IIA Encourages Congress to Craft Legislation
IIA Encourages Congress to Craft Legislation to Avoid Legal Challenges and Market Uncertainty with FCC’s Net Neutrality Decision
Says permanent net neutrality rules will advance Internet openness, continued investment and innovation in broadband economy
WASHINGTON, D.C. – April 13, 2015 – Responding to the publication of the Federal Communication Commission’s (FCC) Title II Net Neutrality decision in the Federal Register, the Internet Innovation Alliance (IIA) issued the following statement:
“Today’s Federal Register publication of the Federal Communication Commission’s Title II Net Neutrality decision starts the clock on potential legal challenges of the agency’s decision, given that its rules will soon take effect. Instead of relying on the uncertain future of public utility regulation soon to be imposed on the Internet, we encourage Congress to use this window of opportunity to craft legislation that sets forth permanent rules to advance Internet openness, and continued investment and innovation in the nation’s vibrant 21st Century digital broadband economy.”
IIA Calls for Narrow, Bi-Partisan Legislation to Permanently Protect Net Neutrality Principles
Says Congress should step in with a non-partisan and long-lasting legislative solution that preserves and maintains the “open Internet” without the burdens of utility-style regulation
WASHINGTON, D.C. – March 12, 2015 – In response to the Federal Communications Commission’s (FCC) release of its net neutrality order, the Internet Innovation Alliance (IIA) issued the following statement:
“Market uncertainty accelerates today with the release of the FCC’s decision to impose public utility regulation on the Internet. Long drawn out legal challenges to the agency’s embrace of Title II regulation without clear statutory authority now await the Internet ecosystem. Yet, Congress can still rescue the nation from this fate by crafting a non-partisan and long-lasting legislative solution that would preserve and maintain an ‘open Internet’ without the burdens of utility-style regulation. Now is the time for a bi-partisan Congressional effort aimed at creating statutory permanence that helps advance innovation, investment, and broadband deployment for the benefit of all Americans.”
Preserving and Maintaining the “Open Internet” with Non-Partisan Legislative Solution
IIA’s Boucher Calls on Congress to Preserve and Maintain the “Open Internet” with Non-Partisan Legislative Solution
Says Congress Can Provide the Certainty Consumers and Industry Need without the Burdens of Utility-style Regulation
WASHINGTON, D.C. – February 26, 2015 – Responding to the Federal Communications Commission’s decision to reclassify broadband Internet services under “Title II” of the 1934 Communications Act, Rick Boucher, a former Democratic congressman from Virginia who chaired the Energy and Commerce Subcommittee on Communications and the Internet and serves as honorary chairman of the Internet Innovation Alliance (IIA), today released the following statement:
“The FCC’s decision to embrace Title II regulation over the Internet now creates an opportunity for Congress to craft a non-partisan legislative solution that provides the legal certainty necessary to preserve and maintain an “open Internet” without the burdens of utility-style regulation. After more than a decade of wrangling about the proper regulatory classification of broadband services and the scope of the FCC’s authority, it is time for Congress to provide the certainty that consumers and industry need. IIA looks forward to working with members of Congress to ensure that the promise of broadband remains available for entrepreneurs, innovators and America’s consumers without a return to the days of utility regulation.”
New IIA Research Report Highlights Europe’s Failed Embrace of Title II-style Regulation
By every relevant measure of broadband capability, the US is ahead, with greater levels of broadband deployment, competition and access to the fastest wireless and next-generation wired facilities
WASHINGTON, D.C. – February 12, 2015 – A light-touch regulatory approach to broadband leads to greater deployment, competition and coverage than Title II-style regulation, according to a new 36-page report from the Internet Innovation Alliance (IIA) that compares the state of broadband in the United States to Europe.
Authored by Fred Campbell, executive director of the Center for Boundless Innovation in Technology and former Wireless Bureau Chief at the Federal Communications Commission (FCC), “Impact of Title II Regulation on Communications Investment” sheds light on the different outcomes resulting from Title II-style Internet policy adopted by the European Union (EU) in 2002 and the deregulatory approach to broadband that the United States (US) adopted that same year.
The IIA study reveals the European Commission’s acknowledgement that:
➢ High-speed broadband investment is taking place more quickly in the United States;
➢ Title II-style regulations are the reason European broadband networks have fallen behind the United States; and
➢ Europe must adopt investment-friendly broadband policies in order to maintain its global competitiveness.
“It is ironic that, as the EU embarks on relaxing its Title II-style approach to broadband regulation to mimic US success, the FCC is now about to reverse course and embrace failed public utility regulation for the Internet,” commented Campbell. “Instead, as the data in the study reveals and the EU experience demonstrates, the US has had it right all along. We should maintain a bi-partisan light-touch regulatory approach to ensure continued innovation, investment and rapid deployment of 21st century broadband networks.”
According to the study, the EU’s wholesale access regulations have posed major barriers to network investment, to the introduction of facilities-based competition and to the availability of the fastest wireless services and next-generation networks.
It notes that even though the EU is smaller in geographic size, has greater population density and surpasses the United States in gross domestic product, US wireline broadband providers have invested nearly three times more capital in their networks than their European counterparts. Our nation’s broadband investment greatly overshadowed European investment despite the fact that total European service provider revenues exceeded those of US providers by $15 to 20 billion annually.
