We commend the FCC for responding to the recommendations of expert analysts, economists, civil rights organizations, industry groups and members of Congress by continuing to seek consensus rather than pursue burdensome and unnecessary regulations.
The Commission deserves credit for seeking additional input from interested parties, including actual market participants who are innovating, investing and deploying networks. As a bipartisan majority of Congress has urged, on such an important issue we should take the time necessary to get this right and to base policy on facts and reality rather than fear and political rhetoric.
— David Sutphen
Over the past decade, minimal regulation has led to extraordinary investment and adoption of broadband by more than two-thirds of American citizens. The shared goal of an open Internet is best served by a thoughtful, fact-based, targeted and bipartisan approach to new policy directions.
It is critical that processes to find consensus continue. With a well-planned strategy based on input from industry players across the spectrum, we can get every American online and build a world-class Internet ecosystem that makes our country a better, more prosperous and fairer society.
At Fierce Telecom, our Co-Chairman Bruce Mehlman says it’s time for the FCC to move past the net neutrality gridlock:
Impossible to miss, headlines highlighting the debate over so-called “net neutrality” have splashed across newspapers around the country for months. While ensuring “a free and open Internet” is a laudable and universally-shared goal, the degree to which it is at risk is very much in dispute. At some point it becomes necessary to weigh real-world problems against hypothetical possibilities, going with what is real and waiting to see if the theoretical threats materialize. From expert analysts to civil rights organizations to members of Congress on both sides of the aisle, thoughtful voices across the spectrum have warned that excessive regulations could chill investment, hinder innovation by failing to anticipate technological development and ultimately kill jobs at a time when our economy needs all the investment, innovation and jobs it can get.
Last week, IIA Co-Chairman Bruce Mehlman participated in luncheon in Wichita, Kansas to discuss Internet regulation and its effect on investment and innovation. Both the Wichita Eagle and Wichita Liberty have coverage of the event.
Our response to the FCC’s Notice of Inquiry on reclassifying broadband under Title II:
July 15, 2010
Dear Chairman Genachowski and Commissioners Baker, Clyburn, Copps and McDowell:
Thank you for the opportunity to offer comments on the proposal to bring broadband information services under Title II of the 1934 Act. While we share your goals of preserving an open Internet and enabling universal broadband deployment and adoption, we fear the proposed “third way” approach will undermine these objectives, reducing investment, stalling economic recovery and inhibiting the pace of broadband progress in America.
This proposal seems intended to fit changed legal circumstances rather than evolving market realities. It could disserve consumers by threatening the continued growth of the industry at a time when increased innovation, investment and job creation are critical to the economy. Recognizing this reality, a bipartisan majority in Congress has urged the Commission to shelve this proposal and let the elected lawmakers lead. Instead of re-defining new technologies to fit old regulatory categories, the FCC should allow Congress to craft clear and narrowly tailored authority that enables the Commission to accomplish specific, focused objectives.
The Internet Innovation Alliance believes the biggest challenges to universal broadband adoption in America right now include:
• The need for ongoing investment in network capacity (up to $350 billion according to FCC estimates) despite significant economic headwinds and uncertainty for investors, to support the bandwidth required by 50,000,000 new customers and ever-more-robust applications;
• The need for digital literacy programs that target the 37 percent of Americans who have access to broadband but have not signed up for service, either because they do not know how to use the services or do not appreciate how it would benefit their lives;
• The need to expand the amount of wireless spectrum available while enhancing effective network management strategies;
• The need to improve enforcement efforts in the face of exponentially-increasing cyber attacks and fraud.
The IIA shares the belief that competition among ISPs and the free and open nature of the Internet have been essential to broadband’s success and remain critical to its future. However, the free and open Internet is not at risk. We are unaware of any current examples of ISPs “blocking or degrading” web sites or broadband traffic. And the few allegedly “bad actions” by ISPs over the past five years have quickly resulted in prompt reversals. The FCC should not expand regulatory risk, even with promises of forbearance, to protect against hypothetical harm.
