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'

Tuesday, September 27

Election Night & Beyond

By IIA

Over at The Street, our own Bruce Mehlman writes about the election and what it could mean for tech and investment. An excerpt:

[I]n this world of technological convergence, in which companies offering Internet, video, and traditional communications services are merging (some quite literally and others through expanding their business lines), investors should know that there are some critical decisions on the horizon regarding interference in these markets or light-touch regulation. Those decisions will impact whether companies invest robustly, whether distributors of content will have the right incentives to continue innovation in that space, and many other issues. Watch the returns on Election Night – but also watch those critical appointments in regulatory agencies over the coming year to get a fuller flavor of the impact of government regulation on markets.

Check out Mehlman’s full piece at The Street.

Thursday, September 22

Boucher on Business Data Services

By IIA

Earlier today, Morning Consult published an op-ed from our own Rick Boucher on the FCC’s ongoing business data services proceedings. An excerpt:

Simple economics suggests that the way to promote the most rapid deployment of the fastest business data services to the enterprises that need them is to rely on competition and the market forces that drive innovation and investment. The FCC, however, seems to start from the position that only regulation can ensure that adequate services are provided to businesses. And so the agency is seeking to set prices at a level that, while convenient for some competitors, doesn’t allow for a sufficient return on investment to stimulate broadband deployment. How this approach will spur investment and deployment is anyone’s guess; the FCC doesn’t have an answer.

Now a group of seven prominent economists has just made clear their opposition to the conclusions the agency is drawing from its plethora of regressions. In short, the economists argue that, because the FCC starts from the wrong place – the mistake that correlation implies causation – the agency, therefore, ends up at the wrong place – the idea that there is not only market power in the Ethernet market but market power that justifies price regulation. As they write, “[a]s commenters across the spectrum rightly acknowledge, the rationale for ex ante rate regulation hinges entirely on protecting customers from a dominant provider’s abuse of market power; in turn, there is no plausible argument for regulating BDS providers that lack market power.”

Check out Boucher’s full op-ed over at Morning Consult.

Monday, September 19

Economists on BDS Competition

By IIA

As the FCC continues its murky — and occasionally confounding — Business Data Services (BDS) process, seven economists have penned a letter to the Commission arguing that any imposed rate regulation on what is a truly competitive market would be a mistake and counterproductive. From said letter:

As commenters across the spectrum rightly acknowledge, the rationale for ex ante rate regulation hinges entirely on protecting customers from a dominant provider’s abuse of market power; in turn, there is no plausible argument for regulation BDS providers that lack market power. No party has suggested — let alone demonstrated — that competitive BDS providers exercise significant market power. Moreover, some of the undersigned economists have examined marketplace data regarding the current state of BDS competition and have found that such data do not support claims that incumbent LECs exercise market power broadly in the provision of BDS.

Translation: The BDS market is competitive and there is no need for across the board price regulation. Again, from the letter:

To the degree there are some BDS markets with persistent monopoly power, we agree that it could be economically justified and welfare enhancing to reduce monopoly rents in such markets to a best approximation of competitive levels, to the extent such a goal can be achieved without imposing large costs on providers and disincentivizing investment. The Commission should limit any such regulation to markets characterized by monopoly power that are unlikely to become effectively competitive in the near future. To that end, the Commission should regulate BDS rates for legacy services only in geographic BDS markets where only a single facilities-based provider is present or nearby.

Translation: If regulation is necessary, it should be implemented using a scalpel, not a hacksaw.

To read the full letter from the economists to the FCC, click here.

Monday, September 12

The Infrastructure of Virtual Reality

By Brad

Recode_rz.png

Over at tech site Recode, our Co-Chairman Jamal Simmons and former Co-Chairman Larry Irving have penned an op-ed on virtual reality and the need for regulators to encourage private investment in the infrastructure that supports it. An excerpt:

The future of virtual reality is bright. Investors are bullish, users are excited to consume novel entertainment and educational applications, and engineers are developing new products. While innovators create exciting hardware and content, a VR future is only possible if policymakers make the right decisions today. Virtual reality will require new and upgraded broadband networks, both wired and wireless, that will be capable of satisfying future bandwidth needs of the technology, which consumes massive amounts of data.