“Rhetoric and partisanship have derailed the net neutrality debate,” commented Rick Boucher, a former Democratic congressman who chaired the Energy and Commerce Subcommittee on Communications and the Internet and now serves as honorary chairman of the IIA. “Rather than basing regulatory choices on philosophical principles and hypothetical concerns, policymakers should rely on real numbers that tell the success story of broadband in the US.”
Boucher added, “The EU has acknowledged that its Title II-style regulatory approach is the reason European broadband networks have fallen behind those in our nation. The FCC has ample authority to assure Internet openness without imposing utility-style regulation on broadband. We should learn from the European example and avoid gambling on the future of the world’s most innovative Internet economy.”
The study highlights how US mobile operators have invested twice as much capital in their networks as EU mobile operators, and have reinvested a significantly greater percentage of their revenues (15-16%) in their wireless network infrastructure versus their EU mobile operator counterparts (7-8%).
Data from the study demonstrate how these higher levels of capital investment in the US correlate with high levels of facilities-based competition and next-generation coverage:
➢ US competitors have a larger share of the telephone market (US 65% vs. EU 41%); competitors also hold a larger percentage of the US broadband market.
➢ The vast majority of US households have access to multiple facilities-based fixed broadband operators while a majority of Europeans lack access to any alternative fixed facilities-based broadband alternative;
➢ US has 5 or more facilities-based mobile operators in most markets, while EU averages fewer than 4 facilities-based mobile operators per market (typically 3-4);
➢ 82% of Americans are covered by next-generation broadband at 50 Mbps download speeds vs. 63% of Europeans covered by broadband networks offering at the most 30 Mbps speed; and
➢ As late as 2012, high-speed wireless broadband (LTE) coverage in the US was more than double that in the EU (79% of US population had LTE coverage vs. 30% of EU households).
To read the full IIA study, go to http://bit.ly/1vlikB0.
Boucher and Irving of IIA Caution against FCC’s Imminent Net Neutrality Action
Says Congress should resolve the Open Internet debate with targeted legislation aimed at reinstating the 2010 Open Internet Rules and not imposing public utility regulation on broadband
WASHINGTON, D.C. – February 4, 2015 – In response to press reports highlighting the Federal Communication Commission’s (FCC) policy direction on new Open Internet rules, IIA issued the following statements from Rick Boucher, a former Democratic congressman who chaired the Energy and Commerce Subcommittee on Communications and the Internet and serves as honorary chairman of the Internet Innovation Alliance (IIA), and former Assistant Secretary of Commerce under Clinton – now IIA Founding Co-Chairman – Larry Irving:
From Congressman Boucher:
“I urge Chairman Wheeler to reconsider his plan to treat broadband services under common carrier rules. Subjecting broadband to public utility regulation under Title II is unnecessary for assuring continued Internet openness and would carry deeply harmful consequences. Internet infrastructure investment would be stifled at a time when we have a national goal of extending high-speed Internet service to 98 percent of Americans.
“A better way to preserve the open Internet, protect consumers and promote innovation is to encourage the private investment necessary to support the deployment of high-speed, next-generation broadband nationwide. I’m confident in Congress’ ability to secure a win for our nation with a bi-partisan legislative solution that empowers the FCC to re-promulgate the 2010 Open Internet Rule but precludes the imposition of onerous Title II regulations. This outcome would protect the Open Internet by remedying the D.C. Circuit’s objection that the Commission lacks the statutory authority to act and maintain the existing light-touch regulatory environment that is welcoming to high-speed broadband investment.”
From Larry Irving:
“Imposing Title II regulation on broadband Internet primarily will benefit lawyers. Endless litigation will create additional uncertainty in the market and impact Internet innovation and investment as companies and investors try to figure out what provisions do or do not apply in a new Title II world.
“Democrats primarily have driven the net neutrality debate, but today Republicans in Congress stand ready to work on a bipartisan basis on legislation aimed to ‘keep the Internet open.’ If an open Internet is the goal, why is the only acceptable mechanism for achieving that goal a centuries-old regulatory framework? Preserving the open Internet through bi-partisan legislation, achieving and declaring victory on an important issue, steering clear of interminable and disruptive litigation, and reducing consumer costs by veering away from antiquated Title II regulation would seem to be the better alternative.
“For more than two decades, from the earliest days of the Internet, I along with most Democrats involved in development of our nation’s Internet policy, have advocated a light regulatory touch for the Internet. I still believe that to be preferable to utility-style regulation for the fast-moving and constantly evolving Internet. But, as important, to craft the right solution for America, we need to end the partisan politics around the Open Internet issue and work towards and embrace bi-partisan solutions.”
LIFELINE PROGRAM REFORM TO EXPAND BROADBAND ACCESS FOR AMERICA’S LOW-INCOME CONSUMERS
NEW IIA WHITE PAPER URGES LIFELINE PROGRAM REFORM TO EXPAND BROADBAND ACCESS FOR AMERICA’S LOW-INCOME CONSUMERS
Outlines recommendations to modernize, improve and transition the existing voice-centric program in order to empower consumers with greater choice and service availability in a competitive marketplace
WASHINGTON, D.C. – November 6, 2014 – The Internet Innovation Alliance (IIA) today released a white paper, titled “Bringing the FCC’s Lifeline Program into the 21st Century,” that calls for fundamental reform of the Federal Communications Commission’s (“FCC”) existing Lifeline Program to provide access and enhanced consumer choice to 21st Century broadband services for the nation’s low-income consumers.
