Late last week, the FCC’s Technology Transitions Policy Task Force announced it was issuing Public Notice seeking comment on proposed “beta” trials to transition America’s networks to all-IP. Below are reactions to the announcement from IIA leadership.
From Honorary Chairman and former Congressman Rick Boucher:
”The FCC’s recognition of the importance of the move from TDM to all-IP networks is a welcome building block, but it’s disappointing that comprehensive IP transition trials have not been authorized. Only through a comprehensive examination can potential issues be identified and addressed and consumers be protected.”
From Co-Chairman Bruce Mehlman:
“The Commission is steering in the right direction, but traveling at the wrong speed. Fully committing to all-IP networks would bring the greatest benefits to consumers and best-equip America to compete on a global scale. Baby steps won’t keep pace with technology.”
From Co-Chairman Jamal Simmons:
“The three areas on which the FCC seeks comment are all important pieces of the puzzle, but instead of a piecemeal approach to figuring out challenges with the IP Transition, the Commission should quickly adopt a holistic strategy, including well-defined trials in designated wire centers, to bring broadband-enabled benefits in health care, education and entrepreneurship to all Americans.”
It’s official: current Federal Communications Commission (FCC) Chairman Julius Genachowski will be handing over the gavel on May 17th. While Commissioner Mignon Clyburn will lead the agency until Obama nominee Tom Wheeler gets confirmed and sworn in, it’s worth taking a look at the top two pressing issues Wheeler will face once he takes the helm of the Commission.
Agenda Item: IP Transition
The trend is undeniable. Americans are leaving their traditional phone service, dropping their standard connection in favor of wireless and IP-based phone connections. You’re probably one of them. If you have your home phone service bundled with cable, you might not even realize you no longer rely on the plain old telephone service (POTS) network.
With scores of people changing the way they communicate (some estimates peg the number at 500,000 people each month), network providers want to gradually sunset their old networks so they can concentrate billions in investment dollars to new, Internet-based services. In other words, they want to put their money where consumers want to go … and are going.
This transition to all-IP (Internet Protocol) networks won’t be as easy as flipping a switch. Ensuring everyone still has a reliable connection, especially seniors and those living in rural areas, is critical. That’s why AT&T submitted a proposal to the FCC for “beta trials” in select markets to identify potential pitfalls, an idea FCC Commission Ajit Pai strongly endorsed in a speech sponsored by the Hudson Institute back in March. As Pai said in his speech:
Right now, the most critical choice we face is whether to move forward with an All-IP Pilot Program. This program would allow forward-looking companies to choose a discrete set of wire centers where they could turn off their old TDM electronics and migrate consumers to an all-IP platform. Now, you may have noticed that when it comes to the IP transition, everyone has a prediction about what will or will not happen if carriers are allowed to provide services exclusively through an all-IP platform. But as we found out during yesterday’s “snowstorm”—what we Kansans call “weather”—predictions are no substitute for hard facts. Albert Einstein had it right: A “pretty experiment is in itself often more valuable than twenty formulae extracted from our minds.”
Fortunately, we don’t need to rely on formulae any longer. The FCC has sought and received comments on a proposal to create an All-IP Pilot Program. I’ve reviewed the record carefully. And having done so, I am proposing today that the FCC move forward with this program.
Going forward with beta trials is just part of the greater IP transition discussion Wheeler will no doubt be having as head of the FCC. Also on the burner will be regulations — specifically, what will be the regulatory framework in an all-IP world? The 1996 Telecommunications Act is by all accounts painfully outdated. Modernizing rules to keep pace with today’s technology in ways that encourage continued investment in network infrastructure and protect consumers will be critical for the IP transition to succeed. And Wheeler, from the driver’s seat of the FCC, will need to lead the discussion.
Agenda Item: Spectrum
Outgoing Chairman Julius Genachowski deserves a ton of credit for recognizing the coming “spectrum crunch” (as he’s coined it), but the FCC’s proposed solution to the problem — incentive spectrum auctions — is barely past the 50-yard line. The auctions are still being shaped, the details still being argued over. Some are pushing for limited involvement in the auctions by certain wireless providers. Others question whether enough broadcasters will participate to make a difference.
