Because every American
should have access
to broadband Internet.

The Internet Innovation Alliance is a broad-based coalition of business and non-profit organizations that aim to ensure every American, regardless of race, income or geography, has access to the critical tool that is broadband Internet. The IIA seeks to promote public policies that support equal opportunity for universal broadband availability and adoption so that everyone, everywhere can seize the benefits of the Internet - from education to health care, employment to community building, civic engagement and beyond.

The Podium

Blog posts tagged with 'Economy'

Thursday, November 04

Replying to the FCC

By IIA

Our response to the FCC’s call for reply comments in its Open Internet Public Notice on “Two Under-Developed Issues in the Open Internet Proceeding” has now been posted at the FCC website.

Statements from our Co-Chairs Bruce Mehlman and David Sutphen:

With Election Day behind us, the Federal Communications Commission (FCC) stands at a pivotal crossroads. If it provides certainty to network operators and predictability to investors, it can meaningfully advance availability and adoption of high-speed Internet across the nation. If it rejects the counsel of bipartisan majorities in Congress and unilaterally pursues a more aggressive regulatory agenda, it can expect years of diminished investment, delayed re-employment in the telecom sector, battles in court and partisan squabbling that disserves our nation.

To realize 100 percent broadband availability at speeds that enable the next-generation of innovative applications, the FCC estimates the need for $350 billion in additional investment. Given the huge federal budget deficit and national debt, those investments are not going to come from the government. We need private investors to see the business case for continually upgrading existing networks and deploying competing infrastructure platforms.

— Bruce Mehlman

At a time when the nation is looking for common ground and common sense solutions for creating new jobs and fostering an economic recovery, the last thing we need is new regulations that threaten one of the few bright spots for growth: the broadband economy. Now is the time to turn the page on net neutrality and focus attention on the issues like universal service fund reform, digital literacy programs, and innovation policy, all of which will help to ensure that every American is benefiting from the broadband economy.

— David Sutphen

Tuesday, November 02

The iPad is Somewhat Popular

By Brad

Via Read Write Web:

New data from Strategy Analytics out today clearly shows Apple’s dominant position as the leader among tablet PCs - during Q3 2010, the company’s iPad has captured 95% of the global market share for tablets. That leaves everyone else - Windows, Linux, Android, etc. - with only a 5% share, combined.

It’s doubtful that Apple can keep up this dominance, especially with new competition being launched every week. But for now all you can say is…wow.

Monday, November 01

Required Reading

By Brad

In a must-read op-ed for the Washington Post, Karen Kerrigan, president and chief executive of the Small Business & Entrepreneurship warns that net neutrality regulations would “smother a growing sector”:

Net neutrality rules would give the FCC new powers to micromanage the operations and pricing and service levels of the privately owned and financed broadband networks that are the physical heart of the Internet. This is a strategy for chasing away the billions of dollars that broadband network operators (principally the telecom and cable companies) plan to invest in broadband infrastructure and new technology.

Thankfully, a bipartisan majority in Congress believes it’s a terrible idea to let three unelected FCC officials decide the fate of America’s broadband networks and jeopardize jobs and economic recovery in the process. With the national unemployment rate at 9.6 percent and an economy that remains fragile, let’s hope Congress reengages in this debate to keep net neutrality regulations as far from small business as possible.

Read the whole thing, as they say.

Thursday, October 28

The Net Neutrality “Zombie”

By Bruce Mehlman

In an op-ed for Politico, Douglas Holtz-Eakin and Sam Batkins from the American Action Forum, warn that pursuing net neutrality could have a drastic effect on the one thing America desperately needs right now — jobs:

Many now predict that “net neutrality” — a Washington power grab that seeks to dictate how private telecoms prioritize use of limited bandwidth — is walking the Green Mile. As Congress scurried to finish its legislative business before returning to the campaign trail, the compromise net neutrality legislation, crafted by House Energy and Commerce Committee chairman Henry Waxman D-Calif.), died in committee.

