Title II is wrong way to keep an open Internet
by Jamal Simmons and Rosa Mendoza
Last week, the president called on the Federal Communications Commission (FCC) to reclassify broadband service under Title II of the Telecommunications Act of 1934. We fully agree with the president when it comes to his goals for an open Internet. There should be no blocking, throttling, or paid prioritization by companies looking for faster lanes than their competitors. In addition, ISPs should be completely transparent. The one thing we differ on is regulating the Internet under Title II, a piece of legislation created decades ago for the regulation of obsolete devices.
The president’s approach is the wrong way to go especially when considering the recently released Pew Internet Project report on “Killer Apps in the Gigabit Age.” The report detailed these experts’ beliefs about the breathtaking future that could be possible when connection speeds reach 1,000 megabits of information per second, about 100 times faster than speeds commonly available today in the United States.
These speeds will allow far more data to pass between and through networks. Many experts who responded to Pew’s questions looked forward to the commonplace use of virtual realities and avatars for meetings, sporting events and long-distance family dinners. Daily home check-ins from devices and far away medical professionals could revolutionize healthcare. Shopping could become a completely different experience with consumers choosing new dresses online and having them appear on a home 3-D printer queue soon after.
Ensuring everyone has access to these coming developments should be a major priority in the Internet Age. Twenty years ago, the talk of a digital divide in computer access became commonplace. In recent years, Pew has well-documented the disparity in broadband access for African American, Latino and other under-resourced communities. Since these communities are already at a disadvantage when it comes to broadband access, it makes them significantly more vulnerable to policies that could potentially impede innovation or progress within the industry.
Obama made the right call by taking on the challenge of getting schools and libraries access to faster broadband through his ConnectED initiative and modernizing the Universal Service Fund. Getting those students high-speed broadband access at home requires private sector investment and that means creating more certainty. According to the Progressive Policy Institute, broadband providers spent “roughly $46 billion in broadband investment in 2013.” To continue promoting this type of private sector investment we must not over-regulate innovative broadband providers using antiquated policies that may end up being litigated for years and diminish the certainty of being able to bring high-speed, advanced broadband networks to all Americans.
Technology has surpassed the days of the rotary phone system and has created a dynamically competitive Internet ecosystem that touches virtually every sector of the economy from banking, ordering a taxi, or even receiving medical attention. In the early part of the twentieth century no one could have imagined how the phone would transform and ultimately provide the technological capabilities it offers us today. Similarly, society can only speculate as to the potential benefits that further technological advancement will make possible in 10 or 20 years. Adding another layer of bureaucratic oversight on this dynamic industry will hinder innovation and potentially discourage investment. Innovative and forward thinking companies would face the inevitable requirement to obtain government approvals and investors may be forced to look elsewhere for capital returns to avoid the uncertainty of navigating the labyrinth of bureaucratic approval processes.
A better option exists that would provide the necessary oversight to preserve the Open Internet. The courts have made clear that Section 706 of the Telecommunications Act of 1996 provides the FCC with enough authority to “encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans.” That would foster an environment for investment flexibility and open access.
Investment flexibility matters not only to broadband companies and individual consumers but also to technology companies founded by African American and Latino entrepreneurs. Though these companies tend to operate with smaller profit margins, they also tend to hire more minorities. That matters when unemployment among Black and Latino communities remains higher than white unemployment. Many companies would not be able to survive the added costs of complying with Title II regulations that may impact “edge providers.”
The FCC should pursue the President’s push for an open Internet, but we recommend using a lighter regulatory approach such as Section 706. Focusing on regulatory solutions that ensure access, innovation and investment will keep all Americans benefitting from these digital advancements.
As Chairman Wheeler himself said in October 2014, “Twenty-first century consumers shouldn’t be shackled to rules that only recognize 20th century technology.”
We couldn’t agree more.
Simmons is co-chair of IIA and Mendoza is executive director of HTTP.
Source URL: http://thehill.com/blogs/congress-blog/technology/224892-title-ii-is-wrong-way-to-keep-an-open-internet
The Lesson From Europe’s Broadband Breakdown
by Rick Boucher
Today a debate is being waged in Washington. Various approaches to preserving the open Internet are being weighed, and reclassification of broadband services under Title II of the Communications Act is still at the heart of the debate.
Earlier this year, Rep. Bob Latta introduced a bill (HR 4752), that would prevent the Federal Communications Commission from putting broadband Internet service providers under Title II, and just recently, Rep. Henry A. Waxman, D-Calif., sent a 15-page letter to FCC Chairman Tom Wheeler proposing a hybrid approach to net-neutrality rules involving Title II.
Title II reclassification is completely unnecessary. It would retard broadband investment and hobble efforts to create better and faster services.
The harms arising from monopoly-era regulation are clearly demonstrated with a glance toward Europe, where requirements for broadband unbundling and leased access have crippled private investment and left the continent far behind. The U.S. is ahead of Europe on virtually every metric of broadband deployment, from access to next-generation networks, to rural access to broadband and investment per household ($562 vs. $244), with better service here as well. While 4G LTE is widely deployed in the U.S., in Europe it’s more difficult to find.
The U.S. is winning the race for broadband — and future economic competitiveness — because our light-touch regulatory model led to an explosion of private investment and innovation while Europe, with heavier regulation, suffers in comparison.
The lesson is clear: Regulatory structure drives investment and directly affects broadband quality and price.
Everyone concerned about the future of broadband wants to preserve an open Internet. But we do not need to adopt a European or public-utility-style regulatory model to achieve that goal. There is a better, more investment-friendly approach using the FCC’s existing powers and maintaining today’s light-touch regulatory treatment.
Section 706 of the Communications Act directs the FCC to take steps to promote broadband deployment. The U.S. Court of Appeals for the District of Columbia has ruled that the FCC has the power, under section 706, to protect the openness of the Internet and to address any violations. Acting under section 706, the FCC could prohibit any broadband management practice that violates a rule of “commercial reasonableness.” Under this rule, the FCC could, for example, prevent any practice such as paid prioritization that degrades the broadband capacity to which users subscribe.
Make no mistake: The FCC’s upcoming decision will affect the quality and availability of broadband. Light-touch regulation works.
First crafted by the Clinton administration, this model created an environment that fostered the large investments in broadband and the fast speeds we enjoy today. The FCC’s 2010 Open Internet rule followed a similar path. In its wake, companies poured tens of billions of dollars into all types of broadband — wireless, wireline and cable. Since that time, video over broadband, tablet computing and the app economy have grown exponentially. Investment and innovation have prospered, including at the edge of the Internet.
What the FCC has termed the “virtuous circle” of broadband investment and adoption depends on private capital. The flow of investment dollars will continue only if the agency now reaffirms its open Internet authority under section 706 alone, rather than by a reclassification of broadband services to the Title II rules designed for the telephone monopoly.