Meanwhile, thousands of Americans are adopting mobile broadband every day. They are firing up smartphones and tablets for the first time and pushing data into the ether. And all that data is joining the bits and bytes being pushed out from tens of millions of other people who are already relying on a wireless connection to the Internet for their daily activities.
To keep up with this flood of data traveling on their networks, wireless providers have been trying to make deals for spectrum left and right. But it’s still not enough, which means a lot will be riding on the FCC’s spectrum auctions. Will Wheeler and the other Commissioners successfully put together proceedings that are open to all qualified bidders? Auctions that maximize much-needed revenue for the Federal government? As my colleague Rick Boucher succinctly put it:
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.
These are the two most critical issues Wheeler will face once he’s in charge of the FCC (and underlying both of those issues is the most important part of his job — increasing access for all Americans to participate in the technological revolution we are experiencing. High-speed access to the Internet only increases in importance as job searches, entrepreneurial opportunities, education and health care are all enhanced by being online). While some have criticized his selection given his past life running both the NCTA and the CTIA, such experience offers encouragement that he has the ability to successfully get the job done. As President Obama remarked during the announcement of his selection:
”If anybody is wondering about Tom’s qualifications… [He] is the only member of both the cable television and the wireless industry hall of fame.”
Here’s hoping Wheeler will one day be inducted into the FCC hall of fame as well.
Over at Rolling Out, our Co-Chairman Jamal Simmons has a piece on how technology can help lead to healthier lives, particularly in minority communities. Here’s a taste:
Broadband Internet access, especially mobile broadband, can go a long way in terms of achieving the goals of improved health care access and affordability. According to comScore, smartphone ownership is at 54 percent in the U.S. That’s a lot of iPhones and Androids in the pockets of Americans across the map, and when it comes to health care information, Pew Research reports more than half (52 percent) of the people owning these gadgets report using them to access health or medical information.
Our Co-Chairman Jamal Simmons has penned an op-ed for The Grio on the critical need to provide urban schools with Internet access. Here’s a taste:
When it comes to digital access, location matters and not all students stand on equal footing. While more than half (54 percent) of these teachers report that almost all students have sufficient access to these tools in school, only 18 percent say students have sufficient access at home. Low income students are least likely to have access in school or at home. For urban students, they face greater barriers at school and rural students have less access at home.
Erasing the barriers to digitally enhanced learning for students in disadvantaged situations requires a multifaceted approach.
Tossing the TV is more evidence in favor of phone companies transitioning to all-IP.
As Ryan Nakashima from the Associated Press recently reported, there’s a dramatic shift afoot in how people are consuming entertainment:
Some people have had it with TV. They’ve had enough of the 100-plus-channel universe. They don’t like timing their lives around network show schedules. They’re tired of $100-plus monthly bills.
A growing number of them have stopped paying for cable and satellite TV service and don’t even use an antenna to get free signals over the air. These people are watching shows and movies on the Internet, sometimes via cellphone connections.
According to Nakashima, these TV tossers have been given a name by the Nielsen group—“Zero TV” households—and their numbers are increasing. In 2007, there were just 2 million homes. Today? 5 million and counting.
While those numbers aren’t yet big enough for broadcasters and cable providers to hit the panic button, they show an undeniable trend. Things are changing fast, and consumers increasingly want more freedom in when and where they watch their favorite shows. The season premiere of Game of Thrones set a record for piracy, which tells you two things: HBO’s business model probably needs an overhaul, and more and more people are unwilling to wait to be entertained.
It’s easy to label millions of people illegally downloading a hit show as entitled, but they’re just the scouts in what will eventually be an all-out assault from consumers on traditional business models. And once the armada lands, we’ll need networks powerful enough to meet their demands.
Those networks will be all IP, or all Internet Protocol.
The transition to all IP networks will mean everything is done via the Internet — not just web surfing and streaming video, but home phone service as well. IP networks will also make viewing TV over the net more reliable and consistent, since it will give companies the ability to invest in upgrades without maintaining legacy networks people are increasingly abandoning.
