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, January 21

Building a Better Boat

By Jamal Simmons

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At the Minority Media and Telecom Council’s 5th Annual Broadband and Social Justice Summit last Thursday, former FCC Chairman William Kennard recounted several stories from his life and recent service as U.S. Ambassador to the European Union. The central point of his talk — which also happens to be a good guidepost for policymaking in our ever-diversifying America — was that we may have come in different ships, but we’re all in the same boat now.

Kennard wasn’t the only one at the MMTC summit to extol the virtues of our diverse democracy. Nor was he alone in highlighting the necessity of keeping the doors open for everyone to participate in the broadband economy. Michael Powell, FCC Chairman under George W. Bush, said getting started on the multi-year process of drafting a new Telecommunications Act, which hasn’t been touched since 1996, would address our modern challenges.

That goal is fraught with complications and the danger of regulatory overreach.

Current FCC Commissioner Mignon Clyburn addressed another crucial step using the same let’s get going framework. The transition to all-IP networks, she told attendees, will kick-start the next wave of innovation, and the FCC should enable a smart process that makes sure everyone benefits and safety concerns are met. Meanwhile, Acting Deputy Secretary of Education Jim Shelton highlighted how high-speed and high-capacity broadband in classrooms across America through the E-Rate and ConnectED programs will help the next generation of Americans be ready for the next generation of jobs.

It wasn’t all policy talk at this year’s summit, however, as innovation — and the benefits of access to high-speed Internet — were well represented by students from the Howard University Middle School of Mathematics and Science. Highlighting its focus on encouraging kids to pursue their coding dreams, the school presented apps students are developing. But instead of ideas common among Stanford educated hipsters in San Francisco like restaurant recommendations or presentation sharing apps, these Washington, DC kids’ apps were focused on issues like combating obesity, more efficient garbage pickup and, tragically, trying to locate missing girls of color because the news media spends so little time focused on them. America could use the innovative talents of more kids like these.

We may all be in the same boat today, but the students from Howard Middle School — and millions of other kids across the country — will soon be in one we can’t even begin to imagine. That means our job is to make the critical investments in broadband today to ensure their future boat is built for speed.

Tuesday, January 14

Playing Both Sides of the Street

By Bruce Mehlman

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Wall Street and K Street are separated by a mere 225 miles, but for many companies they are worlds apart. In particular, industry observers would do well to compare everything said to policymakers with statements by the same competitors made to Wall Street investors. Defense companies, for example, warned policymakers that sequestion would spell the death of the defense industry, yet defense stocks more than doubled since the law prescribing the spending cuts was passed and defense players figured out how to deal with the changes, as they promised Wall Street they would. Telecom companies likewise present sometimes radically-divergent world views on K Street and Wall Street.

Take Sprint. In a January 7 filing at the FCC, Sprint argued that the special access market “in almost every part of the country does not support competition for core DS-1, DS-3 and similarly sized Ethernet channel termination facilities [.]” Sounds pretty dire. Unfortunately, in its conversation with the FCC, Sprint failed to include some other important facts it shared with its understandably-bullish investors. Specifically:

• Two years ago, Sprint entered the market for competitive alternatives for their back haul services to replace incumbent telephone company special access in its network – under the project name “Network Vision.”;

• Sprint initiated a competitive bidding process for its “Network Vision” project that it expected to have 25-30 “significant backhaul providers.”

• Following the competitive bid process, Sprint awarded numerous contracts for their backhaul services to competitive backhaul providers. In fact, in a filing at the FCC, Verizon confirmed that it bid for Sprint’s backhaul business in this process, yet was awarded only 6% of Sprint’s backhaul sites in Verizon’s incumbent telephone company footprint.

• Sprint recently provided details regarding its Network Vision project to the Securities and Exchange Commission, and noted in its 2013 10-K filing that “Network Vision will encompass approximately 38,000 cell sites. We have more than 13,500 sites on-air and have launched LTE in 88 cities. Further deployments of Network Vision technology, including LTE market launches and enhancements of our 3G technology, are expected to continue through the middle of 2014. We expect Network Vision to bring financial benefit to the Company through migration to one common network, which is expected to reduce network maintenance and operating costs through capital efficiencies, reduced energy costs, lower roaming expenses, backhaul savings, and reduction in total cell sites.

• In short, Sprint told the SEC not only that Network Vision was proceeding but that it expected further deployments through 2014.

Investors will reasonably conclude that the market is competitive for what Sprint terms “core DS-1, DS-3, and similarly sized Ethernet channel termination facilities.” And Sprint seems to have a reasonable competitive position and strategy that is proceeding apace. Good news for customers and investors, but tougher news for those aiming to perpetuate the perception that our highly-competitive telecommunications network lacks competition in the special access market.

Friday, January 10

A Busy Year for the FCC

By Brad

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At the official blog of the Federal Communications Commission, Chairman Tom Wheeler lays out the Commission’s commitment to achieving the transition to all-Internet based networks. As the Chairman writes:

Among the biggest changes the FCC must confront are the IP transitions. Note the use of the plural “transitions.” Circuit switching is being replaced by more efficient networks – made of fiber or copper or wireless. Greater efficiency in networks can translate into greater innovation and greater benefits for network operators and users alike.

The best way to speed technology transitions is to incent network investment and innovation by preserving the enduring values that consumers and businesses have come to expect. Those values: public safety, interconnection, competition, consumer protection and, of course, universal access, are not only familiar, they are fundamental.

