Bringing The Benefits of Broadband to Those Who Need It Most
Almost 90 percent of American households have broadband Internet. But tens of millions of Americans still are not connected to broadband.
Those Americans tend to be older, poorer, sicker or live in rural communities. In other words, the Americans who most need the benefits of broadband Internet too often are the people who aren’t connected. We can change that. With a revamp of an existing government program, we will ensure every American that wants broadband Internet service can have it.
The Lifeline Program democratized telephone service in America. It is difficult to imagine today given the ubiquity of mobile phones, but just 30 years ago almost 10 percent of Americans and 20 percent of black and Hispanic Americans lacked access to basic home telephone service. For low-income Americans, the situation was even worse: 25 percent of low-income black families and almost a third of low-income Hispanic families were without home telephone access.
The Lifeline Program was first a legislative proposal by the late Congressman Mickey Leland, then Chairman of the Congressional Black Caucus. At his prodding and with strong encouragement from consumer and civil rights groups, the Federal Communications Commission adopted a program providing low-income families with discounted telephone service. The Lifeline Program has been an unqualified success. Over the past 30 years, we have seen the national percentage of homes with phones increase from 91 percent in 1985 to 95 percent today. And the percentage of low-income households with telephone service has grown from 80 percent in 1985 to 92 percent today.
The Lifeline Program, which was extended to wireless phones in 2005, now provides phone service to 14 million people. But times have changed, and the telephone no longer is the principle tool of communication for many Americans. Broadband Internet is now a critical part of our communications infrastructure. In 2015, broadband Internet is as essential as basic telephone service was in 1985. It is time that our Lifeline policies reflect that reality.
Fortunately, members of the FCC recognize the need for updating Lifeline policies. Commissioners Mignon Clyburn and Jessica Rosenworcel, in particular, have outlined thoughtful approaches that can help bring the Lifeline Program into the 21st Century. There is an emerging consensus on what needs to be done:
• Extend Lifeline benefits to broadband Internet use;
• Empower consumers by providing the subsidy directly to eligible people (they could use a “Lifeline Benefit Card” with different providers);
• Level the playing field between different providers to broaden consumer choice and stimulate competition for their purchasing power; and
• Safeguard and simplify the program by taking administration away from companies and instead vest that responsibility with an appropriate government agency or agencies.
The existing Lifeline program has benefited not just low-income Americans but every American by strengthening our economy and our sense of community. Updating Lifeline so that we connect millions of Americans to broadband Internet similarly benefits us all.
The mix of homes without broadband Internet access today looks very much like the mix of homes without telephone service three decades ago. Lifeline Program reform will bring broadband to Americans who are elderly, disabled, single parents, unemployed or living in poverty. These are precisely the people who need the services, information and assistance that broadband Internet provides.
Revising the Lifeline Program for the 21st Century will allow us to connect more people to high-speed Internet, provide them with more communications choices and increase competition among broadband providers. Smart reforms will simultaneously reduce costs, waste and inefficiency in the program.
Over the past three decades, we improved millions of lives by connecting American families to a telephone. Now, we can improve lives even more by helping to connect those in need to high-speed broadband Internet. What are we waiting for?
Source URL: https://medium.com/@larry_irving/bringing-the-benefits-of-broadband-to-those-who-need-it-most-a1e2b0cd0e61
FCC Needs Market Data Before Changing Rules of the Road
by Bruce Mehlman
Like a cat that won’t give up trying to get on a table, the Competitive Local Exchange Carriers are back, pushing for more special treatment for special access lines. In their latest salvo, three CLECs claim that the Federal Communications Commission should re-regulate special access business services and Ethernet lines on the theory that price deregulation has somehow not worked (read: not been helpful for their business models), even though price deregulation/non-regulation expanded investment and competition in every other telecom market, from cable to wireless to broadband.
Unfortunately for these CLECs, however, the FCC has no legal authority to do what they want. US Telecom recently noted the Commission’s proposal “cannot upend forbearance and other deregulatory decisions with little or no data analysis” and that the FCC’s discretion is constrained by relevant statutes and the agency’s own precedent.
For a decade, the FCC has had an effective policy of “new wires, new rules.” Relying on that policy, the Incumbent Local Exchange Carriers – even though forced by the special access rules to subsidize a second network of non-competitive older technology – eagerly invested billions to roll out the faster broadband network people want to compete with cable, wireless and fiber networks. Now, some CLECs want to toss deregulation out the window, changing the rules in midstream without a formal data analysis and imperiling that needed investment.
That’s just wrong. Why would the FCC want to re-impose regulation on a competitive environment without understanding the marketplace? And what about the ILECs’ reliance on the FCC’s regulatory promise of “new rules” for new wires – does that just get washed away?
As US Telecom correctly contends, “[t]he FCC cannot step in and set prices without a fact-specific, full and fair analysis of the competitive landscape” and instead rely on “procedural shortcuts.”
The FCC has in the past realized all of this, and I’m hopeful it will again. In 2010, for instance, the agency denied a Qwest petition for forbearance and in doing so, significantly increased the burdens on parties seeking forbearance by raising the evidentiary standard for relief.  Perhaps of greater relevance, in his first major address, Chairman Wheeler said that he is “a rabid believer in the power of the marketplace” and that his focus will be to see “what, if any action (including governmental action) is needed to preserve the future of network competition” (Wheeler’s emphasis). He also stated that his policy is to use the tools of government regulation “in a fact-based, data-driven manner” and that if “a market is competitive, the need for FCC intervention decreases.”
That’s exactly right. So what’s happening in the marketplace? Honest examination of real-world data will show the “new wires, new rules” paradigm has worked well to generate investment, competition and innovation, and perhaps exposure of those stubborn facts are what some CLECs fear.
But even if the FCC were tempted to move away from Wheeler’s wise guidance, the courts wouldn’t give deference to such a decision. Judicial tolerance for unreasoned switches in policy is already low and getting tighter. The Tenth Circuit affirmed the FCC’s policy shift in the Qwest case yet warned that “goalpost-moving does not reflect an optimal form of administrative decision making.” No kidding! Why would any company invest billions of dollars in networks if their expected ROI can simply be erased with the stroke of a political pen?
In short, the FCC does not have either the legal authority or marketplace basis to change its rules for the convenience of the business models of certain companies selling outdated technology. Perhaps yet more litigation is needed to figure this out again, but that would be a shame.
Of course the CLECs will keep pushing, even lacking facts to substantiate their case. I’m not sure who first coined the phrase “the plural of anecdote is data,” but I’m starting to wonder if that person works at a CLEC.