Policymakers need to make more spectrum available, too. People are using their iPhones and Android phones for the early versions of VR, but today’s tools will not be adequate for a fully immersive, high-definition virtual reality future. Whether it is 4K, 5K, high-definition or ultra-high definition, each next-generation technology will require retrofitting our infrastructure. It’s time to rethink, rebuild and reinvest.

Check out at the full op-ed over at Recode.

Thursday, September 08

A Look at the Current FCC’s Legacy of Confusion

By Brad

With the election looming and the current makeup of the FCC likely nearing its end, Fred Campbell has penned a thorough look at what he describes as the FCC’s “legacy of confusion about competition.” An excerpt:

The Wheeler FCC’s repudiation of economic rigor and legal precedents is an anomaly that should end with this fall’s election. Unfortunately, Wheeler is determined to dictate the economic and engineering of several market segments before his time expires. In the few months he has remaining, Wheeler wants to:

• Dilute copyright protections for digital content, dictate retail pricing, and weaken privacy protections for consumers in the video marketplace (despite an FCC finding from just last year that this market is effectively competitive), all of which threaten to bring television’s second golden age to an end;

• Impose ineffective data regulations just on broadband Internet access providers (while leaving other big data companies untouched) that would give internet edge competitors government-sanctioned competitive advantages in the internet advertising and big data markets at the expense of consumers; and

• Impose new price regulations on business data services to reduce the investment costs of favored companies (like Sprint) at the expense of their competitors.

These last-minute proposals are inconsistent with our fundamental economic policy of promoting competition and private investment, and none of them are premised on the sound, data-driven analyses Wheeler promised.

Check out Campbell’s full piece over at Forbes.

Wednesday, August 31

Title II Back in Court

By Brad

Speaking of the FCC and Title II (see our infographic), the Commission’s reclassification of broadband still faces challenges in court.

The FCC’s regulation has been challenged by providers and others, asking for a full federal appeals court review of the previous panel decision. As BNA reported, the FCC has already asked for the deadline to respond to be extended to October 3.

Friday, August 26

40 Years of Smart Policy & the FCC’s About-Face

By IIA

Tomorrow is the 40-year anniversary of the Internet Age. On August 27, 1976, scientists from SRI International successfully sent an electronic message from a computer set up at a picnic table at a Portola Valley, California biker bar, to SRI and on through the ARPANET network to Boston.

While the U.S. has seen nearly 40 years of pro-growth internet policy, the Federal Communications Commission in 2015, unfortunately, went from promoting internet investment and innovation through an open, multi-stakeholder platform to making the internet a government utility weighed down by Title II regulation. Check out the infographic below to see the FCC’s abrupt about-face.


DOWNLOAD A COPY OF THIS INFOGRAPHIC

Wednesday, August 17

ICYMI: IIA’s BDS Reply Comments

By Brad

We recently submitted Reply Comments to the FCC’s proposed Business Data Services (BDS) policy. You can read the full comments here, but here’s some highlights:

PRICE REGULATION OF LEGACY AND ETHERNET BUSINESS DATA SERVICES WILL DETER THE INVESTMENT NECESSARY FOR UBIQUITOUS HIGH-SPEED BROADBAND DEPLOYMENT

Only the private sector can provide investment necessary for BDS deployment. As the FCC previously recognized, $350 billion of investment is needed to meet the Nation’s high-speed broadband needs. Investment capital at that level can come only from the private sector, not from government. Similarly, private investors will invest only where they can reasonably envision a positive return on their investment. Thus, to meet the growing demand for ubiquitous nationwide high-speed broadband deployment – including the BDS market – government should advance only those policies that actively promote and encourage, rather than deter, private investment.