Those very same values were highlighted by our own Honorary Chairman Rick Boucher in an op-ed for Bloomberg Government in November:

Government must play a key role throughout this process by advancing consumer interests with a transition plan guided by core principles. These basic protections will remain government’s responsibility even after the old phone system is shut down:

1. The commitment to universal service must endure. Next-generation high-speed broadband networks and their benefits must be available to every American. As we move beyond the old phone network, we cannot leave anybody behind. Without dictating specific technologies or micro-managing how communications competitors meet their public service obligations, we must push the envelope to ensure that every American can access modern broadband service and enjoy the benefits that come with it. At a minimum, post transition everybody should enjoy service at least as good as they can now receive from copper-wire phone networks.

2. Public safety must be assured. 911 emergency calls must go through—every single time—no matter what technology or services consumers adopt.

3. Services for the hearing-impaired and those with vision problems also must be retained at levels that at least match what consumers enjoy today.

4. Consumer protection must remain at the heart of communications policy. Consumers must know that government has their back; that service providers will deliver on their promises; that spotty service, fraud, or other abuses will not be tolerated. Consumers must have a place to take complaints with confidence that something will be done about them.

5. Establishing a backup plan for power failures should be part of the transition process. The rebuilding after Hurricane Sandy exposed some potential weaknesses in the way our digital technology works today. While fiber-optic-based systems tolerate water damage that can short out copper wires, they are more vulnerable when the electricity at the user’s premises goes out.

6. Special retrofitting and other creative solutions may be required to ensure that modern networks function fully with personal and business equipment such as fax machines, security systems, health monitors, and credit card readers, even though they may not currently be compatible with today’s broadband connections.

While it’s encouraging Chairman Wheeler is taking the plunge when it comes to the IP Transition, in reality it’s just one of the major issues the FCC will face under his watch. As our Co-Chairman Bruce Mehlman argued in December, outdated regulations could make many of the FCC’s work difficult:

At the FCC, Wheeler inherits a regulatory regime designed decades ago for an earlier era. Voice and video services are regulated under separate provisions of the Communications Act of 1934 (Title II and Title VI, respectively) based on assumptions of a permanent monopoly and massive barriers to entry. The Act and its subsequent amendments fundamentally fail to acknowledge the competitive alternatives created by the technological and marketplace convergence of the broadband age. Today’s FCC-enforced regulatory framework was designed for a world without Netflix Inc., Skype Communications, Google Inc., or iPhones — a world without the Internet. Thus, the agency remains stuck in the past, distinguishing among companies based on the technology they use and their legacy status under the Act. Consumers make no such distinctions.

That Chairman Wheeler and the Commissioners at the FCC are already rolling up their sleeves for the IP Transition should be applauded. But it’s just one of many issues the Commission needs to dive into in the next 12 months.

Monday, January 06

Kicking Off Trials

By Brad

Over the weekend, Brian Fung of the Washington Post had a good breakdown of the IP-transition test trials the FCC and AT&T are kicking off:

As the country upgrades its old, copper telephone lines to newer technology, the companies that operate those networks face a lot of unforeseen obstacles. The process is supposed to be complete by the later part of the decade and could enable new features in telephony such as HD voice calls and improved 911 service.

Trials present an opportunity to identify issues that can’t be predicted but will need to be addressed before the nationwide move to next-generation networks.

Wheeler on the West Coast

By Brad

Speaking of FCC Chairman Wheeler, John Eggerton of Broadcasting & Cable reports the top dog of the Commission is scheduled to make his first appearance in Silicon Valley this week:

FCC Chairman Tom Wheeler will appear at a town hall meeting in Oakland, Calif., Jan. 9 to talk about the impact of media consolidation, and make a policy speech while on that West Coast swing next week

Free Press, one of the sponsors of the event, announced the appearance. An FCC source confirmed Wheeler will be there, as well as confirming that the chairman would be making a policy speech at another, unnamed, venue. 

Wheeler has pledged to engage with groups outside of FCC headquarters and Washington, so that he can hear “the voices of the American people.”

Expecting a Ruling

By Brad

2014 is here, and the year ahead promises to be a big one in tech, beginning with a major court ruling that could shake things up in the next few days. As Kate Tummarello of The Hill reports, the D.C. Circuit Court of Appeals may soon rule on the FCC’s “net neutrality” rules:

Verizon argues the FCC cannot regulate Internet providers like traditional telephone companies and is hoping to triumph over the administration in the second most powerful court in the land.

A decision against the rules would be a blow to President Obama, who made net neutrality a campaign pledge in 2008. It would also erase one of the central achievements of former FCC Chairman Julius Genachowski.

Flashbacks to three years ago, anyone?

Wednesday, December 18

Fresh Bodies at the FCC

By Brad

Speaking of the FCC, Broadcasting & Cable’s John Eggerton has the goods on a new appointment to the Commission:

FCC Chairman Tom Wheeler has tapped Sara Morris to be acting director of the FCC’s office of legislative affairs, which takes the point on agency interaction with the Hill. Morris is a former congressional affairs exec at the Department of Commerce’s National Telecommunications & Information Administration.

Given the sheer amount of work ahead for the FCC — from IP transition trials and spectrum auctions, to all the day-to-day work on the Commission’s plate — bringing on new blood is a wise decision.

Fly the Quiet Skies

By Brad

With the FCC pondering whether to allow in-flight cell calls, at least one major airline is already laying down the law. As Zach Honig of Engadget reports:

In a company-wide memo sent to 80,000 Delta employees this morning, CEO Richard Anderson put his foot down on the issue of in-flight passenger calls. His definitive statement, “Delta will not allow cellular calls or internet-based voice communications onboard Delta or Delta Connection flights,” will apply regardless of updated regulations from the FCC.

