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 'Fcc'

Friday, October 09

Irving on Lifeline at Medium

By Brad

In his debut post at Medium, our Co-Chairman Larry Irving writes about bringing the Lifeline program into the digital age. An excerpt:

The Lifeline Program, which was extended to wireless phones in 2005, now provides phone service to 14 million people. But times have changed, and the telephone no longer is the principle tool of communication for many Americans. Broadband Internet is now a critical part of our communications infrastructure. In 2015, broadband Internet is as essential as basic telephone service was in 1985. It is time that our Lifeline policies reflect that reality.

Fortunately, members of the FCC recognize the need for updating Lifeline policies. Commissioners Mignon Clyburn and Jessica Rosenworcel, in particular, have outlined thoughtful approaches that can help bring the Lifeline Program into the 21st Century.

Check out Irving’s full piece over at Medium.

Monday, October 05

Look at the Data Before Deciding

By Brad

Late last week, our Co-Chairman Bruce Mehlman penned an op-ed for Morning Consult on the need for the FCC to rely on data as it reforms special access. An excerpt:

For a decade, the FCC has had an effective policy of “new wires, new rules.” Relying on that policy, the Incumbent Local Exchange Carriers – even though forced by the special access rules to subsidize a second network of non-competitive older technology – eagerly invested billions to roll out the faster broadband network people want to compete with cable, wireless and fiber networks. Now, some CLECs want to toss deregulation out the window, changing the rules in midstream without a formal data analysis and imperiling that needed investment.

That’s just wrong. Why would the FCC want to re-impose regulation on a competitive environment without understanding the marketplace? And what about the ILECs’ reliance on the FCC’s regulatory promise of “new rules” for new wires – does that just get washed away?

You can read Mehlman’s full piece over at Morning Consult.

Monday, September 28

Boucher on Using EBT Cards for Lifeline

By Brad

In an opinion piece for Multichannel News, our Honorary Chairman Rick Boucher makes the case for shifting Lifeline into the world of EBT:

To spur competition by encouraging a larger number of carriers to participate in the program and to give consumers the most flexible way to choose from among competing carriers, we support moving the Lifeline subsidy to an electronic benefit transfer (EBT) card.

Putting the Lifeline benefit on an EBT card and asking the states to confirm eligibility would empower consumers in the marketplace and help prevent fraud. Yet even as many states have adopted the convenience and accountability of moving government-provided benefits to an EBT card, some still resist this change for Lifeline.

They contend that EBT cards would burden certain beneficiaries, such as the elderly, disabled and rural poor, based on an incorrect assumption that the cards would have to be swiped at a retail location on a regular basis.

Let’s review how eligibility determinations and EBT cards would work in practice under a new Lifeline program.

Check out Boucher’s full op-ed over at Multichannel News.

Thursday, September 24

Problems with the FCC’s Pricing Rules

By Brad

Recently, our Co-Chairman Bruce Mehlman talked with Amir Nasr of the Morning Consult about the problems with the FCC’s pricing rules for high-grade network lines. An excerpt:

FCC Chairman Tom Wheeler said the rule “preserves competitive choices as the technology transitions move forward… Competitive providers rely on these inputs to serve hundreds of thousands of businesses and other enterprise customers at competitive rates, often offering customized services not offered by incumbents.”

Mehlman said some in the industry are frustrated at the FCC’s apparent shift in thinking after the agency left the matter alone for over a decade. “They promised no regulation for over 10 years, and now they’re proposing to fundamentally change the game,” he said.

FCC Commissioner Ajit Pai, a Republican and outspoken adversary to the agency’s Democractic majority, decried the pricing proposal in a recent speech at the center-right American Enterprise Institute. “These regulatory roadblocks are bad for consumers, bad for infrastructure investment, and bad for our nation’s economic competitiveness,” he said.

Mehlman concurred. “As long as you have regulations on some providers, forcing them to help their competitors at regulated rates, you will have less investment because there is a meaningfully lower return,” he said.

Check out the full piece over at the Morning Consult.


