Friday, November 22
November 21, 2013 10:13PM ET | Bloomberg BNA
American innovation has led to massive adoption of cutting-edge communications and entertainment technologies. Functionalities and services once wondrous and new are now commonplace. A step back reveals how far and how fast we’ve come. In 2000, television changed forever as TiVO introduced us to time shifting, the ability for consumers to record and watch TV programs at the scheduled hour of their choosing. That same year, our Internet and telephone experience was enhanced as cable modems began to take hold in American homes. The following year, we saw the first iPod, and how we buy, store, and listen to music has never been the same. The iPhone (2007) and iPad (2010) gave birth to a revolution in the use of mobile data.
Unseen but ever-present wired and wireless broadband networks provide the foundation for the high-quality video, voice and Internet services that Americans have welcomed with historic enthusiasm, as they have been adopted by in the home and mobile users at a stunning pace.
During the past decade, under our feet and above our heads, the nation’s broadband service providers have invested tens of billions of dollars to bring high-speed wired and wireless connections to our homes and businesses and in the process have reshaped almost everything about how we communicate. Because of these investments, we constantly have available a seamless stream of voice, data, and video on demand.
Today’s digital networks offer boundless opportunity—boosting economic growth and job creation; through remote monitoring and telemedicine, bringing world-class medical care to remote communities and easing the burden of chronic conditions; improving education for students of all ages by delivering advanced coursework, college classes, and even online degrees through distance-learning programs; maintaining constant communications with business associates, family and friends; and providing entertainment and real-time news, weather, and sports information.
This enhanced connectivity also enables civic empowerment—especially for groups who haven’t always been heard—enabling them to communicate more easily with elected officials and to organize and advocate on their own behalf.
Achieving the next level of broadband investment and enabling faster connections, more capable services and deeper Internet penetration in hard-to-serve areas will be facilitated by policy changes by the FCC. With the commission’s newly arrived leadership, these needed changes should be at the forefront of the agency’s agenda.
While communications of all kinds have rapidly moved to the Internet and broadband networks, the aging copper-wire, circuit-switched telephone network remains in place, using the same technology Alexander Graham Bell pioneered. It offers plain old telephone service (POTS), and Americans are fleeing it in droves at an ever-accelerating pace. Only 5 percent of Americans use the old network as their exclusive communications medium. Another 38 percent use it in combination with wireless service, and most Americans use wireless communications only or rely on a combination of wireless and a wired alternative to the telephone network, such as cable modem service.
We stand at an inflection point where the rules that were sensible in the last century for a heavily regulated circuit-switched telephone monopoly are no longer sensible in today’s competitive communications landscape dominated by broadband and a multiplicity of Internet-enabled services. The requirement of current law that telephone companies spend billions annually maintaining a single-function, aging network that consumers no longer prefer is impeding the next level of broadband investment. Planning and delivering a rapid transition to an all-broadband communications environment is the greatest challenge that the new FCC chairman faces.
A Change Requiring New Policy
In its time, the phone network was a culture-changing technical marvel that introduced nationwide communication through copper wire, erasing geography and reliably enabling Americans to dial business contacts, friends, family, and neighbors anytime, anywhere.
During the early and mid-20th century, access to telephones grew rapidly as government aided and promoted a monopoly to accelerate network build-out to reach all Americans. As telephone service became nearly ubiquitous in the latter half of the last century, technological and market advancements created the possibility for alternative satellite, wireless, and landline communications for businesses and consumers.
Realizing the potential benefits that the array of digital technologies could provide, the U.S. government ended the phone monopoly, and with passage of the Telecommunications Act of 1996, began to chart a course toward more robust competition and entrepreneurship in the nation’s communications marketplace. Consumers were first offered choice in the long distance telephone market. Then new providers, such as cable companies, built out broadband networks to offer competitive wired residential telephone and Internet services. The door was opened for telephone companies to offer cable TV service, and digital networks were developed that could accommodate it.
As the reliability of wireless communications increased and access to broadband services has expanded, American consumers at work and in the home have embraced them with a passion. Modern broadband communications systems now link us to the Internet; move information, data and video at lightning speed; and carry our voice “phone” calls, too. These are the networks consumers prefer, and the transition away from the antiquated telephone network is occurring with remarkable speed. As society now treasures its smartphones and tablet devices, streaming videos, GPS guidance systems, and other electronic wonders, we forget that little more than a decade ago personal communications was still largely about POTS. Current law still assumes that most communications are delivered by the POTS network.
Existing regulations were created in a world where heavily regulated phone companies provided copper wire voice service, lightly-regulated cable companies delivered TV, and wireless companies offered services deemed too unreliable to compete with wired telephone service. In fact, these rules still compel telephone companies to invest nearly $13.5 billion each year to maintain and run the old copper phone system as if it were still the nation’s core communications system used by almost all.