Don’t be surprised if the other major airlines quickly follow Delta’s lead.

Wednesday, December 11

Wheeler Could Be Obama’s Best-Positioned Lieutenant

By Bruce Mehlman

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Rarely can public figures glimpse their potential legacy the day they begin service. More often, their significance is only understood decades later. Yet newly confirmed Federal Communications Commission Chairman Tom Wheeler has the rare chance to anticipate his impact at the outset as President Obama’s second-term standout, assuming he seizes the unique opportunity afforded by time, place, and fate.

Wheeler arrives at the FCC at a critical time for the agency and the nation. The FCC is an agency in transition, overseeing a communications sector in revolution, powering an evolving economy despite a dysfunctional Congress and a struggling recovery.

The government writ large, meanwhile, is playing a historically outsized role. Whether measured by taxes, spending or regulation, it is hard to find a prior period over the past 50 years when the federal government exerts greater influence in our economy. A former financial services CEO recently advised his successor that ‘‘your number one client is the government.’’ Many fear Wall Street has become addicted to Federal Reserve interventions. Taxpayers foot more than $1 trillion in annual health care bills, even before Obamacare expands coverage. More than half of all citizens are net recipients of government largess, receiving more in benefit and transfers than they pay in taxes. Over the past century, the number of pages in the tax code has ballooned 18,034 percent.

Yet one bright exception has been the high-tech economy, where the government has played a far less intrusive role. While trade policy, immigration, and federal support for basic research and STEM (science, technology, engineering and mathematics) education have been essential, the sector has seen no bailouts, no hand-outs, no too-big-to-fail-outs. Government intervention in tech has been minimal, especially relative to heavily regulated services, and energy.

Not surprisingly, tech’s freedom from command-and- control regulation has enabled breakneck innovation, furious competition and the fundamental reshaping of how Americans live, work, play, and learn. Technology is transforming education, health care, retail, and manufacturing, and creating new jobs for skilled workers. Yet this non-stop innovation is bringing our most dynamic new sector into conflict with an anachronistic regulatory framework, threatening future progress ab- sent visionary change.

Enter Chairman Wheeler.

At the FCC, Wheeler inherits a regulatory regime designed decades ago for an earlier era. Voice and video services are regulated under separate provisions of the Communications Act of 1934 (Title II and Title VI, respectively) based on assumptions of a permanent monopoly and massive barriers to entry. The Act and its subsequent amendments fundamentally fail to acknowledge the competitive alternatives created by the technological and marketplace convergence of the broadband age. Today’s FCC-enforced regulatory framework was designed for a world without Netflix Inc., Skype Communications, Google Inc., or iPhones — a world without the Internet. Thus, the agency remains stuck in the past, distinguishing among companies based on the technology they use and their legacy status under the Act. Consumers make no such distinctions.

To be the chairman that our economy needs, Wheeler should reorient his agency around three primary goals:

First, the FCC should narrow its mission. Previous efforts to regulate siloed monopolies are no more needed than TV antennas. Leave competition policy to competition authorities, and focus on core FCC competencies such as public safety, consumer protection, and universal service for those most in need. Remove regulations that face backwards, such as those covering the increasingly obsolete copper TDM (time-division multiplexing) telephone networks, which fewer and fewer consumers use.

Second, Wheeler should declare ‘encouraging investment’ a core purpose of the agency. Private investment has driven fierce competition across Internet plat- forms while barriers to entry have fallen. With $17 trillion in federal debt, taxpayers cannot foot the bill for today’s 4G and fiber-to-the-home deployments or tomorrow’s even bolder new networks. Nor should we ask them to. Private investment will continue provided policy makers give some measure of regulatory certainty that the ‘‘rules of the road’’ will not change arbitrarily, and all investors will compete on level playing fields.

Finally, Wheeler must work to make the FCC the government’s most efficient, transparent, and predictable agency. Decisions should be data-based, rather than outcome-oriented, considered and delivered within reliable timeframes.

So far, Wheeler has placed a high priority on auctioning spectrum — and without preordaining winners or losers. He also has initiated long-overdue efforts to get the IP transition under way as soon as January, looking favorably towards approving real-world market trials that will help reduce inefficient investment in old technologies that siphon money away from new high speed broadband infrastructure.

In short, early signs from Wheeler’s commission are most promising.

Mehlman served as assistant secretary of commerce for technology policy from 2001 to 2004 and is founding co-chairman of the Internet Innovation Alliance and founding partner at Mehlman Vogel Castagnetti

To read the insights of Mehlman’s Internet Innovation Alliance co-chairman, Rick Boucher, visit the Telecom- munications Law Resource Center’s BNA Insights
page here.

Reproduced with permission from Telecommunications Law Resource Center, 2013 TERCN 1, 12/4/13. Copyright © 2013 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com

Tuesday, December 10

CLECs Marching Back to the Future

By Bruce Mehlman

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Last week I highlighted the “rear-view” mirror perspective of certain competitive local exchange carriers (“CLECs”) regarding the IP Transition. This week, the CLECs have taken their strategy to preserve antiquated telephone networks and technology by extending the status quo one step further.   

In 2011, FCC Chairman Wheeler headed the FCC’s Technology Advisory Council that recommended the upgrade and modernization of the nation’s telephone networks to make them high-speed broadband capable by 2018… a bold and visionary goal. Network operators responded to the challenge by committing to build out a new broadband network by 2020.

