Friday, August 15
Given all the faulty information being tossed around about regulating broadband under Title II, Patrick Brogan of US Telecom has posted a blog correcting inaccuracies being spread by some of the biggest interest groups. An excerpt:
In comments filed at the Federal Communications Commission (FCC) and in an earlier blog, net neutrality proponent Free Press, is making a puzzling and questionable claim that broadband investment will not be harmed by reclassification to common carrier regulation under Title II of the Communications Act. In fact, Free Press makes the incorrect claim that “Title II is good for the economy” and actually promotes broadband investment.
On the contrary, a reclassification to Title II would create unambiguously negative pressures on broadband provider investment that would not exist absent reclassification. The question is one of degree and the relative weight compared to opposing forces, like demand and competition. At a minimum, Title II reclassification seems unnecessarily risky and potentially counterproductive for policy goals dependent on more investment, such as expanding deployment to all parts of the country and enhancing U.S. global competitiveness.
Head on over to the US Telecom site to read Brogan’s post. It will add some clarity to a complex — and often misconstrued — issue.
Tuesday, July 29
If you missed last week’s Telecommunications Forum on Title II and its impact on broadband investment, check out archived stream below.
Wednesday, July 23
Tomorrow morning at 10 a.m., at the Mandarin Oriental Hotel in Washington D.C., IIA is holding a telecommunications forum on Title II regulation and its potential impact on deployment of 21st century broadband networks and services.
The Keynote Speaker for the event is FCC Commissioner Ajit Pai.
Also participating are Fred Campbell, Director of the Center for Boundless Innovation in Technology; George Reed-Dellinger, Senior Vice President and TeleMedia/Internet Analyst for Washington Analysis; Anna-Maria Kovacs, Visiting Senior Policy Scholar at the Georgetown Center for Business and Public Policy; and Roslyn Layton, Ph.D. fellow in Internet Economics at the Center for Communication, Media and Information Technologies at Aalborg University in Denmark.
Our own Co-Chairman Bruce Mehlman will be moderating what promises to be a lively and informative discussion about the future of technology. More information, including how to watch the forum via livestream, is available here.
Monday, July 14
Title II Regulation and its Potential Impact on Deployment of
21st Century Broadband Networks and Services
Thursday, July 24th
Mandarin Oriental Hotel – The Gallery
Featuring Keynote Speaker
Commissioner, Federal Communications Commission
Commissioner Pai will be followed by a diverse panel of legal, policy and financial analysts that will discuss the potential legal, policy and financial impact of regulating broadband under Title II of the Communications Act.
Director, Center for Boundless Innovation in Technology
Senior Vice President and TeleMedia/Internet Analyst, Washington Analysis
Visiting Senior Policy Scholar, Georgetown Center for Business and Public Policy
Ph.D. fellow in Internet Economics, the Center for Communication, Media and Information, Technologies at Aalborg University in Denmark
Bruce Mehlman (Moderator)
Co-Chairman, Internet Innovation Alliance
Breakfast will be served
*This event complies with House and Senate ethics standards*
Thursday, July 03
In an op-ed for The Street, our Co-Chairman Bruce Mehlman argues that applying regulations from 1934 to today’s data services is a terrible idea. An excerpt:
Reclassification would lead to extreme uncertainty.
Regulatory uncertainty is the enemy of investment and innovation. Cisco (CSCO) CEO John Chambers recently wrote the FCC that his company “...is deeply troubled by the proposals” for reclassification, warning that $60 billion a year in broadband investment could be threatened.
Chambers argues that “If Title II regulation is brought to broadband Internet access services, investment in new infrastructure will be severely hamstrung. New, innovative services may not be brought to market because entrepreneurs fear telecommunications regulation.”
Here’s the basic problem: As technology advances and as companies work ever harder to meet growing consumer demand, the old distinction between companies that focus on “transmission” and those that focus on “content” is vanishing. Each can own networks; each can (and often does) provide data and voice services. Convergence and cross-platform competition are the order of the day, yet Title II would shackle ISPs and some of the world’s most innovative companies with a regulatory regime designed for the 1930s telephone monopoly. It makes no sense.
Check out Mehlman’s full op-ed.