But its death gives the Federal Communications Commission another chance to regulate the bandwidth decisions of private companies.

This could spell death to the thousands of jobs created each year by the billions of dollars private telecoms spend on infrastructure. Imposing net neutrality could reduce broadband expansion and cost the U.S. economy upwards of 300,000 jobs, according to a new Phoenix Center study. Just a 10 percent decline in IT infrastructure investment, Brett Swanson of Entropy Economics found, could eliminate 502,000 jobs and $62 billion in gross domestic product growth. This is a price that the U.S. economy cannot afford.

Read the whole thing.

Monday, October 18

Broadband Fact of the Week

By IIA

Stimulus funds created more than 640,000 new jobs that would not have existed but for the recovery bill.

— Milano, Jessica, “Where Jobs Come From: The Role of Innovation, Investment, and Infrastructure in Economic and Job Growth,” February 2010.

Learn more facts in our ever-expanding Broadband Fact Book.

Monday, October 11

Unintended Consequences

By Brad

At App-Rising, Geoff Daily looks at how recent government health care regulations could actually have a detrimental effect on expanding telehealth:

Recently I met Jamey Hopper, president of Dexcomm, a local call center service in Lafayette that answers calls for doctors, funeral homes, and others.

While what they do isn’t all that bandwidth intensive given that they do voice and not video, what was interesting is that until recently they were growing their workforce more at home than at the office.

The economics for them were simple: why pay for office space when employees can do just as well working from their own homes?

And the overarching impact of this trend on society is profound as imagine what happens when workers can spend more time at home and less in transit, and as a result we have fewer cars filling up roads and polluting the air.

It seems like such a natural, no-brainer thing to be doing for a business like Dexcomm’s, and yet they’ve recently had to reverse course and start pulling that at-home workforce back into the office.

Why? Because of the recently passed healthcare reform.

In that reform are new rules aimed at protecting the privacy of patient health information. While well-intentioned, their result is that in order to keep workers out of the office Dexcomm will have to spend a significant amount of money upgrading the security of their systems for gathering information from their at-home workforce.

The problem is that this expense is significant enough that it makes more economic sense to bring them back into the office than upgrade these systems.

So because of government regulation, Dexcomm is having to stop its transition into a 21st century virtual business and go back to having to maintain a large office.

Read the whole thing.

Thursday, October 07

Wireless Market is Healthy, Growing

By Brad

Speaking of increases, data from wireless trade group CTIA shows that cell phone growth in the U.S. is up 5 percent over last year. As the Washington Post’s Cecilia Kang reports:

In June 2010, users sent 1.8 trillion SMS, or text messages, up 33 percent from the previous year. Multimedia texts (photos and videos) also rose sharply, up 187 percent to 56.3 billion messages.

U.S. consumers are increasingly using smart phones and wireless-enabled gadgets like the iPod. Those devices were up 50 percent to 61.2 million. Wireless carriers said data usage was up 49.8 percent to 161.5 billion megabytes.

 

Monday, October 04

Broadband Fact of the Week

By IIA

As of April 2010, the Internet industry had boosted employment by 3.1 percent over a six month period.

— Mandel, Michael, “The Coming Communications Boom?” Progressive Policy Institute, April 2010.

Learn more facts in our ever-expanding Broadband Fact Book.

Wednesday, September 29

A “Foolhardy” Effort

By Brad

In a smart letter to the editor to Politico, economists Ev Erlich, former undersecretary of commerce for the Clinton administration, and Jeff Eisenach, Managing Director of Navigant Economics, argue against the FCC imposing net neutrality:

In comments we filed with the FCC this summer, we noted that the Federal Trade Commission has been an active watchdog for years. It, rather than the FCC, should be taking the lead in this fight. But even if one believes the FCC should continue, their authority should come directly from Congress—rather than from unelected regulatory commissioners.

