Thursday, September 19
Today, the Progressive Policy Institute released its 2013 list of Investment Heroes. This year, like last year, the telecom and cable sector is a big winner.
AT&T and Verizon once again lead the way in domestic investment, and telecom is second only to the booming energy sector in total U.S. investment. PPI shows that these two companies combined invested nearly $34.5 billion to build-out nationwide high-speed broadband networks and infrastructure. AT&T alone invested almost $19.5 billion. As a sector, telecommunications and cable invested $50.5 billion last year, over a third of the nearly $150 billion invested by the Fortune 150 last year. Such levels of investment are remarkable, but not surprising. With each passing day, Americans witness and benefit from the emergence of the nation’s “data-driven economy,” all driven by U.S. telecom and technology company capital investment. Our data-driven economy is at the forefront of creating new jobs in entirely new industries — like mobile apps — and is a driving force in improving cost structures and the delivery of services in sectors such as healthcare, education, and agriculture.
Broadband providers have done their part to improve the path to economic recovery, demonstrated by their significant investments in America. The progress we’ve seen, however, needs to continue. Billions of dollars of additional private investment is necessary to bring ubiquitous high-speed broadband to every American.
For this to take place, government should adopt policies that create an environment for sustained investment. As PPI notes, government can ensure that upcoming FCC wireless spectrum auctions proceed in an open manner and allow all carriers to bid equally and without restrictions. No one company should be given favored treatment to the disadvantage of its competitors. Moreover, government can also proactively promote additional investment by eliminating existing regulatory barriers and helping to speed the upgrade and modernization of our nation’s antiquated telephone networks, so that more Americans can benefit from the high-speed Internet and video services that next generation broadband networks offer.
It is uncertain that the nearly $50.5 billion in existing telecom and cable investment will continue unless government helps promote additional regulatory and business certainty by adopting wise and timely pro-market investment policies. In the meantime, we owe our gratitude and thanks to the tech and telecom companies who invest in America and help spur innovation, create jobs, and contribute the nation’s economic growth.
Top 25 Nonfinancial Companies by Estimated U.S. Capital Expenditure
1. AT&T - $19.5 billion
2. Verizon Communications - $15.0 billion
3. Exxon Mobil - $12.2 billion
4. Chevron - $10.7 billion
5. Intel - $8.8 billion
6. Walmart Stores - $8.3 billion
7. Occidental Petroleum - $7.6 billion
8. ConocoPhillips - $6.1 billion
9. Exelon - $5.8 billion
10. Comcast - $5.7 billion
11. Duke Energy - $5.4 billion
12. Hess - $4.7 billion
13. Sprint Nextel - $4.3 billion
14. Union Pacific Railroad - $3.7 billion
15. General Motors - $3.7 billion
16. Enterprise Products Partners - $3.6 billion
17. Time Warner Cable - $3.1 billion
18. Microsoft - $3.0 billion
19. Amazon - $2.9 billion
20. CenturyLink - $2.9 billion
21. Ford Motor - $2.7 billion
22. Walt Disney - $2.7 billion
23. FedEx - $2.6 billion
24. Apple- $2.6 billion
25. Target - $2.3 billion
Total Economic Investment - $149.8 billion
Wednesday, September 18
It’s no secret that I have high hopes for the benefits of high-speed Internet access in schools and libraries. President Obama and the Federal Communications Commission (FCC) also recognize that high-speed broadband access is a vital educational tool that will help our students compete and succeed. That’s why the President recently announced his “ConnectED” initiative to modernize the FCC’s existing E-rate program to deliver next-generation broadband connectivity to more students in more areas, advancing modern education.
This week, the FCC begins gathering public input on the value of high-speed broadband deployment as it begins to consider how it can accelerate modern broadband access to 99 percent of K–12 students in the next five years.
Government policies aimed at advancing high-speed broadband connectivity in our nation’s schools are critical to providing today’s students with the essential learning tools and experiences necessary for success in the 21st century economy. High-speed broadband access can enhance traditional classroom learning by honing students’ digital skills and enabling them to use those skills to solve problems, examine sources and data, and find information. Students can thus achieve and learn, while simultaneously developing the skills they’ll need to take their places in the “real” world as our future leaders.