Investment has promoted and will continue to promote real competition in the BDS market. IIA’s studies affirm how the business broadband market has evolved (and continues to evolve) far past the point at which ongoing regulation of this market can be justified. By the end of 2015, wireline competitors, including cable and CLECs, had roughly the same number of business broadband lines as the Incumbent Local Exchange Carriers (ILECs). CLECs seek to continue to rely on incumbents’ networks where they can, rather than employing a business strategy based on true facilities-based investment and competition.

Further Competitive Local Exchange Carrier (CLEC) investment would be easy but continues to lag. Facilities-based competition is accessible for the vast majority of buildings for which there is BDS demand. The FCC’s record highlights how 25% of buildings connected only to ILEC services with demand for BDS services are 17 feet away from the nearest competitive provider’s fiber network, 50% are 88 feet away, and 75% are within 456 feet. If CLEC providers truly wished to serve these buildings, they would have few difficulties building out nearby fiber to them. CLECs have made a business decision to ignore direct facilities-based competition and rely on other carriers’ capital investments to reach customers, rather than to adopt policies that will promote investment and thus benefit the economy as a whole.

REGULATION OF BDS IS IN NO WAY NECESSARY FOR 5G DEPLOYMENT AND WILL IN FACT HARM AND SLOW 5G DEPLOYMENT

The rapid deployment of fiber to date has occurred without the heavy hand of regulation, and there is no reason to doubt that it will continue. The robust fiber build-out to the nation’s existing macro cell towers to facilitate the transition to 4G wireless networks is an excellent barometer of how the market responds to business opportunities presented in the wireless backhaul market.

THE NASCENT DEVELOPMENT OF 5G TECHNOLOGY ARGUES AGAINST THE COMMISSION’S JUSTIFICATION FOR BDS REGULATION

The new 5G networks will transmit data at Gigabit speeds and will, by definition, not be able to use TDM-based megabit speeds. Thus, the regulation of legacy networks is irrelevant to future 5G deployment. The Commission simply cannot use the market-driven transition to 5G networks as justification for ex ante regulation, which would seem to steer the direction of 5G evolution rather than letting the technology evolve and markets along with it.

INVESTMENT AND DEPLOYMENT OF BROADBAND NETWORKS AND SERVICES IN RURAL AMERICA WILL SUFFER UNDER THE FCC’S PROPOSED BDS PRICE REGULATION

High-speed broadband is deployed most quickly when investors have incentives to invest in these deployments. A system that imposes price regulation and lowers profit margins for investors will not provide the necessary incentives for rapid deployment of 5G technology (or even 4G technology) to rural America.

Tuesday, August 09

Boucher on Business Data Services in Forbes

By Brad

Over at Forbes, our Honorary Chairman Rick Boucher has an op-ed on how regulating prices for business data services will only increase the digital divide. An excerpt:

It’s well understood that high-speed networks are deployed most quickly when investors can foresee a profitable rate of return on investment. Because of the unique challenges to network deployment in rural America, the need for a predictable rate of return on investment is essential for rural providers. The Commission’s proposal would impose on rural America a system that, by design, is assured to diminish new network investment. With price regulation, rural deployments would bring lower returns. With the incentive to invest removed, few companies would be willing to dedicate the capital needed to modernize rural networks. The deployment gap will widen, and the arrival of competition in the business data market will be delayed. Even if one high-speed network company proved willing to invest in the currently unserved rural market, it would immediately be saddled with de facto monopoly status and subjected to price regulation.

Under these conditions, it’s certain that few companies would make rural investments. The FCC cannot simply overlook the reality of these markets and remain true to its and the Administration’s commitment that all Americans, and all American businesses, including rural hospitals and educational institutions that are the lifeblood of many local communities, deserve and should receive the same broadband services available in metropolitan areas.

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

Watch the IIA Event at the Republican National Convention

By IIA

The light-touch regulatory framework of the 1996 Telecom Act set the stage for extensive internet network investment and innovation. To examine how this investment and innovation have empowered Americans to shape presidential races, we hosted “From Netscape to Snapchat: Politics in the Age of Broadband” at the Rock and Roll Hall of Fame in Cleveland during the Republican National Convention (RNC). You can watch a video of the event below.

