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

Blog posts tagged with 'Fcc'

Thursday, July 14

Throwback Thursday

By IIA

Originally published by The Hill:

Consumer internet privacy: Leaving the back door unlocked

By Rick Boucher

The Federal Communications Commission’s (FCC) asymmetric approach to internet privacy is likely to create a false sense of security among web users. Despite stringent FCC privacy regulation of internet service providers (ISPs), consumers’ information will enjoy little protection when they are interacting on social media sites, shopping online or surfing the web.

The recent Senate hearing on Internet privacy that featured FCC Chairman Tom Wheeler and Commissioner Ajit Pai, along with Federal Trade Commission (FTC) Chairwoman Edith Ramirez and Commissioner Maureen Ohlhausen, underscored that the FCC’s approach to internet privacy — singling out ISPs while leaving the privacy practices of edge providers essentially unregulated — is unbalanced.

By analogy, compare internet privacy to protecting a house. Wheeler’s proposal only locks the front door to guard against ISP privacy violations, while keeping the back door wide open for edge providers, such as social media and e-commerce companies.

And that’s happening as the internet ecosystem shifts radically toward the ability of edge providers to make the greater use of consumer information. A recently released study demonstrates that the expanded use of end-to-end encryption renders ISPs incapable of accessing most data that moves across their networks. Meanwhile, edge providers have complete access to information about their users, and they have sophisticated processes for monetizing it.

Sen. Al Franken (D-Minn.) suggested a viable alternative that would be better for consumers: keeping both doors locked and assuring uniform privacy protections by both ISPs and edge providers. According to Franken, “Should they [consumers] choose to leave information with companies, they need to know this information is safeguarded to the greatest degree possible. Telecommunications providers and edge providers like Google need to ensure their customers have more information [on] the data being collected from them and if it is sold to third parties.”

The FCC claims it lacks authority over edge providers. The FTC regulates privacy through its “unfair trade practice” authority, under which enforcement only occurs when companies fail to deliver the privacy protections they promise. Neither agency can require edge providers to extend the privacy protections that Franken envisions. His goal could only be achieved if Congress conveys broader regulatory authority on one agency or the other.

Also better for consumers would be to keep both doors unlocked. It’s not ideal, but at least consumers would be aware that all of their personal data on the Internet, irrespective of the device, platform or service used, is susceptible to being tracked and utilized.

Each approach has strengths and weaknesses. The first approach would offer a consistent and enforceable set of consumer rights and expectations. However, Pai thinks the doors-unlocked approach would be better for investment and continued digital innovation.

If and until Congress acts to require edge providers to respect consumer privacy, the only way to assure parity of treatment across the ecosystem and give consumers clear privacy expectations is to rely entirely on the FTC to lightly oversee privacy for both ISPs and edge providers. As Ohlhausen said, the FTC’s approach, “which has been incremental and technology neutral, has allowed us to be flexible as technology changes.” It’s probably the best we can do under current law. Singling out one segment of the internet ecosystem for special and more onerous treatment is flawed policy.

Thursday, July 07

Boucher in Bloomberg BNA

By Brad

Our Honorary Chairman Rick Boucher recently had an op-ed on Special Access services published by Bloomberg BNA. An excerpt:

Existing FCC regulations effectively necessitate that telephone companies maintain two networks—one that is modern and fiber-based offering fast Ethernet services and the old one based on copper technology. New fiber networks are currently unregulated, while the FCC mandates that competitive local exchange carriers (CLECs) be given access to incumbent telephone company copper links at deeply discounted rates.

The FCC now seeks not only to keep existing regulations on the old copper-based services, but also extend government-mandated access and price regulation to new fiber-based services in geographic locations the agency deems to be uncompetitive.

The FCC’s plan, however, relies on deeply flawed and badly outdated data used to determine whether markets are competitive.

You can check out Boucher’s full op-ed over at Bloomberg BNA.

Friday, July 01

A Broken NPRM

By Bruce Mehlman

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The Federal Communications Commission has been extremely active as of late, and this rush to regulate has not been without its headaches. Case in point: The Commission’s proceeding in relation to Special Access services (Business Data Services (BDS).

Specifically, the recent release of peer reviewed responses to a third-party economist study commissioned by the FCC for the Special Access proceeding. Inexplicably, the FCC decided to release these peer reviewed responses on the very day that comments were due on the FCC’s Special Access Notice of Proposed Rulemaking, even though these responses were in the agency’s possession since late April.
   