Too Much Investment to Maintain Old Technology
As the number of telephone company subscribers on POTS sharply falls, the per-subscriber cost of maintaining the old network has become unsustainable. According to a recent study, America’s telephone companies made more than $154 billion in capital expenditures from 2006 to 2011. Surprisingly, the majority of that investment was dedicated to maintaining the declining telephone network, even though today only about one-third of Americans still use it at all, and only 5 percent use it exclusively. Every dollar that is spent maintaining a voice-only network that consumers are fleeing is a dollar not invested in the modern multifunction broadband networks that consumers prefer. Every dollar telephone companies spend on an ancient, declining, and little used technology is a dollar not spent developing the more capable broadband infrastructures through which phone companies can become stronger competitors in the offering of voice, video, and data with largely unregulated cable companies. That’s an important goal because when competition is fair and fierce, consumers ultimately win big with competitive pricing and greater choices to fit their personal needs.
Ancient rules and old ways of thinking are undermining innovation, damaging competition, forcing billions of dollars into misdirected capital investment, and slowing our national progress. Maintaining the status quo for the antiquated telephone network—either by decision or inaction—is a costly anachronism. Requiring phone companies to operate voice-only telephone networks while they are building out new fiber-optic broadband networks makes as much sense as requiring a hitching post in front of every store, forcing bus companies to maintain streetcar tracks, or insisting on backup electric fans in every air-conditioned building.
The IP Transition: Six Principles to Consider
The FCC’s 2010 National Broadband Plan is instructive. It observes that the regulations requiring telephone companies to maintain the old phone network “siphon[s] investments from new networks and services” and is “not sustainable.” The report also declares that the transition to “broadband is the greatest infrastructure challenge of the 21st century.” The FCC’s Technological Advisory Council recommended that the transition and sunset of the POTS network be completed by 2018.
That’s not very far away, and meeting that schedule will bring its own unique challenges. Consumers must be protected, and certain populations are at risk of being disadvantaged. Of particular concern are those who are not yet taking advantage of the opportunities created by new digital technologies. For example, late adopters—largely older and less affluent consumers, many of whom reside in hard-to-serve rural areas, who have not yet joined the broadband era—may be at greater risk unless we complete the transition in a carefully planned and orderly way. The transition to 21st century communications networks must serve every American. But that result is not pre-ordained; it will require hard work.
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.
FCC Should Begin Trials Now
Consumer interests are paramount. These core challenges must be met before the book is closed on the antiquated POTS network. Contrary to the claims of some, the post-transition environment will not be regulation free. Indeed, regulation will be necessary to assure consumer protection, but just as networks are modernizing, the regulatory landscape must be modernized as well.
What’s needed is smart regulation appropriate to protect consumers and public safety, promote competition and support universal service, while also encouraging sustained private investment and innovation in America’s next-generation communications networks.
The upgrade and modernization effort will require thought and planning. That’s why we must start now while the existing phone system is available as a “safety net” backup for any potential glitch or surprise that might arise during the upgrade to a new and modern system. No one is proposing a “flash cut” in which the telephone network disappears overnight. This process will, in fact, probably take half a decade to complete.
To take the first step, the FCC should rely on a time-tested method: demonstration projects. Conducting demonstration trials in carefully selected markets in which existing POTS users are rapidly moved to Internet protocol-based networks will provide a controlled environment for an accelerated transition with the existing telephone network still in place as a safety net.
This approach gives consumers an assurance that if any unexpected problems causing consumer disruptions arise, service can continue over the telephone network while technical and service issues are resolved. Through the demonstration projects, we can determine what is likely to go wrong and have solutions in place prior to a broader national transition.
The FCC has a recent successful precedent for taking precisely this step. In the nation’s transition from analog to digital television broadcasting, the FCC conducted a similar test. Leading up to the digital TV conversion, some warned of potential negative consequences for consumers. The warnings were similar to those we are hearing about the transition from POTS to modern networks. In particular, the articulated fear was that switching to digital television broadcasts would harm consumers, particularly the elderly and less technically savvy viewers who decide to keep their older analog television sets but would experience difficulty installing the required converter box to receive and convert the new digital broadcasts. The circumstance of rural and lower income viewers was a particular focus. To address these concerns, the FCC launched a demonstration project in Wilmington, N.C., an area with a wide diversity of viewers, including those with low incomes, the elderly, and viewers living in both metropolitan and rural areas.
The FCC’s Wilmington demonstration project proved a success. It provided clear evidence that on the day analog broadcasts ended, viewers were prepared. There were almost no complaints. Analog television users across the Wilmington region had successfully installed digital-to- analog converter boxes. The trial inspired confidence that the national transition could proceed uneventfully, and on national transition day, very few problems were encountered.
Employing the same model, the FCC should now move quickly to authorize closely supervised demonstration projects in selected markets, perhaps one urban and one rural, where people quickly shift from existing telephone networks to modern broadband networks. The demonstration projects offer a test bed to guarantee that core consumer values will be protected, to learn what may go wrong in a controlled rapid transition and to devise solutions for problems that in fact arise prior to a broader national transition.