Tuesday, June 24
Eighty years ago this month, the Telecommunications Act of 1934 was created to regulate America’s nascent telephone service. At the time, only about 12 percent of U.S. families had phone service and rotary phones were the norm. Touch-tone phones wouldn’t appear for another three decades. This was the era of “party lines” and operators memorialized in movies sitting in front of large switchboards connecting callers to “KLondike 5-1234.”
As we mark the law’s 80th anniversary, now is not the time to slap the modern, high-speed, innovative and entrepreneur embracing Internet with rules that Congress designed for rotary telephones.
Keeping the Internet available to everyone is the right goal. However, applying Title II of the 1934 law, which treated traditional phone service as a public utility, to broadband could bring the pace of entrepreneurism and investment on the Internet to a crawl. Since 1996, when Congress last updated telecommunications laws, ISPs have invested more than $1.2 trillion. The average Internet connection speed in the U.S. has just hit a remarkable 10 Mbps, which is more than enough to stream an HD movie.
Suddenly putting the Internet under Title II could result in too much innovation needing pre-approval by the FCC. Instead of today’s “bottom up” dynamism in which consumer demands drive change, the web could become hostage to the federal government’s timetable. The spirit and freedom to innovate could depend on Congressional and FCC action.
Today’s Internet is the most free and accessible it’s ever been. That’s getting lost in the push for Title II regulation. America’s broadband deployment continues to rise and 70% of us now have broadband connections at home, according to Pew. People are spending more time online, enjoying real-time benefits with education, healthcare and entertainment.
The less drastic solution is reflected in the FCC’s two existing efforts to balance legitimate consumer interests with the need to maintain the Internet’s dynamism. The FCC’s 2005 Open Internet Policy Statement and its 2010 Open Internet Order both struck that balance.
Yes, the DC Court of Appeals overturned parts of the 2010 Order. But crucially, major ISPs continue to abide by the openness policies, which shows that they recognize the value of providing the freedom that Net users demand.
Belligerents making hyperbolic arguments from opposing corners dominate too many debates in Washington. Ensuring an open Internet doesn’t have to be one of those fights. Nobody wants to turn what we used to call the “information superhighway” into a four-lane toll road with federal monitors stationed at every onramp. Nor should there be an HOV lane only accessible for the wealthiest that leaves the rest of us stuck in a slow moving traffic jam.
Now is the time for common sense rules that are fair to consumers and companies and ensure high speed Internet access to individuals and entrepreneurs without the unintended consequences of 1930’s rotary phone era regulation.
Monday, June 23
At The Hill, Kate Tummarello reports that House Republicans want to take the net neutrality issue out of the FCC’s hands:
Republicans on a House panel want the country’s antitrust regulators, not its telecom regulators, to take the lead on net neutrality.
During a Friday hearing held by the House Judiciary Subcommittee on Antitrust Law, Republicans questioned the need for net neutrality regulation from the Federal Communications Commission (FCC).
“The Internet has flourished precisely because it is a deregulated market” and should be kept open through “vigorous application of the antitrust laws,” House Judiciary Chairman Bob Goodlatte (R-Va.) said.
The idea, according to Tummarello, is for the Federal Trade Commission to take the reigns:
“As regulatory proceedings continue to stretch on, a question I have is whether there might be a more efficient and more effective way to safeguard against potential discriminatory behavior than federal rulemaking,” Subcommittee Chairman Spencer Bachus (R-Ala.) said in his opening statement.
“That is where antitrust law comes in.”
Friday, June 20
We’ll find out soon enough whether the U.S. soccer team can survive the World Cup’s “Group of Death” with two strong European competitors (England and Germany). But for broadband, it’s clear who’s winning: the U.S.
It’s basic economics that if we as a society want less of something—for instance, smoking—we will impose a tax on it or restrict it by regulation, and consumption will fall. The opposite is also true: if we want more of something, deregulation and lower taxes will, by the operation of markets, lead to more of it.
The price, availability and quality of broadband follows the same rules. If we want more and faster broadband—and we do—then excessive and inappropriate regulation of broadband, such as some activists’ proposals for “Title II” common carrier regulation, is the wrong way to go. On top of all the legal and technological problems Title II would bring, we can confidently predict that it would sharply inhibit broadband investment.
