Monday, December 08
As with most heated debates, the current net neutrality kerfuffle has been heavy on rhetoric and light on facts.
Sure, those of us who believe the Internet has thrived — and will continue to thrive — without the heavy mitts of regulation point to study after study after article (most recently from the Progressive Policy Institute, of all places) warning that Title II reclassification would do much more harm than good for the open Internet, but facts and research aren’t nearly as effective as facetious cries about a “two-tiered Internet!” and “They are coming for your Netflix!”
That being said, since I’m a glutton for punishment I’m going to highlight yet another article, this one penned by economist (and IIA friend) Bret Swanson for the Wall Street Journal.
Swanson’s piece has a blunt title — “The U.S. Leads the World in Broadband” — and rather than shouting about the Internet sky falling, he crunches some numbers to show that… well, just what the title says.
From his piece (which is behind a paywall):
Mr. Obama recently called on the FCC to impose “the strongest possible rules” on Internet service providers to make sure they don’t “limit your access to a website” or “decide which online stores you should shop at or which streaming services you can use.”
Neither of these rationales for regulatory intervention is true, however, and there’s a simple way to show it. An international comparison of Internet traffic can tell us about the quality of broadband networks and the vibrancy and openness of content markets. Traffic represents all the bits flowing over our networks—email, websites, texts, chats, photos, digital books and movies, video clips, social feeds, searches, transactions, cloud interactions, phone and video calls, interactive maps and apps, software downloads, and much more.
And just what did the numbers tell Swanson?
What I found was that at 18.6 exabytes (18.6 billion gigabytes) a month, the U.S. generates far more traffic per capita and per Internet user than any other major nation save South Korea, which is a vertical metropolis and thus easy to wire with fiber optics. U.S. traffic per capita is 2.1 times that of Japan and 2.7 times that of Western Europe. Several years ago, U.S. and Canadian traffic measures were similar, but today the U.S. has raced ahead by 25%.
The U.S. lead is similar in traffic per Internet user, which tends to reflect how intensely people use broadband and mobile connections. The U.S. outdoes its closest European rival, the U.K., by 57%. The U.S. outdoes all of Western Europe—the best comparison in terms of geography, population and economic development—by a factor of 2.5.
All due respect to my friends and colleagues on the other side of the Title II debate, but does that look like the U.S. broadband market is hurting? Is the Internet really in need of saving by the unelected officials at the FCC?
Perhaps the most exacerbating thing about the Title II argument is the fact that both sides want essentially the same thing — for the Internet to stay open and thriving. What we disagree on is which tool, if any, the FCC should use.
Given the very real threats of reduced private investment in, and increased prices for, broadband that Title II could usher in, the choice should be simple. As Swanson writes:
The U.S., with 4% of the world’s population, has 10% of its Internet users, 25% of its broadband investment and 32% of its consumer Internet traffic. The U.S. policy of Internet freedom has worked. Why does Washington want to intervene in a thriving market?
Monday, December 01
As the FCC continues to mull its path toward ensuring net neutrality, none other than the Progressive Policy Institute has published new research highlighting just how much damage Title II reclassification could mean for consumers. An excerpt:
Self-styled consumer advocates are pressuring federal regulators to “reclassify” access to the Internet as a public utility. If they get their way, U.S. consumers will have to dig deeper into their pockets to pay for both residential fixed and wireless broadband services.
How deep? We have calculated that the average annual increase in state and local fees levied on U.S. wireline and wireless broadband subscribers will be $67 and $72, respectively. And the annual increase in federal fees per household will be roughly $17. When you add it all up, reclassification could add a whopping $17 billion in new user fees on top of the planned $1.5 billion extra to fund the E-Rate program. The higher fees would come on top of the adverse impact on consumers of less investment and slower innovation that would result from reclassification.