While the attraction of broadband networks has propelled a POTS-to-broadband transition that is now well advanced, we owe it to ourselves to plan and complete it on the schedule that the FCC’s Advisory Council recommended. Applying the knowledge gained through demonstration projects we can accelerate the POTS phase-out and realize the benefits of greater network functionality, a broader array of services for consumers and the economic efficiencies that come from devoting investment to the networks of the future rather than the network of the past.
Public-Private Partnership Needed for New Road Map
For the moment we have the luxury of time to conduct demonstration projects, but an additional sense of urgency for action is now apparent. The current telephone network is supported by antiquated equipment, and as consumers have continued their ongoing migration to the new networks, equipment providers either no longer manufacture or have significantly scaled back production of the TDM (time-division multiplexing)-based equipment necessary to maintain and operate the POTS network. As fewer replacement parts become available, maintaining the phone network grows dramatically more expensive, further skewing the ratio between investment in old and new technologies, with the ever-escalating costs being passed on to consumers. All Americans stand to benefit from shifting investment to modern networks that offer consumers service as least as good as what they enjoy today, as well as the greater functionality that broadband networks can offer.
A public-private partnership among all stakeholders—consumers, telecom companies, suppliers, and regulators—will be needed to establish the rules of the road for the new network. These stakeholders can embrace key principles—recently outlined by the leading consumer advocacy organization Public Knowledge—service for all, competition, reliability, consumer protection, and public safety.
Simply providing access to new technology while protecting core consumer values, however, isn’t the whole job. We also must boost adoption rates, educating every American about what the transition means, how it will affect them and how by using broadband they can improve opportunities for themselves and their families. We can’t afford to leave any American in the dark about the value of broadband; we can’t leave anyone behind.
So the real questions surrounding the IP transition are not whether, but when; not if, but how. Bipartisan support exists in Congress for the transition itself and for the basic principles that should be at its core, including consumer protection, universal service, network reliability, competition and public safety. Now is the time for all stakeholders to work together, starting with the demonstration projects, to ensure that the transition’s rapid final phase proceeds as smoothly as possible.
New FCC Chairman Embraces Need for Quick Action
The Internet’s evolution has brought us to another critical juncture in communications policy as we consider how to complete the transition from the bygone era of plain old telephone service to the broadband future of the 21st century. It’s a critical transition, given broadband’s increasingly dominant role in every part of our economy, as well as its ability to improve lives and advance economic growth. It’s also something that just about every stakeholder, including the FCC, regards as inevitable.
In 2011, the Technological Advisory Council led by now-FCC chairman, Tom Wheeler, noted that “[t]he FCC should take steps to prepare for the inevitable transition” from the old network and in fact “take steps to expedite the transition, with a target date of 2018,” including the need to “re-align regulatory requirements to emerging technologies.”
The recommendation reflected vision and foresight then, and provides an ambitious but achievable agenda now. When it’s achieved, Americans will have access to reliable networks designed specifically for broadband voice, video, and Internet services, rather than antiquated networks that support phones wired to the wall. Every app, every smartphone and tablet, every desktop computer will smoothly connect consumers to the online experience of their choice—telemedicine services for better health, virtual classrooms for lifetime learning, their legislators’ offices for civic engagement, a job opportunity, a business contact, a sporting event, a movie, friends and family across town or on the other side of the world. That’s the goal—delivering the services consumers want. Upgrading and modernizing our 20th century telephone networks will get us there.
This goal now appears closer on the horizon than ever before. In one of his first official acts, Chairman Wheeler has made clear the need to speed the “Fourth Network Revolution,” recognizing how “new networks catalyze innovation, investment, ideas and ingenuity.” He stated that “the time to act starts now” and proposed a timetable for FCC action in January 2014 on how to “begin a diverse set of experiments that will allow the commission and the public to observe the impact on consumers and businesses of the [IP transition and proposed demonstration projects].” In setting this course, the new chairman has jump-started the process and appears ready to steer the FCC toward addressing the key policy, technical, and consumer issues necessary to bring 21st century high-speed broadband to more Americans.
In our land of opportunity and innovation, we’re a place of relentless creativity. At the core of our success is an entrepreneurial culture powered by private sector investment. In that American tradition, it’s incumbent on us to ensure that the benefits and opportunities of next-generation networks and services become widespread and available to all. The POTS-to-broadband transition will free the needed investment. The next steps for us to take are now clear.
Reproduced with Permission from The Telecommunications Law Resource Center, Copyright 2013, The Bureau of National Affairs, Inc. (800-372-1033) www.bna.com.
Thursday, October 31
America’s 60 million rural residents received an early holiday gift this week when the Federal Communications Commission launched an initiative to improve rural communications. In unanimous agreement, the FCC acknowledged problems caused by the existing tangle of regulations, technologies and business plans that have long affected telephone call completion for some rural customers. This week, the FCC took action to ensure better and more accountable service and connectivity.
This action addresses an outstanding issue that has been around for years. The failure of certain calls to go through to rural Americans resulted from new communications technologies interacting with older telephone networks and the failure of regulations to keep pace in the marketplace. Everyone in America, and particularly those in rural areas, depends upon a reliable communications network. For almost 3 decades I represented rural Virginia in Congress, and I know firsthand of the extraordinary importance rural residents attach to reliable and accessible communications.