Students at every level and in every community would benefit from the easier collaboration and research that faster connectivity affords. Teachers can use this technology to help students interact with their global peers, as well as to incorporate important national and international events into lessons as they unfold in real time. The Internet can help foster strong reading comprehension and writing skills. For advanced or hands-on STEM subjects, broadband is a gateway to educational videos and online lessons to supplement classroom instruction. Adding digital learning tools like streaming videos, blogs, wikis, and podcasts to their teaching toolkits will enable educators to offer meaningful, individualized teaching and learning experiences.
Clearly high-speed broadband has much to offer our nation’s schools. That’s why I’m thrilled that our legislators and policy makers have begun talking seriously about how to expand modern broadband connectivity to all of our schools and libraries. Industry leaders, policymakers, and everyday citizens should recognize that broadband is an essential learning tool which can enhance American education and our quality of life. Getting that advanced connectivity to all of our schools and libraries is critical and must be a national priority.
The effort to expand modern broadband access, however, should not stop at our local schoolhouse or library doorstep. When the school bell rings at the end of the day, no student should be without access to the benefits that high-speed broadband provides. David Karp, the founder of Tumblr, started his first internet company from home at 15 years old. America can give every student the opportunity to dream big and engage the world if we expand access to reach every household, community, and individual nationwide.
Government can’t do this alone. It can, however, create an environment that encourages private sector investment and helps speed the upgrade of antiquated telephone networks to modern broadband technologies capable of offering high-speed Internet and video services to all Americans.
We can achieve all that and more by acting now to increase and expand access to modern high-speed broadband services in our nation’s schools and libraries, and move swiftly to set policies that encourage increased private sector investment and accelerated deployment of modern broadband networks nationwide. With the right infrastructure in place across the country, people everywhere can benefit from 21st century connectivity. Let’s work together to make it happen.
Tuesday, September 17
There are 3.79 million square miles in the United States, and the federal government controls 30 percent of that land. This vast swathe of federally controlled land is roughly equivalent to the combined size of Alaska, California, Texas and Montana.
So when a White House task force unveils a guide that lays out the best practices for “dig once,” a program aimed to cut the costs of deploying high-speed broadband along federal roadways by as much as 90 percent in certain areas, it’s big news.
This week, the White House Office of Science and Technology Policy (OSTP) released its latest progress report in response to President Obama’s 2012 Executive Order aimed at accelerating broadband deployment on federally-owned property by making the deployment and construction process cheaper and more efficient. Yesterday’s White House action offers a clear cut example of how government can spur greater and more affordable opportunities for high speed broadband deployment.
Access to and the use of high-speed broadband networks and services are critical to sustaining economic growth. The benefits of broadband-based services and websites have increased the nation’s global competitiveness, allowed small businesses to grow and enter new markets, and helped create many new high-paying jobs. President Obama has pushed to bring state-of-the-art communications networks to unserved and underserved communities. He has also sought to expand access to modern broadband networks by providing incentives for private sector investment designed to support new infrastructure deployment.
The White House announcement highlights several steps that will help reduce barriers to private sector broadband deployment, including an advanced mapping program that offers real-time guidance to identify the most efficient wired and wireless broadband deployment locations on federal land. This tool will also help accelerate high-speed broadband deployment by providing industry with real-time information regarding streets that are currently under construction and thus easier to access.
Yesterday’s action includes the creation of a “one-stop shop” for permit forms, lease agreements, and other legal forms to help reduce the significant legal and regulatory costs often associated with deployment of high speed broadband infrastructure. This convenience should create further efficiencies as it will facilitate deployment approvals, particularly when broadband deployment permitting involves multiple Federal and state agencies.
OSTP estimates that these regulatory tools “can reduce network deployment costs along Federal roadways by up to 90 percent.
While the programs OSTP announced this week offer nationwide benefits, rural America, which has trailed in receiving the best broadband access, may benefit most of all. High-speed broadband is increasingly important to farming communities (see here and here). Faster and more affordable broadband enables greater access to e-learning and e-Health opportunities that level the playing field between citizens in cities and those living in rural areas.
