The Tech Boom

By Brad

Via Zack Colman of The Hill, Ben Bernanke is bullish on the tech sector:

Federal Reserve Chairman Ben Bernanke touted innovation and information technology as drivers of economic change in a Saturday commencement speech at Bard College in Massachusetts.

“Humanity’s capacity to innovate and the incentives to innovate are greater today than at any other time in history,” he said.

Bernanke also touted advancements in biotech, health care, and clean energy as helping keep the tech boom from becoming a bubble.

Tweeting a Crash

By Brad

When the Associated Press’ Twitter account was hacked last week, false tweets that the White House had been attacked led to a tumble in the markets. Examining the fallout, Amy Chozick and Nicole Perlroth of the New York Times report financial institutions are taking a good look at the effect social media can have on the stock market:

On Tuesday, the Commodity Futures Trading Commission plans to hold a public meeting in Washington with a couple of dozen high-frequency traders to discuss whether there should be additional safeguards to protect against the effects of social media on markets.

Even as markets rebounded on Tuesday, some investors lost money on the quick decline while others made money if they bet on a sharp drop.

“In 2010, we passed Dodd-Frank, the big financial reform bill, but nowhere in there do they mention high-speed trading or technology,” said Bart Chilton, a member of the trading commission. “That’s how quickly markets are morphing. Now, here we are three years later, woefully unprepared.”

A Legion of Coders

By Brad

Over at Read Write Web, Lauren Orsini looks at the growing market to teach non-techies how to code:

Within the last two years, more and more companies have saturated the market with the express purpose of teaching everyone and anyone our generation’s hottest new job skill: programming. Now it’s become a fundraising race to the top of the pile.

This April, learn-to-code startup Treehouse announced that it raised a “war chest” of new funding. In a Series B round led by Kaplan Ventures, the Portland, Ore., company added another $7 million, for a total of $12.35 million.

For CEO and founder Ryan Carson, the money couldn’t have come at a better time. Competition between learn-to-code startups is rising, and Carson plans to press his advantage by adding more employees to Treehouse’s current 55 workers.

Telecom Undergirds the Entire Economy

By Brad

Our Co-Chairman Jamal Simmons recently talked with Marc Strassman of Etopia News about our look at the evolution of March Madness online, the IP transition, the need for spectrum dedicated to wireless, and more. Here’s the final clip.

The full interview is available at Etopia News.

Building Out Broadband Will Be Big Economic Boost

By Brad

Our Co-Chairman Jamal Simmons recently talked with Marc Strassman of Etopia News about our look at the evolution of March Madness online, the IP transition, the need for spectrum dedicated to wireless, and more. Here’s one of a number of clips we’ll be posting over the next few days.

The full interview is available at Etopia News.

Commissioner Pai Strongly Supports Pilot Programs for IP Transition

By Brad

At an event hosted by the Hudson Institute earlier today, FCC Chairman Ajit Pai discussed the transition to all-IP networks. During his speech, Pai spoke of two paths the Commission could take when it comes to regulations and technology. One path is rooted in the past — and outdates rules — that could hinder investment and innovation. The other path leads to the future, or the “all-IP world,” as he called it, which has great benefits for health care, education, public safety, and most of all consumers.

Noting that the FCC up until now had a foot on each path, Pai didn’t shy away from his belief that the Commission should be working toward the future, stating the FCC’s decisions around the IP transistion will have “dramatic and real world consequences.” He then made plain his preference for a pilot program — put forward to the FCC by AT&T — to upgrade legacy copper networks to all-IP. As John Eggerton of Broadcasting & Cable reports:

“The FCC has sought and received comments on a proposal to create an All-IP Pilot Program,” Pai said in a speech to the Hudson Institute. “I’ve reviewed the record carefully. And having done so, I am proposing today that the FCC move forward with this program.”

Pai also noted that in 2011 alone, there were over 317 million wireless connections in the U.S., and at least 47% of all households had “cut the cord” — meaning, dropped traditional landline service in favor of wireless or VoIP. This, he joked, pointed to the IP transition being as “inevitable as another reality series starring a Kardashian.”

You can watch a replay of Pai’s speech here.

Genachowski on Spectrum Auctions

By Bruce Mehlman

In today’s Wall Street Journal, FCC Chairman Julius Genachowski goes over the many steps the Commission is taking to free up more spectrum from wireless use. Calling broadband the “engine for economic growth,” he starts out his op-ed by backing up that statement:

To sustain long-term economic health, America needs growth engines, areas of the economy that hold real promise of major expansion. Few sectors have more job-creating innovation potential than broadband, particularly mobile broadband.