“The FCC’s Lifeline Program is a 20th Century government program aimed at spreading a 19th Century technology, voice service,” said former Congressman Rick Boucher, honorary chairman of the IIA. “It’s time to start a new conversation in Washington on how best to provide America’s low-income communities with greater access to 21st Century broadband communications services.”
IIA’s report highlights how this antiquated, cumbersome and complex program currently perpetuates a market imbalance that obligates only wireline telephone providers to participate and maintain the administrative systems and processes required to operate the program.
IIA recommends streamlining the program to provide the flexibility necessary to broaden participation among various communications providers to help bring the benefits of competition to low-income consumers—more innovation, better service, lower prices—while also lowering administrative costs. One step toward attaining this goal, according to IIA, is to transition the current program toward a voucher model, by providing eligible consumers with a “Lifeline Benefit Card” that empowers them to purchase a range of communications services, including broadband, wireline or wireless voice services.
Today, service providers determine the eligibility of consumers for the Lifeline subsidy. The white paper recommends that, given the economic incentives that service providers have to increase enrollment, eligibility determinations for Lifeline benefits and core program administration oversight should be performed by a governmental agency rather than by communications service providers.
IIA’s report offers the following recommendations on how best to modernize and transition the Lifeline program so that it can help ensure next-generation broadband access for low-income consumers:
1. Bring the Lifeline Program into the 21st Century by making broadband a key part of the program’s rubric;
2. Empower consumers by providing the subsidy directly to eligible people instead of companies;
3. Level the playing field between service providers to broaden consumer choice and stimulate competition for their purchasing power;
4. Safeguard and simplify the program by taking administration away from companies that are not accountable to the American public, instead vesting that governmental responsibility with an appropriate government agency.
“Only five percent of U.S. consumers still rely solely on the antiquated, circuit-switched telephone network for their communications needs,” commented Boucher. “This trend is reflected in the FCC’s Lifeline Program, with 80 percent of its dollars currently going to wireless carriers.
“As consumers abandon their wireline telephones for modern broadband services, the Lifeline Program—adopted during the 1980s—should be modernized and upgraded to reflect the realities of the current IP-based world,” Boucher added. “Expanding the program to focus on broadband, and simplifying its administration to welcome participation by more service providers, will help millions more Americans access modern communications services.”
To read IIA’s new report, “Bringing the FCC’s Lifeline Program into the 21st Century,” go to http://internetinnovation.org/library/special-reports/lifeline.
IIA Confronts Myths Surrounding Net Neutrality
Debunks Claims that Title II reclassification of broadband is necessary to preserve an Open Internet
WASHINGTON, D.C. – October 2, 2014 – The Internet Innovation Alliance (IIA) today presents powerful facts to refute commonly disseminated myths aimed at perpetuating confusion and misinformation during the pendency of the Federal Communications Commission’s (FCC) Open Internet proceeding. The facts IIA presents further the argument and rationale as to why the FCC can and should move forward with Open Internet rules designed under its Section 706 authority rather than reclassifying broadband services under Title II of the Communications Act.
“The rhetorical downpour regarding how to best preserve an open Internet has often drowned out results-driven, reality-based reasoning,” observed IIA Founding Co-Chairman Bruce Mehlman. “The truth cuts through the clutter and helps regulators focus on practical, pro-broadband investment outcomes that will ultimately provide consumers with tangible public interest benefits.”
TITLE II AND SECTION 706: Myths vs. Facts
Myth: Title II regulations helped bring about the Internet boom of the early 2000s.
Fact: Although an initial investment spike occurred immediately after the passage of the 1996 Act, that investment was short-lived. That initial spate of investment was primarily directed at technologies and business models that were quickly outstripped by more modern technologies. In fact, the majority of the investment in our country’s broadband infrastructure occurred after the FCC’s 2003-05 decisions to decrease regulations on the broadband industry. This surge in investment laid the groundwork for high-speed Internet to become a leading driver of our nation’s economic growth and to spur the incredible innovation consumers enjoy today.
Myth: Title II-like regulations helped Europe leapfrog the U.S. on broadband deployment.
Fact: Europe gave up its leadership position when it began its path toward heavy-handed regulation that deterred broadband investment and deployment.
According to an independent study, today nearly 82% of U.S. consumers enjoy access to next-generation, high-speed broadband networks (over 25Mbps) while only 54% of Europeans have comparable access. In rural areas, the U.S. again leads in access, 48% to 12%. Next-generation wireless broadband (LTE) is available to 86% of Americans but only 27% of Europeans.
European broadband policies are built on extensive, public utility-style regulation that has depressed broadband investment. In contrast, the U.S. light-touch regulation model has enabled U.S. broadband network operators to invest more than double per household than Europe does: $562 versus $244 in Europe.
Myth: Applying Title II regulations to broadband networks and providers will prevent companies from creating Internet “fast lanes”.