 See Petition of Qwest Corp. for Forbearance Pursuant to 47 U.S.C. S 160 (c) in the Phoenix, Arizona Metro. Statistical Area, Memorandum Opinion and Order, FCC 10-113 at paras. 21, 46, 58-61 25 FCC Rcd. 8622 (2010).
 Qwest Corp. v. F.C.C., 689 F.3d 1214, 1228-29 (10th Cir. 2012).
 See Id. at 1227-28.
A Lifeline Argument Not Rooted in Reality
by Rick Boucher
The Federal Communications Commission is now modernizing its Lifeline program, originally designed to connect low-income Americans to the telephone network.
Lifeline was created in the mid-1980s and reflects the pre-broadband era, when Americans communicated primarily by wired or wireless telephone. The reform now underway would broaden the program to cover high-speed Internet service.
That change is urgently needed. Only 36% of individuals with incomes below $10,000 have access to broadband, even though broadband is the bridge to success in today’s economy.
Lifeline is unique in that service providers, and not the government, today determine whether consumers qualify for and remain in the program. That means service providers maintain an incentive to qualify as many subscribers as possible, which can lead to waste and misallocation of program resources.
That’s why my organization, the Internet Innovation Alliance (IIA), has joined FCC commissioner Mignon Clyburn and many others in calling for fundamental reform of the Lifeline program. We seek to enhance consumer choice, expand the number of carriers willing to offer Lifeline-supported services and promote greater financial accountability to ward off waste, fraud and abuse. To enhance accountability, IIA supports having states, not self-interested companies, determine who is eligible to receive Lifeline service. A state agency determination that an individual is eligible for other federal benefit programs, such as food stamps, would automatically qualify that person in the Lifeline program.
TIME FOR AN EBT
To spur competition by encouraging a larger number of carriers to participate in the program and to give consumers the most flexible way to choose from among competing carriers, we support moving the Lifeline subsidy to an electronic benefit transfer (EBT) card.
Putting the Lifeline benefit on an EBT card and asking the states to confirm eligibility would empower consumers in the marketplace and help prevent fraud. Yet even as many states have adopted the convenience and accountability of moving government-provided benefits to an EBT card, some still resist this change for Lifeline.
They contend that EBT cards would burden certain beneficiaries, such as the elderly, disabled and rural poor, based on an incorrect assumption that the cards would have to be swiped at a retail location on a regular basis.
Let’s review how eligibility determinations and EBT cards would work in practice under a new Lifeline program.
First, Lifeline eligibility would be determined through “coordinated enrollment,” with states performing Lifeline enrollments as they judge eligibility for a number of other federal programs (such as the Supplemental Nutrition Assistance Program, or SNAP). Lifeline could be added to this process to ensure that only those eligible for benefits actually receive them. Upon a determination of eligibility, the low-income consumer would receive a “Lifeline EBT Card,” similar to food stamp cards, allowing them to apply the subsidy to the telephone or broadband service of their choice.
State agencies that approve eligibility for Lifeline would also provide to the beneficiary a list of registered Lifeline service providers in that area. Individuals could then sign up for Lifeline by visiting a retail location or by using their electronic benefit to order service by phone or over the Internet.
Consumers with EBT cards could apply their $9.25 Lifeline monthly discount toward basic telephone or basic wireless service, or they could decide to apply the discount toward Internet service.
When consumers are satisfied with their service option and want it to continue, they should be able to set up automatic monthly payments of the Lifeline subsidy through an agreement with the carrier, revocable by the customer at any time.
There’s no need to go to a storefront every month unless the consumer wants to switch Lifeline providers (which could also be done online or over the telephone).
WORKS IN THE STATES
Thirty-seven states have put federal benefits on some form of debit card. It’s efficient, and it’s working well. There’s no reason why it should not be extended to the Lifeline program.
Those who argue against EBT cards and want to maintain the status quo are obliged to frame their arguments in the realities of how the program would actually function in practice. In particular, claims that placing the Lifeline benefit on an EBT card would impose logistical burdens on subscribers by requiring that they visit physical store locations on a regular basis are simply inaccurate and do nothing to advance the reform dialogue. Moreover, those who oppose moving Lifeline eligibility determination authority to the states and removing self-interested carriers from the process should spell out how the government can stop Lifeline enrollment abuse that weakens popular support for the current program.
An EBT card as part of coordinated enrollment with other federal programs is the best way forward. Giving consumers more choices, including both the choice of broadband and greater choice among providers, will empower consumers to take maximum advantage of their Lifeline benefit and to encourage the nation’s transition to broadband. That is the key not only to Lifeline reform, but to its success in the 21st century.
Source URL: http://www.multichannel.com/lifeline-argument-not-rooted-reality/394090
Four ways to close the ‘homework gap’
by Jamal Simmons
Donald Trump makes the case as plainly as any candidate for president can. He wants to “Make America Great Again.” From Trump to Bernie Sanders, Americans are looking for leaders to stop playing politics, shake things up and help them reclaim the American Dream.
The problems are easy to see. Increasing college costs and student-loan debt are a weight around young Americans’ ankles as they try to get started in the workforce, find life partners and buy homes. Unemployment has decreased and productivity has increased, but incomes have stayed flat. Candidates point fingers of blame at each other, but policy makers still have a chance to fix a few problems before politics takes over every decision made in DC.
The country is becoming more diverse, while our most dynamic industries are not. Silicon Valley is under a microscope as public policy makers, activists and customers have focused on the lack of diversity among their employees. Companies have been wrestling with hiring and retention strategies to jump-start a solution but over the longer term, we need more Americans in the pipeline with the skills to fill jobs in our high-tech sector. Getting them on the path to success at a young age is critical.
One way to make sure students from all backgrounds have the strongest start is by closing what Federal Communications Commissioner Jessica Rosenworcel calls the “homework gap,” which impacts students in five million American households. These students from low-income families have less regular access to broadband Internet at home than their peers from wealthier households, making completing homework assignments tougher.
FCC Commissioner Mignon Clyburn has proposed revamping the Lifeline program as one way to help close this gap. Started during the Reagan administration, Lifeline was created to help low-income Americans get access to telephone service. As mobile phones became more ubiquitous, the George W. Bush administration expanded the program to allow Americans to choose wireless phone service under Lifeline. Today, broadband is the critical service that connects Americans to jobs, health care, entertainment and family, and the current FCC should allow the Lifeline program to evolve again.
In addition to expanding Lifeline to cover broadband, Internet Innovation Alliance, the organization I co-chair, has proposed four reforms that will make this program more effective for more American families:
1) Let the government make the eligibility determination and take it out of the hands of private company providers who may have improper incentives to increase enrollment.
