Friday, November 22
November 21, 2013 10:13PM ET | Bloomberg BNA
American innovation has led to massive adoption of cutting-edge communications and entertainment technologies. Functionalities and services once wondrous and new are now commonplace. A step back reveals how far and how fast we’ve come. In 2000, television changed forever as TiVO introduced us to time shifting, the ability for consumers to record and watch TV programs at the scheduled hour of their choosing. That same year, our Internet and telephone experience was enhanced as cable modems began to take hold in American homes. The following year, we saw the first iPod, and how we buy, store, and listen to music has never been the same. The iPhone (2007) and iPad (2010) gave birth to a revolution in the use of mobile data.
Unseen but ever-present wired and wireless broadband networks provide the foundation for the high-quality video, voice and Internet services that Americans have welcomed with historic enthusiasm, as they have been adopted by in the home and mobile users at a stunning pace.
During the past decade, under our feet and above our heads, the nation’s broadband service providers have invested tens of billions of dollars to bring high-speed wired and wireless connections to our homes and businesses and in the process have reshaped almost everything about how we communicate. Because of these investments, we constantly have available a seamless stream of voice, data, and video on demand.
Today’s digital networks offer boundless opportunity—boosting economic growth and job creation; through remote monitoring and telemedicine, bringing world-class medical care to remote communities and easing the burden of chronic conditions; improving education for students of all ages by delivering advanced coursework, college classes, and even online degrees through distance-learning programs; maintaining constant communications with business associates, family and friends; and providing entertainment and real-time news, weather, and sports information.
This enhanced connectivity also enables civic empowerment—especially for groups who haven’t always been heard—enabling them to communicate more easily with elected officials and to organize and advocate on their own behalf.
Achieving the next level of broadband investment and enabling faster connections, more capable services and deeper Internet penetration in hard-to-serve areas will be facilitated by policy changes by the FCC. With the commission’s newly arrived leadership, these needed changes should be at the forefront of the agency’s agenda.
While communications of all kinds have rapidly moved to the Internet and broadband networks, the aging copper-wire, circuit-switched telephone network remains in place, using the same technology Alexander Graham Bell pioneered. It offers plain old telephone service (POTS), and Americans are fleeing it in droves at an ever-accelerating pace. Only 5 percent of Americans use the old network as their exclusive communications medium. Another 38 percent use it in combination with wireless service, and most Americans use wireless communications only or rely on a combination of wireless and a wired alternative to the telephone network, such as cable modem service.
We stand at an inflection point where the rules that were sensible in the last century for a heavily regulated circuit-switched telephone monopoly are no longer sensible in today’s competitive communications landscape dominated by broadband and a multiplicity of Internet-enabled services. The requirement of current law that telephone companies spend billions annually maintaining a single-function, aging network that consumers no longer prefer is impeding the next level of broadband investment. Planning and delivering a rapid transition to an all-broadband communications environment is the greatest challenge that the new FCC chairman faces.
A Change Requiring New Policy
In its time, the phone network was a culture-changing technical marvel that introduced nationwide communication through copper wire, erasing geography and reliably enabling Americans to dial business contacts, friends, family, and neighbors anytime, anywhere.
During the early and mid-20th century, access to telephones grew rapidly as government aided and promoted a monopoly to accelerate network build-out to reach all Americans. As telephone service became nearly ubiquitous in the latter half of the last century, technological and market advancements created the possibility for alternative satellite, wireless, and landline communications for businesses and consumers.
Realizing the potential benefits that the array of digital technologies could provide, the U.S. government ended the phone monopoly, and with passage of the Telecommunications Act of 1996, began to chart a course toward more robust competition and entrepreneurship in the nation’s communications marketplace. Consumers were first offered choice in the long distance telephone market. Then new providers, such as cable companies, built out broadband networks to offer competitive wired residential telephone and Internet services. The door was opened for telephone companies to offer cable TV service, and digital networks were developed that could accommodate it.
As the reliability of wireless communications increased and access to broadband services has expanded, American consumers at work and in the home have embraced them with a passion. Modern broadband communications systems now link us to the Internet; move information, data and video at lightning speed; and carry our voice “phone” calls, too. These are the networks consumers prefer, and the transition away from the antiquated telephone network is occurring with remarkable speed. As society now treasures its smartphones and tablet devices, streaming videos, GPS guidance systems, and other electronic wonders, we forget that little more than a decade ago personal communications was still largely about POTS. Current law still assumes that most communications are delivered by the POTS network.
Existing regulations were created in a world where heavily regulated phone companies provided copper wire voice service, lightly-regulated cable companies delivered TV, and wireless companies offered services deemed too unreliable to compete with wired telephone service. In fact, these rules still compel telephone companies to invest nearly $13.5 billion each year to maintain and run the old copper phone system as if it were still the nation’s core communications system used by almost all.