Thursday, August 04

Verizon’s Exit

By Brad

Over at The Street, our own Bruce Mehlman has an op-ed on Verizon’s recent about face when it comes to investment and facilities-based competition, particularly in the business data services market. An excerpt:

Since 2003 — a virtual eternity in the fast-paced world of telecom — Verizon has staunchly advocated for investment, deployment of fiber, and facilities-based competition. Verizon’s once-visionary leadership coined the phrase ‘new wires, new rules/old wires, old rules’ used by the FCC to create pro-fiber investment policies that helped spur the deployment of its modern high-speed broadband network. The “Fi” in FiOS, a central part of Verizon’s corporate strategy and broadband buildouts — stands for fiber, after all.

Yet Verizon now trumpets a deal with the competitive local exchange carrier (CLEC) trade association INCOMPAS that favors price regulation in the BDS market. Why the sudden change? Some might suggest that Verizon’s proposed mergers currently pending before the FCC and other government agencies might be the reason why the company is now simply driving 55 past the speed trap giving a friendly wave to the regulatory cops.

But there’s another likely reason: In a highly regulated environment, it can be tempting to let regulators determine outcomes in markets rather than doing the hard work of competition.

You can read Mehlman’s full piece at The Street.

Phoenix Center on Business Data Services and the FCC

By Brad

The Phoenix Center has released a new paper penned by Dr. George Ford titled “Learning from Bad Technique: The WIK-Consult Report on Business Data Services.” While the title of the paper may leave you guessing, its findings make pretty clear that the FCC’s current course and speed when it comes to Business Data Services are misguided. From the paper:

The need for rate regulation requires first a determination that there is market power, meaning that the observed prices or rates are above some “proper” level, usually defined with reference to economic cost or competitive outcomes. Yet, no party has provided the Commission with convincing evidence that prices are not “just and reasonable.” Instead, the unsupported claim that BDS prices “are too damn high” pretty much sums up the economic arguments, leaving the Agency little to work with and explaining its historical reluctance to intervene.

But past is past and the current Commission under Chairman Tom Wheeler has signaled its determination to address and likely lower BDS rates. The regulatory paradigm is outlines in the BDS NPRM is to skirt the issue of evaluating market power altogether, and instead use the simple head-count of the number of competitors as proxy. This analytical substitution is without validity in economic theory and especially inapt for telecommunications markets where fixed costs are largely relative to market size.

Wednesday, August 03

Senators Reach Out to FCC Over Special Access

By Brad

As the FCC continues its special access agenda, its use of flawed data is not escaping notice. The latest to voice their concerns about the Commission’s current course are nine senators — eight democrats, one independent — representing rural communities. From a letter these lawmakers sent to FCC Chairman Tom Wheeler on August 1:

We appreciate the Commission’s goal with the FNPRM to incentivize telecommunications providers to build and invest in networks while enhancing competition among the various providers of business data services. As you work toward a final rule, it is especially important for rural states like ours that the Commission use all the available data, including the data submitted earlier this year by the major cable operators, to both measure competitive markets accurately and ensure that the regulations for noncompetitive markets are based on the real cost to provide service.

The bipartisan letter was put together by Senator Jon Tester (D-Mont.), who was joined by Maria Cantwell (D-Wash.), Patty Murray (D-Wash.), Heidi Heitkamp (D-N.D.), Michael Bennet (D-Colo.), Amy Klobuchar (D-Minn.), Bob Casey (D-Pa.), Angus King Jr. (I-Maine), and Tammy Baldwin (D-Wisc).

For more on the FCC’s flawed Special Access process, check out this recent column from Hal Singer.

Tuesday, August 02

Ignoring the Cable Giant in the Room

By Bruce Mehlman

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The smart folks at Light Reading have kicked off a four-part series analyzing the Cable industry’s performance and opportunities in serving the business market. If you’re the type who enjoys wonking out on telecommunications complexities, you’ll want to check the series out.