Cheaper and more accessible high-speed broadband promises stunning social and economic benefits. It can make better healthcare more accessible and more affordable for those who cannot travel. It facilitates a host of online education options, which may make advanced learning more feasible and affordable for many Americans. Consider for example, a master’s degree in computer science from a respected university for about $7,000!
In short, faster and better high-speed broadband is a necessary step to creating jobs and opportunity at all levels of the economy, and increasing the speed and efficiency at which these networks can be constructed is vital to our nation’s success. Here’s to the Administration for recognizing these realities and taking common-sense steps to provide the tools and guides needed to bring broadband to more Americans. Congratulations and keep up the good work!
Monday, September 16
Last week, Twitter announced it would be filing for an IPO. At Ars Technica, Casey Newton breaks down how going public could change the social networking company. For the most part the move could benefit both Twitter and users, but as Newton points out, there are some potential landmines:
A focus on new business lines could distract the company from the product that brought everyone to Twitter in the first place. Continued changes to the timeline could alienate the user base. And the company’s plans to rule the mobile advertising world could be swatted aside by Google, Facebook, or another competitor.
There’s also the looming question of what becomes of Twitter’s third-party clients, like Twitteriffic and Twittelator. The apps run without advertising, making them free riders on Twitter’s ecosystem, and are widely viewed as an endangered species. Going public may add pressure on Twitter to eliminate apps whose own view of the service increasingly differs from its own.
The latest study from Pew examines the current state of mobile Internet usage. As you’d expect, it’s growing at a good clip:
63% of adult cell owners now use their phones to go online, a figure that has doubled since we first started tracking internet usage on cell phones in 2009. In addition, 34% of these cell internet users say that they mostly go online using their cell phone. That means that 21% of all adult cell owners now do most of their online browsing using their mobile phone—and not some other device such as a desktop or laptop computer.
Other findings from the report, which you can read here:
• Young adults: Cell owners ages 18-29 are the most likely of any demographic group to use their phone to go online: 85% of them do so, compared with 73% of cell owners ages 30-49, and 51% of those ages 50-64. Just 22% of cell owners ages 65 and older go online from their phones, making seniors the least likely demographic group to go online from a cell phone.
• Non-whites: Three-quarters (74%) of African-American cell phone owners are cell internet users, as are 68% of Hispanic cell owners.
• The college-educated: Three-quarters (74%) of cell owners with a college degree or higher are cell internet users, along with two-thirds (67%) of those who have attended (but not graduated) college.
Via Sue Marek of Fierce Wireless, people in rural areas are increasingly embracing mobile:
A new study from Current Analysis and commissioned by the Competitive Carriers’ Association found that more than 80 percent of rural subscribers plan to purchase a smartphone in the next three months. The study also found that 34 percent of those who own a smartphone use wireless exclusively for their telecommunications needs.
While coverage in rural areas continues to be a concern, the fact that “cord-cutting” is making its way into rural communities is just more evidence that the transition to next-generation, all-IP networks is well underway.
Friday, September 13
As Congress returns from its summer recess, one of the best things it can do to help get the economy moving is to encourage the FCC to move swiftly to speed the steps to upgrade and modernize the nation’s antiquated telephone network to make next-generation high speed broadband more widely available throughout the country.
The move toward these high-speed networks is inevitable, yet the question remains how and when it will happen — and what government can do to help smooth this transition and encourage the billions of dollars in private investment necessary to deploy next-generation networks across the country. In a rare piece of good news from Washington, there is increasing bipartisan agreement that the best way forward would be to hold market trials to quickly test how these modern networks can be deployed efficiently and effectively throughout the nation.
Given the complexity of rolling out new technologies, consumers and industry would both benefit from the type of FCC-supervised limited market trials that AT&T seeks to initiate. In a similar technology transition, from analog to digital television, for instance, the FCC conducted a successful market trial of its new digital television standard in Wilmington, North Carolina that served as a model for the country as a whole.