So, as we look across the communications landscape, we see changes everywhere. More than 40 percent of homes today are wireless-only, and almost that same number receive their phone service through a broadband provider. In Florida and Michigan, to pick two representative states, only about 15% of homes connect to traditional telephone landlines today. Americans in droves have dropped their outdated non-broadband plain old phone service and are quickly moving to high-speed, advanced broadband networks and services, both wired and wireless.
Some consumer advocates have suggested that rural call completion must be addressed prior to implementing policies necessary to the upgrade and modernization of our nation’s telephone networks to all broadband. It’s an important need which the FCC has now addressed in a positive and thoughtful manner. As the FCC moves forward to promote better and more ubiquitous high-speed broadband access nationwide, moving the few remaining users of outdated networks to more functional connections that provide more varied services, it can best accomplish the goal by modernizing its regulations to reflect the technologies of today.
I commend the FCC for this week’s action and encourage the Commission to continue its efforts to ensure that regulations match modern technological capabilities. Promoting certainty is the fastest way to ensure that high-speed all-broadband networks become reality.
Wednesday, October 30
Late yesterday, the Senate unanimously approved the appointments of Tom Wheeler and Michael O’Rielly to the FCC. Upon joining the FCC this week, Wheeler and O’Reilly will now bring the Commission to full strength.
The new members join the FCC at a critical time. As my colleague Jamal Simmons wrote back in May (such is the pace of Washington these days), two of the very top issues the Commission faces are the modernization and upgrade of our existing telephone networks and the ever-pressing need to free up more spectrum to meet the increasing demand for wireless broadband by America’s consumers.
To bring next-generation broadband networks to the entire nation, the FCC should approve demonstration tests in several markets, similar to the trails set up by the FCC preceding the conversion to digital television, in order for this major network upgrade to be as smooth as possible. For spectrum, the Commission should move quickly on holding open incentive auctions, rapidly approve secondary market transactions, and work with NTIA in the repurposing of federal spectrum so it can be put to use for consumers.
And the FCC should move rapidly on the ConnectEd initiative, to help ensure access to high-speed broadband for our nation’s students at school and at home. Making that program a reality, along with the two agenda items listed above, will help the FCC make a lasting and highly positive impact on the lives of consumers and the economy as a whole.
On behalf of all of us at IIA, congratulations to Wheeler and O’Rielly on their confirmations, and also congratulations to Acting Chairwoman Clyburn for her steady leadership during the past few months. Now it’s time to roll up sleeves and get to work.
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.
Monday, September 30
It is hard to believe that next month marks one year since Superstorm Sandy slammed into the East Coast, flooding streets, tunnels and cutting power in many towns. Beyond causing $65 billion in damage, the storm highlighted the vulnerabilities of our aging telephone network and the broader need to modernize and upgrade our nation’s communications infrastructure to bring 21st Century services and capabilities to all Americans.
There is an urgent need to complete the upgrade of the century-old telephone network, and replace it with a sparkling new broadband communications system that links to the Internet; moves information, data, and video at lightning speed; and carries our voice “phone” calls, too. It’s an exciting change that creates jobs, opens the door to improved schooling, and enhances access to medical care among other benefits.
It also means saying goodbye to a familiar friend – the old telephone network that’s enabled us to chat with friends and family from the comfort of our own homes for more than 100 years. A marvel of the 20th Century, that system is now becoming obsolete, surpassed by broadband technologies capable of delivering phone calls and offering a myriad of new communications services and applications.
The switch to the next-generation network is invigorating; it’s beneficial and, as the consumer group Public Knowledge has pointed out, “It’s inevitable.” In fact, the vast majority of Americans, perhaps 75 percent, have already made the move. Their house phone, which may look and feel just like what they’ve always had, is now connected to and powered by the same broadband technology that connects their computers to the Internet and can deliver high-definition TV programs, as well. With so many making the switch, the old network has grown redundant and increasingly costly to operate and maintain. In fact, some manufacturers have already pulled the plug and stopped making antiquated equipment for the telephone network, such as the circuit switches used to connect calls.
This nationwide upgrade and modernization requires thought and planning, and should be undertaken in a way that protects consumers and assures that basic voice service remains available and reliable. That’s why we ought to do it now – while the existing phone system can provide a “safety net” as a back-up for any potential glitch or surprise that might arise during the complex transition toward a new and modern technology.
Although inevitable, the move to the network of the future is gradual enough that we now have an opportunity to direct and shape it in a seamless way for America’s consumers. Since we know it’s coming, we owe it to ourselves to make sure it happens the right way and ensure that any potential disruptions are minimized for those who choose to arrive late to the high-speed broadband age.
Central to a smooth transition is having public dialogue among all stakeholders – consumers, telecom companies, suppliers, and regulators – to help set the rules of the road for the new network. Under a collaborative process, we should arrive at key principles to guide us – perhaps beginning with five concepts recently proposed by Public Knowledge – service for all, competition, reliability, consumer protection, and public safety.