Too Much Investment to Maintain Old Technology
As the number of telephone company subscribers on POTS sharply falls, the per-subscriber cost of maintaining the old network has become unsustainable. According to a recent study, America’s telephone companies made more than $154 billion in capital expenditures from 2006 to 2011. Surprisingly, the majority of that investment was dedicated to maintaining the declining telephone network, even though today only about one-third of Americans still use it at all, and only 5 percent use it exclusively. Every dollar that is spent maintaining a voice-only network that consumers are fleeing is a dollar not invested in the modern multifunction broadband networks that consumers prefer. Every dollar telephone companies spend on an ancient, declining, and little used technology is a dollar not spent developing the more capable broadband infrastructures through which phone companies can become stronger competitors in the offering of voice, video, and data with largely unregulated cable companies. That’s an important goal because when competition is fair and fierce, consumers ultimately win big with competitive pricing and greater choices to fit their personal needs.
Ancient rules and old ways of thinking are undermining innovation, damaging competition, forcing billions of dollars into misdirected capital investment, and slowing our national progress. Maintaining the status quo for the antiquated telephone network—either by decision or inaction—is a costly anachronism. Requiring phone companies to operate voice-only telephone networks while they are building out new fiber-optic broadband networks makes as much sense as requiring a hitching post in front of every store, forcing bus companies to maintain streetcar tracks, or insisting on backup electric fans in every air-conditioned building.
The IP Transition: Six Principles to Consider
The FCC’s 2010 National Broadband Plan is instructive. It observes that the regulations requiring telephone companies to maintain the old phone network “siphon[s] investments from new networks and services” and is “not sustainable.” The report also declares that the transition to “broadband is the greatest infrastructure challenge of the 21st century.” The FCC’s Technological Advisory Council recommended that the transition and sunset of the POTS network be completed by 2018.
That’s not very far away, and meeting that schedule will bring its own unique challenges. Consumers must be protected, and certain populations are at risk of being disadvantaged. Of particular concern are those who are not yet taking advantage of the opportunities created by new digital technologies. For example, late adopters—largely older and less affluent consumers, many of whom reside in hard-to-serve rural areas, who have not yet joined the broadband era—may be at greater risk unless we complete the transition in a carefully planned and orderly way. The transition to 21st century communications networks must serve every American. But that result is not pre-ordained; it will require hard work.
Government must play a key role throughout this process by advancing consumer interests with a transition plan guided by core principles. These basic protections will remain government’s responsibility even after the old phone system is shut down:
1. The commitment to universal service must endure. Next-generation high-speed broadband networks and their benefits must be available to every American. As we move beyond the old phone network, we cannot leave anybody behind. Without dictating specific technologies or micro-managing how communications competitors meet their public service obligations, we must push the envelope to ensure that every American can access modern broadband service and enjoy the benefits that come with it. At a minimum, post transition everybody should enjoy service at least as good as they can now receive from copper-wire phone networks.
2. Public safety must be assured. 911 emergency calls must go through—every single time—no matter what technology or services consumers adopt.
3. Services for the hearing-impaired and those with vision problems also must be retained at levels that at least match what consumers enjoy today.
4. Consumer protection must remain at the heart of communications policy. Consumers must know that government has their back; that service providers will deliver on their promises; that spotty service, fraud, or other abuses will not be tolerated. Consumers must have a place to take complaints with confidence that something will be done about them.
5. Establishing a backup plan for power failures should be part of the transition process. The rebuilding after Hurricane Sandy exposed some potential weaknesses in the way our digital technology works today. While fiber-optic-based systems tolerate water damage that can short out copper wires, they are more vulnerable when the electricity at the user’s premises goes out.
6. Special retrofitting and other creative solutions may be required to ensure that modern networks function fully with personal and business equipment such as fax machines, security systems, health monitors, and credit card readers, even though they may not currently be compatible with today’s broadband connections.
FCC Should Begin Trials Now
Consumer interests are paramount. These core challenges must be met before the book is closed on the antiquated POTS network. Contrary to the claims of some, the post-transition environment will not be regulation free. Indeed, regulation will be necessary to assure consumer protection, but just as networks are modernizing, the regulatory landscape must be modernized as well.
What’s needed is smart regulation appropriate to protect consumers and public safety, promote competition and support universal service, while also encouraging sustained private investment and innovation in America’s next-generation communications networks.
The upgrade and modernization effort will require thought and planning. That’s why we must start now while the existing phone system is available as a “safety net” backup for any potential glitch or surprise that might arise during the upgrade to a new and modern system. No one is proposing a “flash cut” in which the telephone network disappears overnight. This process will, in fact, probably take half a decade to complete.
To take the first step, the FCC should rely on a time-tested method: demonstration projects. Conducting demonstration trials in carefully selected markets in which existing POTS users are rapidly moved to Internet protocol-based networks will provide a controlled environment for an accelerated transition with the existing telephone network still in place as a safety net.
This approach gives consumers an assurance that if any unexpected problems causing consumer disruptions arise, service can continue over the telephone network while technical and service issues are resolved. Through the demonstration projects, we can determine what is likely to go wrong and have solutions in place prior to a broader national transition.