Net neutrality has taken center stage with President Barack Obama’s recent statement and in the aftermath of three congressional hearings, and one thing is apparent: Subjecting broadband services to heavy, monopoly-era regulation with Title II reclassification is simply not necessary to achieve the assurance of continued Internet openness — and would carry harmful consequences. The FCC can and should proceed on a path that uses its authority under Section 706 to craft new rules that will help protect consumers, promote innovation and help achieve the nation’s twin goals of ubiquitous broadband deployment through private investment and preservation of an open Internet.
Former Rep. Rick Boucher, D-Va., served in the House from 1983 to 2011. He was chairman of the Energy and Commerce Subcommittee on Communications, Technology and the Internet. He is honorary chairman of the Internet Innovation Alliance and leads the government strategies practice at the law firm Sidley Austin.
Source URL: http://www.rollcall.com/news/the_lesson_from_europes_broadband_breakdown_commentary-238072-1.html
Don’t let the government kill the Internet’s next big thing
Innovative gigabit network should be supported, not stifled
by Larry Irving
“Our job is to steer, not row.” These were the words of the late Secretary of Commerce Ron Brown, my then boss, when I had the good fortune of being a member of the Clinton Administration’s technology team during the early days of the Internet.
We were not “hands-off”, but our goal was to create an environment where innovators and entrepreneurs could succeed to the benefit of consumers and competition. Regulatory humility, we found, was a key ingredient.
A majority of Americans feel they have no control over their personal data, according to a Pew Research Center survey. Pew’s Mary Madden discusses the findings on the News Hub. Photo: Getty.
Over the past 20 years, we have benefitted from a technological abundance that has transformed and continues to transform virtually every aspect of our lives. And there is more change and progress yet to come. Recently I moderated a panel at the Pew Research Center where we discussed a new report on the coming Gigabit Age. Of the technology experts Pew surveyed, 86% believe major new applications will accompany a rise of bandwidth speeds in the U.S. by 2025.
Americans are living in a technological golden age, and public policy has played a supportive role.
In the early 1990’s, we understood that the government was not going to build the Internet. America’s Internet would be built by the private sector — and it has been. The regulatory environment that helped enable and propel the private sector investment that built the Internet as we know it was intentional. We advocated for passage of the Telecommunications Act of 1996, expecting that it would unleash investment in our domestic infrastructure. Since passage of the Act, America’s communications companies, wired and wireless, have invested more than $1.5 trillion dollars in advanced networks and continue to invest at a rate of approximately $100 billion per year.
A gigabit network will be 20- to 100 times faster than the networks the majority of Americans use now and will continue or, more likely, will propel the technological transformation that the Internet ignited barely two decades ago. Private investment of additional tens of billions to hundreds of billions of dollars will be required to build the new gigabit networks.
Most Americans have heard of Moore’s law, which holds that computer processing power will double every two years, and understand its contributions to technological innovation and advancement. Many fewer have heard of Cooper’s Law, which holds that the number of voice or equivalent data transactions possible via all useful spectrum doubles every 30 months.
Cooper’s Law helps our wireless networks carry the ever-increasing demand placed on them. But consider this: 10 million people purchased iPhones in the few weeks following the introduction of Apple’s newest models. Network operators know from experience that users of each new model of the iPhone typically burn through TWICE as much data as they did on the previous version. As devices get faster and smarter, networks also must get faster and smarter.
Cooper’s Law is buttressed by investment in, and increased development and innovative design of, the wired networks that form the backbone of our communications networks. After all, designing, building, maintaining and defending from attack the networks that carry our Internet communications is an expensive and difficult task. The cost of the Gigabit Network that Pew’s experts prophesied will be huge, but the benefit to America will be even bigger.
This week, President Obama asked the FCC to reclassify consumer-based Internet service as a Title II service under the 1934 Communications Act, essentially equating to heavy regulation of broadband. As the Federal Communications Commission weighs options during its Open Internet proceeding, the question remains whether today’s policy makers will be successful in maintaining a regulatory and investment climate that will promote continued investment in and innovation of new broadband networks.
My hope is that the public officials in charge of this stage of Internet growth approach their roles with as much regulatory humility as we did, aiming to steer, not row, and remembering what Secretary Brown understood: Innovation is not inevitable. The regulatory choices they make will propel or forestall innovation.
Larry Irving is a former U.S. Assistant Secretary of Commerce. He currently is the CEO of the Irving Group, a consulting firm that provides advisory services to technology and telecommunications companies. He also is co-chairman of the Internet Innovation Alliance (IIA), a non-profit advocacy group that includes telecommunications companies.
Source URL: http://www.marketwatch.com/story/dont-let-the-government-kill-the-internets-next-big-thing-2014-11-13
Uncaged bears and rotary phones
by Former Rep. Rick Boucher (D-Va.)
Every once in a while, someone comes up with an amusing article about obsolete laws that somehow have remained on the books for far too long. A law in Missouri, for example, apparently stated that it’s illegal to drive with an uncaged bear in the car.
The same exists in the telecom industry. The equivalent of the uncaged bear is a whole panoply of regulations that arose when Ma Bell was the monopoly telephone provider — and that meant rotary telephone, not your mobile device. Unlike some of the sillier laws still in place, antiquated regulations carry real costs in telecom.
The United States Telecom Association (USTA) has petitioned the Federal Communications Commission to “forbear” from enforcing obsolete regulations, precisely so companies can stop spending their dollars on complying with decades-old legacy rules and start spending even more dollars on bringing ever-faster broadband to homes and businesses. It’s sad, really, that the companies should even have to make such a petition. You’d think the FCC would want to do everything in its power to encourage high-speed broadband deployment. But today, the telcos have to spend Janus-like, facing both forward to broadband and backward to the narrowband era. In fact, according to a recent study, between 2006 and 2011, total spending by telephone companies on equipment totaled $154 billion. Shockingly, most of that expenditure was for maintaining the old circuit-switched telephone network, and the minority was devoted to the broadband technologies of the 21st century.
Consumers are fleeing the old network in droves. Only 5 percent use it exclusively, and another 28 percent use it in combination with a wireless service. Two-thirds of communications users have left the old network entirely. Every dollar telcos are required to spend on a network consumers are abandoning is a dollar not spent on deploying the modern networks that consumers prefer. Viewed in this light, the USTA plea for relief is entirely understandable — and it’s entirely justified.
FCC Chairman Tom Wheeler has said he wants more “meaningful competition” in high-speed broadband, particularly between telecom companies and cable providers. As Wheeler put it, these new broadband entrants are “well-positioned to give cable a run for its money, offering consumers greater choice.” This is exactly how it should work.
A while back, cable was the new kid on the block offering broadband and voice services; now, as Wheeler suggests, it’s the telcos’ turn to offer greater broadband competition. But for this to happen, regulatory relief is urgently needed. New entrants, such as wireless operators and cable, without regulatory restraint can devote their investments solely to the new technologies that consumers want, while telco spending by regulatory mandate remains anchored in the past. The best way to encourage telcos to become vibrant competitors with cable is to get rid of legacy rules where their very existence deters the kind of private-sector investment that everyone — including the government — wants to stimulate.