In addition to overarching principles, important technical activity, such as geographic field tests, must commence to better understand what works and what doesn’t in real life and to find solutions for the issues that will inevitably arise. Such advance testing, similar to the trials conducted for America’s switch to digital TV, is the best way to protect consumers. Trials give us the chance to come up with fixes now while the old telephone network is in place to lessen any potential consumer disruption associated with the switchover.
Upgrading and deploying modern broadband networks in a controlled, supervised fashion with “safety net” functionality in place is far superior to inaction. Beyond the obsolescence that is rapidly diminishing the circuit-switched network, as we witnessed during the past hurricane season, our nation’s older telephone system is highly susceptible to the forces of nature and the physical destruction they can bring.
In the future, when natural disasters obliterate legacy telephone networks, service restoration for consumers and businesses will be achieved through the deployment of new wireless and/or broadband network technologies. Under those circumstances, network upgrades occur without the benefit of the existing copper telephone network and the likelihood of consumer inconvenience and disruption being much greater.
Right now, we have the gift of time to get the path toward modernization right by devising a smart new framework tailored for next-generation communications. But without an action plan, such as starting local market trials, some of that time slips away each day. We need to get working without further delay so that the transition to 21st Century communications is a step forward for all and a step backward for none.
This op-ed was originally published in The Hill.
Tuesday, September 17
There are 3.79 million square miles in the United States, and the federal government controls 30 percent of that land. This vast swathe of federally controlled land is roughly equivalent to the combined size of Alaska, California, Texas and Montana.
So when a White House task force unveils a guide that lays out the best practices for “dig once,” a program aimed to cut the costs of deploying high-speed broadband along federal roadways by as much as 90 percent in certain areas, it’s big news.
This week, the White House Office of Science and Technology Policy (OSTP) released its latest progress report in response to President Obama’s 2012 Executive Order aimed at accelerating broadband deployment on federally-owned property by making the deployment and construction process cheaper and more efficient. Yesterday’s White House action offers a clear cut example of how government can spur greater and more affordable opportunities for high speed broadband deployment.
Access to and the use of high-speed broadband networks and services are critical to sustaining economic growth. The benefits of broadband-based services and websites have increased the nation’s global competitiveness, allowed small businesses to grow and enter new markets, and helped create many new high-paying jobs. President Obama has pushed to bring state-of-the-art communications networks to unserved and underserved communities. He has also sought to expand access to modern broadband networks by providing incentives for private sector investment designed to support new infrastructure deployment.
The White House announcement highlights several steps that will help reduce barriers to private sector broadband deployment, including an advanced mapping program that offers real-time guidance to identify the most efficient wired and wireless broadband deployment locations on federal land. This tool will also help accelerate high-speed broadband deployment by providing industry with real-time information regarding streets that are currently under construction and thus easier to access.
Yesterday’s action includes the creation of a “one-stop shop” for permit forms, lease agreements, and other legal forms to help reduce the significant legal and regulatory costs often associated with deployment of high speed broadband infrastructure. This convenience should create further efficiencies as it will facilitate deployment approvals, particularly when broadband deployment permitting involves multiple Federal and state agencies.
OSTP estimates that these regulatory tools “can reduce network deployment costs along Federal roadways by up to 90 percent.
While the programs OSTP announced this week offer nationwide benefits, rural America, which has trailed in receiving the best broadband access, may benefit most of all. High-speed broadband is increasingly important to farming communities (see here and here). Faster and more affordable broadband enables greater access to e-learning and e-Health opportunities that level the playing field between citizens in cities and those living in rural areas.
Cheaper and more accessible high-speed broadband promises stunning social and economic benefits. It can make better healthcare more accessible and more affordable for those who cannot travel. It facilitates a host of online education options, which may make advanced learning more feasible and affordable for many Americans. Consider for example, a master’s degree in computer science from a respected university for about $7,000!
In short, faster and better high-speed broadband is a necessary step to creating jobs and opportunity at all levels of the economy, and increasing the speed and efficiency at which these networks can be constructed is vital to our nation’s success. Here’s to the Administration for recognizing these realities and taking common-sense steps to provide the tools and guides needed to bring broadband to more Americans. Congratulations and keep up the good work!
Friday, August 16
At Light Reading, our Honorary Chairman Rick Boucher argues that open spectrum auctions will open the door to growth. Here’s a taste:
The Federal Communications Commission (FCC) could hand its equivalent of a winning Powerball ticket to select communications companies in the upcoming spectrum auctions. As the FCC creates rules for the incentive auctions, it has the ability to stack the odds, restricting participation in the auctions by some mobile providers and essentially picking winners and losers among our nation’s carriers.
Today, the wireless industry’s future is in the hands of policy makers. The federal government expects to hold spectrum auctions in 2014 in which air frequencies currently used by broadcast television stations, but well-suited for mobile broadband, will be put up for sale. Much is at stake in the way that the auction is structured and in its ultimate success.