The FCC has a recent successful precedent for taking precisely this step. In the nation’s transition from analog to digital television broadcasting, the FCC conducted a similar test. Leading up to the digital TV conversion, some warned of potential negative consequences for consumers. The warnings were similar to those we are hearing about the transition from POTS to modern networks. In particular, the articulated fear was that switching to digital television broadcasts would harm consumers, particularly the elderly and less technically savvy viewers who decide to keep their older analog television sets but would experience difficulty installing the required converter box to receive and convert the new digital broadcasts. The circumstance of rural and lower income viewers was a particular focus. To address these concerns, the FCC launched a demonstration project in Wilmington, N.C., an area with a wide diversity of viewers, including those with low incomes, the elderly, and viewers living in both metropolitan and rural areas.
The FCC’s Wilmington demonstration project proved a success. It provided clear evidence that on the day analog broadcasts ended, viewers were prepared. There were almost no complaints. Analog television users across the Wilmington region had successfully installed digital-to- analog converter boxes. The trial inspired confidence that the national transition could proceed uneventfully, and on national transition day, very few problems were encountered.
Employing the same model, the FCC should now move quickly to authorize closely supervised demonstration projects in selected markets, perhaps one urban and one rural, where people quickly shift from existing telephone networks to modern broadband networks. The demonstration projects offer a test bed to guarantee that core consumer values will be protected, to learn what may go wrong in a controlled rapid transition and to devise solutions for problems that in fact arise prior to a broader national transition.
While the attraction of broadband networks has propelled a POTS-to-broadband transition that is now well advanced, we owe it to ourselves to plan and complete it on the schedule that the FCC’s Advisory Council recommended. Applying the knowledge gained through demonstration projects we can accelerate the POTS phase-out and realize the benefits of greater network functionality, a broader array of services for consumers and the economic efficiencies that come from devoting investment to the networks of the future rather than the network of the past.
Public-Private Partnership Needed for New Road Map
For the moment we have the luxury of time to conduct demonstration projects, but an additional sense of urgency for action is now apparent. The current telephone network is supported by antiquated equipment, and as consumers have continued their ongoing migration to the new networks, equipment providers either no longer manufacture or have significantly scaled back production of the TDM (time-division multiplexing)-based equipment necessary to maintain and operate the POTS network. As fewer replacement parts become available, maintaining the phone network grows dramatically more expensive, further skewing the ratio between investment in old and new technologies, with the ever-escalating costs being passed on to consumers. All Americans stand to benefit from shifting investment to modern networks that offer consumers service as least as good as what they enjoy today, as well as the greater functionality that broadband networks can offer.
A public-private partnership among all stakeholders—consumers, telecom companies, suppliers, and regulators—will be needed to establish the rules of the road for the new network. These stakeholders can embrace key principles—recently outlined by the leading consumer advocacy organization Public Knowledge—service for all, competition, reliability, consumer protection, and public safety.
Simply providing access to new technology while protecting core consumer values, however, isn’t the whole job. We also must boost adoption rates, educating every American about what the transition means, how it will affect them and how by using broadband they can improve opportunities for themselves and their families. We can’t afford to leave any American in the dark about the value of broadband; we can’t leave anyone behind.
So the real questions surrounding the IP transition are not whether, but when; not if, but how. Bipartisan support exists in Congress for the transition itself and for the basic principles that should be at its core, including consumer protection, universal service, network reliability, competition and public safety. Now is the time for all stakeholders to work together, starting with the demonstration projects, to ensure that the transition’s rapid final phase proceeds as smoothly as possible.
New FCC Chairman Embraces Need for Quick Action
The Internet’s evolution has brought us to another critical juncture in communications policy as we consider how to complete the transition from the bygone era of plain old telephone service to the broadband future of the 21st century. It’s a critical transition, given broadband’s increasingly dominant role in every part of our economy, as well as its ability to improve lives and advance economic growth. It’s also something that just about every stakeholder, including the FCC, regards as inevitable.
In 2011, the Technological Advisory Council led by now-FCC chairman, Tom Wheeler, noted that “[t]he FCC should take steps to prepare for the inevitable transition” from the old network and in fact “take steps to expedite the transition, with a target date of 2018,” including the need to “re-align regulatory requirements to emerging technologies.”
The recommendation reflected vision and foresight then, and provides an ambitious but achievable agenda now. When it’s achieved, Americans will have access to reliable networks designed specifically for broadband voice, video, and Internet services, rather than antiquated networks that support phones wired to the wall. Every app, every smartphone and tablet, every desktop computer will smoothly connect consumers to the online experience of their choice—telemedicine services for better health, virtual classrooms for lifetime learning, their legislators’ offices for civic engagement, a job opportunity, a business contact, a sporting event, a movie, friends and family across town or on the other side of the world. That’s the goal—delivering the services consumers want. Upgrading and modernizing our 20th century telephone networks will get us there.
This goal now appears closer on the horizon than ever before. In one of his first official acts, Chairman Wheeler has made clear the need to speed the “Fourth Network Revolution,” recognizing how “new networks catalyze innovation, investment, ideas and ingenuity.” He stated that “the time to act starts now” and proposed a timetable for FCC action in January 2014 on how to “begin a diverse set of experiments that will allow the commission and the public to observe the impact on consumers and businesses of the [IP transition and proposed demonstration projects].” In setting this course, the new chairman has jump-started the process and appears ready to steer the FCC toward addressing the key policy, technical, and consumer issues necessary to bring 21st century high-speed broadband to more Americans.
