Because every American
should have access
to broadband Internet.

The Internet Innovation Alliance is a broad-based coalition of business and non-profit organizations that aim to ensure every American, regardless of race, income or geography, has access to the critical tool that is broadband Internet. The IIA seeks to promote public policies that support equal opportunity for universal broadband availability and adoption so that everyone, everywhere can seize the benefits of the Internet - from education to health care, employment to community building, civic engagement and beyond.

The Podium

Monday, August 24

A Step Backwards

By Brad

Over at Fierce Telecom, Sean Buckley chatted with our own Bruce Mehlman about the FCC’s current stance on legacy copper and TDM-based networks. An excerpt:

Bruce Mehlman, co-chairman of the Internet Innovation Alliance, told FierceTelecom in an interview that what’s troublesome about the regulator’s proposals is that it’s a step backwards.

He said that competitive carriers should focus more of their attention on building their own network infrastructure versus trying to leverage existing facilities built by incumbent telcos.

There are folks that have had a decade of notice that if they wanted more advanced structure they needed to be part of the solution of building network infrastructure, but they chose business models that were based on riding investments that were made by other folks,” said Mehlman. “Everybody’s has been notice for over a decade.”

Citing the move by Google Fiber to build out a new FTTH network infrastructure supporting 1 Gbps broadband and video services, Melhman added that “it seems like a mistake to offer a ‘new wire, new rule’ incentive to get all the investment you thought you would and then to say we’re considering going to ‘new wire, old rules.’”

You can check out Buckley’s full piece over at Fierce Telecom. And for more from Mehlman on this issue, check out his recent op-ed for Bloomberg BNA.

Wednesday, August 19

Let’s Get Nerdy Season 2, Episode 2: Lifeline

By Brad

IIA Honorary Chairman Rick Boucher discusses the future of Lifeline.

Tuesday, August 18

Let’s Get Nerdy Season 2, Episode 1: Lifeline

By Brad

In the first episode of our second season of Let’s Get Nerdy, IIA Honorary Chairman Rick Boucher discusses why and how the Lifeline program should modernized for our current digital age.

Tuesday, August 11

Stick With What Works

By Brad

Over at Mobile Future, Jonathan Spalter looks at the future of wireless and finds that as mobile video consumption contines to boom, fiber-based networks will become more and more critical. As he writes:

[A] Cisco report predicts that in five years, 85 percent of Internet consumption in the United States will be from video, primarily over mobile devices. While freeing up more spectrum is critical to meet the demand for mobile Internet and video services, wireless infrastructure also requires backhaul networks with sufficient capacity to deliver these bits between a wireless tower and the Internet backbone.

Deploying that fiber-based infrastructure will take a substantial amount of investment, and as Spalter points out, regulators have — so far — encouraged that investment:

The FCC in 2007 and 2008 decided to forbear from regulating the Ethernet services companies like AT&T and CenturyLink provide, and it predicted competition would increase even further without heavy-handed regulation. Through its Enterprise Broadband Orders the FCC expressly concluded that the market for packet-switched broadband services was “highly competitive” and recognized that the demand for such services was sufficient to incentivize deployment and entry by competitors absent regulation.

As Spalter notes, competition for Ethernet-based special access services has “skyrocketed” since the FCC’s Enterprise Broadband Order. But that hasn’t stopped some companies from urging the FCC to wield a heavier regulatory hammer. Spalter again:

[F]or all of their complaining that the government needs to intervene in the market and lower just their costs of doing business (a refrain these carriers bring to the spectrum set aside and roaming debates as well), national carriers like Sprint and T-Mobile, as well as smaller regional ones have managed to operate their networks and succeed in the marketplace over the past decade without greater government involvement, often as the low cost provider. There is no justification to increase regulation of legacy special access services when the backhaul marketplace is functioning perfectly well on its own, producing remarkable investment, a stream of new competitors and increasing consumer value.

Put another way, what companies like Sprint and T-Mobile are seeking is a form of corporate welfare; a bailout from the government that will only ding their competitors. It’s not exactly the spirit of competition, but you can’t really blame them for trying.

But unfortunately, as Spalter notes, the FCC may be listening to the unfounded complaints:

Competition in the special access market has flourished due to the bipartisan hands-off approach taken by Chairmen of both parties for over a decade. It defies logic for the FCC to continue spending so much energy attempting to regulate legacy services like DS1 and DS3 special access connections provided by incumbent carriers. The Commission should accept the success of its deregulatory approach in which unregulated entities have stepped up, as expected, to create a highly competitive special access market.

If we want to encourage more fiber deployment — and keep our wireless economy humming — let’s hope the FCC is listening to sensible arguments from the likes of Spalter rather than the unfounded complaints of a few companies.