Check out Boucher’s full op-ed over at Light Reading.
Tuesday, July 30
Our Honorary Chairman Rick Boucher has taken to the digital pages of The Street to argue for smart spectrum policies. Here’s a taste:
Limiting the amount of spectrum these carriers can acquire would potentially rig the auction results, prevent some carriers from getting the spectrum necessary to give customers the service quality they demand, and forestall future wireless innovation. It’s also at odds with Congress’ clear preference for a competitive, level playing field among qualified bidders.
With fewer qualified participants, the auction is less likely to meet Congress’ desire to maximize auction proceeds to fund a planned nationwide public safety broadband network, to compensate broadcasters for the auction of their spectrum and to reduce the federal budget deficit. A recent Georgetown University study contends that severe bidding restrictions could cut revenues by as much as 40%.
Check out Boucher’s full op-ed at The Street.
Friday, July 12
Last Wednesday, just before Americans fired up barbecues and fireworks, the FCC approved the sale of Sprint to SoftBank. The deal is worth a reported $21 billion, with SoftBank now owning 78% of America’s third largest wireless company.
Acquiring Sprint gives SoftBank more than a foothold in the highly competitive U.S. wireless market. Thanks to Sprint’s long-standing deal with wireless broadband provider Clearwire — a deal fully consummated when Sprint recently purchased 100% of the company — the Japanese firm is also taking control of a company with a clear lead when it comes to all-important spectrum holdings. In fact Sprint now owns more spectrum than any other wireless carrier.
There’s certainly nothing wrong with that. Due to the explosive growth of mobile broadband, providers are constantly on the hunt for more airwaves. But there is an issue in how Sprint positions its vast spectrum holdings with the FCC.
The last time the FCC updated its spectrum screen — its guide for keeping the wireless market competitive, among other things — was in 2008. In that update, the Commission decided to leave out the majority of Clearwire’s 2.5 GHz spectrum — airwaves that were then, and continue to be, used for mobile broadband.
That’s a sizable chunk of airwaves left out of the FCC’s screen, and as the Commission continues to crafts its upcoming spectrum auctions, it should definitely reconsider its previous decision to exclude it.
That is precisely the opposite of what Sprint wants to happen. The company, despite now being the clear spectrum winner in the U.S. wireless market, continues to argue that two-thirds of Clearwire’s 2.5 GHz spectrum — which was a driver of Sprint’s decision to buy all of Clearwire in order to better position itself for SoftBank’s interest — should still be excluded. They argue, even though they employ these airwaves for mobile broadband, that it’s essentially unsuitable for mobile broadband.
If that argument seems confusing and confoundingly at odds with reality, that’s because it is.
Sprint’s endgame is not confusing, however, as they’re clearly trying to position themselves as a weaker player when it comes to spectrum holdings. It’s a savvy business move, but given how important mobile broadband is becoming to the American economy, it’s also an unfortunate one.
Every provider is in need of more spectrum. They need it to keep up with the demands of their customers, and they need it to keep up with the speed of innovation. The FCC’s spectrum screen is an important tool in the Commission’s toolbox. But it needs to encompass all holdings in order to be effective.
Thursday, June 27
Yesterday, IIA partnered with the Joint Center for Political and Economic Studies and the Digital Policy Institute to host “X-Factors of Tech Policy Today: Keeping Pace in the Broadband Race.”
Participating in the discussion were:
• Ralph B. Everett, Esq. – President and CEO, Joint Center for Political and Economic Studies
• Robert Yadon, Ph.D. – Director, Digital Policy Institute
• Barry Umansky, J.D. – Senior Fellow, Digital Policy Institute
• Rick Boucher – Former Congressman; Honorary Chairman, Internet Innovation Alliance
• Maurita Coley, Esq. – Vice President and COO, Minority Media and Telecommunications Council
• John Horrigan Ph.D. – Vice President and Director, Media and Technology Institute, Joint Center for Political and Economic Studies
• Louis Peraertz, Esq. – Legal Advisor, Wireless, International and Public Safety, Office of Acting FCC Chairwoman Mignon C. Clyburn
After Ralph Everett welcomed the crowd and made introductions, Robert Yadon kicked things off by highlighting struggles in the state of Illinois to fully take advantage of technology as a driver of economic recovery. By increasing STEM graduate rates and creating a climate of entrepreneurship, Yadon argued, Illinois could greatly benefit. “States with a solid fiscal policy, light regulatory touch, and educated workforce are most attractive for business and investment,” Yadon said. “The same is true at the national level.”
During the panel discussion, moderator Barry Umansky went right at the issue of spectrum:
One key element of the IP transition is global wireless, which depends upon spectrum. Earlier this year, the U.S. Department of Justice suggested that in the upcoming incentive auctions, limits be imposed on the ability of the larger wireless carriers to participate. Why is or isn’t this a good idea?
Tackling the question, our own Rick Boucher highlighted the fact that mobile data services are growing at five times the rate of the national economy. “This is a consumer issue,” Boucher said. “Consumers have the right to assume that carriers will be able to meet increasing demand.”
