controversy over unlocking Apple’s encryption system to the latest breaches of information from e-commerce providers. Lost in all of this discussion—though also illuminated by it—is a tectonic shift in who has access to a user’s electronic data, a change that has profound implications for how privacy should be protected in the future.
Start from a simple point, with which users of digital devices would likely agree: All participants in the Internet economy should extend similar privacy protections to users. That only seems fair. The Internet user’s most important interest, after all, is to have confidence that his or her privacy is being uniformly protected throughout the Internet ecosystem by all entities that have access to users’ information.
Earlier today, we released a memorandum for the next president outlining a path forward when it comes to Internet policy. Our recommendations:
• Show preference for private sector investment. Government alone can’t build out broadband networks or find the tens of billions of dollars every year necessary to keep pace with technological change and demand. Maintain the conditions under which private sector investment can flourish.
• Promote competition – and recognize that it exists. Cross-platform competition is a reality and will only continue to become more intense if government does not interfere.
• Effectively manage spectrum resources, balancing the needs of the private sector and government spectrum users, and licensed and unlicensed uses. Continue efforts to make spectrum available for mobile broadband by either reallocating spectrum currently used for other purposes or making underutilized government-controlled spectrum available for commercial wireless services. Policymakers should also continue to ensure the right mix in making spectrum available for licensed and unlicensed services.
• Maintain an open Internet, with appropriate protections for non-discrimination. The courts may strike down the Federal Communications Commission’s (FCC) new net neutrality rules. The FCC had it right the first time in 2010 when it published reasonable rules necessary to preserve the Open Internet and ensure non-discrimination among network providers and access to information. Encourage Congress to codify those rules in statute law.
• Assure access to connectivity, irrespective of geography or income, through universal service. More rural investment and more investment in schools and educational institutions is needed. In November 2014, the FCC put forward great ideas on universal service reform, focused on modernizing the Lifeline program, expanding it to cover broadband, closing the “homework gap,” and giving consumers more power over how they spend their Lifeline dollars – while deterring waste, fraud and abuse. Continue moving forward with reform efforts.
• Protect the privacy and security of users. Today, different privacy rules apply to the same information traversing the Internet, depending on the regulatory classification of a particular service provider. Policymakers should engage in open discussions across the broadband industry, along with privacy advocacy groups, on the best way to reach agreement on future consumer protections.
• Think through a new Telecommunications Act. While the 1996 Act has been a great success, it’s time to update the Act to reflect current conditions and the competitive markets that now exist. A new regulatory model that ensures government does not slow down the pace of innovation is needed.
“Internet access has become a pre-requisite for full participation in our economy and our society, but nearly one in five Americans is still not benefitting from the opportunities made possible by the most powerful and pervasive platform in history.”
Those were the words of FCC Chairman Tom Wheeler and Commissioner Mignon Clyburn in a post at the Commission’s website announcing a new, modern direction for the Lifeline program. They are words we can all agree with. But beyond those words are the FCC’s actual plan to modernize Lifeline and whether the path put forward by the Commission will be the most effective one they can take.
Reduced to its key ingredients, the FCC’s plan has four key parts:
1) It expands the program to cover broadband internet access services;
2) It sets minimum service standards for both voice and broadband;
3) It streamlines the rules governing the program by eliminating unnecessary regulation;
4) It utilizes a National Eligibility Verifier to take overseeing Lifeline eligibility out of the hands of the carriers
On the surface, each of these four parts are a step in the right direction. In fact, all four were, in some fashion, a part of the recommendations in our Lifeline white paper. But as with any regulatory shift — especially for a program as large and as important as Lifeline — the true success of the FCC’s reform plan can’t be measured until all the details come to light and the plan is actually implemented. So for now we get to play the waiting game.
Still, Chairman Wheeler and the other FCC Commissioners should be commended for listening to every interested party when it comes to reforming Lifeline. The plan the Commission has put forward may not be perfect — for example, there has yet to mention of much-needed eligible telecommunications carrier (ETC) reform. And the devil will, of course, be in the plan’s details. But what the FCC has revealed of the plan so far is definitely encouraging.
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