Wednesday, September 23

Broadband & the Homework Gap


Over at CNBC, Co-Chairman Jamal Simmons highlights the role of broadband access in closing America’s “homework gap.” An excerpt:

One way to make sure students from all backgrounds have the strongest start is by closing what Federal Communications Commissioner Jessica Rosenworcel calls the “homework gap,” which impacts students in five million American households. These students from low-income families have less regular access to broadband Internet at home than their peers from wealthier households, making completing homework assignments tougher.

FCC Commissioner Mignon Clyburn has proposed revamping the Lifeline program as one way to help close this gap. Started during the Reagan administration, Lifeline was created to help low-income Americans get access to telephone service. As mobile phones became more ubiquitous, the George W. Bush administration expanded the program to allow Americans to choose wireless phone service under Lifeline. Today, broadband is the critical service that connects Americans to jobs, health care, entertainment and family, and the current FCC should allow the Lifeline program to evolve again.

In addition to expanding Lifeline to cover broadband, you can read IIA’s specific recommendations for modernization of the Lifeline program in the full op-ed at CNBC.

Monday, September 21

The Effects of Title II Are Real

By Brad

When the FCC moved forward with Title II reclassification, proponents of the regulations claimed it would lead to more investment and more competition in the cable and broadband industries. But as Dow Jones reports, that’s already being proven wrong:

In May, Cablevision Systems Corp. Chief Executive James Dolan publicly implied that his family-controlled company could be a prime acquisition candidate amid needed cable-industry consolidation.

Nobody on Wall Street or in the media world knew how seriously to take the comments, made at an industry convention. After all, the Dolans had been at the altar in the past, but price was an obstacle and it wasn’t clear if the family would part with its core asset.

Why is Dolan selling Cablevision? Among the reasons:

People familiar with the Dolans’ thinking said the price was too good to pass up, and they believe Mr. Drahi will be a good steward. Another issue: Charles “Chuck” Dolan sees certain industry developments, such as utility-style “net neutrality” regulations and cable “cord-cutting,” as negatives for the future, making it a good time to cash out, people familiar with his thinking said.

As for what the sale will mean for the industry, and consumers:

As the Dolans bow out of Cablevision, the cable industry will lose a formidable contrarian voice. Because of its family-controlled roots, Cablevision wasn’t afraid to take different paths from its larger cable peers. It was the first operator to deploy tens of thousands of outdoor Wi-Fi hotspots, allowing it to offer an alternative to cellular phone service that transmits calls over Wi-Fi. It also fought a landmark legal battle against major media companies that legalized the cloud-based digital video recorder. It took on Viacom Inc. in court to press for the right to “unbundle” TV channel packages, a case that is pending.

Wednesday, September 16

Comcast Agrees: Broadband Business Market Thriving

By Bruce Mehlman


Exciting news for those who appreciate how vibrant and competitive today’s telecommunications market is… and perhaps even bigger news for those who don’t yet believe it.

According to this morning’s Wall Street Journal, Comcast has set up a new unit to sell data services to large businesses across the country, including (and this is the important part) outside Comcast’s regular footprint, by negotiating wholesale agreements with other cable providers to sell Comcast data services. In short, the cable guys are taking on the telco guys and setting up a new national provider to offer meaningful competition, so that national businesses would be able to choose cable as an alternative where they have been reluctant to do so before.

As the Journal notes, the new arrangement “threaten[s] the longtime status quo in the cable industry, where operators historically haven’t competed with each other for customers in the same geographic area.”

Some industry observers anticipated this move. As I wrote in the spring, an article in FierceWireless commented that cable is entering the special access market, claiming that “[t]he presence of cable operators could potentially shake up the wholesale special access space where incumbent telcos… have enjoyed a monopoly position for decades.”

Actually, I was wrong — I thought that cable might seek a more mid-market position rather than going after the largest customers, but now cable is doing just that, even more proof of the competitive nature of the market.

So the question naturally arises: if Comcast can do this, why can’t the CLECs who are pleading for continued “special access” regulation? Why can’t the CLECs challenge their own “status quo” as well? CLECs still maintain that they want to continue their current business model, forcing network providers to subsidize their antiquated, copper-based technology, for “decades” more (even though the transition to an all IP-network is supposed to happen this decade).  Even worse, they now seek to expand their price regulated access to new fiber facilities built by investment not traditionally subject to regulation.