We can all agree that the Internet must continue to be open, but as the Title II debate shows, not everyone seems to understand just what reclassifying Internet service would mean. Hopefully, research from the likes of the Progressive Policy Institute will help bring everyone up to speed. You can check out their full report here.
Tuesday, November 18
Our Honorary Chairman Rick Boucher has an op-ed in The Hill on how outdated regulations are limiting competition when it comes to broadband. An excerpt:
Consumers are fleeing the old network in droves. Only 5 percent use it exclusively, and another 28 percent use it in combination with a wireless service. Two-thirds of communications users have left the old network entirely. Every dollar telcos are required to spend on a network consumers are abandoning is a dollar not spent on deploying the modern networks that consumers prefer. Viewed in this light, the USTA plea for relief is entirely understandable — and it’s entirely justified.
FCC Chairman Tom Wheeler has said he wants more “meaningful competition” in high-speed broadband, particularly between telecom companies and cable providers. As Wheeler put it, these new broadband entrants are “well-positioned to give cable a run for its money, offering consumers greater choice.” This is exactly how it should work.
Check out Boucher’s full op-ed over at The Hill.
Friday, September 05
A new paper from Progressive Policy Institute Senior Fellow Hal Singer and Brookings Non-Resident Senior Fellow Robert Litan examines the effect Title II regulations could have on investment and the Internet ecosystem as a whole. An excerpt:
Imposing public-utility style regulation on Internet access would dampen innovation and investment in more, faster broadband. We propose the FCC implement the same case-by-case process to adjudicate discrimination complaints it has established for cable companies to broadband providers.
It’s not just investment from traditional ISPs that could be negatively effected, Singer and Litan also warn. Many companies that provide services on the Internet could also find themselves among those regulated under Title II:
Reclassifying Internet access as a “telecommunications service” under Title II, as supplemented by the provisions of the Telecommunications Act of 1996, opens up the possibility that other tech services meet the same test. The clearest example would be Google’s ultra-fast broadband service, Google Fiber, which the company is gradually rolling out. But it does not stop there. There is a very slippery slope from subjecting ISPs as common carriers to including other forms of Internet transmissions, because they arguably use “telecommunications services,” the legal hook in Title II for its application.
For example, why not then include within the ambit of a telecommunications service the linkage to an advertiser’s website that Google and Microsoft provide for users of their search engines? By clicking on links, the search engine uses the Internet backbone; if Internet access is a “telecommunications service,” because it provides “transmissions,” then so, too, are the search engines. The same logic potentially applies to Amazon’s Kindle book reader device and service, because its owners are able to download books from Amazon, but only because they are connected to a wireless provider of Internet access in the process. Indeed, what would stop the FCC from classifying as Title II common carriers all device makers that have a connection to an ISP?
It’s not all concern and dire warnings in Singer and Litan’s paper, however, as the duo argue the FCC should focus its efforts on something already within its power:
[W]e think the FCC should eschew the heavy-handed approach of Title II regulation, and lean instead on its Section 706 authority to regulate potential abuses by ISPs on a case-by-case basis. Investment across both edge and content providers will be greater compared to Title II, and the FCC can avoid any unintended consequences such as creeping regulation that encompasses content providers or other ISP services.
Check out the full paper, “The Best Path Forward on Net Neutrality,” over at the Progressive Policy Institute.
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, August 05
Over at The Huffington Post, Kristian Ramos — self-described “tech nerd” and one of our Broadband Ambassadors — writes about the new study from Anna-Maria Kovacs released last week. An excerpt:
Expanding consumer options and preferences has forever broken down traditional standalone wire line, wireless, cable and broadcast services. According to Kovacs, 89% of households subscribed to wireless voice by the end of 2013, either by itself or in combination with some supplemental type of wired voice service.
Additionally, 29% of consumers prefer the blend of wireless service with plain old telephone service (with voice capabilities) and 22% with voice over internet protocol. Those figures are corroborated by a recent Pew Research Center study, which shows that as of 2013, 70% of adults had fixed-broadband access from home, a number that rises to 80% when access via smartphone is included. And most notable, are the 38% of consumers who rely solely on wireless.