Boucher also warned that limiting participation from some carriers would negatively impact more than consumers, stating:
Government needs revenue from the incentive auctions in order to build out the first responder network. Broadcasters have also been promised revenue from putting forward spectrum for auction. The more bidders included in the process, the more revenue will be generated, and the more broadcasters will be willing to provide spectrum.”
All the panelists agreed that freeing up more spectrum for wireless as especially critical for minority and economically disadvantaged communities, which are embracing mobile broadband are a rapid rate. As Minority Media and Telecommunications Council Vice President and COO Maurita Coley put it:
Policies should encourage moving forward with auctions and bringing spectrum to market, and ensure that minority entrepreneurs have the opportunity to participate in auctions. The FCC has the ability to ensure that minority and underserved consumers are not left behind.
The other hot topic during the discussion was the coming transition to all-IP networks. As Umansky asked the panelists:
The FCC Technical Advisory Committee, formerly headed by Chairman Nominee Tom Wheeler, has recommended that the FCC take the steps necessary to sunset the PSTN (Public Switched Telephone Network) by 2016. What are the policy implications of a near-term sunset for broadband deployment and consumers?
In response, Rick Boucher pointed out that current regulations are getting in the way of progress:
While only 25% of customers remain on [the PSTN] network, carriers are forced by law to maintain 100% of the old networks, and the cost of carriers maintaining older networks is the opportunity cost of investment in the new ones.
Boucher also encouraged the Commission to help speed up the transition to all-IP networks. “Consumer interest must be regarded as an informed priority,” he said. “A faster sunset will mean a faster delivery to consumers of services over modern networks.”
Back to the topic of competition, a member of the audience asked what the FCC’s ideal number of players was for a competitive marketplace. In response, Peraertz said:
For [Acting FCC Chairwoman] Mignon Clyburn, there is no set number of players. We look for ways to take a more detailed look at wireless market structure and promoting access for low income and underserved communities.
These were just some of the many highlights from what turned out to be a lively and highly informative discussion. If you’d like to watch the entire event, archived video is available here.
Wednesday, June 26
If you missed our “X-Factors of Tech Policy Today” discussion this morning, here’s video of the event. Our thanks to the Joint Center for Political and Economic Studies, the Digital Policy Institute, and all the speakers for a lively and important discussion.
Video streaming by Ustream
Friday, June 21
Via John Eggerton of Broadcasting & Cable, the House Communications Subcommittee has penciled in June 27 for a hearing on wireless spectrum:
The Subcommittee hearing is titled “Equipping Carriers and Agencies in the Wireless Era,” and will include witnesses from the government and private sectors talking about the needs of wireless companies and government agencies “in a time of limited spectrum and financial resources.”
Things could be looking up for congested wireless networks, with President Obama newly focused on America’s spectrum crunch. Hopefully, the FCC’s incentive auctions will stay on track for next year, as suggested by Commissioner Rosenworcel.
Tuesday, June 18
In an op-ed for Roll Call, our Honorary Chairman Rick Boucher praises FCC Commissioner Jessica Rosenworcel fresh take on spectrum policy, writing:
FCC Commissioner Jessica Rosenworcel… is one official advocating for a more comprehensive approach toward spectrum policy. “To successfully solve this puzzle, we must look at the whole picture. We must address these pieces together,” she said.
Rosenworcel urges an open process, including public hearings, to set rules for the incentive auction in which TV broadcasters who choose to participate will say how much spectrum they will give up and at what price, so the FCC can then resell that spectrum to wireless providers.
She also called for speed and a clearly stated timetable so that wireless service providers can plan their spectrum strategy, TV broadcasters can make final decisions about giving up some of their spectrum, and consumers can be confident that wireless services will be reliable.
“All good deliberations must come to an end,” she explained in calling for a traditional auction of 65 MHz of spectrum in the third quarter of 2014 and the larger incentive auction in the fourth quarter. To make that happen, she said a “bandplan” for assembling the auctioned spectrum must be in place by the third quarter of this year. She has proposed a new approach for spectrum now in the hands of federal government agencies, which control approximately 60 percent of the critical asset.
You can read Boucher’s full op-ed at Roll Call.
Monday, June 10
Speaking of spectrum and the FCC, in an op-ed for the Wall Street Journal, Robert Hahn and Peter Passell — the former a professor at the University of Oxford, the latter editor of the Milken Institute Review — argue the Commission’s spectrum auctions must be open to all bidders willing to invest and deploy airwaves quickly:
There is still an important role for the FCC in regulating wireless, but it is limited. The first priority should be making more spectrum available to the highest bidders by accelerating the pace of government auctions. Once spectrum is sold, owners should be free to resell it to other wireless carriers (or to other industries that value it more). For without more bandwidth (and free-market allocation of privately controlled spectrum), access to data-hungry services like HD video will be undermined, along with the incentives to develop the next generation of wireless devices.