To make matters even worse, last week, President Obama urged the FCC to regulate consumer-based Internet services under the same rules that govern rotary telephones. Applying antiquated regulations to broadband will further complicate the effort by the USTA and others to bring the nation’s communications regulations up to date. The specter of saddling broadband with obligations on pricing, entry and exit from the market and other legacy regulations has introduced greater uncertainty that may jeopardize our clear national goal to encourage greater broadband competition. In fact, this uncertainty resulted in AT&T announcing a “pause” in further broadband deployment, while it better understands the rules of the road for future broadband investment.
So whether the issue is legacy telephone rules from the monopoly era or the possibility of shackling today’s broadband providers (and Internet edge companies offering telecommunications-related services) with similar rules from decades ago, tell the president, the FCC and Congress not to keep rules that are unnecessary and that interfere with the fastest possible expansion of technologies that consumers want. We already have strong competition in broadband; fully adding the telcos would make that competition even stronger, to the benefit of consumers.
Oh, and by the way, you probably shouldn’t drive with an uncaged bear in your car. That legacy regulation actually might have made sense.
Boucher served in the House from 1983 to 2011 and chaired the Energy and Commerce Committee’s Subcommittee on Communications, Technology and the Internet. He is honorary chairman of the Internet Innovation Alliance and leads the government strategies practice at the law firm Sidley Austin.
Source URL: http://thehill.com/opinion/op-ed/224452-uncaged-bears-and-rotary-phones
Section 706: A Rare Tech Policy No-Brainer
by Larry Irving and Rick Boucher
Those seeking to impose new regulations on broadband providers offer a seemingly simple approach: Just have the Federal Communications Commission shift broadband Internet regulations from an existing section (Title I) of the Communications Act to another provision (Title II). What’s the danger? Can’t the regulators protect this vital 21st Century technology on which so much of our economy and daily lives depend?
Unfortunately, it’s not so simple.
All participants are in violent agreement on the fundamental need to preserve and protect the open Internet. Everyone agrees that broadband providers should not become content gatekeepers. That’s been clear since 2010 when the FCC initiated its inquiry into how best to maintain an open Internet. Moreover, the facts make clear that the underlying success of the Internet in the two decades since its commercialization has been based on light-touch federal regulation and private sector, commercially-negotiated arrangements among service providers that have led to very few real complaints about supposed “gatekeepers.”
Under section 706, the FCC could prohibit so-called “paid prioritization” anytime such a practice has the effect of slowing down content or degrading the quality of service that any broadband customer receives, and which represent the alleged potential harms that lie at the core of the concerns expressed by activists urging Title II reclassification.
This fall’s intense debate is not about whether to preserve an open Internet. It’s about which of two available approaches the FCC could use is best.
Should the FCC use an axe (Title II) or a scalpel (Section 706) to advance the public interest in a continued vibrant and robust Internet?
There is no real dispute regarding the FCC’s vital role in ensuring that the Internet remains open. The U.S. Court of Appeals for the District of Columbia Circuit said as much in its decision earlier this year in upholding the FCC’s authority to act under Section 706 of the Telecommunications Act.
The FCC’s powers under Section 706 are real and far-reaching. For example, under its “commercial reasonableness” standard, the FCC could prohibit so-called “paid prioritization” anytime such a practice has the effect of slowing down content or degrading the quality of service that any broadband customer receives, and which represent the alleged potential harms that lie at the core of the concerns expressed by activists urging Title II reclassification. In short, the use of section 706 authority to maintain an open Internet would seem to be a complete answer to the Title II activists’ complaints.
Section 706, however, would not extend to things like price regulation, entry and exit from a market, or other types of intrusive Title II regulations that date from the era of copper wire, single-provider telephone service and that are wholly inappropriate for the era of broadband competition. Unlike Title II, Section 706 also would not pose a potential danger of extending unnecessary regulation to the Internet edge companies who offer services that take the place of traditional phone service and that consumers use every day (think Skype, FaceTime and a wide range of applications that involve videoconferencing). And, most importantly, treatment under section 706 would not carry the huge amount of regulatory and litigation uncertainty that would attend Title II reclassification, leading to an inevitable dramatic decline in the willingness of broadband providers to invest in next-generation networks.
Some Title II proponents now contend that the FCC could move forward with a “Title II lite” approach—that is, carry over to broadband Internet access services only certain portions of Title II regulation and allow the FCC to “forbear” from applying certain Title II rules at the outset. Such an effort would be subject to an exceptionally long, heavily lobbied and litigated proceeding, and would face a serious legal challenge, given how one court has already explicitly warned the FCC of the dangers of modifying its forbearance approach. And, in the meantime, the overhang of legal uncertainty will harm the broadband industry, depressing investment and thus delaying the faster, better broadband everyone wants.
Proponents of Title II, no less than their opponents, sincerely desire more broadband for everyone. Then why support a path that leads to less investment to deliver that broadband? In fact, the existing light-touch regulatory approach endorsed by the FCC for well over a decade has made possible the very explosion of broadband, in both reach and speed, which has made America a world leader, far outpacing Europe. An abrupt switch to Title II regulation would endanger that process, essentially freezing the investment on which innovation depends.
Section 706 gets us to the place everyone wants: an open Internet that is innovative and favors investment. The court gave the FCC an open door to promote the open Internet. Let’s take it and end this debate so that the doors of broadband investment and innovation will remain wide open as well.
Larry Irving is a former U.S. Assistant Secretary of Commerce. He currently is the CEO of the Irving Group, a consulting firm that provides advisory services to technology and telecommunications companies. He also is co-chairman of the Internet Innovation Alliance, a nonprofit advocacy group that includes telecommunications companies.
Rick Boucher represented Virginia in the U.S. House of Representatives for 28 years and chaired the Subcommittee on Communications and the Internet. He leads the Government Strategies Group at the law firm Sidley Austin LLP, which represents communications companies, and is honorary chair of the Internet Innovation Alliance.
Originally published at Bloomberg Law: http://www.bna.com/section-706-rare-n17179911495/
Net neutrality: FCC should first do no wrong
by Larry Irving
“First, do no harm.” That phrase generally associated with the medical profession has been the operating philosophy for America’s Internet regulators for more than two decades. The philosophy has benefitted consumers and innovators greatly. Silicon Valley continues to generate new products, new businesses and new strength in old companies—its entrepreneurial spirit is the envy of the world.
With the digital economy and digital innovation continuing to flourish, government regulators should continue to question the impact of regulation.
This week, President Barack Obama asked the FCC to reclassify consumer-based Internet service as a Title II service under the 1934 Communications Act, essentially equating broadband to old copper wire telephone service. Such a regulatory approach would mimic oversight designed for a 19th century monopoly service.
At issue, however, is how to best to preserve an “open Internet”. No one opposes this vital concept. The battle is over how best to ensure the continuation of what has been deemed “net neutrality”.
The Title II path presents several potential harms. First, and most dangerous, is the harm to innovation. A light-touch regulatory environment has advanced ideas birthed in the valley. Introducing outmoded regulations on entrepreneurial business models in the tech sector could hurt the pace at which we’re seeing new start-ups, technologies, and products emerge.