Friday, August 07

Reactions to the Latest FCC IP Transition Order

By Brad

That above quote, in response to the FCC’s latest vote, was echoed by both AT&T Vice President Frank Simone and US Telecom Senior Vice President Jon Banks. From Simone’s blog post reacting to the order:

“The FCC cannot call on the industry to invest in more fiber deployment, raise the bar for what qualifies as a broadband service and then make it more difficult to retire services that do not even qualify as broadband.  We share the Commission’s goal to protect consumers as this revolutionary technological movement continues. But requiring carriers to prolong the use of and maintain an outdated infrastructure is not the way to go about doing that.”

From Banks’ reaction:

USTelecom members have been investing billions of dollars every year to deliver modern broadband services that far surpass the capabilities of older networks to businesses and consumers across the country… These investments to deliver better, faster, more reliable modern services make up the essential compact between providers and customers. We are concerned that today’s FCC Orders handicap delivering on this compact in the name of keeping a regulatory structure under which Fax machines provide a communication service of such importance that they must be preserved.

And, last but not least, from our own response to the vote:

Giving a select group of competitors, which continue to rely on the copper telephone network due to their failure to invest in their own advanced networks, the ability to influence copper retirement plans creates harmful market incentives that ultimately favor some providers over others, and runs contrary to the Administration and FCC’s National Broadband Plan goal of modernizing our nation’s communications networks for the benefit of the American consumer.

Thursday, August 06

A Missed Opportunity

By IIA

Following the FCC’s tech transition vote, IIA released the following statement:

The FCC today missed a unique opportunity to accelerate the nation’s transition toward an IP future.

With less than five percent of Americans relying exclusively on traditional, copper-line plain old telephone service (POTS), and three out of four communications users having already transitioned onto IP-based services, setting ‘rules of the road’ to protect consumers and advance these modern services is appropriate, welcomed, and timely.

Today’s FCC decision, however, takes an unnecessary and harmful detour to the past. Instead of focusing exclusively on how to accelerate IP-based broadband network investment, deployment and consumer adoption, the Commission has chosen to micromanage life support for the fading wireline copper network.

The agency’s action translates into burdensome rules that create greater obstacles to retiring antiquated 20th century copper-based telephone equipment. By impeding the retirement of outdated technology, the FCC’s requirements will divert resources necessary to invest in the upgrade toward new, next-generation, high-speed broadband Internet networks.

Giving a select group of competitors, which continue to rely on the copper telephone network due to their failure to invest in their own advanced networks, the ability to influence copper retirement plans creates harmful market incentives that ultimately favor some providers over others, and runs contrary to the Administration and FCC’s National Broadband Plan goal of modernizing our nation’s communications networks for the benefit of the American consumer.

Today’s consumers want the benefits of high-speed, reliable IP-based networks, and there is no turning back. Americans stream millions of hours of video content, stay in touch with friends and family in video chats daily, and are integrating online learning into their lives at a rapid pace. The new world we have entered relies on these services and untold others that we can’t predict today. It’s important for industry and the FCC to give consumers more access to the benefits on the horizon—with common sense rules—and not hold on to the sentiments of the past.

IIA supports a wired network transition that makes IP-based networks and services more widely available and improves the quality of life for all Americans. We believe the Commission should embrace initiatives that speed the nation toward an IP-based future, and revisit and reject those that unnecessarily anchor us to the past.”

Friday, July 31

“A Referee Without Rules”

By Brad

With the FCC swinging a large regulatory hammer these days, Fred Campbell of Forbes takes a close look at the Commission’s conditions for the recent merger of AT&T and DIRECTV. What he finds is another example of the FCC going rogue with regulation. An excerpt:

The merger’s pricing condition is retail rate regulation, but it’s far worse than what “was done in the pre-broadband days.” In old-fashioned rate-making cases, the FCC is required to justify the rate it imposes. The merger order “doesn’t even make a cursory attempt to explain how it arrived at this $10 price point” or why price regulation should apply to AT&T only and not its competitors.

What rules violation or competitive harm did the referee cite for throwing the retail rate regulation flag at AT&T only? None. The FCC penalized AT&T because it can. Unfortunately, no referee exists to throw a flag when the FCC discriminates against companies in a merger proceeding.

Campbell’s conclusion is that Congress needs to apply more oversight on FCC decisions:

The integrity of any game depends on the credibility of its officiating. That’s why the NFL watches its referees to make sure they are abiding by the rules too. When fans can’t trust officials to make a fair call, the league needs to reign in its referees. With the FCC, that task belongs to Congress.

Check out Fred Campbell’s full piece over at Forbes.

Monday, July 27

“FCC Should Not Import Monopoly Rules for a Competitive Future”

By Brad

Our Co-Chairman Bruce Mehlman has a piece in Bloomberg BNA on regulation the FCC is considering as America transitions to all Internet-based networks. An excerpt:

The nation’s historic transition away from the copper wire toward a modern Internet Protocol-based (“IP”) communication system represents a critical technological leap forward. The United States aims to complete this transition by 2020; indeed, the impetus for this effort actually first came from FCC Chairman Tom Wheeler, then in his role as head of an advisory board on technology transition.