Applying invasive regulatory oversight to a dynamic market like the Internet is foolhardy. Consumers are getting what they want on the Internet, the wired and wireless broadband worlds are converging. Entrepreneurial efforts to provide advanced services through prioritization should be applauded, not banned.

Friday, September 24

Giving Wireless Broadband a Boost

By Brad

Yesterday, the FCC took a big step toward boosting the power of wireless broadband. Amy Schatz at the Wall Street Journal reports:

The Federal Communications Commission Thursday approved a plan to open vacant TV channels for wireless broadband, a win for high-technology companies that have long sought to use the airwaves for new services.

The FCC’s board unanimously reaffirmed a 2008 decision to open up the broadcast airwaves and clarified some technical details about how companies will be able to use them. Google Inc., Microsoft Corp. and Dell Inc. are among the companies that have pushed the FCC to open up the TV airwaves, and they have already been testing systems for using them.

FCC Chairman Julius Gena chowski said the move was important and would offer “unique opportunities for innovators and entrepreneurs.”

At Bloomberg, Todd Shields breaks down what this move could mean for the economy:

White-space applications may generate $3.9 billion to $7.3 billion in economic value each year, according to a September 2009 study funded by Microsoft and written by Richard Thanki, a London-based analyst with Perspective Associates.

Friday, September 10

Members of the Business Community Asks the FCC to Back Away

By Bruce Mehlman

Grant Gross from PC World reports:

Representatives of the U.S. Chamber of Commerce, the National Association of Manufacturers (NAM) and the Telecommunications Industry Association (TIA) questioned the need for the FCC to pass new rules prohibiting broadband providers from selectively blocking Web traffic. New regulations could slow down investment that broadband providers make in their networks, said Jason Goldman, counsel for telecommunications and e-commerce at the Chamber.

“The broadband market is flourishing,” Goldman said during a press conference. “Broadband service providers are investing tens of billions of dollars every year to upgrade their networks. Broadband-enabled devices and applications are being released daily.”

Tuesday, August 24

Broadband Fact of the Week

By IIA

A recent study shows that employment levels within Internet companies are up 13 percent since the recession officially started in December 2007.

— Mandel, Michael, “The Coming Communications Boom?” Progressive Policy Institute, April 2010. Web. 28 Jul 2010.

Learn more facts in our ever-expanding Broadband Fact Book.

Thursday, August 12

Guest Blog: Mike Jude

By IIA

Stratecast has released a new study entitled “Net Neutrality & Broadband Access: Hindrance or Help?” which examines the possible effect proposed regulations on broadband providers would have on investment, broadband deployment, and the National Broadband Plan. We’ve asked Mike Jude, Ph.D. of Stratecast to distill some of the study’s findings. — IIA.

Following the Federal Communication Commission’s announcement that it was pursuing reclassification of broadband service until Title II, network operators warned that, even with promises from the FCC about forbearance, an uncertainty of regulation can severely hurt investment.

Our findings back up network operator concerns. For the most important elements influencing investment decisions (such as ARPU [average revenue per user], CAPEX, OPEX, and innovation), risk is the enemy of investment since it inserts uncertainty into the expectations of revenue and return of investment. Put another way, network operators decide how much to invest based on the outlook for long term return. As we note in the study:

ARPU growth is impacted by net neutrality since one can make the assumption that, to the extent that net neutrality impacts the ability of an operator to offer competitive services, it could reduce the revenue per user. The model predicts that such erosion can be significant…ARPU— the amount that an operator can generate per subscriber in the presence of net neutrality — can be as much as $80 per month less at the limits of this projection. Since this amount is almost exclusively derived from premium services, above the access rate, the impact on the operator is obvious — a dubious investment.

Obviously, this loss will have a major impact on network operator revenues — as much as $4-$5 billion per year, as soon as next year. The ripple effect of this loss would also effect the U.S. economy through the loss or prevention of up to 70,000 jobs by the end of 2011.