2) Link eligibility to those who qualify for the Supplemental Nutrition Assistance Program (SNAP) — 46 million Americans— which is administered by states. This would simplify the process for providers and consumers and make it more efficient.
3) Issue consumers a “Lifeline Benefit Card” to buy stand-alone or bundled wireline, wireless, or broadband services from the authorized companies that make sense for them.
4) Remove regulatory roadblocks to make it easier for service providers to participate in Lifeline and incentivize them to compete for the purchasing power of Lifeline customers.
Black and Latino students would benefit from closing the “Homework Gap” and increasing access to Lifeline, but so would thousands of children in military families who are struggling to make ends meet. Pinpointing the exact number of military families receiving food assistance is difficult, but according to the U.S. Department of Agriculture, more than $84 million in food-stamp benefits was spent at military commissaries in 2014. That number doesn’t include the amount these families spend in grocery stores and markets off base. Using USDA estimates, and pegging Lifeline access to SNAP, we would ensure that as many as 22,000 active duty members of the military and their families are eligible for this benefit.
Working together, Democrats and Republicans can improve efficiency for Lifeline, ensure communications access to those in need and keep costs under control. Fixing Lifeline is not as exciting as a reality TV star lambasting his opponents or news stories about email controversies, but fixing this problem can help real Americans fix real problems. Everybody wins and America can help get more students on the path to success.
Source URL: http://www.cnbc.com/2015/09/23/increase-broadband-access-for-low-income-students-and-families-commentary.html
At the tipping point: Comprehensive reform of FCC’s Lifeline program
By Rick Boucher
Today, few argue with the fact that broadband Internet access is a 21st-century necessity. It’s the modern passkey to healthcare, education, government services and economic opportunities. Unfortunately, some Americans still lack this essential bridge to success.
The overwhelming majority of wealthy Americans have high-speed Internet access, but close to two-thirds of those with the lowest incomes are have-nots. The statistics are stark: Using 2013 data, 93 percent of individuals with annual incomes over $150,000 had broadband compared to only 36 percent of individuals with incomes below $10,000. Lack of broadband availability among the lowest income families makes it ever harder for them to get ahead.
Fortunately, the Federal Communications Commission (FCC) is at this moment working to transform its existing and successful Lifeline program, which was initially created to make essential telephone service affordable, by expanding the program to bring broadband within reach for our nation’s low-income residents.
A forward-looking concept when introduced during the Reagan administration, Lifeline helped raise basic telephone subscribership for low-income households in the U.S. from 80 percent in 1984 to nearly 93 percent by 2013. Yet, the program only provides funding for stripped-down phone service at a time when consumers are rapidly shifting to broadband, whether fixed or wireless, as their preferred means to communicate.
With bipartisan support in Congress, the FCC now has a unique opportunity to completely overhaul and reshape the program for the 21st century. The central challenge is to add broadband as a Lifeline benefit without a significant increase in program costs. Tinkering with the existing program or making minor modifications to program administration at the edges will likely fail to deliver the promise of ubiquitous and modern high-speed broadband access for low-income consumers.
A thoroughgoing reform is needed, one that delivers a fundamentally new program based on core principles similar to those recently announced by FCC Commissioner Mignon Clyburn. For example, why not start by putting the consumer in charge? Today’s program is centered around the carriers who receive the $9.25 per month Lifeline subsidy and also determine the eligibility of individuals for the program. A reformed Lifeline program should be consumer-centric, recognizing the power that consumers exercise in today’s competitive communications marketplace and building off of that recognition.
Instead of giving the subsidy to the carriers, it should be given directly to consumers who could then decide where it should be spent. To promote consumer choice, eligible individuals could be issued a “Lifeline Benefit Card,” similar to food stamp cards, which would allow them to easily apply the subsidy to broadband or basic telephone service or some combination of both. Consumers could also shop among the various service providers and submit their Lifeline Benefit Card to the one they choose. In theory, this change could be made with little increase in program costs.
Eliminating incentives that can lead to misallocation of program resources should result in cost savings for the program. The present approach of carriers determining eligibility for Lifeline participation carries incentives to qualify ineligible applicants, leading to inefficiency and waste of program resources. A better way to administer the program would be to share the responsibility for determining consumer qualification with state governments under a process known as “coordinated enrollment.”
At present, states handle verification of consumer eligibility for a number of federal programs, such as food stamps, school lunches and Medicaid. Adding Lifeline to that list would promote efficiency and would also cut down on the opportunities for waste in the program. Simply stated, when an individual is qualified by a state public assistance office for programs like food stamps or Medicaid, the individual could simultaneously be deemed qualified for the Lifeline program and could receive a Lifeline Benefit Card. Thirty-seven states currently provide federal subsidies, including food stamps, through a debit-card system. It works well; why not simply add Lifeline?
Lifeline remains as important to achieving “full participation in our society and economy” as it was in 1985 when the program was started. If anything, Lifeline is even more critical today as broadband becomes increasingly central to American life. Those without it simply lack access to the tools necessary for success.
Winston Churchill once said that “a pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” I believe that the optimists at the FCC recognize that only top to bottom reform of the Lifeline program can place it on a sustainable path for the nation’s broadband future. I’m also optimistic that they will prevail in initiating the wholesale changes necessary to make broadband an eligible service, strengthen program administration and protect against misallocation and waste of program resources.
Fundamental — not half-hearted reform — is how to ensure that Lifeline remains relevant and opens the door to meaningful opportunities for low-income families in need of communications services.
Source URL: http://thehill.com/opinion/op-ed/253161-at-the-tipping-point-comprehensive-reform-of-fccs-lifeline-program
IP Transition: FCC Should Not Import Monopoly Rules for a Competitive Future
by Bruce Mehlman
The nation’s historic transition away from the copper wire toward a modern Internet Protocol-based (“IP”) communication system represents a critical technological leap forward. The United States aims to complete this transition by 2020; indeed, the impetus for this effort actually first came from FCC Chairman Tom Wheeler, then in his role as head of an advisory board on technology transition.
This transition will ultimately bring consumers new technology, billions of dollars in new infrastructure, and faster and better broadband services and applications. Today, test trials for the transition are underway in Alabama and Florida to work out technical issues and ensure superior service quality for consumers.
Recently, however, Chairman Wheeler publicly outlined his proposed next steps for the IP transition that include applying old monopoly-style telephone rules to favor and advance certain carriers’ business models. Applying such rules to IP-based broadband communications networks of the future would benefit companies that serve businesses, yet provide little to no benefit to the average consumer.
Specifically, in response to the supposed need to “preserve competition in the enterprise market,” the FCC plans to require that “replacement services be offered to competitive providers at rates, terms and conditions that are reasonably comparable to those of the legacy services.”