This transition will ultimately bring consumers new technology, billions of dollars in new infrastructure, and faster and better broadband services and applications. Today, test trials for the transition are underway in Alabama and Florida to work out technical issues and ensure superior service quality for consumers.

Recently, however, Chairman Wheeler publicly outlined his proposed next steps for the IP transition that include applying old monopoly-style telephone rules to favor and advance certain carriers’ business models. Applying such rules to IP-based broadband communications networks of the future would benefit companies that serve businesses, yet provide little to no benefit to the average consumer.

Specifically, in response to the supposed need to “preserve competition in the enterprise market,” the FCC plans to require that “replacement services be offered to competitive providers at rates, terms and conditions that are reasonably comparable to those of the legacy services.”

Check out Mehlman’s full piece from Bloomberg BNA

Thursday, July 23

The Cooling Effect of Title II

By Brad

Our Honorary Chairman Rick Boucher talked with Jeff Hawn of RCR Wireless News for an article on Title II and net neutrality. In the article, Boucher argues that Congress needs to recognize the principles of net neutrality, but that Title II is simply an outdated fit when it comes to regulating broadband. An excerpt:

Boucher’s viewpoint is supported by a recent Georgetown study co-authored by Kevin Hassett of the American Enterprise Institute and Robert Shapiro of the Georgetown Center for Business Policy.

In the study, they write that Title II regulation is “likely to increase costs and regulatory hurdles for providers. Introducing substantial, new regulation of the businesses that provide much of the Internet’s infrastructure and content could not only raise the cost and price of most Internet communications, it also could reduce the efficiency of most network arrangements that depend on Internet platforms, devalue the investments made in those platforms or based on them, and force many organizations to reorient their enterprises in ways that would minimize the costs of the regulation rather than maximizing efficient operations.”

The uncertainty of Title II will likely cool the willingness of ISPs to make investments in their infrastructure, the net effect of which is that we won’t get the broadband build-out we otherwise would,” Boucher added. “Additionally, companies will be more cautious with new innovations. Essentially Title II hits the slow-down button and it’s the American consumer who will suffer.”

Tuesday, July 14

Regulation and Delayed Investment

By IIA

A recent Georgetown University Study by Kevin Hassett and Robert Shapiro confirms that the Federal Communications Commission’s (FCC) decision to subject Internet Service Providers (“ISPs) to “Title II” public utility regulation will “have significant adverse effects on future investment in the Internet.”

The study highlights how new regulation can have a “destructive, negative effect” if capital investment is delayed as a result of the need to resolve new market uncertainty. It notes how the history of FCC regulation of Internet companies has been surprisingly uniform and consistent. Whether under a Democratic or Republican Administration, the historical arc of broadband regulation gravitated toward a light-touch deregulatory approach that treated the Internet as an information service rather than a heavily-regulated telephone common carrier service.

Such treatment of broadband as an information service allowed the pace of Internet adoption to rapidly exceed that of the personal computer or dial-up Internet service. Technological advances and competition accelerated broadband uptake by lowering its “average, quality-adjusted price” that further accelerated its uptake. By contrast, studies have detailed how common carrier regulation inhibited competition for consumers and businesses, and discouraged and slowed innovation in telephone service.

Consumers now, however, bear the risks of the FCC’s decision to reverse course and impose new regulations on ISPs that today provide much of the Internet’s infrastructure and content. Such regulation could ultimately result in increased costs and price for Internet service beyond new universal service fees. Moreover, the Georgetown study notes how the regulatory path toward Title II may result in reduced efficiency of key network arrangements that depend on the Internet platform. Reduced efficiency could have the long-term negative effect of devaluing the investments made in those platforms or based on them and thus trigger many in the Internet ecosystem to minimize the costs of regulation rather than maximize efficient operations.

In addition, the study identifies scholarship that quantifies the negative potential impact of telecommunications regulation on broadband investment. For example, the ban on “paid priority” arrangements could affect telemedicine applications and cost the economy $100 million per year by 2019. More generally, Title II regulation of ISPs could reduce their “future wireline investments by between 17.8 percent and 31.7 percent per year, and their future total wireline and wireless investments by between 12.8 percent and 20.8 percent per year.”

The study’s authors also raise helpful international comparisons to better understand the imminent consequences of Title II regulation on broadband investment. Specifically, they note the “large negative effects on investment” if our nation’s regulatory model were moved closer to the heavy-handed regulations that governed Europe’s communications landscape in the first decade of the 21st century.

Finally, the Georgetown study’s most sobering point is how the “negative effects of uncertainty” resulting from the FCC’s sudden policy shift and on-going litigation may actually understate the harm of reduced broadband investment.

In light of this additional evidence and the potential harm to broadband and consumers, the Internet Innovation Alliance again emphasizes its support for a bipartisan legislative solution to promote an Open Internet without overly burdensome Title II Common Carrier Regulations for 21st Century broadband. 

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