To bring this “Fourth Network Revolution” to life, however, plans, tests, and addressing operational issues must begin ASAP…now. 

The FCC has before it one of the first IP Transition implementation issues to arise. It is whether to approve AT&T’s request to allow its wholesale business customers to keep their current contracts, while it stops offering long-term contracts—greater than 36 months—for old telephone-based services. Such a reasonable step would help accelerate the transition to new IP network-based technologies that Wheeler’s TAC envisioned.

AT&T’s request should have gone into effect December 10.  Yet the CLECs, who never fail to miss an opportunity to embrace the rapid deployment of 21st century broadband services, are once again the main roadblock. The CLECs have figured out that if you successfully force incumbents to continue to offer antiquated telephone services via long-term contracts, it will essentially mean that carriers such as Verizon and AT&T will be forced to continue operating, maintaining and investing in the old copper telephone networks, rather than devoting all efforts to the IP Transition.

CLEC opposition now means that AT&T’s request is being delayed by the FCC.

This is the latest example of CLECs seeking government intervention in order to slow the IP Transition.  Pure rent-seeking, so that they can continue to use old, 20th-century TDM and copper-based networks rather than focus their efforts on investment and deployment of their own next-generation networks.

So I guess the CLECs’ executives really meant what they said at the New America Foundation last week when they spoke of wanting to use the decades-old network for “decades” more.  That’s a far cry from the TAC’s goal of 2018 or AT&T’s efforts to modernize its entire network by 2020.  All very convenient for them, but let’s call this what it is: narrow, self-interested advocacy in favor of an old business model rather advancing the national goal of a prompt IP Transition.

Last week, the participants at the NAF panel said they had “written the book” on the IP Transition. This week, it seems more they’re like writing a book on delay.

Monday, December 09

Delaying Auctions

By Brad

In more FCC news, late last week the Commission announced it was delaying its incentive spectrum auction. As Alina Selyukh of Reuters reports:

The U.S. Federal Communications Commission, as long predicted, now plans to hold the so-called incentive auction of broadcast airwaves in mid-2015, a year later than originally intended, the agency chairman said on Friday.

The FCC is now drafting rules for the auction that would reshuffle the ownership of valuable frequencies among TV stations, as well as wireless carriers, which are clamoring for faster speeds and better services for their devices.

Murmurs of a Merger

By Brad

There have been rumors that cable giant Comcast is interested in merging with fellow giant Time Warner Cable, but as Fortune‘s Dan Mitchell reports, even without a formal announcement, the idea is already expected to get a thumbs down from the FCC:

It’s impossible to predict what might happen if Comcast were to make a bid for all of Time Warner Cable, but as things stand, it seems unlikely that it would be approved, at least without conditions.

One Commissioner who would be in favor of the deal, Mitchell reports, is Ajit Pai, although the Republican member of the FCC doubts his fellow Commissioners would feel the same way.

The Role of the FCC

By Brad

Recently, the FCC made waves when it announced it was easing restrictions on the use of electronics onboard flights. Over at the Commission’s blog, two members of the FCC explain what they’re after:

Today, technology has evolved to allow the provision of mobile wireless service onboard aircraft without causing harmful interference to terrestrial networks. This has been done internationally for years, and we are confident it can be done here at home – we will develop a full technical record on the proposal to make sure that’s the case. 

To be absolutely clear, the FCC is not proposing to mandate that cell phone use be permitted aboard aircraft. Many are concerned that adoption of this proposal will result in a less-enjoyable travel experience caused by other passengers engaging in unreasonably loud phone conversations during flight. As frequent flyers ourselves, we understand and empathize with these concerns, but it is important to keep in mind that it is not within the FCC’s jurisdiction to set rules governing concerns about passenger behavior aboard aircraft. That role is properly left to the FAA and the airlines after consultation with their customers.

Sounds reasonable, as does this line from the same blog post:

The FCC’s proposal reflects its obligation to review and eliminate or modify rules that are no longer justified. As the expert agency charged with overseeing technology policy and interference issues, we believe it is appropriate for the Commission to consider this matter fully.

Here’s hoping the FCC continues to “review and eliminate or modify rules that are no longer justified” as network providers fully upgrade to all-Internet networks.

Thursday, December 05

The Wireless Game

By Brad

Speaking of spectrum, Phil Goldstein at Fierce Wireless reports that a big player in the satellite game is planning to participate in an upcoming auction:

Dish Network has officially registered its intent to bid in the FCC’s upcoming 1900 MHz PCS H Block spectrum auction—and it is likely to secure a significant amount of licenses since it is the only major company planning to participate in the auction. If Dish is successful in winning H Block licenses, the company would notably improve its already significant spectrum portfolio.

The FCC released a list of bidders for the H Block on Wednesday; the auction is scheduled to start Jan. 22. The commission said 14 bidders entered complete applications and an additional 20 bidders submitted incomplete applications that they can correct by Dec. 18.

DISH has long made it known that it wishes to get into the highly competitive wireless business, so their jumping into the auctions isn’t really surprising.

Talking Spectrum

By Brad

According to Brendan Sasso of The Hill, the Senate Commerce, Science and Transportation Committee will be holding a hearing on the FCC’s upcoming spectrum auction on December 10. Expected to be discussed will be a nationwide public safety network and whether limitations should be imposed on the auctions, which many lawmakers and industry groups warn would severely diminish returns from the auctions.