A system of having to ask “Mother, may I?” of government would naturally introduce a chilling effect, as companies of all sizes would start wondering whether they or their product would be regulated. Would their products have to change to comply with regulation? Or would it be better to not introduce products to avoid regulation?
Second, Title II raises a panoply of requirements, such as for entry and exit, just as it did for monopoly telephone service. Section 251 of the Telecommunications Act, for instance, concerns telephone interconnection, but Netflix is trying to use this provision to assert a supposed violation of net neutrality regarding its broadband video traffic. The list of potential negative consequences is long. In a well-working, Internet Protocol-based world of private commercial negotiations, why would it be in our interests to superimpose a telephone model with layers of federal and state regulations?
That gets to a third point. Reclassification would lead to an alarming sense of uncertainty. Some contend that Title II can apply to certain companies but not to others, or to specific activities but not to others. Yet to whom would it apply, and how, and why? And who gets to decide that? Uncertainty in any marketplace means less investment, and Silicon Valley would be no exception.
Prompted by the dynamism of Silicon Valley, the United States has been a staunch proponent of promoting an open Internet, free from government controls, around the world. Reversing course now and switching to a government-based regulatory model for the Internet could undermine that goal and empower nations who most oppose a free and open Internet to attack our credibility. Reclassifying broadband Internet under Title II runs counter to our nation’s, and the valley’s, heritage of Internet innovation with minimal government intervention. We can and must preserve the open Internet without the regulatory and economic risks that Title II would bring.
First, do no harm. Our Internet-driven innovations remain the envy of the world. Why would we change course?
Originally published at the San Jose Mercury News.
Don’t Turn Back the Regulatory Clock to Invigorate Tech Innovation
by Bruce Mehlman
WASHINGTON (TheStreet)—While consumers clamor for cool new apps just as fast as tech innovators can develop them, the policy professionals in Washington return to the burning question of whether 21st century data services should face the same rules and regulations as telephone monopolies did back in 1934.
The D.C. Circuit’s decision earlier this year overturning the Federal Communication Commission’s proposed Open Internet order brought the issue back to life, prompting the FCC to rule that it would propose reclassifying broadband Internet access under Title II (common carrier) regulation.
The Republican-led House Judiciary Committee recently voiced its concerns about such a rule, arguing that consumers should be very afraid of this proposal. The FCC invited public comment on May 15. Here’s mine: It’s a terrible idea.
Activists now plow ahead, even though no economic studies exist to support the supposed harm that reclassification would remedy. Instead, the voices of real Internet experts warn that the implications of reclassification are vast—and would end up hurting everyone who uses the Internet.
Reclassification would lead to extreme uncertainty.
Regulatory uncertainty is the enemy of investment and innovation. Cisco (CSCO) CEO John Chambers recently wrote the FCC that his company “...is deeply troubled by the proposals” for reclassification, warning that $60 billion a year in broadband investment could be threatened.
Chambers argues that “If Title II regulation is brought to broadband Internet access services, investment in new infrastructure will be severely hamstrung. New, innovative services may not be brought to market because entrepreneurs fear telecommunications regulation.”
Here’s the basic problem: As technology advances and as companies work ever harder to meet growing consumer demand, the old distinction between companies that focus on “transmission” and those that focus on “content” is vanishing. Each can own networks; each can (and often does) provide data and voice services. Convergence and cross-platform competition are the order of the day, yet Title II would shackle ISPs and some of the world’s most innovative companies with a regulatory regime designed for the 1930s telephone monopoly. It makes no sense.
As Chambers asks, “Will we have rules that only seek to protect innovation on the edge of the network by imposing onerous regulation on the core of the network? Or will we take a balanced approach that encourages innovation everywhere in the Internet ecosystem while protecting consumers and competition?”
Former Clinton administration official David Balto agrees, explaining: “Reclassification would subject edge companies, those who provide Internet based apps and services, to other regulations—a terrible outcome for consumers. Other firms, such as sellers of connected devices like e-readers, social networks offering messaging, search engines and Internet backbone companies could all be reclassified a telecommunications services and be regulated.”
Similarly, Robert Litan of the Brookings Institution noted, “[t]here is a very slippery slope . . . to having to include other forms of Internet transmissions as well because they arguably use ‘telecommunications services’, the legal hook in Title II for its application.” Anyone who buys wholesale wireless service for content delivery purposes, for example, could become a regulated “reseller” of telecommunications services. The same is true of connected devices, such as car navigation systems and others, even potentially e-health applications.
A proposal that was bad to begin with—broadband Internet access is nowhere close to a monopoly—becomes infinitely worse when applied to other innovative companies in the tech ecosystem.
Former FCC Commissioner Robert McDowell during a recent Congressional hearing noted that Title II contains over 1,000 requirements for those under its purview—a far cry from today’s light-touch regulation. Reclassification would be “yet another attempt to thread the eye of a tiny legal needle with a fat regulatory rope.”
Is this the world we want, a hyper-regulated Internet, mired in years of complex litigation? Or should we rather continue with the same light-touch regulatory regime that has made possible these innovations in the first place?
For most people, the question answers itself. But some activists press on, unaware of the very real threat to the current open, innovative Internet.
The danger here is real. That’s why the Telecommunications Industry Association has reaffirmed its “long-standing position that the Internet must continue to remain free and open, allowing for the connectivity of devices and access to information,” by once again rejecting “utility-style regulation” on Internet Service Providers. If those who wrote Title II intended it to apply only to monopolies, why would we want to subject innovative, edge companies to this burdensome regulation, harming investment and innovation?
Commissioner McDowell has it right: “The term ‘net neutrality’ seems to morph almost daily, but ultimately all of the arguments for it translate into ‘please regulate my rival ... but not me!’ in order for the politically favored to gain a competitive advantage through regulatory arbitrage.”
That’s a terrible way to run a railroad, as the phrase goes, and it’s an even worse idea to burden some of the world’s greatest technology companies with the same kind of regulation the railroads faced 100 years ago.
Source URL: http://www.thestreet.com/story/12764826/1/dont-turn-back-the-regulatory-clock-to-invigorate-tech-innovation.html
Conversion to broadband will aid Delray consumers
By Rick Boucher
March 10, 2014
You may have heard by now that Kings Point in Delray is one of two communities in the country that soon may get a Federal Communications Commission -sponsored test of a new broadband communications network to replace today’s telephone network.
While some of us may have an idle phone bolted to the wall, that’s no longer the case for the majority of Americans. Two-thirds have fled the outdated, copper-wire network entirely. In fact, only five percent of American households still rely on it exclusively.
The old telephone network, first invented by Alexander Graham Bell, is wearing out. And as with most technology of yesteryear, it has severely limited functions and capabilities.
But questions still swirl: Is it really necessary to move away from the telephone network? Who benefits? What does this mean for consumers? Well, here are a few answers.
Every dollar spent to maintain a network Americans are fleeing is a dollar unavailable to invest in modern broadband networks consumers prefer. With broadband networks, telephone service is just the beginning; consumers can connect more quickly to all the Internet has to offer — video, voice, email, text and a vast array of inventive applications.