A new paper from Christopher Yoo of Penn Law School’s Center for Technology Innovation and Competition takes a fresh look at the data and shows that the US is far ahead of Europe on virtually every relevant metric of broadband deployment. The reason, not surprisingly, is that the US regulates broadband lightly while European countries impose investment crippling wholesale unbundling requirements on broadband providers.
Res ipsa loquitur, the lawyers like to say, and Yoo says exactly that: “The data speak for themselves, and the empirical evidence confirms that the United States is performing much better than Europe in the high-speed broadband race[.]”
Look at the data from different angles (as CTIC’s interactive micro-site permits), and it tells the same story: access to next-generation networks (over 25 Mbps), the U.S. leads 82% to 54%; access to next-generation networks in rural areas, 48% to 12%; and LTE coverage, 86% to 27%. Unsurprisingly given these figures, the U.S. (meaning U.S. network operators) invests more than twice as much per household as Europe does—$562 vs. $244. Better service, with less packet loss in the U.S.. And entry-level broadband prices are lower here, too.
Why is the U.S. winning? It all comes down to fundamentally different models of regulation and the incentives each provides for investment: Europe relies on regulations that treat broadband as a public utility and foster competition among multiple leased access providers on incumbent provider platforms. New entrants lease incumbents’ facilities at wholesale cost (also known as unbundling). The U.S. regulatory light- touch has generally left buildout, maintenance, operation and modernization of Internet infrastructure to private companies and focuses on promoting facilities-based competition, in which new entrants are expected to construct their own networks.
The regulatory structure government chooses directly affects broadband availability, quality and price.
Focus on that investment statistic for a minute: there’s over twice as much investment per household in the U.S. as in Europe, which leads to more coverage.
We’ve already had a glimpse of what can happen if the U.S. government tries a different path, that of Title II regulation. When the FCC announced in 2010 that it was considering Title II reclassification of broadband as a possible approach to ensuring network neutrality, there was an immediate negative effect on the stock prices of the network operators who were deploying broadband across the country. On average, the market capitalization of the four largest ISPs in the United States lost a combined $18 billion and the market value of one of those entities dropped 15% overnight. The ability of these companies to acquire the financing necessary for aggressive broadband deployment diminishes as their value in the market declines. This was but one early sign of the kinds of problems that broadband providers will encounter in continuing their world leading broadband deployment performance if the FCC turns to Title II regulation.
So the light regulatory model of the U.S. brings greater adoption, more investment, and faster speeds, while due to the heavy-handed leased access regime on which Europe built its policies, the continent is now lagging far behind.
None of this is surprising to anyone who knows a bit of economics, but it’s a useful reminder as the FCC considers what sort of rules would best achieve our nation’s broadband goals. We can ill afford to neglect history and economics by imposing telephone-era, public utility regulation that will dampen investment at precisely the moment when carriers will have to undertake even greater expenditures to acquire spectrum in the upcoming incentive auction and then spend more to deploy facilities to bring wireless broadband to the entire US population at 4G levels. As Yoo writes, “we have a real-world basis for assessing the impact of imposing telephone-style regulation on the Internet[.] As regulators in the United States contemplate rules for next-generation networks, it would be wise to consider how going down the path of stiff telephone-era regulation has fared elsewhere.”
Because whatever happens in Brazil, the U.S. has already beaten Europe in the broadband competition for economic growth.
Thursday, June 19
Today marks the 80th anniversary of the 1934 Communications Act. Signed into law by President Franklin D. Roosevelt, the Act was basically a shuffling of the Federal Radio Act of 1927 and the Mann-Elkins Act of 1910, which covered telephone service. From Wikipedia:
The stated purposes of the Act are “regulating interstate and foreign commerce in communication by wire and radio so as to make available, so far as possible, to all the people of the United States a rapid, efficient, nationwide, and worldwide wire and radio communication service with adequate facilities at reasonable charges, for the purpose of the national defense, and for the purpose of securing a more effective execution of this policy by centralizing authority theretofore granted by law to several agencies and by granting additional authority with respect to interstate and foreign commerce in wire and radio communication, there is hereby created a commission to be known as the ‘Federal Communications Commission’, which shall be constituted as hereinafter provided, and which shall execute and enforce the provisions of this Act.”