After investing billions of dollars in deploying new 21st-century communications networks, companies like Verizon and AT&T would, under the Chairman’s proposal, be required to share those new facilities with competitors whose business models have been based on “rent-seeking,” or ongoing access to the copper-based networks that others built. The prices, terms and conditions offered to competitors on antiquated copper-based networks would seep into the future and apply to high-cost, newly built next-generation networks.
Such action would reverse course on over a decade of FCC policies designed to promote new investment in fiber and IP-based infrastructure and limit government-mandated, price-regulated facilities sharing to legacy copper networks.
Even worse, the FCC also appears ready to give veto power to certain carriers over whether those who have invested in the future can discontinue supporting the networks of the past. The proposal would give competitive carriers, not actual retail customers, the power to determine whether retail users are “negatively impacted.” Thus, those sharing the facilities of others would dictate whether their supplier must keep offering services – services business customers may not even want – at a discount for as long as they wish. Having government preserve your business model at the expense of your competitors is a great deal if you can get it.
Moreover, the FCC describes all this as an “interim measure,” pending the completion of its special access proceeding. But that proceeding has dragged on for more than a decade. In fact, the Commission’s inaction is evident given that they are still seeking comment on the same issues when this proceeding began.
In Washington, when entities have an interest at stake, “interim measures” have a way of becoming the new reality. After all, the “temporary” telephone tax enacted to fund the Spanish-American War in 1898 only came to an end in 2006.
And it’s all so unnecessary. While policymakers should have the data necessary to determine whether markets are competitive, certain interested parties shouldn’t jeopardize investment and the public good through inordinate delay. It begs the question as to what motives are in play? Are they afraid that the data would show robust competition in the enterprise market and no underlying support to continue their special deal? Imposing unrelated special access requirements in the FCC’s upcoming Order addressing the telephone system transition would award delay tactics – and harm consumers, businesses, and network operators.
Why? Because consumers, businesses, and network operators all have an interest in moving to a faster, more modern system as soon as possible. Special access services that network operators are forced to offer fail to qualify for the FCC’s old definition of broadband, much less its recently defined new standard of 25 Mbps. Why would businesses want an older system to reach their customers?
This is all pretty complicated for non-experts, but the bottom line is that some “competitive” carriers are trying to get access for their old T1 technology forced on to the telephone system of the future. Yet, if we’re trying to get to the future faster, shouldn’t we encourage investment in the technologies of the future rather than in those of the past?
There’s no horse-and-buggy lane on the Interstate, and there’s simply no reason to force network providers who are building the networks of tomorrow to bear the burden of outmoded business models from their supposed “competitors.” Instead of managed competition, it’s time for everyone who wants to compete in the telephone system of the future to invest in new technologies rather than in trying to convince the government to hold on to the past.
Reproduced with permission from Telecommunications Law Resource Center, Vol. 2015, (July 27, 2015). Copyright 2015, The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com. Download a PDF of this article.
Congress should pass an open-Internet law NOW
by Jamal Simmons
While most political insiders are focused on fund-raising numbers, staffing announcements and what fast food candidates eat in Iowa and New Hampshire, there are real issues at stake this year.
Foreign policy, health care and income inequality are sure to be on the docket, but one issue not being discussed is the future of the open Internet and the rules the Federal Communications Commission is adopting.
Although the “net neutrality” debate seemed settled by the recent FCC vote to apply Title II utility-style regulation to broadband, these rules could be overturned in court or changed by a simple majority of commissioners appointed to the FCC by the next president. The only way to lock in the rules consumers and businesses want is to pass legislation that can’t be changed easily by the next presidential election. Rand Paul is looking to overturn the recent FCC action with proposed legislation before the primary votes are cast.
Passing legislation feels like it would be a big lift. Democrats and Republicans are barely able to agree on the current day of the week, but the uncertainty of the political process might provide the leverage required to pass an open Internet bill. It could be the kind of compromise that Congress used to do more regularly and the kind we elect our representatives to make. Members of Congress who seek to protect consumers can make permanent in law prohibitions against slowing or throttling Internet speeds or creating fast lanes on the Internet (both of which were contained in the FCC’s previous 2010 rules), while members focused more on innovation and economic growth can embrace the legislation’s Internet protections that would not rely on imposing public utility regulation on the vibrant and growing broadband industry.
Public utility-like Title II rules, meant to regulate monopoly telephone service, could hamper innovation and flexibility in the most dynamic sector of the American economy. Currently, the FCC has promised to not apply many of these onerous rules; however, doing so is politically tricky and subject to legal challenge. A new statute would allow Congress to sidestep this troublesome issue and instead create a framework that advances today’s broadband Internet and promotes cross-platform competition.
So as competing interests align, a new statute can be a realistic possibility. It just takes political will and goodwill from both sides of the aisle. But Congress will need to hear from the people. All those who care about preserving an open Internet that maintains the flexibility to innovate and develop new products and services without entrepreneurs having to seek government permission should support a new law. A new law won’t be perfect and will require both sides to make compromises, but it is a far better path to certainty and avoids legal and political wrangling that could tie advancement up for years, slowing down innovation and economic growth in the meantime.
Voters should ask Congress to pass an open Internet law before all attention turns to the presidential campaign. Otherwise, the next president will hold in her — or his — hands the future of the open Internet. Protecting such an important resource from the whims of shifting presidential political winds is among the most important things voters can do to keep the economy growing.
Source URL: http://www.cnbc.com/id/102683082
Increased Competition in Special Access Proves Markets Work
Remember special access? Last year, there was a big kerfuffle over the question of whether network operators could be forced to pay for maintaining two separate networks, one operating at higher speeds that consumers and businesses wanted to use, and one operating at much slower speeds using old copper-based technology that few people wanted. One of the rationales for asking broadband providers to pay twice was that it supposedly helped competition by making the Competitive Local Exchange Carriers (CLECs) better able to compete with the large network operators by leasing lines from incumbent telephone operators at wholesale rates.
There were (and are) many reasons to oppose special access rules. For one thing, it slows deployment of faster technologies to everyone as the network operators have to devote limited resources to building out and maintaining two systems. Second, it delays the transition to an all Internet Protocol (IP)-based communications system. This makes bad policy sense. Businesses today want Ethernet data, not copper-based, TDM data. And there’s generally no reason to subsidize one industry’s business model once that business model becomes uneconomic.