Fact: The FCC has stated that no ISP has ever engaged in paid prioritization schemes. No evidence exists that ISPs have ever or are likely to create fast lanes and slow lanes.
Reclassifying broadband under Title II would not prevent such. In fact, under Title II, public utilities have always been allowed to offer prioritized services. Telephone companies routinely offer installation and repair priority along with service level guarantees to those willing to pay extra money.
According to FCC Chairman Wheeler, the 2010 net neutrality rules were never intended to cover these privately-negotiated business deals, only the last mile of the Internet.
Myth: Wireless networks and wireline networks are virtually interchangeable these days and should have the same net neutrality rules.
Fact: In the 2010 rules, to which all carriers committed, the FCC stated that special characteristics of mobile broadband infrastructure make it essential to give mobile providers additional flexibility in how they manage the traffic on their networks. Due to resource constraints, such as the limited amount of spectrum available for consumer use, mobile networks operate differently than wireline networks. A stringent regulatory environment established under Title II, and intended primarily for a monopoly-era copper wireline world, would be onerous.
The FCC still imposed two conditions on wireless networks in 2010. First, wireless networks cannot block access to legal websites, with exclusions for reasonable network management. Second, wireless network providers were required to disclose their network management practices, performance and terms and conditions of their broadband services.
The current approach acknowledges how wireless networks are different from fixed networks but still protects consumers and enables investment and innovation in the intensely competitive wireless marketplace.
Myth: ISPs harm the open Internet through discriminatory practices. The only way to keep the Internet open is to reclassify Internet services as telecommunications services.
Fact: The Internet, without Title II regulations, is and has been open since its first public use. It continues to thrive in the current regulatory environment. In contrast, Title II regulation would stifle investment and hinder innovation. Innovative new services and business models would have to be vetted and approved by the FCC, slowing the Internet’s vitality and growth.
Ensuring a fair and open Internet through authority granted by Section 706 is a better path. Section 706 permits the FCC to prevent paid prioritization while encouraging innovation and investment from ISPs and other Internet companies.
Myth: Title II can be easily adapted to today’s modern communications systems.
Fact: The past 20 years have seen stunning technological advancements in the communication industry. Americans can now access a wealth of information in myriad new ways. The transformation of the communications industry has caused companies to no longer fit neatly into legal categories envisioned by the 1996 Telecommunications Act or, even more obviously, the Title II rules written in 1934. That’s why companies not normally thought of as “broadband providers” could find themselves categorized and regulated as telecommunications carriers because their service overlaps with the services provided by ISPs if Title II regulations are placed on broadband services. For example, when Google connects you to a business you searched, should it be considered subject to Title II? Or if a provider of email enables a video messaging session, would it open itself up to Title II regulation on the grounds that it is a facilities-based provider or reseller? Could be. And that’s the fear.
Myth: The FCC could apply Title II to broadband, but exercise its forbearance authority when dealing with innovative companies and services.
Fact: Reclassifying broadband services as telecommunication services under Title II would burden 1/6 of the nation’s economy with stringent, investment-inhibiting government regulation. The government would have expansive power over all broadband services, likely including all edge providers and consumer broadband applications and services. The process necessary to analyze and identify which areas of the nation’s broadband economy the FCC would spare from heavy government intrusion would be both lengthy and costly. Additional time and resources would probably be squandered in the litigation that will inevitably follow.
Myth: Unlike Title II, the FCC does not have the power to promote an open Internet under the limited provisions of Section 706.
Fact: Relying on Section 706 to protect consumers and ensure an Open Internet is a superior choice to the overbroad, utility-style Title II regulatory framework of the 1934 Communications Act.
The FCC’s Section 706-like approach in 2010, created rules that found the right balance between regulations necessary to advance consumer protection goals and the need to attract new investment to broadband to ensure future deployments of modern high-speed networks. Under those rules, access to capital grew and we saw massive growth in the digital app economy, video over broadband, VoIP, the advent of tablet computing, and the rise of mobile e-commerce.
Moreover, a Federal Appeals court has given Section 706 its seal of approval and the FCC can assert this authority with confidence. In fact, the courts have said that the FCC is empowered to create rules “governing broadband providers’ treatment of Internet traffic…that they will preserve and facilitate the “virtuous circle” of innovation that has driven the explosive growth of the Internet.”
“The facts are clear: Reclassification of broadband under Title II is unnecessary to ensure continued Internet openness and would backfire with harmful consequences for innovation and investment,” commented former Congressman and IIA Honorary Chairman Rick Boucher. “The FCC should instead make use of its powers under Section 706 to protect consumers, promote innovation and encourage nationwide deployment of next-generation broadband.”
To learn more about Title II reclassification of broadband and Section 706 authority in the context of net neutrality, visit the IIA’s website at http://www.internetinnovation.org.
IIA Urges FCC to Rely on Section 706 Authority, Reject Calls for Title II Reclassification
IIA Urges FCC to Rely on Section 706 Authority, Reject Calls for Title II Reclassification of Broadband
Says Section 706 presents the better alternative to preserve the open Internet, protect consumers, and promote innovation
WASHINGTON, D.C. – September 15, 2014 – Today, the Internet Innovation Alliance (IIA) urged the Federal Communications Commission (“FCC”) to rely on its Section 706 authority rather than reclassify broadband Internet access services as telecommunications services under Title II of the Communications Act. In its Reply Comments in the Open Internet Proceeding, IIA warned that reclassification would reverse decades of Commission precedent and threaten the Internet ecosystem’s continued success and future innovation, likely deterring investment with years of further litigation.