While the 1934 Act served America quite well for over six decades, in 1996 it was given a much-needed overhaul to better reflect the technology of the day. But even that overhaul now seems like a bit of a relic, as today’s current broadband age — both wired and wireless — has completely revolutionized America’s communications.
With some activists currently calling for the FCC to reclassify broadband services under Title II, it’s worth remembering that Title II was originally part of the 1934 Act. In other words, those pushing for reclassification of broadband services want the FCC to use an 80 year old law to govern the modern Internet.
Rather than brute force a law on the books since before World War II, a smarter way to govern today’s Internet — and whatever shape the Internet takes in years to come — would be to once again revisit the Communications Act. A lot has changed in 80 years, after all, and relying on such an outdated framework for today’s technology could very easily do much more harm than good.
Friday, June 13
At today’s FCC open meeting, Chairman Tom Wheeler recused himself from the Commission’s work on the transition to all-IP networks. As Kate Tummarello of The Hill reports:
At the agency’s June open meeting on Friday, Wheeler announced that he would not participate in the agency’s work on this topic, citing his tenure on the Board of Directors for telecom company EarthLink, which recently filed to participate.
Wheeler served on EarthLink’s Board of Directors for ten years before resigning last year after the Senate confirmed him to be FCC chairman.
Friday, June 06
With the net neutrality debate once again on the front burner, AT&T Senior Executive Vice President Jim Cicconi has penned a lengthy post at the company’s Public Policy Blog to break down how reclassifying broadband service under Title II is a bad idea for just about everyone with a stake in the open Internet. An excerpt:
Title II would not prohibit the creation of fast lanes and slow lanes on the Internet — that is clear in the plain language of the law, not to mention 80 years of FCC precedent and court decisions. Arguments to the contrary are pure fantasy. At a minimum, Title II supporters have to concede that their argument depends on the bank shot that an appellate court will agree (a) that the FCC can change its mind about how the Internet works after the Supreme Court has validated its prior decision; and (b) the FCC can then ignore the plain language of the statute and 80 years of precedent to determine that the prohibition of “unjust and unreasonable” discrimination actually means it can prohibit any discrimination. And think of all the additional proceedings that will be needed to unpack where we draw the lines between information services “haves” and telecommunications services “have nots.” If that is the road we choose to travel, the investment uncertainty alone will have a massive negative impact on American broadband deployment for years to come.
There’s another important argument against Title II — invoking it would risk massive collateral damage to many, if not most, U.S. Internet companies. Title II could turn every edge or content company into a common carrier for at least part, if not all, of their services.
Cicconi goes on to argue that FCC Chairman Tom Wheeler already has a way to ensure an open Internet without the regulatory hammer of Title II:
Section 706, as interpreted by the court and explained by Chairman Wheeler, does provide a path. It’s a path AT&T supports. For one, it has already been blessed as a valid source of jurisdiction to address the kinds of concerns articulated by Chairman Wheeler and others throughout the current debate. In upholding Section 706 authority, the Verizon court gave the FCC wide latitude to prohibit conduct that would deter broadband investment. And the approach that Chairman Wheeler has proposed would clearly prevent practices like paid prioritization that we feel would change the fundamental nature of the Internet.
Thursday, June 05
Via David Gelles and Nichael J. De La Merced at The New York Times, the long rumored merger between Sprint and T-Mobile is starting to heat up:
Sprint and T-Mobile have talked about a combination for years but continued to put it off, each preoccupied with other deals, and concerned about scrutiny from antitrust regulators.
But in recent days, the two sides have settled on the terms of a $32 billion deal that is likely to be announced this summer, people briefed on the matter said on Wednesday.
Under the terms of the deal, which are still preliminary, Sprint would acquire T-Mobile for about $40 a share in cash and stock, a 17 percent premium to Wednesday’s price.
Between this, the proposed Comcast-Time Warner Cable merger and, to a lesser extent the proposed AT&T-DirecTV coupling, the DOJ and FCC have a lot of work ahead of them.
Tuesday, June 03
Via Kate Tummarello at The Hill, lawmakers from both sides of the aisle have some ideas for how the FCC can successfully update an existing program to bring more technology to schools:
A bipartisan group of lawmakers laid out recommendations for the Federal Communications Commission to modernize its E-Rate program to fund technology in classrooms.