This transition won’t happen overnight, nor should it. Millions of Americans still rely on traditional landlines, just as millions still happily pay for cable and watch broadcast TV over the air. Ensuring people can still depend on their home phones and watch their favorite shows is critical. The transition beta trials AT&T has proposed and the formation of the FCC’s Technology Transitions Policy Task Force to oversee regulatory concerns are good ways to step forward carefully.
The tide is definitely sweeping up toward an all IP future. The recent bump in TV viewers going online is just latest evidence. One day, we might all live in “Zero TV” households, and if everything goes smoothly — if government and industry work together — we won’t even notice how radically things have changed. The home phone will still be the home phone and TV will still be TV; the only difference will be how they’re delivered.
With the news that Chairman Julius Genachowski will reportedly join Commissioner Robert McDowell and leave the FCC, our leaders reflect on the departures.
“Chairman Genachowski has provided a valuable service as FCC chairman. He oversaw the adoption of a comprehensive reform of the federal universal service fund. He has set the stage for the FCC’s consideration of the transition to all Internet Protocol networks. I commend him on his success and wish him well in his future endeavors.” — Honorary Chairman Rick Boucher
“Chairman Genachowski has shown remarkable composure and resilience as FCC chairman while facing cross-pressures to ensure competition while encouraging the innovation necessary to achieve the President’s goal of 98% broadband coverage for Americans. Under his leadership the commission has moved toward freeing up more spectrum and giving fair consideration to the IP transition.
“On a personal note I wish Julius and his wife Rachel well in their future endeavors.”— IIA Co-Chairman Jamal Simmons
“Rob exemplified the very best traditions in his years on the Commission, serving with honor, intelligence, humor and grace. He had a hand in shaping a great number of policies that improved American competitiveness and helped lay the groundwork for future innovation and tech-led growth. He will be missed.” — Co-Chairman Bruce Mehlman
Brian Stelter of the New York Timesrecently reported ABC is working on an app for live streaming shows to mobile devices. According to the report, “The app, which would stream programming to the phones and tablets of cable and satellite subscribers, could become available to some subscribers this year.”
As media companies look for new ways to deliver content directly to mobile devices, wireless companies and the FCC should find new ways to provide the broadband capacity for consumers to enjoy these choices. It is critical that we have a regulatory environment that encourages innovation like freeing up spectrum and exploring the transition to all-IP networks which holds great promise for satisfying consumer broadband demand.
In an op-ed for Fierce Telecom, our Co-Chair Jamal Simmons encourages heavy investment in the transition to all-IP networks. Here’s a taste:
Many observers view this move to the future with enthusiasm. While technological advancements have granted the nation with significant benefits, many people still approach change with caution. Others will advocate for the status quo in order to retain their business models built on old technologies and favorable regulations. For example, many CLECs provide service dependent on regulated access to old Bell networks at subsidized rates. Once upon a time, regulated access may have made sense to provide a competitive alternative to the existing Bell telephone monopoly. In today’s marketplace, however, many providers compete to offer communications services. CLECs in general have failed to use their subsidized access to fund widespread investment and deployment of IP-based services, and instead have banked on the fact that they would have this favorable access in perpetuity. But for consumers, businesses and our nation as a whole to benefit from the opportunities enabled by a high-speed, all IP-based broadband network, the entire ecosystem must invest.
A recent story in USA Today from Ron Barnett highlights some of the benefits students at a South Carolina high school are receiving from being connected:
Jennifer Southers has flipped education upside-down for her math students at Hillcrest High School.
Instead of coming to class and listening to a lecture, then going home and trying out what they learned on their own, they listen to a lecture on video before class and work on putting the new knowledge to practice in the classroom, where their teacher is there to help.
“The level of frustration has almost disappeared completely on those lessons when we do that,” she said of the “flipped classroom” concept that she and other teachers are using.