In our land of opportunity and innovation, we’re a place of relentless creativity. At the core of our success is an entrepreneurial culture powered by private sector investment. In that American tradition, it’s incumbent on us to ensure that the benefits and opportunities of next-generation networks and services become widespread and available to all. The POTS-to-broadband transition will free the needed investment. The next steps for us to take are now clear.
Reproduced with Permission from The Telecommunications Law Resource Center, Copyright 2013, The Bureau of National Affairs, Inc. (800-372-1033) www.bna.com.
Wednesday, November 13
A new report from Bret Swanson of Entropy Economics (Swanson is also one of our Broadband Ambassadors) looks at the current state of competition in the online space and what that competition means for regulations. Titled “Digital Dynamism: Competition in the Internet Ecosystem,” the report is a lean 20 pages but packed with some startling facts and figures. Some examples:
• Private sector investment in high-speed Internet over the past 15 years amounts to $1.2 trillion.
• As a result of that investment, competition is strong and the U.S. broadband networks rank high globally when it comes to speed, and only South Korea generates more traffic than Americans.
• Due to how dynamic and unpredictable the industry is, top-down regulatory oversight is a major challenge, which highlights the need for a new approach from regulators.
Swanson’s paper also contains a graphic breaking down all the ways communication has changed since 1984. The full graphic is available here, but the image above is worth highlighting. Remember when communication meant phone-to-phone? Well things have certainly changed…
You can check out Swanson’s full report at Entropy Economics.
Thursday, October 17
Earlier today, we held a Twitterview with Wear the Cape, an innovative company focused on inspiring goodness in others through clothing. You can check out the condensed interview via our respective Twitter handles (@iiabroadband, @WtCKids). Here’s the extended interview — IIA.
What is Wear the Cape and what is its mission?
Wear the Cape is dedicated to restoring the power of kindness and good character through hip, inspirational products that create teachable moments and via our non-profit arm the kidkind foundation.
October is National Bullying Prevention Month. How does cyberbullying fit into Wear the Cape’s efforts?
Wear the Cape is focused on preventing bullying by shaping behavior from an early age – kids aren’t born bullies. But cyberbullying is a pervasive issue, particularly among teens. We aim to show teens that giving respect, gets respect – your peers don’t look up to you for mistreating others.
How does Wear the Cape interact with its customers and supporters online?
Wear the Cape utilizes its website to accept donations (100% to the kidkind foundation), sell products (10% of proceeds goes directly to the kidkind foundation, with the remained going toward developing educational materials and furthering the mission), and address issues that families care about via our blog. We’re also active on social media!
Is Wear the Cape dependent on high-speed broadband Internet for building, developing, transforming and/or growing the brand and kidkind foundation?
So far, Wear the Cape is — for the most part –— an online-only organization. Our website is a platform for e-commerce, and we also use it to accept donations. Without fast Internet speeds, consumers would not be able to easily and reliably purchase Wear the Cape clothing and gear or make contributions to the kidkind foundation.
What are some of the web applications that have enabled Wear the Cape’s team to run the business and non-profit arm?
We use WordPress as our blogging platform and Shopify to sell our products and take donations for the kidkind foundation. These two gems enabled us to launch, and Wear the Cape depends on them every day!
How would lack of broadband build-out across the nation affect Wear the Cape’s business model?
People that don’t have broadband are much less active on social media and usually don’t shop online. Wear the Cape relies on social media to help reach people far and wide with our mission, and most of our product sales currently take place at our online storefront. It’s difficult for us to reach and help communities without high-speed Internet.
How can the online users connect with Wear the Cape?
Visit us at our website, and follow us on Twitter, Facebook, Tumblr, Pinterest and LinkedIn! We would love to hear from you.
Thursday, October 10
Once again Holman Jenkins offers terrific insight into the dynamic broadband marketplace, highlighting the true forces driving investment (competition) and the forces holding back progress (outdated regulations). Referring to Google’s much-celebrated fiber investments in key cities Jenkins observes in the Wall Street Journal:
“Google’s real innovation was to tunnel under the regulatory morass that inhibits physical broadband deployment. Why is Google introducing Google Fiber in Kansas City and not its native California? Google’s own Milo Medin has explained repeatedly that regulatory brambles make California ‘prohibitively expensive.’”
Jenkins turns to the FCC’s failure to launch reasonable proposals to allow carriers to shift investment from older technologies carrying increasingly less traffic, to newer technologies carrying an exponentially growing volume of voice, video and data. The need for modernizing our regulations becomes even more critical when one reads a study authored by Dr. Anna-Maria Kovacs, a visiting scholar at Georgetown’s Center for Business and Public Policy. Dr. Kovacs’ analysis estimated that incumbents telcos spent a total of $154 billion on their communications networks, with more than half maintaining fading legacy networks that carry less than 1 percent of all data.
While so much else is crippled by Washington paralysis, broadband deployment should be freed.
Tuesday, September 17
There are 3.79 million square miles in the United States, and the federal government controls 30 percent of that land. This vast swathe of federally controlled land is roughly equivalent to the combined size of Alaska, California, Texas and Montana.