“Section 706 has worked well to protect the open Internet that everyone wants to preserve, while minimizing harm to investment and innovation,” commented Bruce Mehlman, founding co-chairman of the IIA. “Section 706 remains viable and effective. By contrast, Title II is an antiquated regulatory framework designed for the era of monopoly telephone service that would undermine today’s competitive broadband marketplace and disserve consumers, dissuade entrepreneurs and inject unnecessary regulatory uncertainty threatening future dynamism in the broadband ecosystem.”
SECTION 706 PRESENTS A BETTER ALTERNATIVE TO PRESERVE THE OPEN INTERNET, PROTECT CONSUMERS, AND PROMOTE INNOVATION
IIA’s filing highlights how, by proceeding under Section 706 authority, the Commission can restore the rules disturbed by the recent Court decision and bring balance to the Internet ecosystem. Under the 2010 rules, access to private capital for investment in broadband networks has grown, and the nation witnessed a period of continued exponential growth in the digital app economy, video over broadband, and VoIP; the surge in tablet computing; and the rise of mobile e-commerce.
Reliance on Section 706 enables proper balance between necessary regulation to advance goals such as consumer protection and the imperative of attracting new investment to broadband to ensure further deployments of ever-faster systems that will support the applications of tomorrow. Only through innovation and continued explosive growth can the Nation meet the ambitious goals set forth in the National Broadband Plan and realize the benefits derived from the 21st century digital economy.
“The FCC already has enough authority under Section 706 to keep the Internet open with high-speed access for consumers and flexibility for entrepreneurs to innovate,” IIA Co-Chair Jamal Simmons said. “Reclassifying broadband as a utility is like using a sledgehammer when a screwdriver will suffice. Title II is a blunt instrument that might break the Internet’s record of innovation and investment, while Section 706 is a better tool for fixing any problems that arise.”
RECLASSIFICATION WOULD DETER INVESTMENT THROUGHOUT THE BROADBAND ECOSYSTEM
IIA notes how Title II was not the primary catalyst that spurred investment that occurred after the enactment of the 1996 Act. The great bulk of investment in the broadband Internet ecosystem following the implementation of the Act – and unquestionably all of the investment from “edge” and cable companies – occurred within a competitive and significantly less regulatory environment.
After the dot-com bubble of the late 1990’s, IIA highlights how broadband investment climbed steadily only after the Commission began its policy of regulatory forbearance under the 2003 Triennial Review Order. Saddling new regulations on broadband now would deter private investment on which the Internet ecosystem depends.
IIA’s filing also points to the European broadband experience as instructive as to why the Commission should resist from experimenting with Title II regulation for broadband networks and services here at home.
“European policies built on extensive, public utility-style regulation and wholesale network unbundling have depressed broadband investment and access to next-generation networks overseas, as fully 82% of U.S. consumers enjoy access to high-speed broadband networks compared to only 54% of European consumers,” noted former Congressman Rick Boucher, honorary chairman of the IIA. “Section 706 fortunately offers us an alternative path that will enable the private investment necessary to deploy modern broadband networks—wireline, wireless, and cable—and continue the virtuous circle fueled by light-touch regulation of the Internet ecosystem.”
Boucher added, “Title II reclassification would not only harm the broadband Internet, but would delay the broadband deployment goals of the Commission.”
To read the Internet Innovation Alliance’s Reply Comments in full, visit here.
The New Network Compact: Consumers Are in Charge
NEW STUDY HIGHLIGHTS HOW SHIFT IN CONSUMER CHOICE AND MARKET PREFERENCES CREATES NEW CHALLENGES FOR 21st CENTURY REGULATORS
Paradigm shift in consumer communications preferences requires new Compact to preserve core network values
Eight times more households choose less-regulated wireless voice service over the most-regulated landline option when they rely on a single service
Policymakers seeking to craft a new Compact for 21st century networks that advances essential consumer values must recognize and address how expanding consumer choice and preferences—spurred by innovation and new competitive offerings—have fundamentally altered the telecommunications landscape, according to a new study released today by the Internet Innovation Alliance (IIA).
Policy scholar and communications industry analyst Dr. Anna-Maria Kovacs authored the 36-page report, “The New Network Compact: Consumers Are in Charge.” The paper details the impact of consumer choice in the digital marketplace and demonstrates how this new paradigm will influence future efforts to design a set of basic consumer protections for the communications platforms of tomorrow.
There is a growing bi-partisan consensus to apply traditional core values—universal connectivity, public safety and consumer protection—as well as the more recent core value of competition, to next-generation networks and services. The study points out, however, that competition has freed consumers from regulatory control. The existing model was based on granting regulators control over a monopoly market with a single service provider, treating consumers as if they were homogeneous, and forcing them to cross-subsidize one another under a price-regulated environment. The advent of new technologies and competing services now offers consumers an array of choices, including the choice and ability to utilize communications services that can circumvent regulations that protect certain core values. The challenge for regulators is to provide necessary protections for consumers without limiting their freedom of choice.