Unfortunately, as Barnett’s piece goes on to point out, America’s ongoing digital divide may be creating an uneven playing field when it comes to educating students:
[W]hat about students who don’t have broadband Internet access at home? How can they keep up with their peers in streaming instructional videos and doing online research?
More than two-thirds of low-income families in South Carolina don’t have a high-speed Internet connection, said Jessica Ditto, spokeswoman for Connected Nation, a nonprofit organization that works to increase broadband access in the nation. Overall, 57 percent of households in the state have broadband access, she said.
Increasingly, access to the Internet means access to improved education, which means students in the 43% of South Carolina households not connected with broadband are at risk of being left behind when it comes to innovative learning. But as Barnett reports, there’s hope on the horizon — for South Carolina and elsewhere:
Bill Brown, executive director of educational technology services for Greenville County Schools, says 4G LTE technology offers the most promise for bridging the digital divide.
With it, “You could blanket buildings, you could blanket cities” with high-speed Internet access, he said.
More powerful networks — beginning with 4G LTE (which, as anyone who has experienced it can attest, is remarkably fast) and continuing with the shift to all-IP based networks — will mean more access in more ways for more people. With the future of education tied to technology, encouraging investment in these networks should be an educational priority.
Our Co-Chairman Jamal Simmons has penned an op-ed for The Root on the coming transition to all-IP networks and what its effect will be on America’s still lingering digital divide. Here’s a taste:
Putting smart policies in place to promote the IP transition would help address these concerns. With the right incentives, incumbent telephone companies could invest in and build faster, more robust and more dynamic IP-based networks that would provide residential customers with additional competitive choices for video, high-speed broadband and voice services. Accelerating the IP transition would also have the positive effect of shifting the cost burden of maintaining antiquated, legacy voice networks away from voice subscribers in communities of color, who would disproportionately have to pay the costs of maintaining outdated networks without the benefit of access to new services provided by next-generation networks being built at the same time.
Last Friday, IIA submitted comments to the FCC on AT&T’s recent petition regarding the transition from copper wire networks to networks that are all Internet Protocol (IP) based. From those comments:
While the era of the telecom monopoly is long over, monopoly-era regulations persist. In some ways this is predictable, since markets move faster than government, and entrepreneurs innovate more rapidly than policy makers. By way of example, one of the most counter-productive, monopoly-era regulations still on-the-books is the requirement for legacy carriers to continue maintaining redundant legacy copper (nonIP) networks even when they are no longer needed for the carrier to serve its customers. While these rules made sense at the dawn of the Internet era when little, if any, competition existed, voice remained the essential product and telephone networks had been built via government-guaranteed-rate-of-return exclusivity, they have longbeen overtaken by events. For example, in many regions incumbent telephone companies have retained less than 30 percent of the customers, yet they are still required to cover 100 percent with their pre-IP, voice-grade networks. Voice is today just another application delivered over multiple IP platforms.
You can read our full comments, penned by our Honorary Chairman Rick Boucher and Co-Chairs Bruce Mehlman and Jamal Simmons, here.
In a speech at CTIA’s MobileCon on Wednesday, FCC Commissioner Ajit Pai talked spectrum – specifically, what has worked (and not worked) in the government’s efforts to free up more airwaves for wireless use.
As many would expect from this Republican member of the Commission, Pai embraces the power of the free market when it comes to providers being able to meet consumer demand for more airwaves. He points out:
Historically, the FCC used comparative hearings — better known as “beauty contests” — or even lotteries to assign licenses. In other words, the agency either had to choose political favorites or leave it to chance — a lose-lose proposition.
The big change, Pai noted, came in 1993, when Congress — and President Clinton — authorized the auction process for spectrum. Calling this move a “win-win,” Pai said:
Not only do [auctions] allocate spectrum more efficiently, but they also have raised over $50 billion for the federal government.