Given this data it is clear many households are combining some form of fixed broadband (including some forms of fixed wireless) with mobile wireless broadband. All of this underscores the need for a new regulatory network framework based on the recognition of the diversity of consumers and the various choices they have today in a 21st century broadband world.
Check out Ramos’s full piece over at The Huffington Post.
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.
Thursday, June 26
Via Mike Dano of Fierce Wireless, a new report predicts that investment in wireless networks won’t be slowing down anytime soon — assuming policymakers don’t throw a wrench in a well-oiled machine, that is. As Dano writes:
According to a new report from the Telecommunications Industry Association, U.S. wireless carriers will spend a total of $159.3 billion on wireless network equipment and infrastructure during the next four years, up fully 40 percent from the $113.9 billion in cumulative spending during the previous four years.
Wireless carriers have been some of the biggest investors in America’s economy for years now, which is one of the reasons placing heavy-handed regulations on the industry is a really bad idea.
Tuesday, February 11
Any update to the Communications Act will take a while to make happen, especially since — as Julian Hattern for The Hill highlights today — the Senate is unlikely to get started soon:
The Senate won’t be following the House’s lead this year to overhaul the sweeping law regulating the TV, radio and other communications services, which has not been updated since the rapid growth of the Internet.
The House Energy and Commerce Committee has begun to probe ways to bring the Communications Act into the 21st Century, but Sen. Mark Pryor (D-Ark.) said on Tuesday that the Senate Commerce Committee, of which he is a member, probably won’t be following suit in 2014.
“I doubt we’ll do anything this year but I know that the House has been saying that they want to open that and certainly we’ll be seeing what they want to do,” said Pryor, chairman of the Senate Commerce subcommittee on Communications, at a winter meeting of the National Association of Regulatory Utility Commissioners in Washington.
Still, any step toward updating the relic of an Act is a positive one. As our own Rick Boucher — who played a major part in the last update of the Communications Act — wrote in a recent op-ed for Roll Call. As Boucher wrote:
Today, the FCC is both catching up and leading. It must catch up to the large majority of Americans who have made their own personal transition to smartphones, tablets and other devices that provide 24/7 connectivity to the Internet and its treasure trove of information and entertainment. At the same time, the agency also must lead by joining Congress in crafting an updated regulatory framework that supports continued innovation and network expansion and extending a helping hand to guide the minority of Americans who have not yet joined the digital world.
To complete the journey, Congress and the FCC must clear the road of outdated rules that made sense for the telephone monopoly era of the 20th century but which now slow the shift to the multitasking digital networks of the future. For example, the old rules require local phone companies to invest billions of dollars every year in the old voice telephone network that droves of Americans abandon every day. Every dollar spent on the aging, single-purpose analog phone system consumers are fleeing is one less dollar invested in multifunctional modern digital networks consumers prefer.
Thursday, February 06
Back in 1996, our Honorary Chairman Rick Boucher played a major role in crafting the Telecommunications Act. For the Act’s 18th anniversary, he penned an op-ed for The Hill arguing that outdated regulations and the shift to broadband-based networks need to be the focus of any Act going forward. As Boucher writes:
The ’96 Act accomplished everything we intended. It unleashed a golden era of competition, service improvements, technological advancements and massive investments in high-speed broadband-capable networks. With the right public policies in place — policies favoring investments and newer technologies consumers want — this golden age will continue for all Americans.
The transition to IP networks, and the policy modernization that will accompany it, represent the largest telecom changes since the ’96 Act. It’s going to be an exciting several years.
Check out Boucher’s full op-ed at The Hill.