The World Has Changed: Consumers Have Choices
From voice communication to social networking, Kovacs notes how consumers make cross-platform choices depending on message, audience and context. Their purchase decisions cut across regulatory silos and providers, and their selection of a voice plan may depend on favorite shows offered in a video package that may be part of a bundle with a broadband package. Wireless voice and wireless broadband may or may not be accompanied by fixed broadband in those packages.
The study provides greater insight into how dramatic changes in consumer preferences are reshaping the communications marketplace:
• In 1996, 94% of households subscribed to plain old telephone service (POTS), and 6% did without landline telephony altogether.
• Only 5% of consumers still rely exclusively on POTS, the most-regulated voice service option.
• As of year-end 2013, two out of five (41%) consumers chose wireless-only in the voice market—eight times as many as those who relied exclusively on POTS.
• Another 26% of American households subscribed to Voice over Internet Protocol (VoIP), either alone or in combination with wireless.
• Consumers often replace multiple voice calls with a tweet or a post on social networks, services that do not support Universal Service.
• Consumers choose Internet access from a variety of platforms—mobile (62%), cable (22%), wireline DSL (8%), wireline fiber (7%), and fixed wireless or satellite (1%).
• Consumers in certain markets are choosing services and applications that do not provide automatic 911 communications capabilities.
• In today’s video market, consumers pick from a buffet of providers including wired cable (48%), broadcast (10%), telco (10%), satellite (31%) and broadband only (1%).
“Because consumers today don’t have to purchase what regulators design and a monopolist provides, they can’t be treated as a homogeneous body without choices; a ‘one size fits all’ solution is no longer viable,” commented Kovacs. “Amidst extensive and varied competition, providers survive only if they give consumers what consumers want. Otherwise, consumers move to competing providers and take their spending and the associated earnings with them. Cross-subsidies don’t work, because consumers can flee the subsidizing services. Regulators can limit providers’ earnings on the upside but can’t protect the downside.”
Kovacs added, “With the old network compact, regulators were in charge, but the new reality is that consumers are in control.”
Need for Strategically-Targeted Regulation
At bottom, the Kovacs analysis notes that the success of any future Network Compact will hinge on the ability of regulators to recognize that consumers have varied needs and desires. Regulators can only accomplish their goals if they respect consumers’ power and choices. To accomplish core values, regulators must focus on vulnerable consumers and target specific needs not addressed by the market, she says.
“The 21st century challenge of regulators in preserving and advancing the core values must take into consideration new platforms and the plethora of consumer choices,” echoed Rick Boucher, IIA honorary chairman who served for 28 years in the House of Representatives, where he was chairman of the Subcommittee on Communications, Technology and the Internet. “Policymakers should tailor the new Network Compact in a way that addresses specific consumer needs rather than making overly-broad attempts to regulate on a technology, platform, or service basis.”
To review “The New Network Compact: Consumers Are in Charge” in its entirety, click here.
Rick Boucher Weighs in on Initiation of IP Trials
IIA Honorary Chairman Rick Boucher Weighs In on Initiation of IP Trials in Alabama and Florida, Per Today’s AT&T Filing
Expresses confidence that IP networks and services will exceed consumers’ and FCC’s expectations for service, reliability, and consumer protection
WASHINGTON, D.C. – February 28, 2014 – Responding to today’s filing from AT&T announcing Alabama and Florida as the selected markets for FCC-authorized IP demonstration projects, the Internet Innovation Alliance (IIA) today issued the following statement from its Honorary Chairman Rick Boucher:
“Every month, 450,000 people make the transition from the old circuit-switched network to the new, IP-based world of telecommunications. Two-thirds of Americans have fled the old phone network entirely, and only five percent use it as their sole means of communication. It’s clear that consumers prefer newer products, services, and technologies in place of the old. Just as the telegraph once gave way to the telephone, and analog gave way to digital, so we stand at the threshold of another revolution in communication, as Alexander Graham Bell’s telephone network gives way to the advanced IP broadband networks of tomorrow. In fact, by the end of this decade a sunset should occur for the antiquated circuit-switched telephone network.
“As a key step in reaching that goal, in its filing today, AT&T has accepted the FCC’s call for the initiation of trials in select local markets where consumers will rapidly be transitioned from the old network to modern broadband communications platforms. The company in its filing underscored a thorough ongoing commitment to the core network values the Commission seeks to promote. Far from being a “regulation-free zone,” the future vision for an all-IP world is one in which communications services are accessible, secure, and reliable. Using the core values of universal service, consumer protection, public safety, reliability, and competition as its guidepost, the FCC can help speed investment in advanced networks that bring the benefits of high-speed broadband to everyone.
“During the upcoming trials – to be held under the direct supervision of the FCC – government, consumers, and industry will all work together, in an open and transparent manner, to learn what can go wrong when the consumers who remain on the old telephone network are rapidly transitioned to modern broadband communications. With information from the trials, solutions can be put in place to ensure that the nationwide transition is a success for everyone. And at this stage and throughout the trials, the traditional phone network will remain in place, providing protections, a kind of safety net, for those who still depend on the old system for essential communications needs.