Wednesday, December 04

The CLECs’ “Rear-View” Mirror Approach to the IP Transition

By Bruce Mehlman

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Today the New America Foundation hosted an event on “Making the Network Work,” focusing on telecommunications and business markets with the nation’s leading competitive local exchange carriers (“CLECs”).

The participants claimed they have “written the book” on the IP transition, based on significant marketplace gains resulting from their investments in modern networks, deployment of thousands of miles of fiber, and the success of their high end and secure Enterprise service offerings.

Yet, while consumers, industry, Congress and the FCC have all acknowledged the need to upgrade America’s antiquated telephone networks, CLECs cling to old 20th century telephone networks and the desire to preserve the status quo.  Instead of advocating how best to accelerate the delivery of next generation high-speed broadband networks and services to the American consumer,  XO Communications’ CEO appeared to suggest that policymakers focus on the “many places where the old copper network will be in place for decades, [and that she]…doesn’t see that changing.”

The CLEC “rear-view” mirror approach also seeks to extend the rules governing outmoded telephone networks to modern competitive broadband networks, and ensure continuation of special regulatory treatment for services provided in the highly competitive business market. The CLEC effort to preserve the status quo is evident in their opposition to any effort to allow telephone companies to grandfather existing copper network contracts and prepare for new offerings once the upgrade to high-speed broadband networks is complete.   

CLECs also seek government intervention to manage how the nation’s existing and highly successful Internet networks interconnect with one another. Today, Internet providers privately negotiate “IP Peering and transit” agreements for their interconnection needs. These arrangements have existed since the creation of the Internet and have been critical to the massive growth of broadband services to the American consumer. 

Surprisingly, in their call for greater government intervention, however, not one CLEC provided evidence or offered a substantiated claim of an existing market failure. Rather than invest and compete in a vibrant and robust broadband market, CLECs seek FCC intervention to prop-up business models based on a dying copper network.

Thankfully, we heard a different message from new FCC Chairman Tom Wheeler, in his first major address, at Ohio State University this week, where he affirmed that he is “a rabid believer in the power of the marketplace” and that his focus will be to see “what, if any action (including governmental action) is needed to preserve the future of network competition” (Wheeler’s emphasis).

Wheeler said that he seeks to use the tools of government regulation “in a fact-based, data-driven manner” and that if “a market is competitive, the need for FCC intervention decreases.” That is what is happening in the marketplace.

The Chairman cited the example of cellphone unlocking — where carriers are responding to demands for consumers to be able to unlock their phones, without formal government action.

Similarly, light-touch government oversight has allowed the Internet to flourish and has brought robust competition to wireless and wired broadband markets to the benefit of the American consumer. 

With regard to interconnection arrangements, Chairman Wheeler needs to look no further than the marketplace. Just last week, competitors Verizon and Vonage provided the latest example of providers reaching mutually beneficial interconnection agreements through commercial negotiations. This follows a similar agreement that Verizon achieved with Comcast last year. 

That’s the way it has always worked, is working, and will continue to work — if only regulators don’t rush in to dictate a false “solution” where the market is working.

Friday, November 22

From Plain Old Phones to Broadband: A Policy Prescription for the FCC

By Rick Boucher

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Bloomberg Government

November 21, 2013 10:13PM ET | Bloomberg BNA

American innovation has led to massive adoption of cutting-edge communications and entertainment technologies. Functionalities and services once wondrous and new are now commonplace. A step back reveals how far and how fast we’ve come. In 2000, television changed forever as TiVO introduced us to time shifting, the ability for consumers to record and watch TV programs at the scheduled hour of their choosing. That same year, our Internet and telephone experience was enhanced as cable modems began to take hold in American homes. The following year, we saw the first iPod, and how we buy, store, and listen to music has never been the same. The iPhone (2007) and iPad (2010) gave birth to a revolution in the use of mobile data.

Unseen but ever-present wired and wireless broadband networks provide the foundation for the high-quality video, voice and Internet services that Americans have welcomed with historic enthusiasm, as they have been adopted by in the home and mobile users at a stunning pace.

During the past decade, under our feet and above our heads, the nation’s broadband service providers have invested tens of billions of dollars to bring high-speed wired and wireless connections to our homes and businesses and in the process have reshaped almost everything about how we communicate. Because of these investments, we constantly have available a seamless stream of voice, data, and video on demand.

Today’s digital networks offer boundless opportunity—boosting economic growth and job creation; through remote monitoring and telemedicine, bringing world-class medical care to remote communities and easing the burden of chronic conditions; improving education for students of all ages by delivering advanced coursework, college classes, and even online degrees through distance-learning programs; maintaining constant communications with business associates, family and friends; and providing entertainment and real-time news, weather, and sports information.

This enhanced connectivity also enables civic empowerment—especially for groups who haven’t always been heard—enabling them to communicate more easily with elected officials and to organize and advocate on their own behalf.

Achieving the next level of broadband investment and enabling faster connections, more capable services and deeper Internet penetration in hard-to-serve areas will be facilitated by policy changes by the FCC. With the commission’s newly arrived leadership, these needed changes should be at the forefront of the agency’s agenda.

While communications of all kinds have rapidly moved to the Internet and broadband networks, the aging copper-wire, circuit-switched telephone network remains in place, using the same technology Alexander Graham Bell pioneered. It offers plain old telephone service (POTS), and Americans are fleeing it in droves at an ever-accelerating pace. Only 5 percent of Americans use the old network as their exclusive communications medium. Another 38 percent use it in combination with wireless service, and most Americans use wireless communications only or rely on a combination of wireless and a wired alternative to the telephone network, such as cable modem service.