The first part of the series, “How Cable Means Business About Business,” examines cable company entry into the business data services market. The data it presents makes clear how companies such as Comcast and Time Warner (now part of Charter Communications) have made significant inroads in the commercial communications service market. As this chart from the article shows, Comcast’s business market strategy appears focused on medium-sized business customers.

And Time Warner Cable (now owned by Charter Communications) has seen year over year revenue growth in the commercial service market:

So what’s the big deal about these charts? Why is cable’s growth in commercial services relevant?  It’s important because the Federal Communications Commission (FCC)  is poised to impose new price regulations on existing antiquated copper-based networks as well as new fiber facilities and services that serve business customers. The FCC justifies this regulatory overreach on the perceived lack of competition in the marketplace.   

In doing so, however, the Commission appears to be turning a blind eye to the true competitive nature of the commercial services market. As we’ve noted before, in crafting new price regulation, the FCC is relying on dated, incomplete and deeply flawed data. The FCC’s market data is not only nearly three years old, it also fails to capture the robust entry and success of cable in this market. 

Imposing heavy handed price regulation on this rapidly changing market could create long-term incentives that ultimately lower capital investment, lessen facilities-based competition, and harm consumer for businesses in urban and rural markets across the nation.   

Broadband network investment vital to 21st century economic growth and job development should not be put at risk, it’s not too late for the FCC to pause and consider these new data points before rushing to judgment.

Thursday, July 14

Throwback Thursday

By IIA

Originally published by The Hill:

Consumer internet privacy: Leaving the back door unlocked

By Rick Boucher

The Federal Communications Commission’s (FCC) asymmetric approach to internet privacy is likely to create a false sense of security among web users. Despite stringent FCC privacy regulation of internet service providers (ISPs), consumers’ information will enjoy little protection when they are interacting on social media sites, shopping online or surfing the web.

The recent Senate hearing on Internet privacy that featured FCC Chairman Tom Wheeler and Commissioner Ajit Pai, along with Federal Trade Commission (FTC) Chairwoman Edith Ramirez and Commissioner Maureen Ohlhausen, underscored that the FCC’s approach to internet privacy — singling out ISPs while leaving the privacy practices of edge providers essentially unregulated — is unbalanced.

By analogy, compare internet privacy to protecting a house. Wheeler’s proposal only locks the front door to guard against ISP privacy violations, while keeping the back door wide open for edge providers, such as social media and e-commerce companies.

And that’s happening as the internet ecosystem shifts radically toward the ability of edge providers to make the greater use of consumer information. A recently released study demonstrates that the expanded use of end-to-end encryption renders ISPs incapable of accessing most data that moves across their networks. Meanwhile, edge providers have complete access to information about their users, and they have sophisticated processes for monetizing it.

Sen. Al Franken (D-Minn.) suggested a viable alternative that would be better for consumers: keeping both doors locked and assuring uniform privacy protections by both ISPs and edge providers. According to Franken, “Should they [consumers] choose to leave information with companies, they need to know this information is safeguarded to the greatest degree possible. Telecommunications providers and edge providers like Google need to ensure their customers have more information [on] the data being collected from them and if it is sold to third parties.”

The FCC claims it lacks authority over edge providers. The FTC regulates privacy through its “unfair trade practice” authority, under which enforcement only occurs when companies fail to deliver the privacy protections they promise. Neither agency can require edge providers to extend the privacy protections that Franken envisions. His goal could only be achieved if Congress conveys broader regulatory authority on one agency or the other.

Also better for consumers would be to keep both doors unlocked. It’s not ideal, but at least consumers would be aware that all of their personal data on the Internet, irrespective of the device, platform or service used, is susceptible to being tracked and utilized.

Each approach has strengths and weaknesses. The first approach would offer a consistent and enforceable set of consumer rights and expectations. However, Pai thinks the doors-unlocked approach would be better for investment and continued digital innovation.

If and until Congress acts to require edge providers to respect consumer privacy, the only way to assure parity of treatment across the ecosystem and give consumers clear privacy expectations is to rely entirely on the FTC to lightly oversee privacy for both ISPs and edge providers. As Ohlhausen said, the FTC’s approach, “which has been incremental and technology neutral, has allowed us to be flexible as technology changes.” It’s probably the best we can do under current law. Singling out one segment of the internet ecosystem for special and more onerous treatment is flawed policy.