Right now, the FCC is awaiting the confirmation of its new Chairman Tom Wheeler, who has called for this transition to be completed by 2016. So there is no time to waste. It’s good to see that in a recent Senate hearing, FCC Commissioners of both parties called for a quick start to the proposed market trials. Democratic Commissioner Jessica Rosenworcel endorsed “location-specific IP trials” to “kick-start” the IP transition and “take smart steps to foster the transition to next-generation networks.”
Republican Commissioner Ajit Pai reiterated his support of “an all-IP pilot program” to show how companies can switch off the old networks as customers migrate to the newer, next-generation networks.
Anything complex like this involves a great number of technical and engineering challenges. That’s why Pai and others want to get the ball rolling now, so that the technical aspects of the transition may be addressed in geographically-limited areas first.
One important reason to get this process underway quickly is that, under the current system, telephone companies must support two very different networks — the copper wire networks of the past and the fast, next-generation broadband networks of the future. Every dollar spent supporting the legacy network is a dollar that cannot be spent building out new high-speed broadband networks. By modernizing these new networks, we will make even faster broadband available, creating thousands of new jobs and even entire new industries. And as Commissioner Pai notes, it would signal to telephone companies that they should shift from investing in the old networks and instead set their sights fully on building the networks of the future.
With demand for mobile broadband data expected to grow 13-fold over the next five years, as Commissioner Rosenworcel stated, there’s no time to lose. Let’s seize this emerging bipartisan consensus. The FCC should move quickly to allow America’s telephone companies to start market trials of new high-speed broadband networks of the future, to enhance job creation and provide all Americans the opportunity to access the benefits of the 21st century digital economy.
Wednesday, September 11
In a post for The Hill‘s Congress Blog, Brian Fontes, chief executive officer for the National Emergency Number Association, argues that successfully building state-of-the-art public safety networks will require smart spectrum auctions from the FCC:
In order to be successful, however, the auction must generate maximum revenue by capturing the full value of repurposed spectrum. This is the best and perhaps only opportunity to raise the necessary funds for investment in a network we so desperately need. We cannot settle for half-measures and incremental moves – the FCC must take decisive steps and set up an auction that delivers the resources needed to empower our public safety officials.
An incentive auction permitting all bidders to participate will be the most effective way to deliver the funds necessary to build FirstNet and help deploy Next Generation 9-1-1. If the most likely bidders in the auction face participation limits, then as a recent study found, auction proceeds would fall 40 percent. Restrictions, including limits on bids, would likely slash $12 billion in revenue. Broadcasters wishing to make the most of their spectrum holdings will be more hesitant to offer up their airwaves for bidding. A limited spectrum inventory will reduce funds generated from the auction, and jeopardize the future of FirstNet and funding for Next Generation 9-1-1.
In a speech yesterday at the Media Institute, AT&T Senior Executive Vice President Jim Cicconi argued the FCC needed to change with the times or risk becoming irrelevant. As John Eggerton of Broadcasting & Cable reports:
Framing the speech as advice to incoming chairman Tom Wheeler, Cicconi suggested it would be Wheeler’s task to fix the problem rather than Congress’ because it was next to impossible to get any major legislation through Congress.
He said the FCC is still geared to an era when wireline voice was a monopoly, the Internet was nonexistent, broadcaster and cable divided up the video audience and wireless was a niche service.
To make his point, Cicconi offered up some stats. Skype has 500 million registered users. AT&T and Verizon together have 21 million traditional access lines. “What’sApp, a very popular over-the-top text messaging application, sent or received 27 billion texts in one single day…“It’s not complicated,” he says.
“In this situation, the FCC’s historic mission must be modernized to reflect the fundamental evolution in communications that IP technology and the Internet have wrought. If it doesn’t, the agency will become irrelevant,” Cicconi says.
At Valleywag, Sam Biddle highlights a vision of the future put forward at the annual TechCrunch Disrupt conference:
Imagine it’s a few years in the future, and you are driving down the road in an Uber, built by Tesla and auto-driven by Google software. You are in a hurry, so you decide to accelerate and pass the other cars. Your vehicle could then interface with the other cars, and pay them a sliver of Bitcoin to let you pass. You get where you are going faster, and everyone is happy. Programmable currency.
Obviously, mobile broadband has the power to take us in amazing new directions. But this scenario is a wee bit creepy.