“As we move forward, I’m confident that the IP networks and services to be tested will exceed both consumers’ and the FCC’s expectations for service, reliability, and consumer protection.”
Answering Upton and Walden’s Call
’96 Telecom Act Architect Rick Boucher Answers Upton and Walden’s Call for Comments on the Future Regulation of the Communications Industry
Says today’s laws severely lag technological and marketplace advancements, calls #CommActUpdate vital
WASHINGTON, D.C. – February 3, 2014 – Rick Boucher, honorary chairman of the Internet Innovation Alliance (IIA), today released his recommendations on modernization of communications industry regulation, in response to the House Energy and Commerce Committee’s request for input on the future of the law. Boucher served for 28 years in the House of Representatives, where he chaired the Subcommittee on Communications, Technology and the Internet and was a key architect of the Telecommunications Act of 1996.
“Since 1996, the way in which consumers receive communications services of all kinds has dramatically transformed,” explained Boucher. “Today’s laws severely lag technological and marketplace advancements—comprehensive statutory telecommunications reform for the 21st Century is vital.”
In December, House Energy and Commerce Committee Chairman Fred Upton and Subcommittee Chairman Greg Walden launched a comprehensive #CommActUpdate, including a series of white papers as the first step toward rewriting the laws governing the communications and technology sector. To read the first white paper released on January 8, visit http://1.usa.gov/1iVVvBE.
During the last significant revision of the Communications Act 18 years ago, telephone companies offered telephone service through signals delivered over circuit-switched networks; cable companies used coaxial cables to deliver multi-channel video service; the wireless industry was in its adolescence; and the Internet was in an early stage of commercial use. Today, telephone, cable and wireless companies offer the combination of voice, video, and data to their customers in digital format over packet-routed networks that employ Internet Protocol (IP); there are more wireless than wireline communications customers; and the use of the Internet for the delivery of information of all kinds is becoming ubiquitous.
“A date should be set by the end of this decade to ‘sunset’ the public switched network and replace it with Internet-based communications platforms that are highly efficient, scalable , resilient and readily capable of handling voice, data or video communications,” commented Boucher.
Boucher recommends that the Committee initiate legislative reforms that:
1. Recognize the pervasive and rapidly developing role of broadband networks in the delivery of modern communications and the urgent need for deregulatory parity among similarly situated broadband service providers.
2. Reaffirm the current light-touch regulatory approach to broadband that broadly stimulates investment in networks and promotes both job creation and innovation.
3. Realign the Federal Communications Commission’s (FCC) regulatory structure to match current marketplace and technological realities, recognizing today’s cross-platform competition in which telephone, cable and wireless carriers compete head-to-head in the provision of voice, video, and data services.
4. Eliminate existing duplicative or unnecessary functions at the FCC, including its duplication of the Department of Justice and Federal Trade Commission’s role in reviewing communications merger transactions.
5. Enable the near-term reallocation of significant swaths of government-held spectrum for commercial auction to help address the existing spectrum deficit facing commercial wireless carriers.
6. Facilitate secondary market transactions among spectrum holders and encourage streamlined processes to enhance the efficiency of spectrum use as additional mechanisms to address the nation’s spectrum crisis.
To review Boucher’s recommendations on addressing modern communications policy needs in full, visit here.
IIA Backs FCC Action to Initiate Local, High-Speed Broadband Network Demonstration Projects
Says FCC-monitored trials will bring the nation one step closer to completing the transition to 21st Century modern broadband-enabled communications networks
WASHINGTON, D.C. – January 30, 2014 – Responding to today’s Federal Communications Commission’s (FCC) action to “authorize voluntary experiments to measure the impact on consumers of technology transitions in communications networks,” the Internet Innovation Alliance (IIA) today issued the following statement:
“In launching a national framework for local trials of state-of-the-art broadband networks, the FCC ushers in the dawn of a new era of expanded consumer benefits and increased economic growth. Accelerating the ‘fourth network revolution’ will help unleash consumer benefits in education, healthcare, energy, business and rural development.
“We applaud the FCC’s new framework that enables stakeholders to address—in an open and transparent manner—the challenges posed by the nationwide move to next-generation broadband networks and creates an opportunity to establish consumer protections to ensure we ‘leave no one behind’ and pave the way for an easy and rapid transition for America’s consumers and businesses.
“We hope that, in the days ahead, the FCC’s vision for local market trials will mean more rapid deployment of next-generation networks that provide new broadband choices, better products, services and devices with enhanced functionality. Upgrading the nation’s communications infrastructure will fuel our economy, maximize investment and promote America’s global competitiveness. Conducting geographically-limited, closely-monitored IP demonstrations with consumer protections in place will build on the momentum of two-thirds of American households already choosing to live in an all-IP world.”
IIA Celebrates 10-Year Anniversary with Return of Founding Co-Chair Larry Irving
Re-emphasizes benefits for consumers, businesses and the economy of migrating America’s antiquated telephone networks to high-speed, IP-based broadband
WASHINGTON, D.C. – January 23, 2014 – Ten years after he founded the Internet Innovation Alliance (IIA) alongside still-Co-Chair Bruce Mehlman, Larry Irving this month returns to the coalition, the IIA today announced. In 2009, Irving stepped down from his role with IIA to join Hewlett Packard as vice president of global government affairs. Since 2011, he has provided strategic advice and assistance to international telecommunications and information technology companies, foundations, and non-profit organizations.