Thursday, July 07

Boucher in Bloomberg BNA

By Brad

Our Honorary Chairman Rick Boucher recently had an op-ed on Special Access services published by Bloomberg BNA. An excerpt:

Existing FCC regulations effectively necessitate that telephone companies maintain two networks—one that is modern and fiber-based offering fast Ethernet services and the old one based on copper technology. New fiber networks are currently unregulated, while the FCC mandates that competitive local exchange carriers (CLECs) be given access to incumbent telephone company copper links at deeply discounted rates.

The FCC now seeks not only to keep existing regulations on the old copper-based services, but also extend government-mandated access and price regulation to new fiber-based services in geographic locations the agency deems to be uncompetitive.

The FCC’s plan, however, relies on deeply flawed and badly outdated data used to determine whether markets are competitive.

You can check out Boucher’s full op-ed over at Bloomberg BNA.

Friday, July 01

A Broken NPRM

By Bruce Mehlman

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The Federal Communications Commission has been extremely active as of late, and this rush to regulate has not been without its headaches. Case in point: The Commission’s proceeding in relation to Special Access services (Business Data Services (BDS).

Specifically, the recent release of peer reviewed responses to a third-party economist study commissioned by the FCC for the Special Access proceeding. Inexplicably, the FCC decided to release these peer reviewed responses on the very day that comments were due on the FCC’s Special Access Notice of Proposed Rulemaking, even though these responses were in the agency’s possession since late April.
   
This surprise last minute dump of critical information is bad enough, but what makes the headache a potential migraine for interested parties is the fact that the peer review responses make clear that the data the FCC relied upon to propose new regulations on business services is flawed. As Hal Singer notes on his website:

As revealed in the peer review, the flaws in the underlying economic work that undergirds the proposed regulation of BDS (previously called “special access” services) are potentially fatal, rendering the analysis useless as the basis for the agency’s proposed regulations.

The fact that the FCC’s data is so severely flawed — even useless — is critical information that should have been made known to commenting parties before they submitted their comments. The FCC’s decision to sit on this data until after comments were filed represents a breach of trust between regulators and the public. Moving forward to adopt new regulations in light of now useless data would compound that breach and signal a potential political motive to achieve a certain policy goal. Here’s Singer again:

In seeming disregard to these significant criticisms, the FCC presses forward with its radical proposal, which would subject both telcos (incumbents) and facilities-based entrants (cable companies) to price controls. None of the economic statements released by the staff this week credibly addresses the critical errors reviewed here. Peer review is great in theory, but if doesn’t cause the Commission to alter its approach, then what good is it?

The simple solution for this mess is for the FCC to immediately extend the reply comment deadline for their BDS NPRM. This would give all interested parties and Congress an opportunity to review and provide input on the peer review study and the related economic statements. After all, billions in broadband investment dollars are potentially at stake. Let’s hope the FCC is listening.

Monday, June 27

Measuring Special Access

By IIA

Wednesday, June 22

Lessons From Canada

By IIA

Originally published at Forbes.

A Lesson From Canada For The FCC

by Bruce Mehlman

Oh, FCC: Take some notes from Canada.

Maxime Bernier, one of the candidates for leader of the Conservative Party of Canada, has just given a speech in which he set out ways to achieve real competition in the telecom sector. And one of the things he proposes is actually to phase out the role of the Canadian Radio-television and Telecommunications Commission (CRTC) as telecom regulator.

Bernier is a telecom and regulatory expert. He was Minister for Industry in Stephen Harper’s Conservative government and led the deregulation of local telephone markets after cable companies and wireless had transformed the telecom landscape. In short, Bernier recognized that there was “obviously more and more competition,” and he acted on it. In the face of opposition both from those who favored continued regulation and the Canadian regulator itself, the market was deregulated and competition flourished.