This surprise last minute dump of critical information is bad enough, but what makes the headache a potential migraine for interested parties is the fact that the peer review responses make clear that the data the FCC relied upon to propose new regulations on business services is flawed. As Hal Singer notes on his website:

As revealed in the peer review, the flaws in the underlying economic work that undergirds the proposed regulation of BDS (previously called “special access” services) are potentially fatal, rendering the analysis useless as the basis for the agency’s proposed regulations.

The fact that the FCC’s data is so severely flawed — even useless — is critical information that should have been made known to commenting parties before they submitted their comments. The FCC’s decision to sit on this data until after comments were filed represents a breach of trust between regulators and the public. Moving forward to adopt new regulations in light of now useless data would compound that breach and signal a potential political motive to achieve a certain policy goal. Here’s Singer again:

In seeming disregard to these significant criticisms, the FCC presses forward with its radical proposal, which would subject both telcos (incumbents) and facilities-based entrants (cable companies) to price controls. None of the economic statements released by the staff this week credibly addresses the critical errors reviewed here. Peer review is great in theory, but if doesn’t cause the Commission to alter its approach, then what good is it?

The simple solution for this mess is for the FCC to immediately extend the reply comment deadline for their BDS NPRM. This would give all interested parties and Congress an opportunity to review and provide input on the peer review study and the related economic statements. After all, billions in broadband investment dollars are potentially at stake. Let’s hope the FCC is listening.

Monday, June 27

Measuring Special Access

By IIA

Wednesday, June 22

Lessons From Canada

By IIA

Originally published at Forbes.

A Lesson From Canada For The FCC

by Bruce Mehlman

Oh, FCC: Take some notes from Canada.

Maxime Bernier, one of the candidates for leader of the Conservative Party of Canada, has just given a speech in which he set out ways to achieve real competition in the telecom sector. And one of the things he proposes is actually to phase out the role of the Canadian Radio-television and Telecommunications Commission (CRTC) as telecom regulator.

Bernier is a telecom and regulatory expert. He was Minister for Industry in Stephen Harper’s Conservative government and led the deregulation of local telephone markets after cable companies and wireless had transformed the telecom landscape. In short, Bernier recognized that there was “obviously more and more competition,” and he acted on it. In the face of opposition both from those who favored continued regulation and the Canadian regulator itself, the market was deregulated and competition flourished.

So why is Bernier so anxious to act now? It all goes back to his time in government. Ten years ago, he had set out a Policy Direction to the CRTC, which instructed, in his words, “the CRTC to rely on market forces to the maximum extent feasible within the scope of the Telecommunications Act” as a “solution” to its “control freak mindset.”

Back to old ways

What happened? “I, and many others at the time thought that it would force the CRTC to change its ways, to become more flexible and adapt to the new competitive reality. We were wrong. The CRTC seemed to take the Policy Direction seriously for a few years. And then it reverted back to its old ways.”

And from this, Bernier draws a conclusion about regulation and regulators: “Those whose task it is to regulate this industry tend to be behind the curve. They don’t want to let go of their regulatory control. Meanwhile, the industry has actually moved on, with new innovations.” That’s exactly right. And it applies just as much here as there.

Now if the CRTC can behave this way in a parliamentary system, in which it is supposed to follow the directions of Parliament, imagine the vast discretion our own Federal Communications Commission (FCC) has in a system where it is an independent regulatory body.

Implementing policies that ignore the marketplace

Why should Americans care? Because the issues that Bernier cites as examples of a regulatory mindset are the same ones we face here, notably with broadband, wireless and the nature of competition itself. In each case, the regulator opted for policies that ignored the marketplace, put its hand on the scale and favored policies that restrict investment. In auctions, restrictions on bidding intended to dictate market outcomes led to misallocation and under-utilization (as some of the spectrum sold in 2007 for public safety is still not being used and other parts took seven years to finally see service after sale in secondary markets).

So whether it’s broadband, wireless auctions or the nature of competition itself, the issues are similar on both sides of the 49th parallel. Regulators too often seek to ignore marketplace realities. In the U.S., we are witnessing it today with the FCC’s heavy-handed proposed regulations in areas such as special access, privacy and the video marketplace, among others.

Regulators only want to protect their own power

What Bernier writes of the CRTC could equally be said of the FCC: “As the industry evolves, the CRTC finds new reasons to continue to regulate it, in order to justify its existence. In doing so, it is not protecting consumers, it is only protecting its own power. The telecom industry is a mature and competitive industry, and it should be treated as such. It’s not a playground for bureaucrats.”