The FCC is now looking at retiring the old telephone network by the end of this decade, enabling all consumers to make the switch to broadband — but the transition to all high-speed networks will not be regulation-free. Consumer groups, the FCC and industry are all working together to assure the protections they have long enjoyed on the old telephone network will be maintained. What core consumer values will guide the transition? Take a look:
Leaving no one behind. Universal connectivity will remain our national goal. Everyone, including seniors, should receive a service after the transition at least as good as the service they have now, regardless of the technology used.
Maintaining priority access to public safety and first responders. Consumers must continue to have access to 911 services when they need them. Emergency services must know where a caller is located.
Requiring emergency backup power for modern broadband networks. High-speed broadband networks should have levels of resiliency comparable to the older network’s reliability and security when the power goes out.
Keeping key consumer protections in place. Consumers should have a place to bring any complaints, with a prospect of rapid resolution. Billing errors should be corrected, and existing prohibitions against “slamming” and “cramming” on consumers’ bills should remain intact. Consumers should also be able to keep their telephone numbers if they switch providers on new broadband networks.
Requiring consumer education. Telephone companies should be required to educate customers about this next-generation technology as well as any differences in the terms or conditions of their new service as compared to their old service.
Continuing services for special populations. Protections to guarantee access for persons with disabilities, including the vision and hearing impaired, should continue. Protections should also exist for vulnerable populations, including the elderly, low-income populations, and residents of Tribal lands.
Enhancing competition. Broadband service providers will compete for both wired and wireless consumers, just as now.
With these core principles as guiding lights, the FCC can ensure the success of pilot transition projects in markets like Kings Point. Through the demonstrations, policymakers will have an opportunity to find out what — if anything—can go wrong as remaining users on the outdated network are transitioned to modern networks. The gathered knowledge on best practices and remedies for observed problems will pave the way for a smooth move, nationwide.
To most consumers, phones today mean so much more than just voice. The upgrade to next-generation broadband will free phone companies to direct their investment to modern networks that expand the possibilities. With regulations that ensure consumer protections and a careful plan in place, the FCC is sure to help everyone get these new 21st century services. Get ready, Kings Point.
Source URL: http://www.sun-sentinel.com/news/opinion/fl-rbcol-oped0310-20140310,0,3535415.story?dssReturn
Special access, end of PSTN no secret to wireline marketplace
by Bruce Mehlman
A recent Huffington Post article by Bruce Kushnick highlighted “special access,” a service long provided by companies like Verizon (NYSE: VZ), AT&T (NYSE: T) and CenturyLink (NYSE: CTL) to business customers seeking access to the nation’s antiquated telephone system. It inaccurately described special access as a monopoly market that is a “…secret network you should know about”—with “secret wires.”
I’m not quite sure what the author was trying to convey; however, I do know that special access is no secret. It’s a decades-old service that many Americans (including American businesses) have already abandoned and virtually all don’t use exclusively. It’s no secret in the marketplace: Far from being some monopoly, today’s reality is that the business market served by special access services is robustly competitive.
Don’t take my word for it—look at the companies and competitors who use special access services. In 2012, Sprint (NYSE: S) announced that it would look for other alternatives to telephone company special access service by starting an RFP for competitive bids from other companies. Thirty to 40 competitive providers were expected to offer alternative service to telephone company special access high-capacity services. In fact, at the conclusion of the RFP process, Verizon, the nation’s second largest phone company, obtained a contract to provide special access services to only 6 percent of Sprint’s cell towers in Verizon’s service area.
Special access is also no secret to America’s cable TV companies. Cable TV providers know all about these “secret” wires and have been competing fiercely against incumbent telephone companies with their own high-capacity Ethernet service to gain significant market share in the lucrative small business market. Cable entry into the telephone business market has been so successful that they are now offering Ethernet 2.0 services to compete with telephone company special access.
But beyond the details of the competitive special access market, there is a broader and more important point. These not-so-secret phone lines are the last vestiges of the old public switched telephone network, which is rapidly yielding to modern high-speed broadband networks that already carry 99 percent of all data traffic in this country. This is not a nefarious plot; rather, it represents getting closer to the goal of replacing the antiquated phone system as set out by the FCC’s 2010 National Broadband Plan.
The old telephone network served us well for decades, but its limited service capabilities are well known. Many consumers—including the 38 percent of households that “cut the cord” to wireless service or who receive phone service over cable—have already switched to using a high-speed broadband network from a telco or cable MSO. In fact, only 5 percent of Americans rely exclusively on “plain old telephone service.”
Ninety-five percent of Americans use broadband-based communications networks in some form. If affordable and ubiquitous nationwide broadband is our goal, then we need to start sunsetting the PSTN as soon as possible. Here’s why.
Regulatory requirements—nowhere mentioned in the blog post—force incumbent telephone operators to subsidize not one but two networks, the old TDM network that the author appears to favor and the new, faster IP-based network consumers want. Their competitors that offer broadband services, however, face no such burden of maintaining two networks, and those that rely on incumbent special access services benefit handsomely from subsidized, regulated access to incumbent telephone facilities. A recent study revealed that of the $154 billion incumbent telephone companies invested in their networks from 2006 to 2011, nearly $81 billion went to maintaining their old networks—ones the author admires—and only $73 billion devoted to new modern broadband networks.
Imagine what could happen if that $81 billion in mandatory regulatory costs were used to finish the buildout on the new networks to serve everyone. In the State of the Union address, President Obama set forth the goal to connect every school and library in the country to high-speed broadband—even 1GB ultra-high-speed broadband—within five years. He did not say: “Let’s connect schools with dial-up modems and copper wires.” His message was clear; it is not the special access technology of the past he seeks for America’s schools and libraries, rather our future will depend on the rapid buildout of modern high-speed broadband lines throughout the nation.
Kushnick was right about one thing when he stated that “there’s nothing special about special access lines.” Exactly correct: They represent old technology. Businesses as well as individual consumers are all migrating, fast, to the high-speed broadband networks that represent the future of telecommunications. And that’s no secret.
Source URL: http://www.fiercetelecom.com/story/special-access-end-pstn-no-secret-wireline-marketplace/2014-03-03
To Grow Our Future in Technology, Look to the Past
by Larry Irving
History doesn’t just happen. History starts with a vision.
In the early 1980s, Rep. George T. “Mickey” Leland, who was then chairman of the Congressional Black Caucus, envisioned a more inclusive telecommunications and media world.
A decade later, the late Secretary of Commerce Ron Brown recognized that the power of the Internet could unlock a brighter future for our children with better economic and educational opportunities.
Today, our leaders are writing history with critical decisions that will affect the future of the mobile revolution and the transition to all-Internet-based networks.
Mickey was weary of seeing stereotypical depictions of blacks and Hispanics in the media and was disappointed at the low rates of minority ownership and employment in the media and telecommunications industries. He understood that media ownership and employment would determine not just how white America saw black people but how black people saw themselves.