Comcast estimates the potential size of this new market at $40 billion. By any standard, that’s real money. It’s another nail in the coffin of an old uneconomic business model that is being propped up only by regulation. Why wouldn’t the CLECs want to go for that market rather than relying on a protected business model selling antiquated technology?

And isn’t it time for the FCC to note what’s happening in the marketplace?

Thursday, September 10

Boucher on Fundamental Lifeline Reform

By Brad

Our Honorary Chairman Rick Boucher has penned an op-ed for The Hill laying out how Lifeline should be reformed. An excerpt:

A thoroughgoing reform is needed, one that delivers a fundamentally new program based on core principles similar to those recently announced by FCC Commissioner Mignon Clyburn. For example, why not start by putting the consumer in charge? Today’s program is centered around the carriers who receive the $9.25 per month Lifeline subsidy and also determine the eligibility of individuals for the program. A reformed Lifeline program should be consumer-centric, recognizing the power that consumers exercise in today’s competitive communications marketplace and building off of that recognition.

Instead of giving the subsidy to the carriers, it should be given directly to consumers who could then decide where it should be spent. To promote consumer choice, eligible individuals could be issued a “Lifeline Benefit Card,” similar to food stamp cards, which would allow them to easily apply the subsidy to broadband or basic telephone service or some combination of both. Consumers could also shop among the various service providers and submit their Lifeline Benefit Card to the one they choose. In theory, this change could be made with little increase in program costs.

You can read Boucher’s full op-ed over at The Hill.

Monday, August 31

IIA Filing on the Future of Lifeline


Today, IIA delivered a filing to the FCC urging the Commission to embrace fundamental and sweeping reform as the agency moves forward in its effort to modernize the existing federal Lifeline Program.

It is our strong belief that only a “sea change” in the program’s current design will advance the goal of creating a 21st Century program capable of efficiently and effectively delivering broadband Internet technologies and meaningful opportunities to America’s low-income consumers.

“The time for bold action is now. As Commissioner Clyburn aptly noted, Lifeline reform gives us a unique opportunity to ‘rid us of antiquated constructs’ and ‘design a future-proof program that enables low-income consumers to have access to broadband services comparable to everyone else.” — IIA Honorary Chairman Rick Boucher.

Beyond making broadband an eligible Lifeline service, we urge the FCC to squarely address existing structural flaws that today hamstring the program and the Lifeline marketplace. We propose that the Commission move swiftly to adopt the following essential reforms:

1. Safeguard the Lifeline Program by taking eligibility determinations away from self-interested service providers.

In its comments, IIA enthusiastically supports the FCC’s proposal to remove the responsibility of consumer eligibility determination from Lifeline providers. IIA points out that determining eligibility for receiving benefits from a government program is an inherently governmental function; as such, eligibility determinations should not be left to service providers that may have improper economic incentives to increase enrollment.

2. Simplify and protect the Lifeline Program by vesting administration in a state agency using a “coordinated enrollment” and de-enrollment process.
IIA supports relying on state governmental agencies as the neutral entities charged with using a coordinated enrollment process to verify consumer eligibility and administer the enrollment and de-enrollment processes. Under this process, consumers determined eligible to receive Supplemental Nutrition Assistance (SNAP) by the State would automatically be deemed eligible to receive Lifeline assistance. IIA believes that a reformed federal Lifeline program should link eligibility determination to a single, mature assistance program – SNAP – which would increase administrative efficiency, promote participation by both consumers and service providers, and reduce the potential for waste, fraud, and abuse.

3. Empower consumers and promote dignity with a “Lifeline Benefit Card” – a direct-to-consumer benefit.

To preserve and advance the personal dignity of Lifeline beneficiaries, IIA believes that Lifeline Program benefits should be transferred directly to the consumer using a “Lifeline Benefit Card” or similar approach (e.g., coordinated enrollment taking advantage of existing SNAP EBT cards and adding the Lifeline benefit to that EBT card). Eligible consumers could use the “Lifeline Benefit Card” as a voucher to buy whichever communications service meets their needs from authorized and registered providers, whether broadband, wireline, or wireless voice service (on a stand-alone or bundled basis).