Both Americans and Canadians are better off with greater access to modern, fast telecommunications services, when the regulator lets the market work, encourages real competition, and investment, and keeps its hand off the scale. In fact, again quoting Bernier: “Interventionist policies that are meant to bring more competition actually do the opposite. Competitive markets don’t need government intervention to work. They only need to be free.”

Thursday, June 16

Backup Battery Power for… Broadband?

By IIA

In a new article for Forbes, Fred Campbell, director of Tech Knowledge and former head of the Wireless Telecommunications Bureau at the Federal Communications Commission (FCC), brings to light yet another example of regulatory overreach, compliments of the FCC. The Commission intends to marry broadband with…batteries? In short, broadband providers would be required to redesign cable and DSL modems to have bigger backup batteries that would allow web surfing for up to 8 hours during a power outage – IF you also have backup power for your computer and/or other devices that you use to access the web.

As Campbell points out, the Commission’s thought process might as well have been born in the 20th century and doesn’t make sense for a number of reasons. Here are the top three:

First, this directive would take choice out of the hands of consumers. Forget having a say about whether or how you want to implement a backup power solution.

Second, it’s unnecessary. A power outage doesn’t prevent mobile devices from being used to connect during an emergency, from calling 911 to texting friends and family. In real-world testing, a mobile phone can run for at least 35 hours with low and mixed usage. And, as Campbell describes, if you use your broadband modem to make phone calls, the FCC’s rules already require your broadband provider to offer you a backup power battery for voice calls – that 97% of Comcast XFINITY voice service customers decline, by the way.

Third, consumers – despite demonstrating (through an extremely low take-rate) little interest in backup power for broadband – will be forced to foot the bill for this extravagance in the end…for your “protection.” Big Brother knows best?

Head on over to Forbes and read Campbell’s full piece for more details about why the FCC’s reasoning on backup battery power for broadband doesn’t add up.

Tuesday, June 14

Response to Today’s DC Circuit Court Decision

By IIA

The Internet Innovation Alliance is deeply disappointed with today’s DC Circuit decision affirming the FCC’s Open Internet Order. Unfortunately, the Court has missed a unique opportunity to continue the bipartisan policies that have spurred 21st century broadband wired and wireless infrastructure investment and brought high-speed Internet access services and applications to Americans throughout the nation. As the parties now consider their appellate strategies, we again reaffirm our call for Congress to step in and take a leadership role to adopt bipartisan legislation that ensures both an open internet and the policies necessary to expand critical private investment in next-generation broadband networks.

Wednesday, May 25

Boucher in The Hill

By Brad

With online privacy once again a hot topic inside the Beltway, our own Honorary Chairman Rick Boucher has tackled the issue in an op-ed for The Hill. An excerpt:

The Federal Communications Commission’s (FCC) asymmetric approach to internet privacy is likely to create a false sense of security among web users. Despite stringent FCC privacy regulation of internet service providers (ISPs), consumers’ information will enjoy little protection when they are interacting on social media sites, shopping online or surfing the web.

The recent Senate hearing on Internet privacy that featured FCC Chairman Tom Wheeler and Commissioner Ajit Pai, along with Federal Trade Commission (FTC) Chairwoman Edith Ramirez and Commissioner Maureen Ohlhausen, underscored that the FCC’s approach to internet privacy — singling out ISPs while leaving the privacy practices of edge providers essentially unregulated — is unbalanced.

Check out Boucher’s full op-ed over at The Hill.

Wednesday, April 27

Close Competition

By Bruce Mehlman

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.

Check out Mehlman’s full op-ed over at The Street.

Friday, April 08

The Data on Special Access

By Bruce Mehlman

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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.

Tuesday, April 05

Bridging the Homework Gap

By Jamal Simmons

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.

Friday, April 01

Special Access

By IIA

A lot has changed since 1996. But one thing that hasn’t changed are so-called “Special Access” regulations.

Thursday, March 31

Statement on the FCC’s Lifeline Actions

By IIA

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.

IIA Event: Closing the Homework Gap

By IIA

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.

Members of the media can RSVP for the event by emailing lauren@internetinnovation.org

Wednesday, March 16

Promising Signs From the FCC’s Lifeline Reform

By Rick Boucher

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“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.