Equally important, he knew that electronic media and technology were going to be among the principal drivers of our economy and would present tremendous entrepreneurial opportunities for decades to come. And, being a great politician, he understood one other thing: He knew that times of great disruption bring great opportunity.
The media and telecommunications landscape was undergoing massive disruption in the 1980s. The historic AT&T was broken up into seven “Baby Bells.” New competitors such as MCI and Sprint were entering the telecommunications marketplace. Broadcasting was expanding from the three historic networks, and media-ownership opportunities were proliferating. And, perhaps most importantly, the cable-television industry was maturing and expanding.
Mickey was a strong supporter of innovation and technological advancement. But he made sure that every industry, even the most innovative industries, knew that his support for their efforts came with a condition: their support for increased opportunities for minorities and women.
Mickey fought for changes in the way minorities were portrayed by television broadcasters and movie producers; he drove the FCC to establish linkup and lifeline programs to increase telephone penetration rates in low-income communities; he fought for and won increased opportunities for ownership of radio and television stations by minorities; and, perhaps most importantly, he wrote legislation codifying increased employment and vendor opportunities for minorities in the cable-television industry. Those equal employment opportunity provisions became the model for other media industries, including the broadcasting industry.
Over the past 30 years, hundreds of thousands of minorities and women employees of media companies, in addition to thousands of cable vendors, benefited from Mickey’s hard work and vision. While the media and telecommunications industries are not as diverse as they could be, vast strides have been made as a result of Mickey’s vision and leadership.
Secretary Brown similarly understood the power of disruptive technology. He was a central figure in the Clinton administration’s policy formulations in the early days of the Internet, and he understood that the Internet was the transformative technology of its day. But he also understood that the Internet would only matter—would only be judged a clear success—if it benefited all Americans.
Shortly after Secretary Brown took office, a group of White House staffers presented him a list of proposed nominees for a Clinton administration private-sector advisory committee on the Internet. Secretary Brown looked at the list and noted that of the 25 suggested nominees, 22 were white males. He told the White House staff to take the list back and return with a more inclusive and diverse slate of nominees. One of the White House staff said, “But this list has been vetted and cleared by the White House,” to which Brown said, “Yes, and now it’s been vetted and rejected by the secretary of commerce who has to chair and manage that advisory committee.” The list was resubmitted with more diversity and a much-improved ratio of women and minorities on the committee.
The inclusion of women and minorities wasn’t just window dressing. Secretary Brown knew that we were at another technological inflection point. When he took office, fewer than 2 million people worldwide were on the Internet. The secretary knew that the Internet would grow and become ever more important. By ensuring diversity on the advisory committee, he made certain that as this high-powered group of individuals made policy suggestions to the president, they were looking at how this important new technology would affect and benefit all Americans and all American communities.
Secretary Brown was a firm supporter of the e-rate proposal that provided low-cost Internet connectivity to schools and libraries across America. He worked to develop policies and establish grant programs designed to connect schools, libraries, hospitals and rural health clinics. It’s a straight line from Secretary Brown’s commitment to connecting schools to the Internet two decades ago to the ConnectEd program the Obama administration supports today. Secretary Brown understood that, particularly in the early days of the Internet, millions of Americans would have their first experience with the Web in public institutions, and he fought to ensure those institutions had the resources they needed to serve their public.
Perhaps most importantly, he understood that there was a “digital divide,” and that it was the role of government to assist industry in bridging that divide. The digital divide would have been deeper and more pervasive but for Secretary Brown.
It is his signature on the front page of the first report defining the digital divide and stating that we, as a nation, have an obligation to ensure that all Americans have access to essential technological tools. He knew that with government and industry working together and with the formulation of smart policies, we could drive Internet connectivity rates higher. In slightly more than two decades, we have gone from 2 million people with access to the Internet to almost 3 billion people having access worldwide. Much of that growth is the result of the vision and the work of Ron Brown.
Today we are at another technological inflection point, another time of great disruption. The mobile revolution and the so-called “IP transition” promise to be even more disruptive than the cable revolution and the Internet revolution. And they promise to provide great opportunity for the smart and the agile. Women and men of vision must step forward to embrace these twin revolutions and work to ensure that these new technological tools are used to improve education, increase access to health care and fitness tools and provide for greater productivity and economic opportunity for our community.
Rep. Leland and Secretary Brown understood the power of technology to transform our image of ourselves, to enhance economic and educational opportunities and to ensure the future of our children. As we enter this next new phase of technological development, it is our obligation to further their twin visions.
The best way to celebrate Black History Month is to create some history of our own. Fast-tracking the move to modern, high-speed broadband networks, while ensuring that core consumer values are protected, will lay the foundation for even greater progress with education, health care, entrepreneurship, energy and the environment. We must understand and embrace new technologies and the opportunities they provide us. That’s what Mickey and Ron would have done.
Source URL: http://www.theroot.com/articles/culture/2014/02/blacks_in_technology_two_pioneers_who_inspired_the_next_generation_of_innovators.1.html
The future of telecommunications
By Former Rep. Rick Boucher (D-Va)
In today’s hyperpartisan environment, it’s useful to remember that not so long ago, Congress normally worked in a bipartisan manner to achieve matters of great national purpose. Saturday marks the 18th anniversary of one such notable achievement, the Telecommunications Act of 1996.
The ’96 Act was a watershed development in communications policy. It opened the door for cross-platform competition across a range of telecommunications sectors, expanding consumer choices and stimulating network investment. Telephone companies were empowered to offer multi-channel television service. Cable companies and other new entrants were empowered to provide competitive local telephone service. The Regional Bell Operating Companies were provided a path to enter the nationwide long-distance market upon demonstrating they had sufficiently opened their networks to local telephone competition, and they were given permission to manufacture telecommunications equipment.
The ’96 Act cleared away the regulatory underbrush that prohibited the cross-platform competition now made possible through technological advances. It ushered in an era of service convergence. Consumers benefited from the highly competitive market and were given one-stop shops for all their voice, video and data needs. Together with Congress’s wise decision in 1993 to adopt a light-touch regulatory approach to the then-emerging wireless industry and the contemporaneous decision of the Federal Communications Commission to forbear from applying common carrier regulations to broadband networks, the ’96 Act has undergirded the progress we have seen over the last two decades.
The rapid technological and marketplace changes advanced by the ’96 Act have outpaced our existing regulatory regime and brought us to a new policy inflection point. Technology and consumer access to information have changed so rapidly since 1996 that the debates we had in those days now seem quaint, and the communications opportunities available to consumers in 2014 would have been unrecognizable 18 years ago.
The dramatic shift toward broadband-based networks forecasts nothing less than the end of the aging telephone network first used in the era of Alexander Graham Bell. By the end of this decade, through a carefully planned process, all consumers will have transitioned to modern high-speed broadband networks.
Most consumers — essentially anyone who has a cellphone or who gets telephone service from a cable provider — have already made this switch without government action. Drawn in significant part by 4G wireless technology offering speeds comparable to the fastest wired broadband, consumers are fleeing the old network in droves. Today, less than one-third of the country uses it at all, and only 5 percent use it exclusively. It’s rapidly wearing out. Manufacturers don’t make new equipment for it, and the costs of maintaining it are skyrocketing. It’s a network with limited service functionality. As the transition to date underscores, consumers realize how broadband-based networks offer them far more. Driven by new technological opportunities, that’s the marketplace at work.