Genachowski then highlights how the U.S. now leads the world in 4G LTE deployment (along with the fact that private investment in mobile infrastructure is “more than 50% higher than in Europe”), but warns that in order to keep both deployment and investment happening, more airwaves are critical. As he writes:

Spectrum is finite, and the demand for airwaves being created by data-hungry, Internet-connected devices is on pace to exceed supply. How significant is the spike in demand? Today’s smartphones generate 50 times more mobile traffic than a traditional cellphone. For tablets, it’s 120 times more traffic. As a result, American wireless networks are running at the highest utilization rate of any in the world.

One solution to this problem, Genachowski tells readers of the Journal, is the Commission’s upcoming spectrum incentive auctions, which have the potential to both free up airwaves and deliver much needed revenue to the Federal Government. That’s potentially a win-win, as they say. But as our own Rick Boucher wrote this past February, the key to making the FCC’s initiative successful for consumers and the economy is ensuring spectrum auctions are open to all bidders. Boucher:

History has shown that when the FCC has tried to pick winners and losers in the wireless market, American consumers have lost. Past attempts by the Commission to favor certain bidders and/or impose rigid regulations on auction winners have drastically diminished auction proceeds, left major blocks of spectrum unused, and led to what FCC Chairman Julius Genachowski himself has labeled “America’s looming spectrum crisis.”

The simple truth is America’s wireless industry continues to be fiercely competitive… Allowing the FCC to impose conditions on spectrum auctions will not make the industry more competitive. And the spectrum critically needed by all providers to keep up with increasing demand will not be put to its full use, leading to spectrum shortages, reduced investment and innovation, and higher prices for consumers.

Only through truly competitive, open spectrum auctions will America’s wireless industry continue to thrive. After all, the best way to ensure competition is to encourage everyone to compete.

Genachowski and the entire FCC deserve praise for their tireless work to keep this critically important issue on the front burner. But given mobile broadband’s benefits — not just to consumers and the economy, but to communities, education, and the health care industry — ensuring spectrum incentive auctions are open to all those willing to make the substantial private investment to keep rapid deployment going should be at the top of the list. As Genachowski himself wrote in his op-ed:

Private-sector innovation in mobile broadband has been extraordinary. But maintaining the creative momentum in wireless networks, devices and apps will need an equally innovative wireless policy, or jobs and growth will be left on the table.

Number of the Day

By Brad

19, which is the number of financial institutions that reported a “cyberassault” last year. As Ellen Nakashima and Danielle Doulas of the Washington Post report:

Almost all reported that they were targeted in last year’s highly publicized “distributed denial of service attacks” (DDOS) — efforts to disrupt access to Web sites by barraging servers with computer traffic. The assaults, which are ongoing, made headlines in the fall when U.S. officials said they believed they were launched by the Iranian government in retaliation for sanctions imposed because of Tehran’s nuclear program.

Nakashima and Doulas go on to say that some analysts calculate the cost of dealing with these attacks in the “hundreds of millions.”

The App Avalanche

By Brad

At the Wall Street Journal, Jessica E. Lessin and Specner E. Ante report on the still booming mobile app industry:

App stores run by Apple and Google Inc. now offer more than 700,000 apps each. With so many apps to choose from, consumers are estimated to spend on average about two hours a day with apps. Global revenue from app stores is expected to rise 62% this year to $25 billion, according to Gartner Inc.

Not bad for an industry that essentially didn’t exist just five years ago. Just goes to show the economic power of innovation — in this case, with both devices (smartphones, tablets) and the mobile broadband networks that power them.

The Great Firewall and the Economy

By Brad

China has long been one of the leaders when it comes to Internet censorship, and as Paul Mozur and Carlos Tejada of the Wall Street Journal report, government meddling is having a negative effect on the economy:

Experts say the blocks that keep Chinese users from accessing services like Facebook, Twitter and Google Inc.‘s online-video unit YouTube, are hurting businesses, slowing their traffic and hindering their use of a new generation of cloud-computing services like those offered by Google.

Akamai Technologies, which provides services to help websites speed up connections, says China’s average connection speed ranked 94th globally in last year’s third quarter, well behind Asian rivals like Malaysia, at No. 71, and Thailand, at No. 58.

Mehlman at State of the Net

By Brad

Last week, our Co-Chairman Bruce Mehlman appeared on a panel as part of the State of the Net in Washington, D.C. The discussion, “The Internet Leadership Challenge: Restoring America to Economic Greatness Through Sound Internet Policy,” was moderated by Joe Waz, Senior Strategic Adviser to the Comcast Corporation. Also on the panel were Blair Levin, Communications & Society Fellow, FCC Commissioner Robert McDowell, Grover Norquist, President of Americans for Tax Reform.