We stand at an inflection point where the rules that were sensible in the last century for a heavily regulated circuit-switched telephone monopoly are no longer sensible in today’s competitive communications landscape dominated by broadband and a multiplicity of Internet-enabled services. The requirement of current law that telephone companies spend billions annually maintaining a single-function, aging network that consumers no longer prefer is impeding the next level of broadband investment. Planning and delivering a rapid transition to an all-broadband communications environment is the greatest challenge that the new FCC chairman faces.

A Change Requiring New Policy

In its time, the phone network was a culture-changing technical marvel that introduced nationwide communication through copper wire, erasing geography and reliably enabling Americans to dial business contacts, friends, family, and neighbors anytime, anywhere.

During the early and mid-20th century, access to telephones grew rapidly as government aided and promoted a monopoly to accelerate network build-out to reach all Americans. As telephone service became nearly ubiquitous in the latter half of the last century, technological and market advancements created the possibility for alternative satellite, wireless, and landline communications for businesses and consumers.

Realizing the potential benefits that the array of digital technologies could provide, the U.S. government ended the phone monopoly, and with passage of the Telecommunications Act of 1996, began to chart a course toward more robust competition and entrepreneurship in the nation’s communications marketplace. Consumers were first offered choice in the long distance telephone market. Then new providers, such as cable companies, built out broadband networks to offer competitive wired residential telephone and Internet services. The door was opened for telephone companies to offer cable TV service, and digital networks were developed that could accommodate it.

As the reliability of wireless communications increased and access to broadband services has expanded, American consumers at work and in the home have embraced them with a passion. Modern broadband communications systems now link us to the Internet; move information, data and video at lightning speed; and carry our voice “phone” calls, too. These are the networks consumers prefer, and the transition away from the antiquated telephone network is occurring with remarkable speed. As society now treasures its smartphones and tablet devices, streaming videos, GPS guidance systems, and other electronic wonders, we forget that little more than a decade ago personal communications was still largely about POTS. Current law still assumes that most communications are delivered by the POTS network.

Existing regulations were created in a world where heavily regulated phone companies provided copper wire voice service, lightly-regulated cable companies delivered TV, and wireless companies offered services deemed too unreliable to compete with wired telephone service. In fact, these rules still compel telephone companies to invest nearly $13.5 billion each year to maintain and run the old copper phone system as if it were still the nation’s core communications system used by almost all.

Too Much Investment to Maintain Old Technology

As the number of telephone company subscribers on POTS sharply falls, the per-subscriber cost of maintaining the old network has become unsustainable. According to a recent study, America’s telephone companies made more than $154 billion in capital expenditures from 2006 to 2011. Surprisingly, the majority of that investment was dedicated to maintaining the declining telephone network, even though today only about one-third of Americans still use it at all, and only 5 percent use it exclusively. Every dollar that is spent maintaining a voice-only network that consumers are fleeing is a dollar not invested in the modern multifunction broadband networks that consumers prefer. Every dollar telephone companies spend on an ancient, declining, and little used technology is a dollar not spent developing the more capable broadband infrastructures through which phone companies can become stronger competitors in the offering of voice, video, and data with largely unregulated cable companies. That’s an important goal because when competition is fair and fierce, consumers ultimately win big with competitive pricing and greater choices to fit their personal needs.

Ancient rules and old ways of thinking are undermining innovation, damaging competition, forcing billions of dollars into misdirected capital investment, and slowing our national progress. Maintaining the status quo for the antiquated telephone network—either by decision or inaction—is a costly anachronism. Requiring phone companies to operate voice-only telephone networks while they are building out new fiber-optic broadband networks makes as much sense as requiring a hitching post in front of every store, forcing bus companies to maintain streetcar tracks, or insisting on backup electric fans in every air-conditioned building.

The IP Transition: Six Principles to Consider

The FCC’s 2010 National Broadband Plan is instructive. It observes that the regulations requiring telephone companies to maintain the old phone network “siphon[s] investments from new networks and services” and is “not sustainable.” The report also declares that the transition to “broadband is the greatest infrastructure challenge of the 21st century.” The FCC’s Technological Advisory Council recommended that the transition and sunset of the POTS network be completed by 2018.

That’s not very far away, and meeting that schedule will bring its own unique challenges. Consumers must be protected, and certain populations are at risk of being disadvantaged. Of particular concern are those who are not yet taking advantage of the opportunities created by new digital technologies. For example, late adopters—largely older and less affluent consumers, many of whom reside in hard-to-serve rural areas, who have not yet joined the broadband era—may be at greater risk unless we complete the transition in a carefully planned and orderly way. The transition to 21st century communications networks must serve every American. But that result is not pre-ordained; it will require hard work.

Government must play a key role throughout this process by advancing consumer interests with a transition plan guided by core principles. These basic protections will remain government’s responsibility even after the old phone system is shut down:

1. The commitment to universal service must endure. Next-generation high-speed broadband networks and their benefits must be available to every American. As we move beyond the old phone network, we cannot leave anybody behind. Without dictating specific technologies or micro-managing how communications competitors meet their public service obligations, we must push the envelope to ensure that every American can access modern broadband service and enjoy the benefits that come with it. At a minimum, post transition everybody should enjoy service at least as good as they can now receive from copper-wire phone networks.

2. Public safety must be assured. 911 emergency calls must go through—every single time—no matter what technology or services consumers adopt.

3. Services for the hearing-impaired and those with vision problems also must be retained at levels that at least match what consumers enjoy today.