Of great concern, this proposal threatens to undermine investment by adding significant uncertainty and depressing returns. Analysts and expert observers have overwhelmingly identified this proposal as a negative blow to America’s economic recovery and investment in broadband. For example:
• “Reclassifying broadband to bring it under FCC jurisdiction is the ‘the nuclear option’...This would call into question virtually every assumption about the terminal value of networks…Markets abhor uncertainty. Today (day of FCC’s announcement that it will push forward with Title II reclassification of broadband) we got uncertainty in spades…this development is an unequivocal negative.” (Sanford Bernstein Senior Analyst Craig Moffett)
• “...Decreased investments by broadband service providers will hinder capital expenditures by others in the ecosystem, particularly those at the edge…the imposition of network neutrality rules could have devastating impacts across the ecosystem between 2010 and 2015. A 10 percent decrease in investment by wireline and wireless broadband service providers, coupled with likely spillover effects, could result in the loss of 502,000 jobs across the entire ecosystem and would have a negative impact on U.S. GDP on the order of approximately $62 billion per year.” (Study: Davidson, Charles and Bret Swanson. “Net Neutrality, Investment & Jobs: Assessing the Potential Impacts of the FCC’s Proposed Net Neutrality Rules on the Broadband Ecosystem.” New York Law School. June 2010.)
• “Net neutrality acts like a tax on the Internet. It imposes overheads on network operators, which, in turn, decrease network investments, providing less opportunity, not only for the operators, but also for those that use the operators’ networks as well.” (Study: Jude, Michael. “Net Neutrality: Impact on the Consumer and Economic Growth.” Frost & Sullivan. May 2010.)
IIA also fears the proposed new regulations are more likely to widen the digital divide than close it. By deterring new investment where and when it is needed most, this regulatory approach could add to the cost of service and price broadband beyond the reach of many low and moderate-income Americans. Experts on the digital divide have not cited “lack of common carrier regulations” as either a cause or a cure for race or income-based differences in broadband adoption. Nor did former Pew researcher John Horrigan find any non-users of broadband citing concerns over the future of the free and open Internet as the basis for their failure to buy broadband.
A groundbreaking December 2009 poll of 700 African Americans and 200 Latinos conducted by former Obama Campaign pollster Cornell Belcher found that the main reasons that non-Internet users in communities of color remain offline are (1) they do not see the need/value, (2) they lack computers or smart phones and (3) they lack the digital literacy and online confidence. We understand how to remedy all of these challenges, none of which would be solved or even addressed by this proposal.
We believe that minimal regulation and consistent bipartisanship will lead to maximum investment and innovation. Regrettably, the “third way” expanding Title II would maximize regulation and ignore the bipartisan majority. The Commission should shelve this proposal and await focused and narrowly-tailored legislation from Congress that authorizes core elements of the National Broadband Plan, including initiatives to promote digital literacy, universal service reform and expand spectrum availability.
Thank you for your careful consideration of our views.
Yesterday, NPR’s “All Things Considered” aired a segment on America’s broadband infrastructure and the FCC’s proposed Internet regulations. Our own Bruce Mehlman was interviewed for the piece.
IIA has espoused the same formula for 6 years now: minimize regulation & politics to maximize investment, innovation and competition. The Title II maneuver proposed by the FCC today seems more like a political solution to a political problem rather than a practical measure to align old regulations with new technologies and market realities. A bipartisan majority clearly sees the need for the FCC to slow down and Congress to step up in a focused and targeted way.
As we’ve heard from a majority of elected officials, what’s needed now is clear guidance to regulators that comes from thoughtful debate and narrow and considered policy decisions by elected officials in Congress and the Administration. With thoughtful bipartisan action, we can advance the mission of delivering high-speed Internet to every American and build world-class broadband networks that make our country a better, more prosperous, and fairer society.
While the FCC has demonstrated wisdom and vision in much of the 384-page national broadband policy it issued two months ago, our confidence in their sincere promises to forbear from imposing new regulations does not warrant blind support for the regulatory blank check they seek. Over time, regulators almost always use all of the powers they are given and then some. Better to let Congress narrowly prescribe such authorities when and as they are necessitated by market failures and actual situations “on the ground.”