4. Incentivize voluntary participation in the Lifeline Program by cutting red tape.

IIA recommends delinking the ETC designation from the Lifeline Program so subsidy recipients receive the complete benefits of robust competition that full service provider participation could offer. Removing existing regulatory roadblocks will make it easier for service providers to participate in Lifeline and incentivize them to compete for the purchasing power of Lifeline consumers.

To read our full filing to the FCC, visit here.

Monday, August 24

A Step Backwards

By Brad

Over at Fierce Telecom, Sean Buckley chatted with our own Bruce Mehlman about the FCC’s current stance on legacy copper and TDM-based networks. An excerpt:

Bruce Mehlman, co-chairman of the Internet Innovation Alliance, told FierceTelecom in an interview that what’s troublesome about the regulator’s proposals is that it’s a step backwards.

He said that competitive carriers should focus more of their attention on building their own network infrastructure versus trying to leverage existing facilities built by incumbent telcos.

There are folks that have had a decade of notice that if they wanted more advanced structure they needed to be part of the solution of building network infrastructure, but they chose business models that were based on riding investments that were made by other folks,” said Mehlman. “Everybody’s has been notice for over a decade.”

Citing the move by Google Fiber to build out a new FTTH network infrastructure supporting 1 Gbps broadband and video services, Melhman added that “it seems like a mistake to offer a ‘new wire, new rule’ incentive to get all the investment you thought you would and then to say we’re considering going to ‘new wire, old rules.’”

You can check out Buckley’s full piece over at Fierce Telecom. And for more from Mehlman on this issue, check out his recent op-ed for Bloomberg BNA.

Wednesday, August 19

Let’s Get Nerdy Season 2, Episode 2: Lifeline

By Brad

IIA Honorary Chairman Rick Boucher discusses the future of Lifeline.

Tuesday, August 18

Let’s Get Nerdy Season 2, Episode 1: Lifeline

By Brad

In the first episode of our second season of Let’s Get Nerdy, IIA Honorary Chairman Rick Boucher discusses why and how the Lifeline program should modernized for our current digital age.

Tuesday, August 11

Stick With What Works

By Brad

Over at Mobile Future, Jonathan Spalter looks at the future of wireless and finds that as mobile video consumption contines to boom, fiber-based networks will become more and more critical. As he writes:

[A] Cisco report predicts that in five years, 85 percent of Internet consumption in the United States will be from video, primarily over mobile devices. While freeing up more spectrum is critical to meet the demand for mobile Internet and video services, wireless infrastructure also requires backhaul networks with sufficient capacity to deliver these bits between a wireless tower and the Internet backbone.

Deploying that fiber-based infrastructure will take a substantial amount of investment, and as Spalter points out, regulators have — so far — encouraged that investment:

The FCC in 2007 and 2008 decided to forbear from regulating the Ethernet services companies like AT&T and CenturyLink provide, and it predicted competition would increase even further without heavy-handed regulation. Through its Enterprise Broadband Orders the FCC expressly concluded that the market for packet-switched broadband services was “highly competitive” and recognized that the demand for such services was sufficient to incentivize deployment and entry by competitors absent regulation.

As Spalter notes, competition for Ethernet-based special access services has “skyrocketed” since the FCC’s Enterprise Broadband Order. But that hasn’t stopped some companies from urging the FCC to wield a heavier regulatory hammer. Spalter again:

[F]or all of their complaining that the government needs to intervene in the market and lower just their costs of doing business (a refrain these carriers bring to the spectrum set aside and roaming debates as well), national carriers like Sprint and T-Mobile, as well as smaller regional ones have managed to operate their networks and succeed in the marketplace over the past decade without greater government involvement, often as the low cost provider. There is no justification to increase regulation of legacy special access services when the backhaul marketplace is functioning perfectly well on its own, producing remarkable investment, a stream of new competitors and increasing consumer value.

Put another way, what companies like Sprint and T-Mobile are seeking is a form of corporate welfare; a bailout from the government that will only ding their competitors. It’s not exactly the spirit of competition, but you can’t really blame them for trying.