Friday, January 10
At the official blog of the Federal Communications Commission, Chairman Tom Wheeler lays out the Commission’s commitment to achieving the transition to all-Internet based networks. As the Chairman writes:
Among the biggest changes the FCC must confront are the IP transitions. Note the use of the plural “transitions.” Circuit switching is being replaced by more efficient networks – made of fiber or copper or wireless. Greater efficiency in networks can translate into greater innovation and greater benefits for network operators and users alike.
The best way to speed technology transitions is to incent network investment and innovation by preserving the enduring values that consumers and businesses have come to expect. Those values: public safety, interconnection, competition, consumer protection and, of course, universal access, are not only familiar, they are fundamental.
Those very same values were highlighted by our own Honorary Chairman Rick Boucher in an op-ed for Bloomberg Government in November:
Government must play a key role throughout this process by advancing consumer interests with a transition plan guided by core principles. These basic protections will remain government’s responsibility even after the old phone system is shut down:
1. The commitment to universal service must endure. Next-generation high-speed broadband networks and their benefits must be available to every American. As we move beyond the old phone network, we cannot leave anybody behind. Without dictating specific technologies or micro-managing how communications competitors meet their public service obligations, we must push the envelope to ensure that every American can access modern broadband service and enjoy the benefits that come with it. At a minimum, post transition everybody should enjoy service at least as good as they can now receive from copper-wire phone networks.
2. Public safety must be assured. 911 emergency calls must go through—every single time—no matter what technology or services consumers adopt.
3. Services for the hearing-impaired and those with vision problems also must be retained at levels that at least match what consumers enjoy today.
4. Consumer protection must remain at the heart of communications policy. Consumers must know that government has their back; that service providers will deliver on their promises; that spotty service, fraud, or other abuses will not be tolerated. Consumers must have a place to take complaints with confidence that something will be done about them.
5. Establishing a backup plan for power failures should be part of the transition process. The rebuilding after Hurricane Sandy exposed some potential weaknesses in the way our digital technology works today. While fiber-optic-based systems tolerate water damage that can short out copper wires, they are more vulnerable when the electricity at the user’s premises goes out.
6. Special retrofitting and other creative solutions may be required to ensure that modern networks function fully with personal and business equipment such as fax machines, security systems, health monitors, and credit card readers, even though they may not currently be compatible with today’s broadband connections.
While it’s encouraging Chairman Wheeler is taking the plunge when it comes to the IP Transition, in reality it’s just one of the major issues the FCC will face under his watch. As our Co-Chairman Bruce Mehlman argued in December, outdated regulations could make many of the FCC’s work difficult:
At the FCC, Wheeler inherits a regulatory regime designed decades ago for an earlier era. Voice and video services are regulated under separate provisions of the Communications Act of 1934 (Title II and Title VI, respectively) based on assumptions of a permanent monopoly and massive barriers to entry. The Act and its subsequent amendments fundamentally fail to acknowledge the competitive alternatives created by the technological and marketplace convergence of the broadband age. Today’s FCC-enforced regulatory framework was designed for a world without Netflix Inc., Skype Communications, Google Inc., or iPhones — a world without the Internet. Thus, the agency remains stuck in the past, distinguishing among companies based on the technology they use and their legacy status under the Act. Consumers make no such distinctions.
That Chairman Wheeler and the Commissioners at the FCC are already rolling up their sleeves for the IP Transition should be applauded. But it’s just one of many issues the Commission needs to dive into in the next 12 months.
Wednesday, January 08
Via Julian Hattem of The Hill, two Republican lawmakers have taken a deep dive into the 1996 Communications Act and are urging a major overhaul:
Reps. Fred Upton (R-Mich.) and Greg Walden (R-Ore.), who lead the House Energy and Commerce Committee and its communications and technology subcommittee, released a white paper outlining flaws that have emerged since the law was last updated more than a decade ago. The paper is the first action in the multi-year effort to update the landmark Communications Act.
The 1934 law created and outlined the powers of the Federal Communications Commission (FCC), but has not been significantly modernized since 1996.