“The funding priorities must reflect the changing nature of the Internet, so that our classrooms and students have access to today’s technology,” a group of 46 lawmakers told the FCC in a letter on Monday.
“America’s school and libraries are in need of a technological update to accelerate next-generation education reforms, support teachers and enhance student learning through universal access to high-speed broadband.”
Thursday, May 29
The latest flare up in the never-ending net neutrality debate involves the possibility that the FCC could regulate Internet service under Title II. At The Hill, Kate Tummarello reports the very idea of Title II has already inspired work on a bill from House Republicans:
A new House Republican bill would prevent the Federal Communications Commission (FCC) from going forward with a proposal for stronger regulations on Internet service providers.
Late Wednesday, Rep. Bob Latta (R-Ohio) — vice chairman of the House Commerce subcommittee on communications — introduced a bill that would keep the FCC from reclassifying Internet providers to treat them more like traditional phone companies, which are heavily regulated.
“The Internet has remained open and continues to be a powerful engine fueling private enterprise, economic growth and innovation absent government interference and obstruction,” Latta said in a statement announcing his bill.
Tuesday, May 27
Speaking of the FCC, Julian Hattem at The Hill reports that Senate Republicans aren’t yet going to step into the Commission’s latest foray into the net neutrality debate:
The top GOP senators on the Appropriations Committee and the subcommittee overseeing the FCC both told The Hill this week that they don’t expect a rider preventing the commission from moving forward with the effort.
“I don’t see any possibility of that. I really don’t,” said Sen. Mike Johanns (R-Neb.), the ranking member of the Financial Services and General Government subcommittee.
“It’s not there yet,” added the top Republican on the full committee, Sen. Richard Shelby (Ala.). “But you know, this is early.”
Last Friday, when most people were gearing up for the long weekend, FCC Chairman Tom Wheeler was busy outlining the Commission’s agenda in an official blog post. Encouragingly, the transition to all-IP networks received top billing:
Next month’s open Commission meeting will be highlighted by an update on our efforts to facilitate the transition from the circuit-switched networks of Alexander Graham Bell to a world with fiber, cable and wireless Internet Protocol (IP) networks. This past January, the Commission unanimously adopted an Order inviting service providers to propose voluntary experiments designed to assess how the transition to IP networks impacts users and initiating targeted experiments. In three weeks, the Commission will receive a status report on proposed experiments and how best to deploy next-generation networks, while preserving enduring values like universal access, competition and consumer protection.
Wednesday, May 14
Over at VOXXI, IIA Broadband Ambassador Kristian Ramos highlights why the FCC’s incentive spectrum auctions need to be open to every bidder willing to invest. An excerpt:
What many fail to realize is that the rate of growth in spectrum usage continues to accelerate. For example, the amount of spectrum used by mobile broadband data doubled in 2012 and is expected to increase eightfold by 2018.
To address this impending “spectrum crunch,” in 2012 Congress authorized the FCC to conduct a voluntary incentive auction as a way to make additional spectrum from television broadcasters available to commercial wireless providers so that they can meet the ever increasing demand for wireless broadband.
The proceeds of the incentive auction will be used to compensate broadcasters for relinquishing their spectrum and pay for a nationwide broadband public safety network consistent with the recommendation of the 9/11 commission, with leftover funds going toward deficit reduction.
However, for the auction to work properly, the FCC needs strong participation from as many broadcasters and bidders as possible. In fact, 78 House Democrats recently told the FCC as much, writing in a letter: “The FCC must invite as many participants as possible ‘on equal terms’ to an ‘open and fair’ broadcast TV spectrum incentive auction.”
Participation in the incentive auction matters. Remember: The auctions are voluntary, which means broadcasters that are participating do not have to sell their unused spectrum if they do not feel as if they are being fairly compensated.
By increasing the number of bidders participating in the auction, the FCC would improve the financial impact of the auction and enhance broadcaster participation. The more broadcaster spectrum that is available at auction, the more spectrum is available for consumers.
Check out Ramos’ full op-ed at VOXXI.
Wednesday, May 07
In the upcoming incentive auction for wireless spectrum, the Federal Communications Commission (FCC) seeks to advance widespread deployment of mobile broadband in rural America with the infusion of additional 600 MHz “low” band spectrum into the wireless market.