So when a White House task force unveils a guide that lays out the best practices for “dig once,” a program aimed to cut the costs of deploying high-speed broadband along federal roadways by as much as 90 percent in certain areas, it’s big news.
This week, the White House Office of Science and Technology Policy (OSTP) released its latest progress report in response to President Obama’s 2012 Executive Order aimed at accelerating broadband deployment on federally-owned property by making the deployment and construction process cheaper and more efficient. Yesterday’s White House action offers a clear cut example of how government can spur greater and more affordable opportunities for high speed broadband deployment.
Access to and the use of high-speed broadband networks and services are critical to sustaining economic growth. The benefits of broadband-based services and websites have increased the nation’s global competitiveness, allowed small businesses to grow and enter new markets, and helped create many new high-paying jobs. President Obama has pushed to bring state-of-the-art communications networks to unserved and underserved communities. He has also sought to expand access to modern broadband networks by providing incentives for private sector investment designed to support new infrastructure deployment.
The White House announcement highlights several steps that will help reduce barriers to private sector broadband deployment, including an advanced mapping program that offers real-time guidance to identify the most efficient wired and wireless broadband deployment locations on federal land. This tool will also help accelerate high-speed broadband deployment by providing industry with real-time information regarding streets that are currently under construction and thus easier to access.
Yesterday’s action includes the creation of a “one-stop shop” for permit forms, lease agreements, and other legal forms to help reduce the significant legal and regulatory costs often associated with deployment of high speed broadband infrastructure. This convenience should create further efficiencies as it will facilitate deployment approvals, particularly when broadband deployment permitting involves multiple Federal and state agencies.
OSTP estimates that these regulatory tools “can reduce network deployment costs along Federal roadways by up to 90 percent.
While the programs OSTP announced this week offer nationwide benefits, rural America, which has trailed in receiving the best broadband access, may benefit most of all. High-speed broadband is increasingly important to farming communities (see here and here). Faster and more affordable broadband enables greater access to e-learning and e-Health opportunities that level the playing field between citizens in cities and those living in rural areas.
Cheaper and more accessible high-speed broadband promises stunning social and economic benefits. It can make better healthcare more accessible and more affordable for those who cannot travel. It facilitates a host of online education options, which may make advanced learning more feasible and affordable for many Americans. Consider for example, a master’s degree in computer science from a respected university for about $7,000!
In short, faster and better high-speed broadband is a necessary step to creating jobs and opportunity at all levels of the economy, and increasing the speed and efficiency at which these networks can be constructed is vital to our nation’s success. Here’s to the Administration for recognizing these realities and taking common-sense steps to provide the tools and guides needed to bring broadband to more Americans. Congratulations and keep up the good work!
Friday, September 06
Exhibit A, the headline for this piece at the official NASA website, which is “Space Laser To Prove Increased Broadband Possible.” That’s right, a space laser!
Exhibit B, the description of said space laser:
When NASA’s Lunar Laser Communication Demonstration (LLCD) begins operation aboard the Lunar Atmosphere and Dust Environment Explorer (LADEE) mission managed by NASA’s Ames Research Center in Moffett Field, Calif., it will attempt to show two-way laser communication beyond Earth is possible, expanding the possibility of transmitting huge amounts of data. This new ability could one day allow for 3-D High Definition video transmissions in deep space to become routine.
“The goal of the LLCD experiment is to validate and build confidence in this technology so that future missions will consider using it,” said Don Cornwell, LLCD manager. “This unique ability developed by MIT (Massachusetts Institute of Technology Lincoln Laboratory), has incredible application possibilities and we are very excited to get this instrument off the ground.”
3-D High Definition video transmission to deep space? Okay, that’s pretty great. What else you got NASA?
LLCD’s main mission objective is to transmit hundreds of millions of bits of data per second from the moon to Earth. This is equivalent to transmitting more than 100 HD television channels simultaneously. LLCD receiving capability will also be tested as tens of millions of bits per second are sent from Earth to the spacecraft. These demonstrations will prove the technology for increased bandwidth for future missions is possible.
Monday, August 26
70%, which is the number of American adults who now have high-speed Internet at home, according to the latest numbers from Pew. That’s an increase of 4% from a year ago.
As for lingering barriers to broadband adoption, Pew finds:
The demographic factors most correlated with home broadband adoption continue to be educational attainment, age, and household income. Almost nine in ten college graduates have high-speed internet at home, compared with just 37% of adults who have not completed high school. Similarly, adults under age 50 are more likely than older adults to have broadband at home, and those living in households earning at least $50,000 per year are more likely to have home broadband than those at lower income levels.
Policy implication? We must continue encouraging investment in broadband networks.
Monday, August 19
Be careful where you swing the regulatory hammer, or you might kneecap an entire industry.
That’s just one of the takeaways from a must-read an op-ed in Roll Call penned by Martin H. Thelle and Bruno Basalisco of Copenhagen Economics. Titled “Europe’s Internet Handcuffs Show U.S. How Not to Regulate,” the piece makes a strong case against miring America’s broadband industry in the regulatory muck.