There’s no denying the temptation to intervene on behalf of the underdogs in the marketplace. But the lessons from the long, checkered history of economic regulation are painfully clear: The cures are often worse than the disease.
For similar thoughts, see this blog post from our Honorary Chairman Rick Boucher.
Thursday, May 30
Last week Apple announced the 50 billionth app download, despite the App Store being open less than five years. This benchmark is compelling evidence of a vibrant wireless market. However, as more and more Americans embrace mobile technology, wireless providers are running out of spectrum, the wireless airwaves that underpin the mobile industry.
This shortage could affect wireless service. Without additional spectrum, wireless broadband service will deteriorate. Mobile videos could freeze; downloads might take longer; phone calls could drop. None of the nearly half of Americans who own a smartphone want this to happen.
To avoid this looming problem, more spectrum must be made available for consumer wireless use. A wireless auction, designed to reallocate broadcasters spectrum to wireless carriers, is scheduled for 2014.
Not only could this auction provide much-needed additional spectrum for consumer use, but it could raise as much as $26 billion for the federal treasury. A recent study by the Center for Business and Public Policy at Georgetown University sees it as high as $31 billion. Some of this money will go toward building out a nationwide interoperable public safety network. Other monies will go to reimbursing broadcasters for their spectrum.
However, the FCC is considering adopting auction rules that would favor certain wireless service providers over others. Rather than pushing for an open and competitive auction in which all qualified bidders can bid, the Department of Justice and others seek restrictions on who can fully participate in the auction. The aforementioned study found that limiting who can participate in the auction risks the auction’s success. It went on to say that restricting some bidders could mean $12 billion in lost revenue to the federal government.
Moreover, in addition to the monetary cost, tampering with the auction could delay President Obama’s goal of delivering broadband to 98% of Americans by curtailing the expansion of mobile broadband access. The Georgetown study estimates that predicted higher prices could cause fewer Americans to adopt 4G by 2017.
In short, consumers will pay a cost unless the 2014 spectrum auction is done right. However, if the same rules are applied to all, the auction will succeed and all Americans will benefit from the availability of better mobile broadband connections.
Tuesday, May 14
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.”
For further reading, check out FCC Commissioner Ajit Pai’s statement on the FCC’s Public Notice.
Monday, May 06
In an op-ed for the Huffington Post, American Consumer Institute for Citizen Research President Steve Pociask worries the FCC may end up hurting consumers with its upcoming spectrum incentive auctions:
A basic principle of any well-designed auction process is that it is open and competitive. However, there are some unsettling news reports that this basic principle may be in jeopardy. For one, there has been some recent coaxing by the Department of Justice that the FCC may want to consider favoring its auction to benefit some small wireless providers over larger ones. Along the same lines, there have been suggestions that the FCC may consider rules to prevent the largest two wireless providers, AT&T and Verizon, from participating in the upcoming auctions. If recent headlines and comments from the FCC Chairman are any indication, Sprint and T-Mobile are “getting stronger” and the reality remains: “Every mobile operator out there, including the largest ones, needs more spectrum.”
Here is the problem—protecting competitors does not help competition, and that hurts consumers. Any action by the FCC that would intentionally benefit some competitors at the expense of others runs counter to the intent of Congress to constrain the FCC’s ability to limit participation in the upcoming spectrum auctions. When it comes to picking favorites in the market, that choice should stay with consumers, not regulators.
Back in February, our own Honorary Chairman Rick Boucher had similar thoughts on the FCC’s auctions:
History has shown that when the FCC has tried to pick winners and losers in the wireless market, American consumers have lost. Past attempts by the Commission to favor certain bidders and/or impose rigid regulations on auction winners have drastically diminished auction proceeds, left major blocks of spectrum unused, and led to what FCC Chairman Julius Genachowski himself has labeled “America’s looming spectrum crisis.”
Friday, April 26
Our Honorary Chairman Rick Boucher has an op-ed in The Hill on the need to modernize regs to keep up with today’s technology. Here’s a taste:
the development of the Internet has brought us to another critical juncture in communications policy as we consider how to complete the transition from the bygone era of plain old telephone service to the digital bonanza of the 21st century. It’s a critical transition, given the Internet’s increasingly dominant role in every part of our economy, as well as its ability to improve lives and help achieve important national goals. It’s also something that just about every stakeholder, including the Federal Communications Commission, regards as inevitable. As we move forward, the guiding principle must be to put consumers first.
You can read the full op-ed at The Hill.
Monday, April 01
Our Honorary Chairman Rick Boucher has penned an op-ed for Reuters on the transition to all-IP networks. Here’s a taste:
As with the adoption of any new technology, the move to IP networks offers challenges and opportunities. A majority of Americans have already changed from voice-only telephone networks. Roughly 93 percent of U.S. households subscribed to switched-access phone service a decade ago, according to USTelecom, today it’s less than one-third and is projected to decline to one-quarter of households by the end of 2013.
Moving the dwindling number of consumers still on copper technology will likely require a public-private partnership that can ensure no one is left behind while also providing access to affordable 21st century technologies.
You can read the full op-ed at Reuters.