But unfortunately, as Spalter notes, the FCC may be listening to the unfounded complaints:

Competition in the special access market has flourished due to the bipartisan hands-off approach taken by Chairmen of both parties for over a decade. It defies logic for the FCC to continue spending so much energy attempting to regulate legacy services like DS1 and DS3 special access connections provided by incumbent carriers. The Commission should accept the success of its deregulatory approach in which unregulated entities have stepped up, as expected, to create a highly competitive special access market.

If we want to encourage more fiber deployment — and keep our wireless economy humming — let’s hope the FCC is listening to sensible arguments from the likes of Spalter rather than the unfounded complaints of a few companies.

Friday, August 07

Reactions to the Latest FCC IP Transition Order

By Brad

That above quote, in response to the FCC’s latest vote, was echoed by both AT&T Vice President Frank Simone and US Telecom Senior Vice President Jon Banks. From Simone’s blog post reacting to the order:

“The FCC cannot call on the industry to invest in more fiber deployment, raise the bar for what qualifies as a broadband service and then make it more difficult to retire services that do not even qualify as broadband.  We share the Commission’s goal to protect consumers as this revolutionary technological movement continues. But requiring carriers to prolong the use of and maintain an outdated infrastructure is not the way to go about doing that.”

From Banks’ reaction:

USTelecom members have been investing billions of dollars every year to deliver modern broadband services that far surpass the capabilities of older networks to businesses and consumers across the country… These investments to deliver better, faster, more reliable modern services make up the essential compact between providers and customers. We are concerned that today’s FCC Orders handicap delivering on this compact in the name of keeping a regulatory structure under which Fax machines provide a communication service of such importance that they must be preserved.

And, last but not least, from our own response to the vote:

Giving a select group of competitors, which continue to rely on the copper telephone network due to their failure to invest in their own advanced networks, the ability to influence copper retirement plans creates harmful market incentives that ultimately favor some providers over others, and runs contrary to the Administration and FCC’s National Broadband Plan goal of modernizing our nation’s communications networks for the benefit of the American consumer.

Thursday, August 06

A Missed Opportunity


Following the FCC’s tech transition vote, IIA released the following statement:

The FCC today missed a unique opportunity to accelerate the nation’s transition toward an IP future.

With less than five percent of Americans relying exclusively on traditional, copper-line plain old telephone service (POTS), and three out of four communications users having already transitioned onto IP-based services, setting ‘rules of the road’ to protect consumers and advance these modern services is appropriate, welcomed, and timely.

Today’s FCC decision, however, takes an unnecessary and harmful detour to the past. Instead of focusing exclusively on how to accelerate IP-based broadband network investment, deployment and consumer adoption, the Commission has chosen to micromanage life support for the fading wireline copper network.

The agency’s action translates into burdensome rules that create greater obstacles to retiring antiquated 20th century copper-based telephone equipment. By impeding the retirement of outdated technology, the FCC’s requirements will divert resources necessary to invest in the upgrade toward new, next-generation, high-speed broadband Internet networks.

Giving a select group of competitors, which continue to rely on the copper telephone network due to their failure to invest in their own advanced networks, the ability to influence copper retirement plans creates harmful market incentives that ultimately favor some providers over others, and runs contrary to the Administration and FCC’s National Broadband Plan goal of modernizing our nation’s communications networks for the benefit of the American consumer.

Today’s consumers want the benefits of high-speed, reliable IP-based networks, and there is no turning back. Americans stream millions of hours of video content, stay in touch with friends and family in video chats daily, and are integrating online learning into their lives at a rapid pace. The new world we have entered relies on these services and untold others that we can’t predict today. It’s important for industry and the FCC to give consumers more access to the benefits on the horizon—with common sense rules—and not hold on to the sentiments of the past.

IIA supports a wired network transition that makes IP-based networks and services more widely available and improves the quality of life for all Americans. We believe the Commission should embrace initiatives that speed the nation toward an IP-based future, and revisit and reject those that unnecessarily anchor us to the past.”