4. Consumer protection must remain at the heart of communications policy. Consumers must know that government has their back; that service providers will deliver on their promises; that spotty service, fraud, or other abuses will not be tolerated. Consumers must have a place to take complaints with confidence that something will be done about them.

5. Establishing a backup plan for power failures should be part of the transition process. The rebuilding after Hurricane Sandy exposed some potential weaknesses in the way our digital technology works today. While fiber-optic-based systems tolerate water damage that can short out copper wires, they are more vulnerable when the electricity at the user’s premises goes out.

6. Special retrofitting and other creative solutions may be required to ensure that modern networks function fully with personal and business equipment such as fax machines, security systems, health monitors, and credit card readers, even though they may not currently be compatible with today’s broadband connections.

FCC Should Begin Trials Now

Consumer interests are paramount. These core challenges must be met before the book is closed on the antiquated POTS network. Contrary to the claims of some, the post-transition environment will not be regulation free. Indeed, regulation will be necessary to assure consumer protection, but just as networks are modernizing, the regulatory landscape must be modernized as well.

What’s needed is smart regulation appropriate to protect consumers and public safety, promote competition and support universal service, while also encouraging sustained private investment and innovation in America’s next-generation communications networks.

The upgrade and modernization effort will require thought and planning. That’s why we must start now while the existing phone system is available as a “safety net” backup for any potential glitch or surprise that might arise during the upgrade to a new and modern system. No one is proposing a “flash cut” in which the telephone network disappears overnight. This process will, in fact, probably take half a decade to complete.

To take the first step, the FCC should rely on a time-tested method: demonstration projects. Conducting demonstration trials in carefully selected markets in which existing POTS users are rapidly moved to Internet protocol-based networks will provide a controlled environment for an accelerated transition with the existing telephone network still in place as a safety net.

This approach gives consumers an assurance that if any unexpected problems causing consumer disruptions arise, service can continue over the telephone network while technical and service issues are resolved. Through the demonstration projects, we can determine what is likely to go wrong and have solutions in place prior to a broader national transition.

The FCC has a recent successful precedent for taking precisely this step. In the nation’s transition from analog to digital television broadcasting, the FCC conducted a similar test. Leading up to the digital TV conversion, some warned of potential negative consequences for consumers. The warnings were similar to those we are hearing about the transition from POTS to modern networks. In particular, the articulated fear was that switching to digital television broadcasts would harm consumers, particularly the elderly and less technically savvy viewers who decide to keep their older analog television sets but would experience difficulty installing the required converter box to receive and convert the new digital broadcasts. The circumstance of rural and lower income viewers was a particular focus. To address these concerns, the FCC launched a demonstration project in Wilmington, N.C., an area with a wide diversity of viewers, including those with low incomes, the elderly, and viewers living in both metropolitan and rural areas.

The FCC’s Wilmington demonstration project proved a success. It provided clear evidence that on the day analog broadcasts ended, viewers were prepared. There were almost no complaints. Analog television users across the Wilmington region had successfully installed digital-to- analog converter boxes. The trial inspired confidence that the national transition could proceed uneventfully, and on national transition day, very few problems were encountered.

Employing the same model, the FCC should now move quickly to authorize closely supervised demonstration projects in selected markets, perhaps one urban and one rural, where people quickly shift from existing telephone networks to modern broadband networks. The demonstration projects offer a test bed to guarantee that core consumer values will be protected, to learn what may go wrong in a controlled rapid transition and to devise solutions for problems that in fact arise prior to a broader national transition.

While the attraction of broadband networks has propelled a POTS-to-broadband transition that is now well advanced, we owe it to ourselves to plan and complete it on the schedule that the FCC’s Advisory Council recommended. Applying the knowledge gained through demonstration projects we can accelerate the POTS phase-out and realize the benefits of greater network functionality, a broader array of services for consumers and the economic efficiencies that come from devoting investment to the networks of the future rather than the network of the past.

Public-Private Partnership Needed for New Road Map

For the moment we have the luxury of time to conduct demonstration projects, but an additional sense of urgency for action is now apparent. The current telephone network is supported by antiquated equipment, and as consumers have continued their ongoing migration to the new networks, equipment providers either no longer manufacture or have significantly scaled back production of the TDM (time-division multiplexing)-based equipment necessary to maintain and operate the POTS network. As fewer replacement parts become available, maintaining the phone network grows dramatically more expensive, further skewing the ratio between investment in old and new technologies, with the ever-escalating costs being passed on to consumers. All Americans stand to benefit from shifting investment to modern networks that offer consumers service as least as good as what they enjoy today, as well as the greater functionality that broadband networks can offer.

A public-private partnership among all stakeholders—consumers, telecom companies, suppliers, and regulators—will be needed to establish the rules of the road for the new network. These stakeholders can embrace key principles—recently outlined by the leading consumer advocacy organization Public Knowledge—service for all, competition, reliability, consumer protection, and public safety.

Simply providing access to new technology while protecting core consumer values, however, isn’t the whole job. We also must boost adoption rates, educating every American about what the transition means, how it will affect them and how by using broadband they can improve opportunities for themselves and their families. We can’t afford to leave any American in the dark about the value of broadband; we can’t leave anyone behind.

So the real questions surrounding the IP transition are not whether, but when; not if, but how. Bipartisan support exists in Congress for the transition itself and for the basic principles that should be at its core, including consumer protection, universal service, network reliability, competition and public safety. Now is the time for all stakeholders to work together, starting with the demonstration projects, to ensure that the transition’s rapid final phase proceeds as smoothly as possible.