Updating the law “is critical to ensuring that the communications and technology sectors, the bright spot of our national economy, have laws and regulations that foster continued innovation and job creation,” Upton and Walden said in a joint statement. “This is the first step in a multi-year open and transparent effort and we look forward to broad input from the many interested parties.”
The Reps.’ white paper is available here. On a related note, our Honorary Chairman Rick Boucher — who was chair of the Energy and Commerce Subcommittee on Communications, Technology and the Internet when the 1996 Act was put together, marked the 17th anniversary of the Act back in February. As he wrote then in an op-ed for Roll Call:
Seventeen years after the 1996 Telecommunications Act was signed into law, we find ourselves at another major inflection point. The IP transition is already under way, driven by technological advances and consumer preferences. FCC Chairman Genachowski has taken farsighted steps to create a process for addressing the policy questions that transition brings, and one of the giants of the industry has made helpful suggestions for a national dialogue through a single, focused proceeding for clarity and meaningful participation by all interested parties.
It is my hope that regulators can, once again, come to a consensus on how best to regulate fairly. Only with a level playing field will competition thrive and more investment in America’s broadband infrastructure increase. Let the conversation begin.
Monday, December 09
Recently, the FCC made waves when it announced it was easing restrictions on the use of electronics onboard flights. Over at the Commission’s blog, two members of the FCC explain what they’re after:
Today, technology has evolved to allow the provision of mobile wireless service onboard aircraft without causing harmful interference to terrestrial networks. This has been done internationally for years, and we are confident it can be done here at home – we will develop a full technical record on the proposal to make sure that’s the case.
To be absolutely clear, the FCC is not proposing to mandate that cell phone use be permitted aboard aircraft. Many are concerned that adoption of this proposal will result in a less-enjoyable travel experience caused by other passengers engaging in unreasonably loud phone conversations during flight. As frequent flyers ourselves, we understand and empathize with these concerns, but it is important to keep in mind that it is not within the FCC’s jurisdiction to set rules governing concerns about passenger behavior aboard aircraft. That role is properly left to the FAA and the airlines after consultation with their customers.
Sounds reasonable, as does this line from the same blog post:
The FCC’s proposal reflects its obligation to review and eliminate or modify rules that are no longer justified. As the expert agency charged with overseeing technology policy and interference issues, we believe it is appropriate for the Commission to consider this matter fully.
Here’s hoping the FCC continues to “review and eliminate or modify rules that are no longer justified” as network providers fully upgrade to all-Internet networks.
Wednesday, November 13
Next Tuesday, IIA is teaming up with RocketSpace for a discussion on the future of communication in America. We’re calling it “Next-Gen Networks: Impact on Innovation, Education, Regulation & Economy,” and it will feature some rather heavy hitters in the tech and policy space. How heavy? Well, FCC Commissioner Jessica Rosenworcel for one, Bill Coughran of Sequoia Capital for two, and Vivek Wadhwa, Vice President of Research and Innovation at Singularity University for three.
Our own Jamal Simmons will be moderating.
It all happens Tuesday, November 19 from 12-1:30 pm at RocketSpace, which is located at 344 Pine Street in San Francisco. If you’re the area and want to attend, you can RSVP here.
A new report from Bret Swanson of Entropy Economics (Swanson is also one of our Broadband Ambassadors) looks at the current state of competition in the online space and what that competition means for regulations. Titled “Digital Dynamism: Competition in the Internet Ecosystem,” the report is a lean 20 pages but packed with some startling facts and figures. Some examples:
• Private sector investment in high-speed Internet over the past 15 years amounts to $1.2 trillion.
• As a result of that investment, competition is strong and the U.S. broadband networks rank high globally when it comes to speed, and only South Korea generates more traffic than Americans.
• Due to how dynamic and unpredictable the industry is, top-down regulatory oversight is a major challenge, which highlights the need for a new approach from regulators.