These are just some of our findings. Overall, we see the potential for great harm in imposing broadband reclassification and net neutrality.

Mike Jude, Ph.D.
Program Manager — Consumer Communications Services, Stratecast

Tuesday, August 10

IIA Web Chat: Broadband Regulations and the Economy

By IIA

chat_bubble
IIA Co-Chairman Bruce Mehlman and IIA Broadband Ambassador Joseph P. Fuhr, Professor of Economics at Widener University and Senior Fellow at the American Consumer Institute, are discussing the implications of broadband policy on jobs, investment and economic recovery.

Join the discussion.

Wednesday, July 21

Required Reading

By Bruce Mehlman

From a new study conducted by the Progressive Policy Institute entitled The Coming Communications Boom? Jobs, Innovation, and Countercyclical Regulatory Policy

There’s little doubt that a permissive regulatory regime for derivatives and securitization helped foster the housing boom, creating millions of jobs in construction and finance. But it also set the stage for the financial crisis that eventually sent unemployment soaring. Right now regulators seems intent on tightening the regulatory regime on the communications sector, despite it being one of the few growth sectors in the economy, and despite the fact that communications-related industries were completely blameless in the housing boom and bust. The Federal Communications Commission (FCC) is considering imposing tighter regulations on broadband, bringing it under the same common carrier rules that govern older phone networks. That would be part of a move towards net neutrality, a policy that would require broadband providers to follow rules about what kind of service and products they could offer. There are different approaches to net neutrality, but the strictest version would be like requiring airlines to sell all tickets to a particular destination at the same price, no matter what the time of day or when the ticket was bought.

The debate over net neutrality is intense. But whether or not you think that such a move is a good idea, it seems unlikely that such regulations would boost investment or employment in the telecom industry. The experience of the airline industry suggests that differentiated pricing and service is an essential part of keeping a high-fixed-cost industry running.

The full study — required reading for anyone interested in the current Internet regulations debate — is available at the Progressive Policy Institute’s website.

Monday, July 12

Hanging on in China

By Brad

The Wall Street Journal reports that Google, which has been scuffling with the government of China lately, had its licensed renewed by the government last Friday. The renewal allows the search giant to keep its Chinese web address, but the government can still revoke it whenever it sees fit.

Thursday, July 01

The Cost of Crashing

By Brad

On Tuesday, Amazon.com experienced a major outage for most of the day, prompting CNet to look at the cost of the outage:

At an annual revenue of nearly $27 billion, Amazon faces a potential loss of an average of $51,400 a minute when it’s site is offline. Amazon shares closed down 7.8 percent, a sharper fall than the Nasdaq index.

Thursday, June 24

Broadband Fact of the Week

By IIA

For every 3 million new broadband lines deployed, nearly 300,000 economy-wide jobs are created.

— “Where Jobs Come From, The Role of Innovation, Investment, and Infrastructure in Economic and Job Growth,” Jessica Milano, February 2010.

More facts about broadband.

Monday, May 17

Broadband Fact of the Week

By IIA

Investments in America’s digital infrastructure are likely to create or retain 1 million to 2.5 million jobs in the near term.

— BB4US.net, ‘‘Report of the US Broadband Coalition on a National Broadband Strategy,’‘? US Broadband Coalition. September 24, 2009

More facts about broadband.

Wednesday, May 12

Broadband on the Rise (Again)

By Brad

After relatively flat broadband growth in 2009, a new report from Leichtman Research finds that in the first quarter of 2010 demand for broadband was once again increasing. From GigaOm:

The top 19 cable broadband and telephone companies added a net total of 1.4 million broadband subscribers in the first three months of the year vs. 890,000 new subscribers in the fourth quarter of 2009.

According to the report, the top cable companies now have more than 40 million subscribers, while phone companies have over 32 million.

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