But the best reason of all to oppose special access regulation is that it interferes with the normal workings of the vibrant market and innovation in telecommunications. If there is demand for a product, the market will address that demand; if there is no demand, the market will move on. Horse carriage parts, like TDM (special access) equipment, are hard to find in a world of cars and broadband connections. Put it another way: once the tin can was invented, there would be a market for can openers – innovation begets innovation. See iPhone and App Economy. Cut off innovation in one area, and it suffers in others.
The best proof that telecom markets can work if we will just let them is what’s happening in the special access market right now. A recent article in FierceTelecom observed that cable is entering the special access market, claiming that “[t]he presence of cable operators could potentially shake up the wholesale special access space where incumbent telcos . . . have enjoyed a monopoly position for decades.”
Why cable? Many cable operators are building out fiber and/or hybrid fiber/coax (HFC) systems to serve existing customers, particularly businesses, and so entry into the special access market is a natural extension of their current business model, which includes aggressive efforts to attract small business and teleworkers – natural, healthy competition at work. They probably won’t be able to compete for the largest customers at first, but for small and mid-size businesses, cable could be a good choice. As the article remarked, “[h]aving a set of HFC-based options, including Ethernet over HFC, means that a cable operator could address perhaps lower speed needs between 2-10 Mbps.” That may be plenty for small businesses looking for reliable broadband connections but for whom the fastest speeds are not critical to business success – basically the heart of the CLEC market.
All this raises another point: in a smooth functioning market, there will be many providers offering a variety of options, including different options based on speed. Not everyone wants to pay for the fastest speeds available. Though inconsistent with the Washington narrative of regulate-to-prevent-“inequality”, as we’re seeing in health care and some tax proposals, in the real world consumers and businesses prefer to choose what’s best for them.
So with cable joining the fray, incumbent telcos are now facing greater competition in special access, just as one would predict in a market that is working well – something for regulators to remember the next time competitors come knocking on their door seeking government intervention and stricter regulations as a means to help subsidize their business model. Markets work, if we will just let them.
Source URL: http://www.multichannel.com/special-access-proving-markets-work/389890
Legislative thaw on net neutrality
by former Rep. Rick Boucher (D-Va.)
Legislative windows of opportunity rarely open, where the issues are few and crystallized, where Democrats and Republicans have roughly equal leverage, and where each party has the power to grant the other’s most important priority.
With the Federal Communications Commission’s recent release of its Open Internet Order, which details its decision to reclassify broadband as a public utility Title II telecommunications service, that rare moment has arrived.
The FCC’s recent decision gives Democrats leverage they have previously lacked to pass legislation giving statutory permanence to strong network neutrality principles. Since the first days of the network neutrality debate a decade ago, Republicans in Congress have consistently and successfully resisted net neutrality legislation. Now, however, Republican leaders of the House and Senate Commerce committees have circulated draft bills offering to Democrats the very net neutrality guarantees Democrats have long sought.
In return, Republicans seek to continue the light-touch regulatory framework that broadband has enjoyed for the past decade, which has spurred American investment and innovation to produce an Internet ecosystem defined by the most capable networks and most innovative content that are the envy of the world. To achieve that goal, however, they’ll need Democratic support to clear that provision through both houses and obtain a presidential signature.
But why, one may ask, would Democrats want to accept such an offer, since the FCC has now reclassified broadband as a telecommunications service, vesting the FCC with the power to apply a broad swath of common carrier rules to the Internet? Under that authority, the FCC can assure network neutrality and have residual power to regulate broadband providers in other ways that today are unforeseen. Why would Democrats want to give that up for a statute that only protects net neutrality?
The answer is both simple and compelling. The FCC’s reclassification decision rests on a bed of sand. It is highly impermanent and could be washed away with the next presidential election. Today’s seemingly firm network neutrality assurances are at serious risk of being lost in the future.
The current administration enjoys a 3-2 Democratic voting majority on the FCC. Yet, in a Republican administration, that majority would flip to the Republicans. Given the highly partisan nature of the net neutrality issue, it’s safe to assume that a top priority for a Republican FCC would be to reverse the Title II decision and re-establish broadband as a lightly regulated information service. Moreover, little assurance exists that a Republican FCC would show any interest in starting a new proceeding to protect net neutrality if a court invalidates the FCC’s recent net neutrality decision, or a Republican FCC on its own once again declares broadband to be a lightly regulated information service.
Early polling indicates we may have another close presidential race in 2016. Assuming, hypothetically, that Republicans have a 50-50 shot at winning the White House, we then face the stark reality of a 50 percent probability — in the absence of adopting net neutrality legislation — that the net neutrality guarantees of the FCC’s Title II decision will be swept away as early as 2017.
The current Republican invitation to craft legislation offers Democrats a unique opportunity to achieve the nearly decade-long quest for net neutrality guarantees protected by statutory permanence.
The Republican legislative draft contains provisions objectionable to Democrats that are not needed either to assure statutory permanence for net neutrality or to maintain broadband as a lightly regulated information service. Republicans should be willing to eliminate these extraneous and unnecessary provisions, in order to reach agreement and meet the priority needs of both political parties.
Based on my over 30 years of experience in Washington, such moments are rare, and there is usually a short period when the leverage both parties hold can be effectively exercised. With the passage of time, leverage is lost and opportunity vanishes. But, perhaps with the beginning of spring will come a net neutrality thaw that at long last will put to rest the most contentious communications policy debate of the 21st century.
Source URL: http://thehill.com/opinion/op-ed/238141-legislative-thaw-on-net-neutrality
The Next Role for Virginians in Promoting Internet Growth
by Rick Boucher
Virginia and Virginians have a special role in the history of the Internet and a special concern for its flourishing. You can have a “Virginia Internet C@pital” license plate on your car; last year, the Washington Post suggested that Ashburn, VA was “the center of the Internet”, with 70% of the world’s Internet data passing through it and 5,000,000 square feet of data centers in Loudoun County alone. Silicon Valley may be more famous, but without Virginia, the backbone of the Internet would simply not exist.
It helped to have the Pentagon and the defense industries, but none of this happened by accident. Virginia fostered an entrepreneurial business and technology community that led to the many start-ups that bring jobs and innovation to the world from their Virginia hubs.
Not surprisingly, the policies that have fostered this growth and today’s open Internet have largely been bipartisan. Everyone favors good, clean, well-paying technology jobs and the companies that generate those jobs. This bipartisan consensus extended to the Federal Government as well. Back in the 1990s, during the Clinton Administration, the Federal Communications Commission (FCC) raced to do all it could to get the Internet to as many Americans as possible and to keep it free from overly burdensome public utility regulation that then applied to telephone companies. Two decades later we see the results of bipartisan efforts in the form of the free, open, privately-networked Internet that we enjoy today.
And equally unsurprisingly, anything that threatens this consensus and the Internet on which our economy increasingly depends should be of first importance to Virginia.