But as a result of current regulatory requirements, telephone companies collectively spend more maintaining the outdated network than investing in modern broadband networks. As the number of subscribers on the old network dramatically declines, these expenditures are simply unsustainable. Moreover, every dollar expended maintaining an outdated network is a dollar not available for investment in the modern, highly functional networks consumers prefer.
These realities in 2012 led the FCC’s Technological Advisory Council to recommend that the old, public switched telephone network sunset by 2018. At the time, the Advisory Council was chaired by Tom Wheeler, now FCC chairman. In his first months in office, he has embarked on a thoughtful process to achieve a complete national transition by decade’s end.
Modeled on the successful demonstration trial the FCC established in the run-up to the digital television transition, the agency this year will conduct several demonstration projects in carefully selected markets, through which consumers will rapidly be transitioned from the old network to modern multimedia platforms. With the information gained from these trials, the FCC can fashion a plan to sunset the switched network by a date certain.
Completing the transition will require answering some challenging questions, such as how to protect the core consumer values of universal connectivity, access to public safety and disability services and competition. Equally important: How do we maintain today’s vibrant environment for broadband investment?
Thanks to our light-touch regulatory regime, the U.S. already receives three-quarters of worldwide investment in broadband networks. These expenditures will be dramatically accelerated, with billions more invested, once the local exchange carriers are freed from the need to maintain outdated, less popular and highly expensive old networks, even as they invest in modern ones.
To meet these challenges, the full participation of all stakeholders, including government, consumers and network operators, will be essential.
The ’96 Act accomplished everything we intended. It unleashed a golden era of competition, service improvements, technological advancements and massive investments in high-speed broadband-capable networks. With the right public policies in place — policies favoring investments and newer technologies consumers want — this golden age will continue for all Americans.
The transition to IP networks, and the policy modernization that will accompany it, represent the largest telecom changes since the ’96 Act. It’s going to be an exciting several years.
Source URL: http://thehill.com/opinion/op-ed/197573-rick-boucher-the-future-of-telecommunications#ixzz2sYCVcCMp
Time for more American dreaming
by Jamal Simmons
Happily, President Obama talked about opportunity in the State of the Union speech last night. Since the economy tanked in 2008, leaders naturally began erecting barriers against fierce economic headwinds and knitting together a tighter safety net to catch those who were thrown off their financial perches in the maelstrom. Now it is time for Washington to get back to helping Americans dream again; then put concrete plans in motion to help us achieve those dreams.
I grew up in Detroit during the de-industrialization of America in the 1970s and 80s. Despite our collective idealization of the old days of manufacturing when men like my grandfather could raise a family of six on his blue collar auto plant wages, that world is not coming back.
Instead we must prepare our children for the jobs of the future that will require more skills and a willingness to keep adapting throughout their careers. Consumers spent over $2 trillion dollars on IT products and services in 2013, and one study reported that Apple paid app developers $5 billion dollars, Google $900 million and Microsoft $100 million. Yet despite our increasing diversity, another study found 83 percent of tech startups’ founding teams are all-white; 5 percent Asian and 1 percent African American. Only 10 percent of startup founders are women. Allowing those trends to continue is bad for the tech industry, bad for the people being left out and bad for the economic prospects of the United States. Much like the gene pool of families that intermarry over generations, our country’s innovative DNA will deteriorate without diversifying beyond the narrow band of elites now setting the pace in the tech industry.
Non-profits like #YesWeCode, Girls Who Code and LOFT (Latinos on the Fast Track) are taking on the challenge of teaching kids to code with the help of many corporate funders. Schools like Howard Middle School in Washington D.C. are trying to do their part by teaching students how to build their own apps to fit the needs of their communities.
The Howard Middle School students at the MMTC broadband summit recently presented apps to fight obesity, smartly provide for more efficient garbage pickup and, tragically, find missing girls of color because the news media doesn’t pay as much attention to their disappearances. One of these kids could be their generation’s Mark Zuckerberg or Nigerian-born Chinedu Echerou whose HopStop app to find mass transit directions was recently sold to Apple for a reputed $1 billion.
Other groups are opening doors of opportunity in Silicon Valley for minority workers and entrepreneurs. Laura Weidman Powers recently attended an event the Internet Innovation Alliance hosted in San Francisco with FCC Commissioner Jessica Rosenworcel, California Lieutenant Governor Gavin Newsom and representatives of academia and the investment community. Powers co-founded Code2040, which provides mentorship, internships, leadership training, and network development for minority talent by connecting them with growing tech companies.
The federal government can do its part by making sure all schools, regardless of income or geography, are equipped with high speed, high capacity broadband and well-trained teachers. The president’s ConnectED proposal to modernize the 1996 E-Rate law and get educational software into the classroom is a great place to start.
Once kids go home, they need the same access there that they have in school. Companies are focusing on enhancing high-speed broadband network deployment and low cost equipment options. In the interim, low-cost handheld devices like PDA’s and tablets are standing in. These devices require bandwidth and speeds that the private sector can provide. The Obama administration should continue working with companies to promote high speed broadband network deployment that will mean tens of billions of dollars in investment each year and more services for families and students at home.
Government can’t fix all of our problems alone. Like the non-profits above, it needs to partner with the private sector. That’s how we built the electric grid and nation’s railroads. As companies invest they will create opportunities for small and minority-owned businesses, and we know those companies tend to hire more women and minorities, which could make an even bigger dent in the unemployment rate.
Source URL: http://thehill.com/blogs/congress-blog/technology/196721-time-for-more-american-dreaming
Wheeler Could Be Obama’s Best-Positioned Lieutenant
December 4, 2013 | Bloomberg BNA
by Bruce Mehlman
Rarely can public figures glimpse their potential legacy the day they begin service. More often, their significance is only understood decades later. Yet newly confirmed Federal Communications Commission Chairman Tom Wheeler has the rare chance to anticipate his impact at the outset as President Obama’s second-term standout, assuming he seizes the unique opportunity afforded by time, place, and fate.
Wheeler arrives at the FCC at a critical time for the agency and the nation. The FCC is an agency in transition, overseeing a communications sector in revolution, powering an evolving economy despite a dysfunctional Congress and a struggling recovery.
The government writ large, meanwhile, is playing a historically outsized role. Whether measured by taxes, spending or regulation, it is hard to find a prior period over the past 50 years when the federal government exerts greater influence in our economy. A former financial services CEO recently advised his successor that ‘‘your number one client is the government.’’ Many fear Wall Street has become addicted to Federal Reserve interventions. Taxpayers foot more than $1 trillion in annual health care bills, even before Obamacare expands coverage. More than half of all citizens are net recipients of government largess, receiving more in benefit and transfers than they pay in taxes. Over the past century, the number of pages in the tax code has ballooned 18,034 percent.