Friday, July 31

“A Referee Without Rules”

By Brad

With the FCC swinging a large regulatory hammer these days, Fred Campbell of Forbes takes a close look at the Commission’s conditions for the recent merger of AT&T and DIRECTV. What he finds is another example of the FCC going rogue with regulation. An excerpt:

The merger’s pricing condition is retail rate regulation, but it’s far worse than what “was done in the pre-broadband days.” In old-fashioned rate-making cases, the FCC is required to justify the rate it imposes. The merger order “doesn’t even make a cursory attempt to explain how it arrived at this $10 price point” or why price regulation should apply to AT&T only and not its competitors.

What rules violation or competitive harm did the referee cite for throwing the retail rate regulation flag at AT&T only? None. The FCC penalized AT&T because it can. Unfortunately, no referee exists to throw a flag when the FCC discriminates against companies in a merger proceeding.

Campbell’s conclusion is that Congress needs to apply more oversight on FCC decisions:

The integrity of any game depends on the credibility of its officiating. That’s why the NFL watches its referees to make sure they are abiding by the rules too. When fans can’t trust officials to make a fair call, the league needs to reign in its referees. With the FCC, that task belongs to Congress.

Check out Fred Campbell’s full piece over at Forbes.

Monday, July 27

“FCC Should Not Import Monopoly Rules for a Competitive Future”

By Brad

Our Co-Chairman Bruce Mehlman has a piece in Bloomberg BNA on regulation the FCC is considering as America transitions to all Internet-based networks. An excerpt:

The nation’s historic transition away from the copper wire toward a modern Internet Protocol-based (“IP”) communication system represents a critical technological leap forward. The United States aims to complete this transition by 2020; indeed, the impetus for this effort actually first came from FCC Chairman Tom Wheeler, then in his role as head of an advisory board on technology transition.

This transition will ultimately bring consumers new technology, billions of dollars in new infrastructure, and faster and better broadband services and applications. Today, test trials for the transition are underway in Alabama and Florida to work out technical issues and ensure superior service quality for consumers.

Recently, however, Chairman Wheeler publicly outlined his proposed next steps for the IP transition that include applying old monopoly-style telephone rules to favor and advance certain carriers’ business models. Applying such rules to IP-based broadband communications networks of the future would benefit companies that serve businesses, yet provide little to no benefit to the average consumer.

Specifically, in response to the supposed need to “preserve competition in the enterprise market,” the FCC plans to require that “replacement services be offered to competitive providers at rates, terms and conditions that are reasonably comparable to those of the legacy services.”

Check out Mehlman’s full piece from Bloomberg BNA

Thursday, July 23

The Cooling Effect of Title II

By Brad

Our Honorary Chairman Rick Boucher talked with Jeff Hawn of RCR Wireless News for an article on Title II and net neutrality. In the article, Boucher argues that Congress needs to recognize the principles of net neutrality, but that Title II is simply an outdated fit when it comes to regulating broadband. An excerpt:

Boucher’s viewpoint is supported by a recent Georgetown study co-authored by Kevin Hassett of the American Enterprise Institute and Robert Shapiro of the Georgetown Center for Business Policy.

In the study, they write that Title II regulation is “likely to increase costs and regulatory hurdles for providers. Introducing substantial, new regulation of the businesses that provide much of the Internet’s infrastructure and content could not only raise the cost and price of most Internet communications, it also could reduce the efficiency of most network arrangements that depend on Internet platforms, devalue the investments made in those platforms or based on them, and force many organizations to reorient their enterprises in ways that would minimize the costs of the regulation rather than maximizing efficient operations.”

The uncertainty of Title II will likely cool the willingness of ISPs to make investments in their infrastructure, the net effect of which is that we won’t get the broadband build-out we otherwise would,” Boucher added. “Additionally, companies will be more cautious with new innovations. Essentially Title II hits the slow-down button and it’s the American consumer who will suffer.”

Tuesday, July 14

Regulation and Delayed Investment


A recent Georgetown University Study by Kevin Hassett and Robert Shapiro confirms that the Federal Communications Commission’s (FCC) decision to subject Internet Service Providers (“ISPs) to “Title II” public utility regulation will “have significant adverse effects on future investment in the Internet.”