If we are ever to reach 100 percent broadband penetration—an important goal of the Obama Administration that we wholeheartedly share—we will need to ensure maximum investment, innovation and competition across access platforms. The optimal environment for such outcomes would have narrowly-tailored regulations targeted at specific problems rather than sweeping rules for problems that do not exist. The FCC’s so-called “third way” is the wrong way. The application of these archaic rules will bring uncertainty to the market, stifling Internet investment and innovation.
Delivering his opening remarks at an Open Internet Workshop in Seattle, Washington, FCC Chairman Julius Genachowski reaffirmed his commitment to moving forward on net neutrality regulations:
At this decisive moment in the American broadband revolution, we should strive to give greater certainty to telecom investors and innovators and rally support to the collective push for universal access and adoption, rather than advancing divisive regulations that increase investors’ uncertainty. Because marketplace realities do not necessitate new Internet rules at this time, we urge the FCC to shelve such regulations and devote all of its energies toward advancing the National Broadband Plan.
The two greatest risks to a free and open Internet in the future come from escalating cyber-security-related attacks and insufficient bandwidth to support 50 million new customers and ever-more-robust applications. Not only would the regulations envisioned in this NRPM leave ISPs with their hands tied, potentially unable to adequately manage networks to address these challenges, but they are precisely the sort of investment-killers that could undermine the National Broadband Plan and limit its success.
Broadband offers great potential to increase domestic employment, according to multiple experts across the political spectrum. Recent studies, by contrast, suggest good new jobs could be lost in the face of greater uncertainty caused by heavier regulation.
The White House recently hosted a Forum on Workplace Flexibility, where President Obama stressed the importance of bringing telecommuting opportunities to communities that need new jobs and advocated expanding teleworking opportunities for federal employees, underscoring the necessity of increased broadband connectivity. The IIA strongly believes this important goal can be achieved with the help of the National Broadband Plan, which has potential to make a positive and powerful impact, provided it is not accompanied by heavy new regulations that threaten to chill investment when we need it most.
The National Broadband Plan highlights a decade of success and innovation in Internet technology. Relatively minimal regulation has helped achieve great advances in Internet technology and has brought broadband access to 95% of all Americans. Over the past decade, the cable and telecommunications industry has invested more than $165 billion in infrastructure and upgrades. The NTIA reports that broadband adoption has expanded to 63.5 percent of U.S. households as of October 2009, up from just 4.4 percent in 2000.
There is more to be done. Thirty-five percent of Americans still have not adopted broadband due to digital illiteracy, lack of resources or failure to appreciate the value and benefits. Too often, the slow adopters are those for whom broadband can make the biggest difference.
IIA Co-Chairman Bruce Mehlman’s latest column for FierceTelecom examines some of the questions waiting to be answered as the National Broadband Plan moves forward.
The Washington Post reports on an innovative idea to help rebuild Haiti’s infrastructure following the country’s devastating earthquake in January:
John Stanton, founder of Voice Stream and former chief executive of T-Mobile USA, wants the Haitian government to forget about rebuilding its copper wire communications network. Instead, he thinks Haiti should go mobile.
“Necessity is the mother of invention,” Stanton said.
Stanton pitched the idea at the CTIA trade show in Las Vegas, and announced that his company Trilogy would be willing to contribute as much as $100 million to the effort.
Later in the Post article, a familiar name offers some insight:
Experts say any project to rebuild infrastructure in the nation should be open to competition. That would include laying down fiber for a stronger backbone to connect calls. Dozens of new cellphone towers would be raised to support traffic that will grow as Internet use takes off.
“It can be a fantastic opportunity, but all over the world there is also a push to have a mix of wireless and fixed-wire networks supporting broadband and communications,” said Bruce Mehlman, co-president of the Internet Innovation Alliance and former assistant secretary of commerce for technology policy. “And you must make sure that this doesn’t preclude any competition.”