Yet one bright exception has been the high-tech economy, where the government has played a far less intrusive role. While trade policy, immigration, and federal support for basic research and STEM (science, technology, engineering and mathematics) education have been essential, the sector has seen no bailouts, no hand-outs, no too-big-to-fail-outs. Government intervention in tech has been minimal, especially relative to heavily regulated services, and energy.
Not surprisingly, tech’s freedom from command-and- control regulation has enabled breakneck innovation, furious competition and the fundamental reshaping of how Americans live, work, play, and learn. Technology is transforming education, health care, retail, and manufacturing, and creating new jobs for skilled workers. Yet this non-stop innovation is bringing our most dynamic new sector into conflict with an anachronistic regulatory framework, threatening future progress ab- sent visionary change.
Enter Chairman Wheeler.
At the FCC, Wheeler inherits a regulatory regime designed decades ago for an earlier era. Voice and video services are regulated under separate provisions of the Communications Act of 1934 (Title II and Title VI, respectively) based on assumptions of a permanent monopoly and massive barriers to entry. The Act and its subsequent amendments fundamentally fail to acknowledge the competitive alternatives created by the technological and marketplace convergence of the broadband age. Today’s FCC-enforced regulatory framework was designed for a world without Netflix Inc., Skype Communications, Google Inc., or iPhones — a world without the Internet. Thus, the agency remains stuck in the past, distinguishing among companies based on the technology they use and their legacy status under the Act. Consumers make no such distinctions.
To be the chairman that our economy needs, Wheeler should reorient his agency around three primary goals:
First, the FCC should narrow its mission. Previous efforts to regulate siloed monopolies are no more needed than TV antennas. Leave competition policy to competition authorities, and focus on core FCC competencies such as public safety, consumer protection, and universal service for those most in need. Remove regulations that face backwards, such as those covering the increasingly obsolete copper TDM (time-division multiplexing) telephone networks, which fewer and fewer consumers use.
Second, Wheeler should declare ‘encouraging investment’ a core purpose of the agency. Private investment has driven fierce competition across Internet plat- forms while barriers to entry have fallen. With $17 trillion in federal debt, taxpayers cannot foot the bill for today’s 4G and fiber-to-the-home deployments or tomorrow’s even bolder new networks. Nor should we ask them to. Private investment will continue provided policy makers give some measure of regulatory certainty that the ‘‘rules of the road’’ will not change arbitrarily, and all investors will compete on level playing fields.
Finally, Wheeler must work to make the FCC the government’s most efficient, transparent, and predictable agency. Decisions should be data-based, rather than outcome-oriented, considered and delivered within reliable timeframes.
So far, Wheeler has placed a high priority on auctioning spectrum — and without preordaining winners or losers. He also has initiated long-overdue efforts to get the IP transition under way as soon as January, looking favorably towards approving real-world market trials that will help reduce inefficient investment in old technologies that siphon money away from new high speed broadband infrastructure.
In short, early signs from Wheeler’s commission are most promising.
Mehlman served as assistant secretary of commerce for technology policy from 2001 to 2004 and is founding co-chairman of the Internet Innovation Alliance and founding partner at Mehlman Vogel Castagnetti
To read the insights of Mehlman’s Internet Innovation Alliance co-chairman, Rick Boucher, visit the Telecom- munications Law Resource Center’s BNA Insights
Reproduced with permission from Telecommunications Law Resource Center, 2013 TERCN 1, 12/4/13. Copyright © 2013 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com
From Plain Old Phones to Broadband: A Policy Prescription for the FCC
November 21, 2013 10:13PM ET | Bloomberg BNA
by Rick Boucher
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) http://www.bna.com.
Washington Lags Consumers in Embracing Digital Age
By Rick Boucher
Oct. 24, 2013 (published online on Oct. 23, 2013)
As they have throughout history, Americans are embracing technological change as a way to improve their quality of life. Just as the steam engine, electric light bulb and the automobile drove earlier revolutions, Internet-based communication is expanding our horizons and opening boundless opportunities. But Internet innovation could move even faster if Washington policymakers could manage to keep pace with the average American.
A new study by veteran telecom guru Dr. Anna-Maria Kovacs makes clear that 21st-century innovation is weighted down with antiquated 20th-century regulations. Across the country, Americans connect via text, Twitter, Skype and email, but Washington’s rules assume that telephone service is still king and that consumers have little choice.
The old phone system rules still see the world in silos — phone companies deliver voice service and are heavily regulated, cable companies offer TV and are unregulated, and wireless companies sell unreliable voice service that regulators discount as a competitor to wired phone service.
With the help of innovation, however, in 21st-century America, the old distinctions have been obliterated. Phone and cable companies compete head-to-head in the offering of voice, video and Internet access. There are now more wireless devices in the country than people. Thanks to one law (the Telecommunications Act of 1996), there is now a diverse communications market in which consumers choose the specific Internet, voice, digital information services and technologies they want from a wide range of providers.
“The most effective competition,” Kovacs writes, “is between different technology platforms that bring different characteristics and economics to bear.”
But those old silo-centric rules skew competition and misdirect investment. Some broadband providers — the former local phone companies such as AT&T and Verizon — are compelled by regulation to maintain the old phone network on par with the new. That means billions of dollars that should be invested in Internet-based innovation are directed, by Federal Communications Commission rules, into an antiquated phone network that more than two-thirds of Americans have stopped using and thousands more leave behind every day.
It’s as if towns still require a hitching post in front of every store, force the bus company to maintain streetcar tracks, or insist on backup electric fans in every air-conditioned office.
By contrast, cable TV companies, wireless operators, satellite providers and new broadband entrants such as Google are free to invest in modern facilities as they see fit in order to give consumers the services they want without any obligation to keep up older networks.
The disconnect between antiquated phone rules and the reality that Americans experience daily in the marketplace results in distorted competition, stifled innovation, limited choice and increased costs for consumers. America owes consumers an updated set of rules that fits today’s reality — not deregulation, but smarter regulation that protects consumers, ensures public safety and also allows every communications provider to put its dollars into bigger and better networks.
Arguing for liberating investment dollars from antiquated technology, Kovacs observes: “Consumers will be best protected if all resources are devoted to the networks that they have chosen to use rather than being wasted on the networks most have abandoned, and that the rest are likely to abandon within a few years.”
Smarter regulation requires that new rules be guided by a set of consumer-focused principles. Without dictating specific technologies or micro-managing how communications competitors meet their obligations, we should insist that every American have access to reliable service. Protecting consumers from fraud or misconduct by service providers, ensuring competition and consumer choice and ensuring public safety access also are critical. Every American should be confident, for example, that they can reach 911 no matter what communication device or technology they choose.
Current trends make clear that almost every American will soon use communications from Internet-based technology, not the old phone network. Knowing that, the FCC should move quickly to market trials to learn what problems consumers will experience with a rapid move from the old network to Internet-based communications. With that knowledge, means can be found to meet consumer needs.
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.
Source URL: http://www.rollcall.com/news/washington_lags_consumers_in_embracing_digital_age_commentary-228610-1.html