Tuesday, March 15

Anna-Maria Kovacs on Special Access

By Brad

A new paper from Anna-Maria Kovacs, Visiting Senior Policy Scholar at the Georgetown Center for Business and Public Policy, takes a deep dive into the current state of “special access” services, particularly whether there is a case for re-regulation. You can download a copy of the full report here, but here’s some findings from the executive summary to chew over:

Both the traditional U.S. CLECs and the cable companies who have entered the business broadband market are in good financial health and are generating higher free cash flow than the wireline segments of the largest ILECs. The CLECs and cable operators also have higher stock valuations, indicating that investors expect them to grow revenues and cash flow more rapidly.

Traditional CLECs have focused on the business market exclusively and built out only in areas where high-density makes construction-cost relatively low and attainable-revenue relatively high. In other words, they build only where they can expect penetration levels high enough to ensure high free cashflow. The CLECs’ metro fiber networks have brought them into or close to most buildings that house potential business broadband customers.

The data provided publicly by U.S. CLECs and cable operators confirms the few facts that have so far emerged from the FCC’s special access data collection, i.e. that there is extensive facilities-based competition in the business broadband market.

The enterprise market’s migration from legacy TDM facilities to Ethernet over fiber or coax facilities provides the CLECs and cable operators with the opportunity to compete on equal terms with the ILECs in the fast-growing portion of the market, while decimating the legacy revenues of the ILECs.

For more on special access and regulations, check out our Co-Chairman Bruce Mehlman’s recent piece in The Hill as well as three white papers on the subject released by US Telecom.

Friday, March 11

A Conversation About Special Access

By IIA

On Wednesday, IIA Founding Co-Chair Bruce Mehlman moderated a panel at the TIA Spring Policy Summit, titled “Special Access Re-Regulation.” The robust discussion explored the FCC’s regulation of the business data services market. Below are a handful of highlights:

Berge Ayvazian, Wireless 20/20: We have seen significant competition in the special access field between companies. This competition has shaped the underlying infrastructure on which wireless exists. We must take advantage of this opportunity to apply what we have learned in the last 10 years to allow the market to evolve around the competition already happening in the marketplace. In most markets, the quality of service being delivered by an ILEC and a CLEC is the same. We need to change the way we impose regulations on the business broadband market.

Patrick Brogan, USTelecom: Competition policy has been evolving since 1996 in the business broadband marketplace. The special access market has been competitive in telecom for a very long time. The guiding policy over the past fifteen years has been to encourage facilities-based competition and this should continue to be our goal.

Fred Campbell, Tech Knowledge: I find it difficult to believe that price regulation is needed when we have seen healthy competition. During the net neutrality proceeding, Chairman Wheeler was certain that there would be no price regulation. Business services is where competition started. Consumers do not need price regulation. Something is not right about this proceeding.

Hal Singer, PPI: If you push prices down from competitive levels you will see inefficiencies at all levels. If you are going to seize someone’s property, though, you are smart to wait until they have upgraded their network. You do not want to join the old copper network; you want them to already be upgraded to fiber. Prices are not at monopoly levels. By 2014, 42% of commercial buildings were outfitted with fiber. In 2009, it was just 23%. If you step in now and impose price regulations you could do some bad things. The notion that people are competing on a non-level playing field does not make sense.

Ayvazian: We all agree there is no basis on which to introduce price regulations.

Campbell: In my view, price regulation is the last option and worst possible way to address market issues.

Singer: Before Gigi Sohn was at the FCC, she was at Public Knowledge. One of Public Knowledge’s ultimate objectives is increased regulation and unbundling. There are a lot of forces at play here that are pushing them towards the CLEC agenda.

Brogan: There is a group in the CLEC industry that benefits from price regulation and increased access to network facilities. It is easier to lease these from the incumbents than it is to build their own facilities.
Campbell: Their complaint is that, to get a certain discount, you need to commit to a 7-year term. I do not see how that is inherently problematic when facilities must be built. These contracts are long-term for a reason.

Brogan: I would continue to not regulate carrier Ethernet and rationalize regulation. Do not lower prices. This will discourage investment. That is the source of innovation within the broadband industry. Facilities-based competition is more self-sustaining.