New FCC Chairman Embraces Need for Quick Action

The Internet’s evolution has brought us to another critical juncture in communications policy as we consider how to complete the transition from the bygone era of plain old telephone service to the broadband future of the 21st century. It’s a critical transition, given broadband’s increasingly dominant role in every part of our economy, as well as its ability to improve lives and advance economic growth. It’s also something that just about every stakeholder, including the FCC, regards as inevitable.

In 2011, the Technological Advisory Council led by now-FCC chairman, Tom Wheeler, noted that “[t]he FCC should take steps to prepare for the inevitable transition” from the old network and in fact “take steps to expedite the transition, with a target date of 2018,” including the need to “re-align regulatory requirements to emerging technologies.”

The recommendation reflected vision and foresight then, and provides an ambitious but achievable agenda now. When it’s achieved, Americans will have access to reliable networks designed specifically for broadband voice, video, and Internet services, rather than antiquated networks that support phones wired to the wall. Every app, every smartphone and tablet, every desktop computer will smoothly connect consumers to the online experience of their choice—telemedicine services for better health, virtual classrooms for lifetime learning, their legislators’ offices for civic engagement, a job opportunity, a business contact, a sporting event, a movie, friends and family across town or on the other side of the world. That’s the goal—delivering the services consumers want. Upgrading and modernizing our 20th century telephone networks will get us there.

This goal now appears closer on the horizon than ever before. In one of his first official acts, Chairman Wheeler has made clear the need to speed the “Fourth Network Revolution,” recognizing how “new networks catalyze innovation, investment, ideas and ingenuity.” He stated that “the time to act starts now” and proposed a timetable for FCC action in January 2014 on how to “begin a diverse set of experiments that will allow the commission and the public to observe the impact on consumers and businesses of the [IP transition and proposed demonstration projects].” In setting this course, the new chairman has jump-started the process and appears ready to steer the FCC toward addressing the key policy, technical, and consumer issues necessary to bring 21st century high-speed broadband to more Americans.

In our land of opportunity and innovation, we’re a place of relentless creativity. At the core of our success is an entrepreneurial culture powered by private sector investment. In that American tradition, it’s incumbent on us to ensure that the benefits and opportunities of next-generation networks and services become widespread and available to all. The POTS-to-broadband transition will free the needed investment. The next steps for us to take are now clear.

Reproduced with Permission from The Telecommunications Law Resource Center, Copyright 2013, The Bureau of National Affairs, Inc. (800-372-1033) www.bna.com.

Thursday, November 14

Just Say No to Aggregation Limits

By Bruce Mehlman

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Today’s letter from a handful of organizations that asks the FCC to set spectrum-auction aggregation limits puts whipped cream on a mud pie. The FCC should follow Congress’ clear goals of getting more spectrum out into the marketplace for all willing investors and maximizing revenue to fix the debt, rather than siding with some competitors over others. We should be finding more spectrum for all carriers rather than barriers to hold some back. The suggested limits would reduce auction revenue, make broadcasters less likely to participate and reduce the pace of broadband investment.

Wednesday, November 13

Save the Date!

By Brad

Next Tuesday, IIA is teaming up with RocketSpace for a discussion on the future of communication in America. We’re calling it “Next-Gen Networks: Impact on Innovation, Education, Regulation & Economy,” and it will feature some rather heavy hitters in the tech and policy space. How heavy? Well, FCC Commissioner Jessica Rosenworcel for one, Bill Coughran of Sequoia Capital for two, and Vivek Wadhwa, Vice President of Research and Innovation at Singularity University for three.

Our own Jamal Simmons will be moderating.

It all happens Tuesday, November 19 from 12-1:30 pm at RocketSpace, which is located at 344 Pine Street in San Francisco. If you’re the area and want to attend, you can RSVP here.

Wednesday, November 06

Talking About Access

By Jamal Simmons

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This morning, the Joint Center for Political and Economic Studies held a broadband technology forum in Washington, DC. The event coincided with the release of a new study, “Broadband and Jobs: African Americans Rely Heavily on Mobile Access and Social Networking in Job Search.”

As titles go, that’s quite a mouthful. But then, the study itself is packed with information, some of it surprising, some of it well-known, and all of it important. Some case(s) in point:

• 50% of African American Internet users believe being online is critical in order to find a job. The surprising part? That’s 14% higher than the entire sample used for the study.

•  Latinos are right there with African American Internet users, with 47% calling access “very important” to finding a job.

• 47% of African Americans have used a smartphone for job searches, which is nearly double the entire sample.

For today’s event, the Joint Center assembled some heavy-hitters in tech policy, including FCC Commissioner Mignon Clyburn, Latino Information Network Director of Innovation Policy Jason Llorenz, and AT&T Vice President of Global Policy Ramona Carlow.

Besides the stats listed above, a key focus of the event was the need to improve tech education, or as the Joint Center’s John Horrigan put it, “lift up the digital skills for the entire population.” Given that one major finding of the Joint Center’s study is that confidence in digital skills directly correlates with people going online in search of employment, the focus on education wasn’t surprising. But it was encouraging that the group agreed that effective digital education means helping both adults and children.

That starts with better connecting schools through eRate. The panelists also agreed it requires better training for teachers and librarians — a link often missing in discussions of expanding broadband access. I would add one more thing: students need the same high speed broadband access at home they get in school and that’s going to require the private sector. Federal regulations should encourage all of these investments.

Today’s event wasn’t streamed online, unfortunately, but the Joint Center’s study is available at their website. I encourage you to dig in.

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