So why is Bernier so anxious to act now? It all goes back to his time in government. Ten years ago, he had set out a Policy Direction to the CRTC, which instructed, in his words, “the CRTC to rely on market forces to the maximum extent feasible within the scope of the Telecommunications Act” as a “solution” to its “control freak mindset.”

Back to old ways

What happened? “I, and many others at the time thought that it would force the CRTC to change its ways, to become more flexible and adapt to the new competitive reality. We were wrong. The CRTC seemed to take the Policy Direction seriously for a few years. And then it reverted back to its old ways.”

And from this, Bernier draws a conclusion about regulation and regulators: “Those whose task it is to regulate this industry tend to be behind the curve. They don’t want to let go of their regulatory control. Meanwhile, the industry has actually moved on, with new innovations.” That’s exactly right. And it applies just as much here as there.

Now if the CRTC can behave this way in a parliamentary system, in which it is supposed to follow the directions of Parliament, imagine the vast discretion our own Federal Communications Commission (FCC) has in a system where it is an independent regulatory body.

Implementing policies that ignore the marketplace

Why should Americans care? Because the issues that Bernier cites as examples of a regulatory mindset are the same ones we face here, notably with broadband, wireless and the nature of competition itself. In each case, the regulator opted for policies that ignored the marketplace, put its hand on the scale and favored policies that restrict investment. In auctions, restrictions on bidding intended to dictate market outcomes led to misallocation and under-utilization (as some of the spectrum sold in 2007 for public safety is still not being used and other parts took seven years to finally see service after sale in secondary markets).

So whether it’s broadband, wireless auctions or the nature of competition itself, the issues are similar on both sides of the 49th parallel. Regulators too often seek to ignore marketplace realities. In the U.S., we are witnessing it today with the FCC’s heavy-handed proposed regulations in areas such as special access, privacy and the video marketplace, among others.

Regulators only want to protect their own power

What Bernier writes of the CRTC could equally be said of the FCC: “As the industry evolves, the CRTC finds new reasons to continue to regulate it, in order to justify its existence. In doing so, it is not protecting consumers, it is only protecting its own power. The telecom industry is a mature and competitive industry, and it should be treated as such. It’s not a playground for bureaucrats.”

Both Americans and Canadians are better off with greater access to modern, fast telecommunications services, when the regulator lets the market work, encourages real competition, and investment, and keeps its hand off the scale. In fact, again quoting Bernier: “Interventionist policies that are meant to bring more competition actually do the opposite. Competitive markets don’t need government intervention to work. They only need to be free.”

Thursday, June 16

Backup Battery Power for… Broadband?

By IIA

In a new article for Forbes, Fred Campbell, director of Tech Knowledge and former head of the Wireless Telecommunications Bureau at the Federal Communications Commission (FCC), brings to light yet another example of regulatory overreach, compliments of the FCC. The Commission intends to marry broadband with…batteries? In short, broadband providers would be required to redesign cable and DSL modems to have bigger backup batteries that would allow web surfing for up to 8 hours during a power outage – IF you also have backup power for your computer and/or other devices that you use to access the web.

As Campbell points out, the Commission’s thought process might as well have been born in the 20th century and doesn’t make sense for a number of reasons. Here are the top three:

First, this directive would take choice out of the hands of consumers. Forget having a say about whether or how you want to implement a backup power solution.

Second, it’s unnecessary. A power outage doesn’t prevent mobile devices from being used to connect during an emergency, from calling 911 to texting friends and family. In real-world testing, a mobile phone can run for at least 35 hours with low and mixed usage. And, as Campbell describes, if you use your broadband modem to make phone calls, the FCC’s rules already require your broadband provider to offer you a backup power battery for voice calls – that 97% of Comcast XFINITY voice service customers decline, by the way.

Third, consumers – despite demonstrating (through an extremely low take-rate) little interest in backup power for broadband – will be forced to foot the bill for this extravagance in the end…for your “protection.” Big Brother knows best?

Head on over to Forbes and read Campbell’s full piece for more details about why the FCC’s reasoning on backup battery power for broadband doesn’t add up.

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