Campbell: We need to stop moving to the left of Europe on communications policy. Many of the same consumer groups supporting price unbundling loved to point to Europe as an example of how broadband policy in the United States policy should move. In 2013, the EU’s version of the FCC drafted a lengthy report with data on developments in the EU markets and concluded that investment in the EU is lower due to unbundling. The reason is that unbundling discourages investment. If an entity has regulated access at government regulated rates, they have profit without the risk of losing investment dollars. Their conclusion was that, beyond where cable was, there was no increased investment. Now Chairman Wheeler wants to do it anyways.

Singer: If you want to maximize broadband deployment, we should be free of regulations.

Campbell: Chairman Wheler uses the word “competition” a lot, but when he uses it, he means something completely different than I do when I say competition.

Singer: When you say competition three times, it is static and not dynamic. Chairman Wheeler’s competition does not mean anything.

Campbell: Our FCC just makes up competition in market segments as if it is a new thing. Europe has imposed standards on how to impose these regulations. This has given them enormous power to do unhealthy things for a viable and competitive communications market.

Singer: We are not going to get to a Communications Act rewrite until we solve the net neutrality problem. The idea is to figure out a way to give the FCC authority to regulate allegations of discrimination on a case-by-case basis. Republicans should go forward on a broadband subsidy so we do not have to raise taxes on the back of broadband users.

Campbell: If we want to talk about politicized decision-making, let’s look at net neutrality. One of the arguments raised in favor of Title II regulations were the number of comments received in favor of it. It did not matter who these were from, but simply the volume of responses. The question we all asked was the relevance of each of these comments. There are arguments about the FCC’s political form of decision-making.

Wednesday, March 02

Encourage Competition

By Brad

Over at Forbes, Fred Campbell has a smart piece on the issue of Special Access and how the FCC should encourage competition rather than rely on old regulations. An excerpt:

The only businessmen who claim that cable and CLECs can’t compete with telcos in the market for business communications service are those who are already profiting from the FCC’s existing special access regulations and who want the agency to apply these outdated rules to new IP-based technologies. As NCTA put it, these CLEC companies’ “entire argument boils down to the simple proposition that they would prefer to pay less than they do today.”

A fair and unbiased agency would reject this self-serving argument as an invalid justification for imposing new rate regulations — regulations that would also have the effect of discouraging competition and investment in new IP-based facilities.

But don’t be surprised if the FCC decides to regulate business rates anyway.

Check out Campbell’s full op-ed over at Forbes.

Tuesday, March 01

Elevate Broadband Access

By Brad

Yesterday, The Root published an op-ed from our Co-Chairmen Larry Irving and Jamal Simmons on the need for sensible reform of the Lifeline program. An excerpt:

These days, new social media platforms emerge regularly. Individuals have become broadcast channels with audiences rivaling some small radio stations. The barrier to new technologies reaching even wider audiences is lack of high-speed Internet access, and for many people who need it most, the barrier to access is cost. This Black History Month, reforming the federal Lifeline program to include broadband should be elevated as a key step to increasing access for Americans with the lowest incomes.

Check out Irving and Simmons’ full op-ed over at The Root.

Tuesday, February 23

The Data Dead End

By Brad

Earlier today, the Phoenix Center released a new paper titled “The Road to Nowhere: Regulatory Implications of the FCC’s Special Access Data Request.” Penned by Chief Economist George S. Ford, the paper predicts that the FCC’s data collection efforts will not serve those who want more regulations on Special Access services. In fact, Ford argues that the “FCC’s Special Access data will likely show that regulation is unnecessary in many geographic areas and already adequate, if not too strict, in others.”

Ford also reports that comments so far received at the Commission aren’t helping the process either. As he writes:

The first round of comments based on the data have been submitted to the Commission, but the comments and reports aren’t terribly helpful to the general public; the Commission, perhaps concerned the data would not support its pro-regulatory agenda, has not only restricted access to the data but those with access are required to redact from their comments and reports even the most summary of statistics indicating the extent of competition and other facts.

The Phoenix Center’s concerns about the FCC’s Special Access data gathering are shared by our own Bruce Mehlman, who penned an op-ed for The Street back in December that argued:

The commission’s new investigation into special access rates gives short shrift to these aggressive competitors and relies on an old vision of the marketplace to protect the business models of a few companies, even as it is supposed to be promoting deployment of ever-faster broadband. Those hardworking crews you see from the road, and that rumbling sound you can feel, represent investment taking place. Competition works and is working in the real world—but it apparently remains unseen and unfelt at the FCC.

You can download the Phoenix Center’s “The Road to Nowhere: Regulatory Implications of the FCC’s Special Access Data Request” at their website.

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