Unfortunately, the FCC’s new “net neutrality” rules attempt to promote an open Internet by imposing regulations designed for public utilities, such as gas and water companies. Imposing these so called “Title II” regulations on the Internet introduces unnecessary uncertainty into the broadband marketplace, and it could threaten the future investment that is essential to promoting an innovative, growing, and vibrant Internet-centric economy.
By treating the competitive multi-media Internet as a 20th Century “common carrier”, the FCC’s decision opens the door to Internet regulations modeled on the rules that were developed for the Ma Bell telephone monopoly and for other monopolies that offered a single service and were regulated in virtually all aspects of their businesses. Under the light touch regulation that has applied to the Internet since the Clinton era, investment across the information ecosystem has produced an Internet economy that is the envy of the world. A regulatory environment welcoming to investment was at the foundation of that success, and it is now threatened.
It is not shocking that some original proponents of “Title II” public utility regulation, such as Netflix, now believe that the regulations may have gone too far. After all, the continued growth of broadband, which Title II regulations threaten, is essential to the business growth of companies like Netflix.
We can all agree that preserving and maintaining an Open Internet is vital to the nation’s and Virginia’s economy, but there is a far better way to protect network neutrality principles than reverting to regulations designed for the era of rotary phones.
Fortunately, Washington decision makers can take an alternative path. In 2010, the FCC proposed an earlier version of net neutrality regulations which, after years of litigation, were invalidated in court for lack of statutory authority to put them in place. Efforts in Congress are now underway to codify the FCC’s 2010 net neutrality principles, return to light-touch regulation of the Internet and create legal permanence on how it should be governed for the future.
It’s my hope that this legislative effort will be the basis for a bipartisan solution in favor of preserving both Internet openness and the light touch regulation that under different Administrations has promoted the exponential growth of the Internet ecosystem by letting entrepreneurs do what they do best. Virginia and Virginians need to take the lead in promoting this solution, for the sake of an industry that has come to define our “New Dominion.”
Source URL: http://www.jeffersonpolicyjournal.com/the-next-role-for-virginians-in-promoting-internet-growth-2/
It’s Throwback Thursday for the FCC with net neutrality
by Larry Irving
The Federal Communications Commission (FCC) this week embarked on its own Throwback Thursday with the release of its Open Internet Order. A 20-year bipartisan philosophy of regulatory restraint for the Internet changed when the FCC voted to transform the Internet from a model of global entrepreneurial innovation and advancement to a utility governed under a 19th-century regulatory model. The newly available rules usher in a new era of government involvement in the evolution of the Internet here in America and, perhaps more importantly, in countries around the planet.
Since the inception of the Internet, the U.S. government, under both Republican and Democratic administrations, has fought for regulatory restraint with regard to the Internet. I had the honor of serving as a policy adviser in the earliest days of the Clinton administration’s development of Internet policy and I am confident that our forceful advocacy of limited government regulation of the Internet and related technologies helped foster the explosive growth of the Internet globally over the past two decades.
Proponents of utility-style regulation of the Internet believe that it is the only way to ensure net neutrality or an open Internet. They fear that, without government intervention, Internet service providers such as cable or telecommunications companies will block new entrants or competitors.
Unfortunately, most of today’s proponents of a utility model for the Internet either have forgotten or never knew the genesis of the regulatory-restraint model that helped spur and continues to support Internet expansion.
They fail to realize that the global Internet was not inevitable. In the early days of the Internet, policymakers from developed countries fought for regulation of the Internet to protect incumbent national champion telecommunications providers, and developing economies saw the Internet as a means of America asserting economic and cultural hegemony or dominance. We had the task of explaining the importance of the then-emerging Internet and its potential for transforming economies and nations. We were addressing a skeptical world.
In 1993 when I joined the Clinton administration, only 2 million people were on the Internet. More than half the world’s population had no access to a telephone. Half the planet had to walk an hour or more to the nearest telephone. Mobile telephony was in its infancy.
Telecommunications service generally was provided by state owned and controlled monopolies. Governments in developing countries saw telecommunications services as a source of foreign capital and political control.
Under the leadership of President Bill Clinton and Vice President Al Gore, the U.S. argued forcefully, consistently and passionately for a transformation of telecommunications and technology policy. We suggested countries that wanted to enter the Internet age should:
• Seek to increase private investment
• Promote competition
• Provide open access to emerging networks
• Ensure universal service
• Create a flexible regulatory environment that minimized regulation and would foster competition.
Most nations, and particularly their regulators and policymakers, had no experience with the Internet in the early to mid-1990s. Those officials were used to a command-and-control, top-down utility form of regulation of communications networks. We argued that new networks required new thinking and a new approach, but not necessarily new or more rules. The unmistakable economic benefits of and consumer demand for the Internet helped us to persuade regulators not to regulate the Internet under then existing models.
By any measure, the Internet has transformed the world. We are witnesses to a two-decadelong experiment that has resulted in one of the greatest technological revolutions in history. We have seen an explosion in connectivity and the democratization of communications. Today, more than 3 billion people access the Internet. Internet-based telephony has reduced telephone costs dramatically. Globally, there are more than seven billion mobile telephone subscriptions. The cost of computing, telephony and Internet access has fallen dramatically.
In recent years, we have seen renewed efforts internationally to constrain the Internet, to increase government control of communications, to censor content and to impose institutional controls on the Internet. For 20 years, the U.S. could argue forcefully that we did not regulate the Internet in our country and that regulation of the Internet was not only not needed but bad policy. That has changed with the newly released rules soon heading to the Federal Register, and it will change the debate globally.
The U.S. has led the global debate for two decades on a nonpartisan basis. There is a strong interest among many for a nonpartisan congressional response to the FCC’s action that will ensure an open Internet, but without the burden of utility-style regulation. The U.S. led a technological and regulatory revolution that changed the world. Surely we can find a way to ensure the Internet is open for the benefit of entrepreneurs, innovators and consumers without a return to the days of utility regulation.
Originally published in The Hill. Source URL: http://www.sfexaminer.com/sanfrancisco/its-throwback-thursday-for-the-fcc-with-net-neutrality/Content?oid=2923292
How to Really Preserve the Open Internet
Congress can write a better law than the FCC’s ill-advised regulations.
by Jamal Simmons
The Federal Communications Commission voted recently to approve regulating the Internet as a public utility under Title II of the Communications Act, approving the plan favored by President Barack Obama to achieve what’s known as “net neutrality.” But that may not be the best way to ensure the principles of an open Internet in an era of big political swings. Remarkably, bipartisan Congressional action is a real possibility and would do a better job ensuring lasting protection for consumers.