Here’s video of the discussion, which touches on President Obama’s legacy, taxation of the Internet, and the transition from legacy networks to all-IP.

Keeping the App Economy Booming

By Bret Swanson

I recently released a new study called “Soft Power: Zero to 60 Billion in Four Years,” which examines the effect the booming mobile app economy is having in the U.S. A highlight:

Smart mobile devices are the most personal of computers. The colossal numbers of these devices, and their connectivity to each other and to all the Internet’s vast resources, creates a market so large and so diverse that the economic forces of innovation and specialization are supercharged. This platform of distributed computation and bandwidth offers unlimited possibilities to create tools and content serving every interest. We call this phenomenon Soft Power.

Beyond the app boom’s substantial boost to the economy (as I note in the study, economist Michael Mandel has pegged the number of jobs it currently supports at 519,000 and counting), there are numerous benefits in the consumer space. Not just in entertainment, but for health care and education— from doctors managing patient dosages via an app on their iPad, to the growing number of teenagers who now use smartphones alongside textbooks to complete homework assignments.

Those are just some of the benefits we’re currently witnessing — who knows what innovation in the app space will bring us next? But one thing is certain: In order to keep the good times rolling, two things are absolutely critical. Investment in the mobile ecosystem must continue, and spectrum — the airwaves that make mobile broadband, and thus the mobile app economy, possible — needs be made available.

The latter is currently being tackled by the Federal Communications Commission, albeit slowly, via its upcoming spectrum incentive auctions. The former will require a continued partnership between the public and private sectors to encourage the investment necessary to keep up with this new, and accelerating, economy. As I write in the study:

In the same way that Microsoft expanded its software to exploit the ever increasing number of transistors provided by Intel under Moore’s Law, apps will grow to consume the available computer and communications power of the mobile ecosystem. We will push our devices and networks to the limits — and then beyond. The cycle is nowhere near an end.

Bret Swanson is President of Entropy Economics LLC and a Visiting Fellow of Digital Society. He’s also an IIA Broadband Ambassador.

The App Economy: Endless Possibilities That Start With More Spectrum and Investment

By IIA

On Tuesday, December 11, IIA will be hosting a webinar with Entropy Economics President Bret Swanson about his new report “Soft Power: Zero to 60 Billion in Four Years.”

The webinar will cover the new era of software, where apps are the new American software industry. The App Economy boom has hugely benefited consumers, as well as fields like health care and education. “Soft Power” has generated more than half a million jobs in the U.S., but the App Economy’s dependence on the cloud will require ever-increasing network coverage and speed, i.e. more spectrum and investment.

Members of the media will have the opportunity to present questions during the webinar, and questions may also be submitted beforehand to .(JavaScript must be enabled to view this email address). The discussion can be followed on Twitter using the hashtag #SoftPower.

Webinar Info:

When: Tuesday, December 11th at 11:30am ET/8:30am PT

Where: https://www1.gotomeeting.com/register/155959473

Presenters will include:

• Bret Swanson, president of Entropy Economics LLC, a strategic insight firm specializing in technology, innovation, and the global economy

• Bruce Mehlman, founding co-chair of the IIA and former Assistant Secretary of Commerce for Technology Policy (moderator)

A Successful Cyber Monday

By Brad

Courtesy of the Wall Street Journal comes some good news for the economy:

It is estimated that this year’s Cyber Monday will be the biggest online shopping day of the year for the third year in a row. According to research firm comScore, Americans are expected to spend $1.5 billion, up 20% from last year on Cyber Monday, as retailers have ramped up their deals to get shoppers to click on their websites.

The WSJ report also looks at what’s helping drive the increase in Internet sales. Not surprisingly, it’s great access to broadband:

With the growth in high speed Internet access and the wide use of smartphones and tablets, people are relying less on their work computers to shop than they did when Shop.org, the digital division of trade group The National Retail Federation, introduced the term “Cyber Monday.”

“People years ago didn’t have…connectivity to shop online at their homes. So when they went back to work after Thanksgiving they’d shop on the Monday after,” said Vicki Cantrell, executive director of Shop.org. “Now they don’t need the work computer to be able to do that.”

Somewhat ironically, this increase of home broadband access will probably lead to Cyber Monday becoming less of an event.

Access to Broadband Internet: Top Ten Areas of Saving 2012

By IIA

For methodology, and to see our reports from 2010 and 2011, visit here.

there's more...