If you’re looking for the duo’s argument in a nutshell, it can be found in the third paragraph:
Since the late 1990s, the U.S. and the European Union have taken two very different paths on broadband policy. While the U.S. has focused on infrastructure-based competition, the EU has forced service-based competition through government regulation, with the primary objective of lowering prices.
According to Thelle and Basalisco, that focus on service-based competition has been near disastrous for the EU when it comes to investment in broadband. How disastrous? Try this on for size:
As with any communications service, investment in infrastructure is needed to provide consumers with the quality services they demand. A decade after unbundling in Europe, per capita investment in telecommunications infrastructure now lags the U.S. by more than 50 percent.
Now that’s a regulatory knee-capping — so much so that Thelle and Basalisco are genuinely surprised that some here in the States want to take a page out of the EU’s model. As they write:
Clearly, the cautious U.S. decision to refrain from applying EU-style unbundling on providers has spurred competition and investment in the American broadband market, thus enabling huge advances in Internet technology.
Reversing that decision would risk hindering further advancements in all services using broadband infrastructure.
Heading down a path of EU-style, interventionist broadband regulation could severely harm U.S. investments in necessary communications infrastructure, darkening U.S. competitiveness globally.
That right there is what those of us against leveling more regulations on the broadband industry have been arguing all along. Even from across the Atlantic, Thelle and Basalisco recognize that the U.S. model is working quite well. The question is, will regulators here recognize the EU’s model isn’t working well at all?
Wednesday, August 14
The phenomenon of people “cutting the cord” is about more than people choosing wireless and Internet-based technology instead of traditional phone service. Cable is also feeling the effect, with services like Netflix, iTunes, and Amazon Prime plucking consumers away. Case in point: Gerry Smith of The Huffington Post, who writes about his experience with a new service called Aereo aimed at providing consumers with a new way to watch broadcast television:
For me, Aereo has been a welcome addition to the patchwork of services my wife and I use to watch our favorite shows and live sports.
We are two of the “cable cutters” you hear about—youngish residents of big cities who don’t have cable. We don’t want to pay an expensive monthly bill and don’t want to be tempted to watch hours of mindless television.
For $8 a month, we’ve been able to watch live golf tournaments and basketball games and record up to 20 hours of programs when we’re not home. To watch must-see shows we can’t get on Aereo, like “Mad Men,” “Breaking Bad” and old episodes of “Friday Night Lights,” we use iTunes and Netflix.
Smith notes that while Aereo is facing a flurry of lawsuits from content providers, the service still plans to expand to 22 cities over the next year. Stay tuned…
Tuesday, August 06
The broadband sky is definitely not falling.
That’s the conclusion Ev Ehrlich, former undersecretary of commerce for the Clinton administration, comes to in an op-ed for the Wall Street Journal [LINK] Calling his piece “The Myth of America’s Inferior Broadband,” Ehrlich takes a direct shot across the bow of those calling for heavy-handed regulations in the U.S broadband industry. And he relies on facts rather than rhetoric to do it.
On the oft-cited global broadband ranking, Ehrlich writes:
The Internet company Akamai, which produces international speed rankings, has the U.S. currently at No. 9, up from No. 22 in 2009—faster than in France, Germany and Britain. A recent report by the Information Technology and Innovation Foundation notes that the U.S. has the second-lowest entry-level broadband prices (behind Israel) in the Organization for Economic Cooperation and Development, despite ranking No. 27 among OECD countries in population density, a key driver of cost.
A jump from #22 to #9 in just four years is a success, any way you slice it. Especially given the state of the economy during that same stretch. And a big reason for that success, Erhlich notes, is the $250 billion U.S. broadband companies have invested in networks since the global recession started in 2008. How does that match up to other countries? According to Ehrlich, quite well:
Compare this with Europe, where in most countries Internet service providers lease aging wires from incumbent, often state-sanctioned telephone companies. This may have created instant infrastructure for Europe, but because the ISPs do not own the underlying infrastructure, they have no incentive to invest in it. The incumbent phone companies, in turn, are often directly or indirectly subsidized heavily by taxpayers.
There’s much more in Ehrlich’s piece, but I’ve already used my allotment of block quotes, so head on over to the Wall Street Journal and read his full op-ed. SPOILER ALERT! Anyone hoping America embrace European-style regulations of the broadband industry are going to be a bit shocked.
Tuesday, July 23
Earlier today, we held a Twitterview with innovative social company Audingo, which provides a social platform for fans to connect with their favorite personalities by phone, audio text, audio email, and even video. You can check out the condensed version of our interview via our respective Twitter handles (@iiabroadband, @audingo). Here’s the extended interview. — IIA
What type of business is Audingo?
Audingo is a pioneer in the audio-visual social media space. We offer a mobile platform that gives users the opportunity to hear directly from organizations and personalities that they choose via personalized audio and video messages in the form of a call, text or email. It’s a great way for a company or a celebrity to cultivate a loyal fan base with regular outreach to supporters in a one-to-one format. An organization could also use it, for example, to communicate with a vast network of members or employees.
Does your business impact consumers? If so, how?