“Larry is ‘one of the greats’ when it comes to the tech world, having helped write our nation’s Internet success story,” said Mehlman. “We indeed are amidst the ‘fourth network revolution’, and IIA is excited to take advantage of Larry’s seasoned insight to help make the IP Transition yet another win for Americans in education, healthcare, business and rural development.”
Mehlman added, “High-speed broadband is essential for powering economic growth, maximizing investment and promoting America’s global competiveness.”
Irving and Mehlman teamed up in 2004 to help solve, through technology, many of the challenges facing our country. Today, they are joined by IIA Co-Chairman Jamal Simmons and Rick Boucher, honorary chairman of the organization, and are committed to helping achieve national priorities in areas such as education, healthcare, energy and environmental sustainability through the upgrade of America’s communications infrastructure.
A central focus for IIA, and identified by the Federal Communications Commission (FCC) as a national priority, moving all Americans from 20th Century copper telephone lines to 21st Century IP-based networks will ensure faster broadband speeds and meaningfully expanded services. The IIA is dedicated to helping guide the IP Transition with recommendations to fast-track local IP demonstration projects while preserving core consumer values:
a) When the transition is complete, all consumers should be connected with services that are at least as good as what they have now.
b) Public safety must be upheld with access to first responders, as well as access for the vision or hearing impaired.
c) Competition should be encouraged, and consumers should have a place for ready resolution of complaints regarding services.
d) Putting in place a backup plan to keep networks working through power failures and natural disasters must be a chief objective.
Irving brings extensive knowledge and experience that will be invaluable to IIA as it supports the modernization of America’s telephone networks and anachronistic regulations. He played an integral role on the Obama-Biden Transition Team, served for nearly seven years as Assistant Secretary of Commerce for Communications and Information during the Clinton Administration, and as Administrator of the National Telecommunications and Information Administration (NTIA), advising the President, Vice President and Secretary of Commerce on domestic and international information technology issues. Irving is widely credited with coining the term the ‘digital divide’ and was the principal author of the landmark Federal survey “Falling Through the Net,” which tracked access to telecommunications across demographic lines. He also was named one of the 50 most influential persons in the ‘Year of the Internet’ by Newsweek.
“I’m thrilled to come home to IIA at such a critical point in time, when policymakers’ decisions truly will determine whether our nation continues leading the world in the broadband race. In addition to profiting America as a whole, getting it right with the IP Transition will enhance consumer benefits with new choices, greater functionality, and better products, services and devices.”
IIA Gives Regards to Wheeler and O’Rielly in Light of Senate Confirmations
Encourages new FCC Chairman and Commissioner to get down to business on spectrum auctions, IP Trials and ConnectED
WASHINGTON, D.C. – October 30, 2013 – The Internet Innovation Alliance (IIA) today issued the following statement in response to Senate approval of Tom Wheeler and Michael O’Rielly for Chairman of the Federal Communications Commission (FCC) and FCC Commissioner, respectively, by unanimous consent:
“IIA sends its best wishes to Tom Wheeler, an astute, technology-industry veteran who is well-equipped to take the reins of the FCC at this important juncture in time. We also warmly welcome Michael O’Rielly to his post as FCC Commissioner and look forward to his valuable contributions on highly important policy issues standing before the federal agency. There are both great opportunities and challenges before the FCC and, given the exponential growth in wireless broadband use and the larger technology transition to IP-enabled services that is underway across the country, their vision and influence will be instrumental in redefining and shaping America’s communications sector for decades to come.
“We urge Wheeler and O’Rielly to quickly roll up their sleeves on the IP transition, spectrum policy and ConnectED. To jumpstart network modernization, the Commission should give the green light on IP trials that will pave the way for a smooth transition to next-generation networks. With wireless users multiplying and available spectrum at a standstill, it’s critical that more spectrum be made available for commercial mobile services in short order, before demand hurdles supply. The FCC should take swift action to conduct open incentive auctions, approve secondary market transactions, and repurpose federal spectrum.
“And for the benefit of communities across the nation, Wheeler and O’Rielly should crystalize a vision for ConnectEd, an initiative that should help ensure access to high-speed broadband for our nation’s students both at school and at home. Technology is the fuel of the modern economic engine.”
REPORT: Broadband Delivers Over $9,300 in Annual Savings to American Consumers
Move to next-generation networks and additional spectrum for mobile services will help more American families achieve Internet-enabled cost savings
WASHINGTON, D.C. – October 29, 2013 – High-speed Internet – and, increasingly, mobile broadband – allow Americans to save an average of $9,363.85 a year on household spending, the Internet Innovation Alliance (IIA) today announced. Potential Internet-enabled savings increased nearly $500 from last year, along with a rise of 3.5 percent in average annual expenditures in 2012 reported by the U.S. Bureau of Labor Statistics. Authored by Nicholas J. Delgado, certified financial planner and principal of Chicago-based wealth management firm Dignitas, “Mobile Broadband and Money: Top 10 Ways to Save” is the fourth edition of the annual financial analysis. This year, the IIA-identified cost savings – achieved by having access to and using broadband – were calculated with the mobile consumer in mind.