I bet most people who supported Title II utility-style regulation didn’t know that adopting that option would increase costs on low- and middle-income people. That’s not something in the standard net neutrality talking points, but it’s true. Robert Litan and Hal Singer authored a report for the Progressive Policy Institute that predicted new taxes and fees would increase by $11 billion because of state and local regulations as regulatory costs are passed on to consumers.
In fact, the prospect of increasing taxes and fees is so ominous that it inspired one of the first bipartisan actions of the new Congress. Recently, a bill was introduced in the Senate to prevent some sales taxes, though state and localities may still be able to impose other fees that the law can’t prohibit.
Adoption of Title II may cause other unintended harms that could stifle the innovative economy. The FCC says it will “forbear” from the application of certain provisions to prevent negative outcomes, but that could get pretty messy. Lawsuits are certainly on the way. Companies will jockey for their best position while trying to keep their competitors at bay, questioning the picking and choosing of each rule.
Although the ruling is settled, Congress can still pass a bipartisan solution that enacts the valuable objectives of preserving an open Internet while leaving the onerous utility-style regulations of Title II behind. There are other solutions available, such as Section 706 of the Telecommunications Act of 1996, but the president and net neutrality supporters wanted something more. A Congressional act is a more permanent solution that would enshrine the prohibition against blocking sites, throttling speeds for consumers or allowing paid prioritization by companies for faster lanes, and would require disclosure of network management practices. A law doesn’t leave these rules in the hands of regulators whose opinions could change with the political winds. Who knows what political changes may come in 2016?
I co-chair the Internet Innovation Alliance because of a commitment to seeing more people in communities, such as the one where I grew up in Detroit, participate in the global technology revolution. Students need access to the best technology at school and at home to get up to competitive speed with their peers around the world. Mobile devices can help families get health care services that may be more difficult to access because of the dearth of facilities in low-income and rural communities. Entrepreneurs need access to global markets from wherever they are.
Ensuring we don’t discriminate in digital access is a core value when it comes to closing the opportunity gap. Government is an important partner in maintaining order in the marketplace, but maintaining an environment that encourages public and private investment in broadband availability and helps entrepreneurs maintain the flexibility to build great companies is critical.
It’s rare that Democrats and Republicans can agree on the substance of any matter, but there is great agreement on the principals of an open Internet. Companies, activists and political leaders from both parties want to make sure companies can’t pay for special treatment and consumers have high speed, reliable access to the Internet that can’t be blocked or slowed down. Let’s focus on the core values in common and write a law that will protect consumers while giving companies the ability to innovate without setting ourselves up for years of lawsuits and political wrangling. The people who need access to this valuable resource can’t wait for Washington power brokers to battle it out in the courts.
Source URL: http://www.usnews.com/opinion/economic-intelligence/2015/03/12/congress-can-preserve-open-internet-better-than-fcc-net-neutrality-rules
We Need a New ‘Straight A’ Strategy to Bridge the Digital Divide
It’s imperative that we prepare young people of color with the skills they need to succeed in a high-tech economy.
by Larry Irving and Jamal Simmons
Black History Month provides Americans an opportunity to celebrate our successes as a nation, reflect on what might have been and begin to craft a more inclusive future. Recent reports about the paucity of minority professionals in tech are all the more devastating because today’s underemployment has its roots in our collective failure to prepare all of America’s youth for the technology revolution that has swept our nation over the past 20 years.
Almost two decades ago, we had the honor of having front-row seats at the advent of the Internet era and the emergence of information technology as the new engine for driving global economies. Working at the Commerce Department under President Bill Clinton, Vice President Al Gore and Secretaries Ron Brown, Mickey Kantor and Richard Daley, we saw the dawning of a new era of opportunity and prosperity.
It was clear that the technology revolution could change the trajectory of some of the challenges facing low-income and black and Latino-American communities. On behalf of the Clinton administration, we worked to educate our communities so they could participate in the emerging high-tech economy; to stem the emerging digital divide; to connect urban, rural and low-income schools to the Internet; to inform black and Hispanic-serving colleges and universities about the need to prepare their graduates for careers in technology; and to educate black and Latino youth about the necessity of obtaining the skills they would need to succeed in the new economy.
As assistant secretary for the National Telecommunications & Information Administration, Larry outlined a Straight A Strategy consisting of three components—access, aptitude and attitude—in an attempt to steer a course for technological advancement that would include more of America’s cities and all of our citizens. When the 1990s tech boom collapsed and the Clinton administration ended, efforts such as the Straight A Strategy cratered. Despite the failure to develop an inclusive strategy for minority youth employment in tech back then, elements of that strategy still present a framework that has the potential to work today.
Access: Low-income and minority students still don’t have access to the educational technologies that are commonplace in more affluent American communities. The Federal Communications Commission’s new E-rate program will bring improved access to America’s schools and libraries, making institutional access more available to millions of Americans. The Internet Innovation Alliance, which we co-chair, has joined with key members of Congress and the FCC in calling for an overhaul of our Federal Lifeline program to bring greater access to broadband to millions of low-income Americans’ homes and to foster broader use of computing and Internet technologies.
Aptitude: In addition to providing connectivity and hardware, we also must provide students training and help them obtain the skills they will need for tech-industry jobs. Over a million additional high-tech jobs will be available between now and 2022—high-tech companies should make clear to public-sector leaders what skills students should learn so they are prepared to fill these jobs. Why are we talking about importing skilled workers, when we should be talking about imparting work skills?
Attitude: Finally, we need to ensure that all students and communities are familiar with new technologies and aware of the importance of high-tech skills. As President Clinton said in his commencement address at MIT in 1998, “All students should feel as comfortable with a keyboard as a chalkboard; as comfortable with a laptop as a textbook.” Sadly, that goal still eludes us two decades later.
One way to inspire our youth is to highlight the successes of those who come from their communities: Jewel Burks recently won a pitch competition for Partpic, her app that helps locate replacement parts for companies. Trey Brown recently started selling the Wemojis app that makes round-faced emojis with different skin colors for smartphones. Both of these entrepreneurs are recent Howard University graduates.
Two decades ago, America failed its children by not providing them with the tools, skills, environment and encouragement they would need to thrive in the high-tech economy we knew we were creating. Today, it’s imperative that we enlist the brightest minds in technology, government, education and urban communities to craft a new Straight A Initiative that ensures the future of all of America’s children and to create a new chapter in black history.