Both use of social media and online video consumption have skyrocketed. Audingo fuses these trends and delivers messages in a format that consumers are embracing more and more. As reported by Reuters, DreamWorks Animation Chief Jeffrey Katzenberg recently predicted that the future of social media “moves from text-based communication to video and audio-based, making it more intuitive and instinctual.” Audingo is on the leading edge of technology.
How does broadband relate to your business?
Audingo hinges on the availability of broadband, particularly mobile broadband. It’s required for the delivery of Audingo messages and emails to users’ cellphones/smartphones — the data rides over wireless networks.
How has high-speed broadband or wireless broadband helped build, develop, transform or grow your business?
Mobile technology is becoming ever-more embedded in everyday life. The rise of the smartphone has paved a clear path for the development of Audingo, with users’ wireless devices in their pockets at nearly all times. A majority of Americans can now be reached by text, email or a phone call (almost) whenever, wherever. How does broadband come into play? Smartphones were invented when wireless broadband networks were in place to support the technology.
Does your business rely on access to wireless broadband? If so, in what capacity?
Without wireless broadband, Audingo wouldn’t be able to reach subscribers via text message or deliver video messages to their phones via our enterprise level architecture platform. And, obviously, our mobile application that allows organizations and personalities to easily create messages and send to subscribers using their smartphone depends on access to wireless broadband.
Is spectrum, the invisible airwaves that carry voice and data signals to and from electronic devices, critical to the future of your business? If so, how?
Consumers need good reception to make or receive calls on their cellphones and surf the web, check email or use mobile apps on their smartphones. Audingo is committed to efficiently delivering messages from our clients, organizations and public figures. That’s only possible if enough spectrum is available for wireless carriers to reliably support the explosion in mobile.
How would a “spectrum crunch” impact your business?
A spectrum crunch would mean that calls could be dropped in the middle of an audio Audingo message being delivered by phone call – and that would be completely out of our control. It could mean that text and email Audingos are delayed from reaching recipients – maybe even so much that they’re no longer timely. Audingo is very aware of the need for policymakers to take action now to prevent an extreme spectrum crunch from coming to be.
Wednesday, July 17
Yesterday, FCC Commissioner Ajit Pai laid out his vision for reforming the E-rate program, which helps connect schools with broadband. At Broadcasting & Cable, John Eggerton has a recap:
[Pai]... enumerated his proposed fixes: “First, I propose that we start by allocating the E-Rate budget across every school in America so that every school board and every parent knows up front, on day one, how much E-Rate funding is available… Second, I propose that we redirect spending away from outdated services and toward next-generation technologies that directly benefit students… Third, I propose that we vastly simplify the E-Rate application process…Fourth, I propose to add real accountability and transparency to the E-Rate process.”
The full text of Pai’s speech, which was delivered to the American Enterprise Institute, is available at the FCC website.
Monday, July 01
Last month, President Obama put forward a bold initiative to connect 99% of American schools with high-speed Internet within the next five years. On Friday, Brendan Sasso of The Hill reports, acting FCC Chairwoman Mignon Clyburn did her part to kickstart the initiative:
In a statement on Friday, Clyburn said the agency’s proposal answers the president’s call “to close our education system’s bandwidth gap by modernizing the E-Rate program and providing our schools and libraries with a path towards affordable access to high-speed broadband.”
“Since its inception, the E-Rate program has succeeded in connecting nearly all U.S. classrooms to the Internet, and in 2010 we took a number of initial steps to cut red tape and help schools get faster speeds for less money. But now, to ensure a robust future for our children, we must equip them with the necessary tools to compete and flourish in an increasingly global and high tech economy,” she said.
For a look at the benefits broadband has on education, check out our “Not Just Generation Text” infographic.
Wednesday, June 26
If you missed our “X-Factors of Tech Policy Today” discussion this morning, here’s video of the event. Our thanks to the Joint Center for Political and Economic Studies, the Digital Policy Institute, and all the speakers for a lively and important discussion.
Video streaming by Ustream
Friday, June 14
As my colleague Rick Boucher has already stated, the spectrum-related initiatives President Obama announced this morning are a “great step” toward getting mobile broadband providers the airwaves they need in order to meet the demands of their customers. That’s the first nugget of good news.
The second nugget of good news, which was also included in this morning’s announcement, is the White House’s report on the state of broadband, which highlights just how far our country has come in providing high-speed Internet access to citizens. Some bullet points from the report:
• In the year 2000, 4.4% of American households had a home connection to broadband; by 2010 that number had jumped to 68%.
• Broadband networks at a baseline speed of >10 megabits per second now reach more than 94% of U.S. homes.
• Overall, average delivered broadband speeds have doubled since 2009. In 2012, North America’s average mobile data connection speed was 2.6 Mbps, the fastest in the world, nearly twice that available in Western Europe, and over five times the global average.
• Annual investment in U.S. wireless networks grew more than 40% between 2009 and 2012, from $21 billion to $30 billion, and exceeds investment by the major oil and gas or auto companies; investment in European wireless networks remained flat during this time period, while wireless investment in Asia (including China) rose only 4%.
• There are over 500 million Internet-connect devices now in American homes and businesses.
Those are some impressive numbers, especially on the investment front, and they underscore just how vibrant and competitive the U.S. wireless market really is.