Swanson’s paper also contains a graphic breaking down all the ways communication has changed since 1984. The full graphic is available here, but the image above is worth highlighting. Remember when communication meant phone-to-phone? Well things have certainly changed…
You can check out Swanson’s full report at Entropy Economics.
Friday, November 01
This is a guest post from Floyd Mori, President & CEO of the Asian Pacific American Institute for Congressional Studies, which is an IIA Member.
At the U.S. Capitol last week, a bipartisan group of lawmakers addressed the changing means of communications in our nation. As consumer preferences move increasingly toward Internet-based communications, so full advantage can be taken of the plethora of new and exciting applications, the network of old is going by the wayside.
The Congressional hearing focused on whether the federal regulations that for decades governed the monopoly, single-carrier era of the old, non-broadband phone system are still necessary in an age where consumers have their choice of any number of communications modes, including cell phones and smartphones, Skype, text apps, wired home VoIP, say from your cable provider, among others.
The timing is important. These regulations are based on federal communications laws that stretch back generations and were last updated in 1996, the reflection of a bygone-era, pre-mobile Internet and high-speed connections. That year, as I recall, the cutting-edge products were Compaq PCs with built-in 3Com modems that let us use our telephone lines to dial into AOL — remember the catchy noise that went along with it?
According to the Pew Research Center, 87 percent of English-speaking Asian-Americans use the Internet compared to 74 percent of all adults. However, there are still millions of Americans, particularly minorities, members of the Asian-American community included, who do not adopt or have access to broadband, falling on the wrong side of the digital divide.
But today, as technology modernizes to become better, faster, more capable and dynamic through “Internet Protocol” (IP) technology, outdated regulations hold back progress, and more importantly, increased availability and access to high-speed broadband. As tens of millions of consumers drop their landlines, regulations need to be modernized to free up short-term, unproductive investments in that service in order to deliver new benefits based of the IP system.
What became abundantly clear from the hearing is that federal regulators need to move faster to promote this transformative technology. A good way to start would be for the Federal Communications Commission (FCC) to move expeditiously on a recent request from AT&T to conduct “test-runs” in a few limited markets, under the oversight of the agency. These closely-controlled areas would see a complete communications modernization to all-broadband, complete with all the attendant economic, healthcare, education, and civic participation benefits. During the process, policymakers and stakeholders would work together to monitor progress and ensure that basic consumer protections continue.
For the Asian-American community, this is far more than a technological debate, as the transition to Internet-based communications technology has been shown to have a massive positive impact on issues ranging from healthcare, higher education, the environment, local economies, and civic participation.
Engagement in all areas of government and policy – and community activism at all levels of the political process (a benefit of a connected society) – are integral to diverse communities across the country. In today’s knowledge-based culture, broadband is serving to empower our citizens, giving us the ability and opportunity to elevate and advocate for society’s needed changes on a national and even global platform.
Washington needs to move this process forward, beginning with the FCC’s approval of the trials, so we can all have the opportunity to reap the benefits of a connected, digital world.
Thursday, October 24
Today’s edition of Roll Call features an opinion piece from our Honorary Chairman Rick Boucher on how antiquated rules are slowing innovation. Here’s a taste:
Throughout history, innovation and new technologies have improved the way we live. But each change also required adjustments to maximize the gains. When the automobile overtook the horse, we needed new rules of the road so traffic would flow safely and efficiently. Electric lighting gave us the chance to adjust schedules for efficiency and lifestyle benefits because our day was no longer governed by the rising and setting of the sun.
Similarly, it’s time for smart, modernized telecom rules that promote consumer choice and protect consumer rights, enhance competition, and ensure public safety so that Americans fully enjoy the boundless opportunities of the Internet Age.
Check out the full piece over at Roll Call.
Wednesday, October 23
Earlier today, the House Communications Subcommittee held a hearing on what’s commonly known in the tech industry as the “IP transition.”