Source URL: http://www.theroot.com/articles/culture/2015/02/time_for_a_straight_a_strategy_in_tech.html?wpisrc=newstories
Outdated U.S. Regulations Would Stifle Global Internet
by Larry Irving
After years of contentious debate on net neutrality, there is good news and bad news in Washington. The good news is that there is strong bipartisan support for an open Internet. The bad news is that there is an increasingly partisan disagreement on how best to protect the open Internet.
Federal Communications Commission Chairman Tom Wheeler recently provided a preview of the open Internet rules he intends to enact, but this sneak-peek was not well received by Republicans on Capitol Hill or by his Republican colleagues on the commission. Historically, Internet policy has been relatively free of partisan strife — but that may no longer be the case. Over the past decade, preservation of the open Internet has galvanized political progressives, consumer advocates and policy advocacy groups. Advocates of net neutrality decry court rulings suggesting that the FCC might not have authority to protect the open Internet, and so utility-type regulation of broadband under Title II of the Communications Act is seen by many progressives — and by the president and his advisers — as the only way to unambiguously assure the FCC’s authority. Yet Title II regulation of the Internet seems like the wrong solution to those of us who support an open Internet but fear the impact of burdening still-evolving wired and wireless networks with centuries-old rules.
The U.S. government declaring the Internet an essential utility and applying Title II rules will also have an impact on policy deliberations about the Internet in other nations. Since the inception of the Internet, the U.S. government has urged international policymakers and regulators to exercise regulatory restraint. To reverse course at this critical time in the development of the global Internet seems self-defeating.
Despite partisan distrust and increasingly strident debate about Internet policy in Washington, an opportunity to protect core Internet values without changing our historic bipartisan approach to Internet regulation remains. Republican members of Congress recently circulated legislation that would:
• Enforce prohibitions against wired and mobile Internet service providers from blocking access to lawful content and devices;
• Prohibit future “paid prioritization” deals under which content providers pay serve providers to have their content ahead of competitors;
• Prohibit “throttling” or slowing of Internet traffic; and
• Require detailed disclosure of network management practices.
While Democrats in Congress expressed concern about other provisions of the draft bills, those principles could serve as both a baseline and springboard for further congressional deliberations. A key benefit of a legislative solution is that it would provide assurance that some future commission won’t overturn proscriptions against network discrimination. Insistence on Title II regulation by a badly divided FCC only assures three things:
• The seemingly interminable fight over net neutrality will continue at the commission, in the Congress and in the courts;
• Regulatory uncertainty that will stifle investment and innovation in our nation’s most critical infrastructure will continue; and
• Policymakers and regulators in other nations will be encouraged to regulate an Internet that has thrived precisely because of the lack of government interference.
One year ago it would have been considered an historic victory of monumental proportions for Congress to pass open Internet legislation. And there is still time for a bipartisan legislative endorsement of the open Internet today, without resorting to Title II.
Both sides of the political spectrum need to ask themselves if they are more interested in making good policy or making a point. If Republicans and Democrats would embrace the opportunity to craft a legislative solution and declare victory, the ultimate winners would be those of us who want to see the Internet remain open — not just here in America, but globally.
Source URL: http://www.sfchronicle.com/opinion/article/Regulating-the-Internet-like-a-utility-is-wrong-6090757.php
Why Download Europe’s Lousy Broadband Policy?
Treating the Internet like a utility has been tried, with deleterious effects on innovation and costs.
by Rick Boucher and Fred Campbell
As the Federal Communications Commission prepares to treat Internet companies like public utilities under Title II of the 1934 Communications Act, it is worth asking how government regulation of the Internet would actually work. Conveniently enough, Europe has been experimenting with heavy-handed Internet regulation since 2002, and the results are a warning of what the U.S. can expect.
That is the conclusion of a new study by our organization, the Internet Innovation Alliance, a coalition of businesses and nonprofits. Over the past two decades, the U.S. has benefited from a bipartisan, light-touch broadband regulatory regime that has spurred more capital investment, more competition and—perhaps most important—more broadband capacity than in the European Union, which has a larger population and similar economy.
Consider capital investment, without which broadband networks do not exist and cannot be modernized. Fixed-broadband operators in the U.S. invested $137 billion in 2011 and 2012, more than four times Europe’s $31 billion over the same time period. U.S. mobile operators, at $55 billion, invested twice as much as their European counterparts’ $29 billion. Even when the comparison is made as a percentage of industry revenue, the U.S. investment advantage persists.
Europe’s “wholesale-access” regulatory regime, under which fixed operators must make their networks available to competitors at a regulated price, was ostensibly designed to promote competition. Yet in Europe, powerful incumbent carriers hold 65% of the local telephone market, while in the U.S. 59% of the local telephone market is served by new competitors. More than 90% of U.S. households can choose from among 10 or more providers.
A similar story emerges in facilities-based broadband competition. While 76% of American households have access to three or more fixed-broadband providers, in Europe less than 50% do. This is in large part because European investment has been so weak. Without robust investment, competition cannot flourish, and it is no surprise that 82% of U.S. households have access to high-speed broadband, compared with 63% in the European Union.
The study’s analysis of mobile networks also illustrates how the U.S. offers greater access than Europe to the highest-speed, so-called LTE networks. In 2012 only 30% of European households had access to LTE, while 79% of American households did.
So where does this leave us? Net-neutrality proponents assume that the impact of common-carrier regulations will be minimal and that the U.S. will maintain its technology lead forever, but the European regulatory example suggests that such an outcome is far from certain. It is more likely that imposing regulations crafted for last century’s monopoly telephone service will have a crippling and chilling effect on broadband investment. Investment drives innovation: As the Internet Innovation Alliance study demonstrates, Europe has fallen badly behind the U.S.
The European Union has wisely decided to pull back, recommending in 2013 that member-state regulators not impose wholesale-access prices on the deployment of next-generation networks, fearing that private investment would be severely reduced.
It is ironic that shortly after the European Commission recommended relaxing its Title II-style approach to broadband regulation, the FCC began considering whether to impose such a failed policy in the U.S. The irony is compounded by the reality that the FCC could use its existing authority to adopt strong network-neutrality protections without reclassifying broadband as a public utility.
Sufficient investment and innovation are needed to prevent Internet capability in the U.S. from declining, an alarming prospect for one of the economy’s most dynamic sectors. Furthermore, adding regulations while Europe scales back may send capital overseas to a more welcoming investment environment.
Mr. Boucher, a former Democratic congressman from Virginia, is a partner at Sidley Austin LLP and honorary chairman of the Internet Innovation Alliance. Mr. Campbell, formerly chief of the Federal Communications Commission’s Wireless Bureau, is the author of the study discussed in this op-ed.
Source URL: http://www.wsj.com/articles/rick-boucher-and-fred-campbell-why-download-europes-lousy-broadband-policy-1423700586