For further proof, Pai focused on two previous auctions — one in 2006, the other 2008 — that together provided 142 MHz of spectrum for mobile broadband. And that boost in airwaves, Pai went on to say, has greatly benefited the U.S. as a whole:
How important have these auctions been? They are the main reason why the United States today leads the world in 4G deployment. Verizon Wireless is using the C-Block spectrum it obtained in [2008’s] Auction 73 to roll out 4G LTE service nationwide. AT&T provides 4G services over B-Block spectrum from Auction 73 as well as spectrum from [2006’s] Auction 2006. MetroPCS uses spectrum from Auction 66 to provide 4G LTE service. So does Leap Wireless. And soon, so will T-Mobile.
That’s obviously a lot of wireless expansion — not to mention a healthy boost to competition — from just two auctions, but as Pai himself noted there’s still much work to be done, especially when it comes to closing America’s digital divide. Wired broadband can only reach so many people before it becomes economically unfeasible. That means, if the U.S. is going to achieve the ambitious goal of bringing broadband to every corner of our nation, mobile broadband is the way to go.
According to Pai, the key to making it all happen is for the Commission to stay on the schedule it has already laid out for spectrum auctions. But he added:
I think three principles should [also] guide our work as we set up these auctions. Specifically, we must remain faithful to the legislation. We must be fair to all stakeholders. And we must keep our rules as simple as possible.
That’s exactly right, and I hope Pai and the Commission are able to take lessons from past successes to shape the role that the government should play going forward. Making the goals of the National Broadband Plan reality is simply too important — to the economic health of America, to the promise that everyone in our nation should have an opportunity to succeed — for us to fail. The future of broadband is up in the air, and it will take smart spectrum management and reallocation by the FCC to help tap mobile broadband’s full potential.
FCC Chairman Julius Genachowski has done a remarkable job in sounding a very consistent and clear alarm that our national romance with wireless communication is headed for a meltdown unless we make a lot more spectrum available for mobile. His agency has estimated that that demand for wireless data could begin outrunning the spectrum available in just a couple more years. Responding to a handful of deniers, Genachowski recently told a Stanford University conference: “No one can factually dispute that we have a spectrum crunch.”
Further, consumer excitement over the iPhone 5 clearly signals that even more pressure on our spectrum supply lies ahead. Even before Apple unveiled the latest upgrade, forecasters were predicting that mobile data demand would climb an average of 74 percent a year through 2016.
But Genachowski’s foresight in identifying the challenge isn’t enough. We need a convincing solution — especially in the short term. We need to find spectrum anywhere we can and get it to wireless service providers as fast as humanly possible. There is no single solution, so we better try “all of the above.”
The challenge is daunting, the FCC’s National Broadband Plan, released in 2009, said commercial wireless service required an additional 500 MHz of spectrum over the next decade, but was only able to identify 200 MHz that might be available for allocation that didn’t belong to some government agency. It urged new government-run auctions, an approach strenuously embraced by Genachowski and authorized by Congress this year. But as observers have stated, the approved auction probably won’t provide more than 60 MHz —‚ barely a tenth of what we need. And, even that won’t happen fast. In the past, it’s been 5-10 years between identifying spectrum for auction and getting it into service. The FCC aims to do better this time, but we shouldn’t put all our eggs in that basket.
Spectrum sharing was also pushed hard in a recent PCAST report by academic experts. Since federal agencies, which hold the lion’s share of spectrum, are reluctant to give it up, the report suggested they share it with commercial providers. It’s an idea worth exploring. But it would take years to figure out the mechanics and if you’ve ever tried to convince your children to share their toys, you know it may be easier said than done. During a speech at Stanford, Genachowski described sharing as “an additive,” not an answer.
In the near term at least, let’s let “the market” work. When somebody in our economy needs a valuable resource to serve customers they are more than happy to buy it from somebody who already has it, but doesn’t need it. It’s fast, too, because regulators don’t have to find it, persuade somebody to give it up, or write rules for an auction.
It’s also a way for Chairman Genachowski to turn his concerns over a spectrum shortage into a viable strategy because his agency must review and approve such deals. The FCC just approved transfer of spectrum from cable companies to Verizon — though it took approximately eight months to do so. Faster action and a clear signal that the FCC is inclined to approve additional transfers would help create a spectrum road map — market transactions now, auctions up ahead, and sharing as an option to explore.
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