I applaud the FCC for presenting an ambitious plan that sets goals for greater broadband availability, adoption and speeds — all key to the advancement of our economic, health care and educational systems.
The National Broadband Plan both highlights a decade of success and innovation in Internet technology and lays out the work that remains ahead. It has been estimated that hitting the targets outlined in the plan, including at least 90 percent broadband adoption by 2020, could cost as much as $350 billion. This plan could be powerful and positive provided strict new regulations are not imposed to undermine investment.
In a surprising move — for government, anyway — the FCC has announced that it’s much anticipated national broadband plan will now be released on March 16 — a day earlier than originally scheduled.
Via InfoTech & Telecom News, the Electronic Frontier Foundation — long supportive of net neutrality principles — is arguing against the FCC imposing new regulations:
In comments filed with the FCC in February, the San Francisco-based organization said the agency lacks the authority to issue neutrality regulations that would ban Internet Service Providers (ISPs) such as Comcast from favoring some forms of Internet traffic over others.
“Congress has not deputized the FCC to be a free roving regulator of the Internet,” the group argued in a filing that came as a shock to net neutrality supporters such as the intensely pro-regulation “public advocacy” groups Free Press and Public Knowledge.
“So while EFF strongly endorses the goals of this commission ... a limitless notion of ancillary jurisdiction would stand as an open invitation to future commissions to promulgate ‘policy statements,’ issue regulations, and conduct adjudications detrimental to the Internet,” EFF wrote.
High-speed Internet connections are helping to change the meaning of a snow day—serving as a vital tool to keep Americans working, even when the roads, public transportation and airports are not. For those who could go online from home during the storms, it was largely business as usual.
But clearly not enough could. The “Snowmageddon” of 2010 forced federal offices to shut their doors for days, resulting in an astounding loss of money and productivity. It’s been estimated that closing the government for just one day costs taxpayers roughly $100 million. If you factor in the business shutdowns in the private sector, it is easy to see that these storms exacted a high cost on the nation as whole.
The problem is that currently about a third of the population doesn’t have a broadband connection, and one in five don’t have any Internet connection at all.
I commend the FCC for its leadership on broadband adoption and for recognizing the role the Internet plays in the American job market. We no longer operate in a brick-and-mortar economy. Broadband increases opportunities for American businesses large and small to succeed and advance and enables new job creation as well.Investing in Internet technology and infrastructure benefits all business sectors, and at a time when economic recovery is at the top of our national agenda, broadband advancement has never been more critical.
— Bruce Mehlman
The new FCC study underscores the need to remain focused on closing the digital divide by addressing the American public’s attitudes about broadband and reinforces the IIA’s belief that digital literacy must be a key component of the National Broadband Strategy, due to Congress next month. In a 2009 survey of 900 African Americans and Hispanics by Obama pollster Cornell Belcher, 43 percent of respondents cited not knowing how to use the Internet or not seeing the need for the Internet as the reason why they are not online, and 44 percent of those same minorities polled said they would be more likely to subscribe to Internet services if they were provided free lessons on how to use the technology. Bridging the digital divide and getting every American online should be our top priority—broadband Internet is the great enabler and the great equalizer.
More than $100 billion has already been spent to deploy high-speed systems across America. But the FCC has estimated that $350 billion is necessary to achieve universal broadband access. As such, the focus of the FCC should be on speeding this process, either through federal programs or by incentivizing the investment of private companies.
Throughout this process, we must also strive to ensure that access remains affordable. To achieve this, I see one logical solution - to have the build-out in these communities financed in part by agreements between the companies paying to lay the wires and the companies that will use those links to sell services.
Largely missing the point, proposals for new “neutrality” rules do nothing to help us realize these important goals. Instead, it is widely thought that new net neutrality regulations will reduce much needed investment in infrastructure, thus causing broadband to become less affordable and accessible to underserved and un-served populations.
IiA Co-Chairman Bruce Mehlman has a new column in Fierce Wireless on digital literacy and closing the digital divide. Check it out and join the discussion, which is already underway.
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