The Economic Boost of Internet Everywhere

By Joe Fuhr

America’s communications industry is evolving.

It is an evolution that goes by many names. Smart networks. Internet Protocol Networks. All-IP.

At its core, is a dramatic shift for America’s communications infrastructure. A major leap forward from the copper networks of the past to the digital communication of today and tomorrow.

This transition from copper to IP has been happening for a while, led by a society that is increasingly “cutting the cord” — dropping traditional landlines in favor of wireless, be it phone service or broadband.

Now things are speeding up. Recently, AT&T announced it will be investing more than $60 billion over three years to accelerate its transition to all-IP networks. This substantial investment is not without its hurdles. While more and more Americans are abandoning a reliance on the copper network, there are still millions of people — many of them in rural areas — who still depend on it for their communication needs.

It is important that the industry work hand-in-hand with the government to ensure no one is left behind as the transition happens. This is a message regulators need to listen to — not only because they share in the responsibility to keep Americans connected, but because of what the shift to all-IP will mean for the economy.

According to broadband association US Telecom, America’s telecommunications companies have invested close to $1.2 trillion since 1996. As recent announcements show, the transition to all-IP promises to unleash even more investment from the highly competitive telecommunications industry — investment that will translate into a substantial increase in jobs and overall economic growth.

Obviously, the government should continue to encourage this high level of investment from private industry. One way they can do so is through modernizing regulations.

As copper networks are increasingly losing relevance, so are the rules governing their operations. Today, companies must continue to invest heavily in their legacy networks even as customers are embracing newer technologies. Not only is this increasingly a waste of investment dollars, it also maintains an uneven playing field, one where certain companies are forced to divert investment dollars necessary to keep them competitive. It is not just the industry that is being held back. The same outdated regulations are also slowing the government’s own goal of connecting everyone in America to high-speed Internet.

The way we communicate changes quickly. Just five years ago, there was no iPhone. Mobile broadband was in its infancy. Tablet computing was almost non-existent. In order to keep up with innovation, the transition to all-IP networks needs to happen now. There is a path to make this transition go as smoothly as possible, one that ensures everyone remains both connected and able to participate in the digital revolution. However, it will take substantial cooperation from private industry and the government to make it happen.

The age of the Internet everywhere is at hand. We just need to ensure regulations from 1930s do not hold it back.

Joe Fuhr is a Professor of Economics at Widener University, a Senior Fellow at the American Consumer Institute, and one of our Broadband Ambassadors.

Happy Holidays Online

By Brad

Every year, online holiday shopping continues to make gains. And as Leena Rao of TechCrunch reports, this year analysts are expecting a good season:

After comScore predicted a very healthy holiday shopping season for online retailers yesterday, Forrester is joining in, reporting that this holiday season is expected to generate $68.4 billion in US online sales. That’s a 15% increase over 2011′s total and 3% higher than the expected overall annual online retail growth rate.

Forrester’s report also predicts holiday shoppers will spend over $400 online this year on average, an increase of 12% over last year.

Tech & Jobs

By Brad

Juliana Gruenwald of the National Journal highlights a new report on tech jobs:

During the first half of the year, the tech industry added nearly 100,000 jobs, an increase of 1.7 percent, bringing the total number of Americans employed in the tech sector to 6 million, according to a new report released on Thursday by the TechAmerica Foundation.

In its jobs report, the group found that the tech industry added jobs in 16 of 18 months from January 2011 until June 2012. The study also found job growth in three of the four sectors it studied, which included tech manufacturing, communications services, software services, and engineering and tech services.

According to TechAmerica Foundation’s report, the tech industry was one of the last to be hit by the 2008 recession, and one of the first to pull out of it.

How Money is Made

By Brad

The fine folks at Mashable have posted an interactive graphic breaking down how major websites and tech companies make their money. Among some of the interesting findings, popular blog provider Tumblr has yet to turn a profit, while Twitter has turned the corner of making money via advertising.

The Internet & the Economy

By Brad

The Washington Post‘s Cecilia Kang has the goods on a new report from the Interactive Advertising Bureau that measures the effect the ad-supported Internet has on the economy:

The IAB-commissioned report from Harvard Business School, which updated a similar 2009 report, found Internet-based companies in every congressional district in the United States. About 2 million people are directly employed by Internet ad-supported firms, the report said.

An additional 3.1 million jobs, including those in Internet advertising and digital advertising analysis, would not exist without the sector.

All told, the economy benefited by $530 billion last year alone, according to the report.