That may sound like a rather dry affair, but the issues being discussed are anything but dry or boring. In fact, when it comes to our nation’s communications infrastructure — and, really, the health of our vital tech economy — conversations like the one held today are critical.
While the hearing itself was short on fireworks, it was not without surprises. Both Public Knowledge’s VP Harold Feld and AT&T’s Senior VP Jim Cicconi agreed on much – for example, that well-constructed trials are needed and that as the transition moves forward, certain principles must continue to be adhered to. As Cicconi testified:
[T]his transition from the old to the new should consider things we’ve all come to see as fundamental — universal connectivity, consumer protection, reliability, public safety, and interconnection.
The fact that Feld and Cicconi agree not just on the importance of those “things we’ve all come to see as fundamental,” but on the importance of moving forward with the transition itself, shows just how much things have changed in a short amount of time.
The legacy copper telephone network that has served our country so well for over a century is rapidly being abandoned by consumers, who are increasingly choosing wireless and VoIP for their communication needs. At the same time, providers like AT&T and Verizon are required to continue investing billions maintaining the network of old.
This point was not lost on Rep. John Dingell, who stated during the hearing that the billions now spent on legacy networks “would be better spent on the IP backbone of the future.”
But the IP transition is about more than the direction of investment dollars. As Cicconi told the Subcommittee:
Four years ago the FCC issued a National Broadband Plan as directed by the Congress. That plan concluded that bringing modern broadband services to all Americans is vital, and that to do so we must have communications policies rooted in the future, not the past.
Put another way, if we’re ever going to achieve the goals of the FCC’s National Broadband Plan, the IP transition needs to be encouraged through smart policies. That starts with looking at regulations crafted in 1996 or earlier that no longer apply to — and may in fact hold back — the vast array of choices consumers now have.
Put still another way, the IP transition is really a national broadband goal. The only question, which today’s hearing started to address, is how best to get there.
For AT&T’s part, the company has already put forward a plan with the FCC to conduct “test trials” akin to the one conducted during the transition to digital broadcasting in order to identify any potential problems as the legacy network is upgraded and the few customers who still have legacy service move to modern connections. As Cicconi testified:
We feel trials are critical. As careful as our planning is, no one can anticipate every issue that may arise when we actually transition off the legacy wireline infrastructure. Trials will help us learn while we still have a safety-net in place. And as we learn, all of us — industry, government, customers and stakeholders — can then work together over the coming years to address any problems we find.
On this point too, Public Knowledge’s Feld agreed, although his organization’s vision for how the trials should be conducted differed from AT&T’s. And encouragingly, Rep. Dingell also stated the FCC should “work with AT&T to set IP trials in motion,” adding that the trials would be an “invaluable case study for businesses, government, and consumers.” Rep. Shimkus and Rep. Waxman agreed that we should move forward with the trials, as well.
As Cicconi noted during his testimony, the transition is already well underway, but it won’t be a quick process. Nor should it be, because every time we make a great leap forward, we should know exactly where we’re going to land. Now is the time for all parties to work together on ensuring the transition goes as smoothly as possible. That’s what today’s hearing was about.
Any time you have industry, government, and consumer groups in agreement on something, you know it’s time to act. Today’s hearing was just one of many discussions yet to come on the IP transition, but it was a critical step in the right direction.
Thursday, October 10
Once again Holman Jenkins offers terrific insight into the dynamic broadband marketplace, highlighting the true forces driving investment (competition) and the forces holding back progress (outdated regulations). Referring to Google’s much-celebrated fiber investments in key cities Jenkins observes in the Wall Street Journal:
“Google’s real innovation was to tunnel under the regulatory morass that inhibits physical broadband deployment. Why is Google introducing Google Fiber in Kansas City and not its native California? Google’s own Milo Medin has explained repeatedly that regulatory brambles make California ‘prohibitively expensive.’”