The numbers also tell us that in order to keep the party lights on, the Federal Communications Commission must pursue policies that encourage investment and innovation. Currently the FCC has two issues burning up its docket. The first is the upcoming spectrum incentive auctions, which need to be transparent and open in order to get the most out of those airwaves. Competition is important – which is already occurring in the telecom market – and so is raising as much money as possible for the U.S. Treasury. Also, we need to ensure companies that can quickly put new spectrum to work powering mobile broadband are in the mix.
The other issue facing the FCC is the upgrade of America’s wired networks so they are better suited for the Internet age. While the baseline speed of >10 megabits per second cited in the White House’s report is good, we can do better. The upgrade to all-Internet based networks will mean substantially faster broadband in more places, but getting there will require substantial investment. It will also mean a close examination — and potential overhaul — of regulations currently governing our nation’s networks.
Neither of these issues is insurmountable, but it will take continued partnership between the government and private industry to keep America at the forefront of both wired and mobile broadband. The numbers in the White House report are encouraging. The President’s push to free up more government spectrum is inspiring. Smart policies when it comes to spectrum auctions and network upgrades will help us hit the trifecta.
Wednesday, June 05
Via Mike Snider of USA Today, a new report from PricewaterhouseCoopers finds that when it comes to being online, consumers are increasingly turning to mobile connections:
This year, consumer spending on Internet-connected smartphones, tablets and other devices will surpass home broadband service fees for the first time, according to PricewaterhouseCoopers’ “Entertainment & Media Outlook 2013-2017” report. In four years, nearly 286.7 million in the U.S., or 87% of the population, will have mobile Internet devices, while about 85% of homes will have broadband.
Mobile Internet access spending will top $54 billion in the U.S. this year, compared with $49.6 billion in home Internet spending, the consulting firm estimates in the report, out today. In 2012, home Internet spending ($46.5 billion) slightly outpaced mobile ($44.5 billion).
“We see mobile growing at a much more pronounced rate than broadband, because we are getting toward the saturation point (on home broadband),” says PwC partner Sean De Winter. “Mobile Internet penetration is screaming through the roof.”
All the more reason for the FCC to ensure their upcoming spectrum auctions are designed to be as successful as possible — for providers, the federal government, and consumers.
Monday, June 03
Video streaming service Hulu has reportedly been up for sale for a while now, and according to Noah Kravitz of Read Write Web, the company has a number of suitors:
At least seven suitors are said to be vying for Hulu, which went back on the auction block after previous attempts at a sale and initial public offering both failed. A deal would hinge as much on terms as sheer dollar value, as the length of Hulu’s content licenses - and what control the site’s trio of owners have over content available to subscribers - will be part of any negotiations. Hulu’s days of exclusive rights to popular television content could be drawing to a close as networks see the financial benefit in licensing online rights to multiple players including Amazon, Netflix and YouTube/Google.
The current price for Hulu is rumored to be north of $1 billion, with players Yahoo! and DirectTV reportedly in the lead.
Friday, May 17
In a speech before the Media Institute yesterday, Craig Silliman, Senior Voce President of Public Policy for Verizon, argued that outdated regulations risk holding back innovation and investment. It’s a similar argument other telecom providers have made recently. As Silliman told the crowd:
[W]e need to ensure is that we do not let an increasingly outdated regulatory regime for the Internet ecosystem slow innovation and investment. The 1996 Telecom Act succeeded in what it was designed to achieve, but almost two decades later it is leaving the FCC struggling to shoehorn Internet-era technologies into phone-era regulations. I am not suggesting that the answer is to abolish all regulation. But I am suggesting that we need a 21st century policy framework that is designed for 21st century technologies and marketplaces, not 19th century ones.
We need to start by asking the right questions. It has been suggested that a key question for the next FCC chairman will be how to keep the FCC relevant in the Internet era. I believe that is the wrong question. I recognize, of course, that tactical battles to secure budgets and resources are part of any organization or entity, including the federal government. But a strategic view of policymaking starts by asking what objective we are trying to achieve, and then asking whether regulation is needed, why it is needed, and who is best placed to administer it.
The full speech is worth checking out.
Tuesday, April 30
Via Janko Roettgers of paidContent, streaming service Hulu hit some big numbers during the first quarter of this year:
Hulu now has more than four million paying users subscribing to its Hulu Plus service, and the number of subscribers has doubled since last year. The service also streamed more than one billion videos in the first quarter of 2013, which is another record for Hulu.
This is on the heels of last week’s announcement from Netflix that it had hit more subscribers than HBO.
Wednesday, April 24
Speaking of streaming video, Brad Stone at Bloomberg has the scoop on another big tech player making a big play to get in on the action:
Amazon is making e-readers and tablets and will likely soon introduce a smartphone. As it works to build all types of connected devices, that leaves a natural next step: a television set-top box. The e-commerce giant is planning to introduce a device this fall dedicated to streaming video over the Internet and into its customers’ living rooms, according to three people familiar with the project who aren’t authorized to discuss it.
Amazon’s entry will be just another example of how streaming is the future of TV. All the more reason for more investment in the infrastructure to handle the coming flood of data.