The study highlights how new regulation can have a “destructive, negative effect” if capital investment is delayed as a result of the need to resolve new market uncertainty. It notes how the history of FCC regulation of Internet companies has been surprisingly uniform and consistent. Whether under a Democratic or Republican Administration, the historical arc of broadband regulation gravitated toward a light-touch deregulatory approach that treated the Internet as an information service rather than a heavily-regulated telephone common carrier service.

Such treatment of broadband as an information service allowed the pace of Internet adoption to rapidly exceed that of the personal computer or dial-up Internet service. Technological advances and competition accelerated broadband uptake by lowering its “average, quality-adjusted price” that further accelerated its uptake. By contrast, studies have detailed how common carrier regulation inhibited competition for consumers and businesses, and discouraged and slowed innovation in telephone service.

Consumers now, however, bear the risks of the FCC’s decision to reverse course and impose new regulations on ISPs that today provide much of the Internet’s infrastructure and content. Such regulation could ultimately result in increased costs and price for Internet service beyond new universal service fees. Moreover, the Georgetown study notes how the regulatory path toward Title II may result in reduced efficiency of key network arrangements that depend on the Internet platform. Reduced efficiency could have the long-term negative effect of devaluing the investments made in those platforms or based on them and thus trigger many in the Internet ecosystem to minimize the costs of regulation rather than maximize efficient operations.

In addition, the study identifies scholarship that quantifies the negative potential impact of telecommunications regulation on broadband investment. For example, the ban on “paid priority” arrangements could affect telemedicine applications and cost the economy $100 million per year by 2019. More generally, Title II regulation of ISPs could reduce their “future wireline investments by between 17.8 percent and 31.7 percent per year, and their future total wireline and wireless investments by between 12.8 percent and 20.8 percent per year.”

The study’s authors also raise helpful international comparisons to better understand the imminent consequences of Title II regulation on broadband investment. Specifically, they note the “large negative effects on investment” if our nation’s regulatory model were moved closer to the heavy-handed regulations that governed Europe’s communications landscape in the first decade of the 21st century.

Finally, the Georgetown study’s most sobering point is how the “negative effects of uncertainty” resulting from the FCC’s sudden policy shift and on-going litigation may actually understate the harm of reduced broadband investment.

In light of this additional evidence and the potential harm to broadband and consumers, the Internet Innovation Alliance again emphasizes its support for a bipartisan legislative solution to promote an Open Internet without overly burdensome Title II Common Carrier Regulations for 21st Century broadband. 

Friday, July 03

The Benefits of Regulation Must Outweigh the Burdens

By Brad

Last week, we held a discussion in Washington DC on how regulators can help — rather than hinder — the broadband economy. The featured speaker at this event was FCC Commissioner Mike O’Rielly, who delivered his vision for how the FCC and other regulatory bodies should fulfill their vital role in the face of the fast-moving technology. An excerpt from Commission O’Rielly’s speech:

As regulators consider proposals that would impact the Internet or the deployment of broadband, thoughtful analysis should be done prior to enactment to consider whether the costs and burdens imposed are greater than the benefits of acting. Given the amazing positives to be gained from an Internet free and open from government intrusion — or at least significant government intervention — there should be a universal requirement for quantifiable data under a cost-benefit analysis regime. It seems universally accepted that there are direct and indirect costs to every burden placed on Internet activities. It should be our duty to show the detailed costs and benefits of every proposal, not hypothetical claims that give short shrift to statutory requirements to do an actual analysis. If a regulator involved in some capacity with the Internet cannot accept this basic premise, maybe they are in the wrong line of work.

Let me also take a moment to provide a few other premises that most people who operate in this space accept: Internet-related taxes depress deployment and adoption; costs of regulations are ultimately passed onto consumers; and the structure of the Internet will produce some type of reaction to undermine any imposed regulation. If these premises are accepted, and they have proven to betrue time and time again, it means that regulators need to be extremely cautious in acting or risk decreasing deployment, or raising prices — and all for naught.

You can read Commissioner O’Rielly’s full remarks — and watch a video of the event, which also featured Stuart N. Brotman of the Brookings Institution, James Reid from TIA, Susan Bitter Smith of the Arizona Corporation Commission, and our own Bruce Mehlman — by clicking here.

Page 1 of 43 pages  1 2 3 >  Last »

« Back to Blog Home