Jenkins turns to the FCC’s failure to launch reasonable proposals to allow carriers to shift investment from older technologies carrying increasingly less traffic, to newer technologies carrying an exponentially growing volume of voice, video and data. The need for modernizing our regulations becomes even more critical when one reads a study authored by Dr. Anna-Maria Kovacs, a visiting scholar at Georgetown’s Center for Business and Public Policy. Dr. Kovacs’ analysis estimated that incumbents telcos spent a total of $154 billion on their communications networks, with more than half maintaining fading legacy networks that carry less than 1 percent of all data.
While so much else is crippled by Washington paralysis, broadband deployment should be freed.
Thursday, September 19
Today, the Progressive Policy Institute released its 2013 list of Investment Heroes. This year, like last year, the telecom and cable sector is a big winner.
AT&T and Verizon once again lead the way in domestic investment, and telecom is second only to the booming energy sector in total U.S. investment. PPI shows that these two companies combined invested nearly $34.5 billion to build-out nationwide high-speed broadband networks and infrastructure. AT&T alone invested almost $19.5 billion. As a sector, telecommunications and cable invested $50.5 billion last year, over a third of the nearly $150 billion invested by the Fortune 150 last year. Such levels of investment are remarkable, but not surprising. With each passing day, Americans witness and benefit from the emergence of the nation’s “data-driven economy,” all driven by U.S. telecom and technology company capital investment. Our data-driven economy is at the forefront of creating new jobs in entirely new industries — like mobile apps — and is a driving force in improving cost structures and the delivery of services in sectors such as healthcare, education, and agriculture.
Broadband providers have done their part to improve the path to economic recovery, demonstrated by their significant investments in America. The progress we’ve seen, however, needs to continue. Billions of dollars of additional private investment is necessary to bring ubiquitous high-speed broadband to every American.
For this to take place, government should adopt policies that create an environment for sustained investment. As PPI notes, government can ensure that upcoming FCC wireless spectrum auctions proceed in an open manner and allow all carriers to bid equally and without restrictions. No one company should be given favored treatment to the disadvantage of its competitors. Moreover, government can also proactively promote additional investment by eliminating existing regulatory barriers and helping to speed the upgrade and modernization of our nation’s antiquated telephone networks, so that more Americans can benefit from the high-speed Internet and video services that next generation broadband networks offer.
It is uncertain that the nearly $50.5 billion in existing telecom and cable investment will continue unless government helps promote additional regulatory and business certainty by adopting wise and timely pro-market investment policies. In the meantime, we owe our gratitude and thanks to the tech and telecom companies who invest in America and help spur innovation, create jobs, and contribute the nation’s economic growth.
Top 25 Nonfinancial Companies by Estimated U.S. Capital Expenditure
1. AT&T - $19.5 billion
2. Verizon Communications - $15.0 billion
3. Exxon Mobil - $12.2 billion
4. Chevron - $10.7 billion
5. Intel - $8.8 billion
6. Walmart Stores - $8.3 billion
7. Occidental Petroleum - $7.6 billion
8. ConocoPhillips - $6.1 billion
9. Exelon - $5.8 billion
10. Comcast - $5.7 billion
11. Duke Energy - $5.4 billion
12. Hess - $4.7 billion
13. Sprint Nextel - $4.3 billion
14. Union Pacific Railroad - $3.7 billion
15. General Motors - $3.7 billion
16. Enterprise Products Partners - $3.6 billion
17. Time Warner Cable - $3.1 billion
18. Microsoft - $3.0 billion
19. Amazon - $2.9 billion
20. CenturyLink - $2.9 billion
21. Ford Motor - $2.7 billion
22. Walt Disney - $2.7 billion
23. FedEx - $2.6 billion
24. Apple- $2.6 billion
25. Target - $2.3 billion
Total Economic Investment - $149.8 billion