What’s the best approach to achieving the goal of expanded rural service? Don’t restrict the auction by cutting out companies that currently serve rural America and want to expand their presence there.
FCC Chairman Wheeler kicked off a lively debate on this issue in his recent blog post maintaining that:
“The low-band spectrum we will auction is particularly valuable because it has physical properties that increase the reach of mobile networks over long distances at far less cost than spectrum above 1GHz. Today, however, two national carriers control the vast majority of that low-band spectrum. This disparity makes it difficult for rural consumers to have access to the competition and choice that would be available if more wireless competitors also had access to low-band spectrum.”
While no disagreement exists on the need for more spectrum and the policy goal of expanding mobile broadband availability in rural America, the realities of today’s marketplace suggest an alternative view on the best way to bring affordable and ubiquitous mobile broadband services to more of America’s heartland.
Sprint and T-Mobile contend that that the success of the spectrum auction depends on the FCC’s ability to limit AT&T (T) and Verizon’s (VZ) future spectrum purchases. Yet, neither Sprint (S) nor T-Mobile (TMUS) has publicly committed to use any additional spectrum to serve rural America. Instead, a recent study by Dr. Anna Maria Kovacs reveals that these wireless entities have informed Wall Street that they would limit high-speed wireless broadband coverage to a population of only 250 million. For America’s rural consumers, their plan means far less broadband service coverage from Sprint and T-Mobile than what these companies offer to their existing voice service customers. In fact, it appears that their goal in utilizing new spectrum is to limit enhanced broadband service mainly to the nation’s urban centers.
If satisfying Wall Street’s demands for Sprint and T-Mobile to use newly acquired spectrum only to serve revenue-rich urban and suburban broadband customers is the nation’s primary goal, the FCC may be on the right track. On the other hand, if expanding mobile broadband deployment to rural Americans everywhere, from the mountains of western Virginia to the open ranges of the West, best serves the public interest, the FCC may want to choose a different path.
Unlike Sprint and T-Mobile, AT&T and Verizon have stressed that they will use additional spectrum to serve nearly a population of 300,000,000, bringing advanced mobile broadband services to less densely populated areas. In fact, these companies already serve large portions of rural America directly (not just through partners), offering the same competitive nationwide pricing and calling plans that they offer in the suburbs or cities.
Excluding certain companies from the auction in an attempt to engineer greater “competition” isn’t going to work. Modern broadband networks require significant capital investment to build out these new services to difficult-to-reach populations. The companies that are most likely to make that capital investment are the ones who currently serve rural America and have announced their intention to expand rural access with newly acquired spectrum.
Availability of high-speed mobile broadband depends on service providers that agree to actually deploy cell towers there—something both Sprint and T-Mobile have failed to commit to doing in the future. They seem perfectly content to focus their core efforts on areas where revenue per square mile will be highest. The “back 40” of Manhattan contains a lot more people, after all, than the back 40 of a ranch in New Mexico or Montana.
While these two foreign-owned entities are free to advance their business interests in Washington and Wall Street corridors, America’s rural customers depend on the FCC to separate fact from fiction and help deliver broadband to every corner of the nation.
Non-existent investment commitments and theories on managed competition are no basis to rig an auction. If we seek a real “pop” in high-speed mobile broadband use in rural America, let’s look at the population each company has agreed to serve. Our spectrum policies shouldn’t exclude from the auction the prospective bidders who have actually announced plans to serve more of America’s heartland.
Monday, April 28
Last week, FCC Chairman Tom Wheeler made waves when he announced new net neutrality (yes, it’s back) rules. At Tech Policy Daily, Roslyn Layton argues that the Internet sky is not falling:
There is no doubt that feelings about net neutrality are strong. Many consider the Internet a human right and that it should not be subject to market norms, indeed that it should be offered without charge and under government control. But whether we like it or not, there are real world costs to delivering the internet. Furthermore the services that we overwhelmingly use online (Google, Facebook, Twitter, Netflix etc) do not do it out of the goodness of their hearts. They expect to make a profit, and if it means that they improve their service so we chose them over others, so be it. The reality of what the FCC proposes actually puts the power in the hands of content and application providers – subject of course to what their customers demand.
The FCC will reportedly take up the proposal at its May meeting. Stay tuned…
Wednesday, April 23
Via our Tumblr.