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'

Wednesday, May 25

Boucher in The Hill

By Brad

With online privacy once again a hot topic inside the Beltway, our own Honorary Chairman Rick Boucher has tackled the issue in an op-ed for The Hill. An excerpt:

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.

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

Wednesday, April 27

Close Competition

By Bruce Mehlman

Our Co-Chairman Bruce Mehlman had a piece published in The Street yesterday highlighting the fact that data collected by the FCC shows special access services are, in fact, highly competitive. An excerpt:

[L]et’s look at the facts. Based on an analysis of the FCC’s own data, it turns out that 25% of buildings that have a connection only to an incumbent local exchange carrier’s (ILEC) special access services are only 17 feet away from the nearest competitive provider’s fiber network; 50% are 88 feet away, and 75% percent are within 456 feet. The mean distance for all relevant buildings is 364 feet.

For comparison, 364 feet is about the length of a football field with the end zones. Seventeen feet? There are canoes and snakes that long. Eighty-eight feet? That’s shorter than an NBA court and less than Yadier Molina throws every night to get a runner out at second base. What about 456 feet? Well, with the Kentucky Derby coming up, that’s more than 200 feet shorter than one furlong. And it’s the same height as a roller coaster in New Jersey.

Check out Mehlman’s full op-ed over at The Street.

Friday, April 08

The Data on Special Access

By Bruce Mehlman

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This week the FCC allowed parties to release some aggregate data in the broadband market collected as part of the ongoing special access proceeding.  And this data, even though partial, confirms what I and others have been saying all along: virtually all businesses have access to real, facilities-based competition today. And to the degree that some individual businesses don’t have that access today, it’s because the current beneficiaries of special access regulation have an incentive not to invest to connect their business customers to the closest competitive fiber networks that are readily available in the market.

In all, 95% of Census blocks where demand for special access exists have competitive facilities available.  And those Census blocks include 99% of all businesses in the country.

With grades like these, let’s give an A+ to the competitive providers that are bringing modern fiber to American businesses.  This definitely includes cable companies that are rapidly expanding their services to businesses of all sizes.

On the other hand, it’s clear from the data that the CLECs have customers in many office buildings that must continue to rely on antiquated copper facilities and their slow data speeds because their CLEC provider refuses to build out fiber connections to nearby fiber networks.  Apparently, it’s easier to call for FCC action than it is to build out networks even 1000 feet to compete with the competitive carriers.

As US Telecom notes, the calls for more FCC intervention are “a matter of convenience, not competition.”  But a business strategy of rent-seeking-rather-than-investing is not evidence of market failure.  It’s evidence instead of regulatory failure.  Because so long as the FCC’s special access policies serve to protect the business models of CLECs, who decline to invest, then why invest?  Why spend shareholders’ or investors’ money when the government forces others to subsidize you?  Nice work if you can get it, but it does nothing to promote innovation or, for that matter, competition.  Government-enabled competition isn’t really competition.

But now that at long last we have some data publicly available, the right policy is even more clear:  There’s simply no reason for the FCC to intervene in this market even more than it already has.  The decision by some companies not to invest in the future should not be a basis for increased regulation.

Tuesday, April 05

Bridging the Homework Gap

By Jamal Simmons

Yesterday, FCC Commissioner Jessica Rosenworcel and I traveled to Philadelphia to tour String Theory Charter Schools’ Vine Street Campus (5th grade through 12th grade) and make classroom visits to see the application of modern technology in a next-generation, “Apple Distinguished School” setting.

Commissioner Rosenworcel has championed changes to U.S. Internet and Wi-Fi policies to provide American students greater access to 21st century broadband technologies. She coined the term “Homework Gap” that now commonly refers to the difficulty students experience completing homework when they lack high-speed Internet access at home.

The Homework Gap is real—for one in five kids in our country, it’s a daily struggle that is standing in the way of them reaching their full potential. Affordability is a barrier to high-speed Internet access for low-income families. The FCC’s decision to add broadband to the Lifeline subsidy program last week is a significant step toward closing this digital divide.

According to Pew Research, seven in 10 teachers assign homework that requires Internet access, but five million of the 29 million U.S. households with school-aged children lack regular access to broadband. Unfortunately, a 2015 Consortium for School Networking (CoSN) survey reveals that three in four U.S. school districts report that they are not currently doing anything to address technology access outside of school.

After touring the digital accomplishments of the Vine Street Campus, Commissioner Rosenworcel and Jason Corosanite, Co-Founder & Chief Innovation Officer of String Theory Schools, joined String Theory educators, administrators, parents and local business supporters in a roundtable discussion focused on “Closing the Homework Gap: Technology Lessons Learned in Advancing Education.”  

Commissioner Rosenworcel’s in-depth conversation on the Homework Gap generated thoughtful discussion and innovative ideas in response to the following issues:

• How is technology transforming education?

• Is wireless broadband sufficient for completing homework assignments?

• What are the major barriers to home broadband adoption?

• Are there any federal programs that can help bridge the divide?

• How can the public and private sectors, educators and parents, partner to help close the Homework Gap?

 
“Technology is pervasive in today’s world, and the educational environment should reflect that to keep kids interested and engaged, and enable them to be innovative and productive,” Corosanite stated during the panel discussion. “Rather than taking place in a vacuum, a well-rounded educational approach should train students to perform later in life. Kids without digital skills will fall behind.”
 
Very true. Half of all jobs now require some level of technology skills, according to the U.S. Bureau of Labor Statistics. Experts say that number will surpass three-quarters (77%) within the next decade.

Our thanks to Commissioner Rosenworcel and Jason Corosanite for taking part in the discussion. And thanks as well to all the bright students and faculty of String Theory Charter Schools’ Vine Street Campus.

Friday, April 01

Special Access

By IIA

A lot has changed since 1996. But one thing that hasn’t changed are so-called “Special Access” regulations.

Thursday, March 31

Statement on the FCC’s Lifeline Actions

By IIA

IIA supports today’s FCC action to make 21st century broadband services accessible and more affordable for our nation’s low-income consumers. For too long, the FCC’s Lifeline program was limited to supporting only voice telephone service. Today’s reforms will not only bring vital broadband Internet service to more Americans, it will also advance administrative efficiencies in the program necessary to attract greater broadband service provider participation and expand competition and choice for eligible consumers. IIA is pleased to have been an active participant in the Lifeline reform process, and we congratulate the Chairman and his fellow Commissioners for their hard work and effort to make the Lifeline program more relevant and useful for low-income Americans in the broadband age.

IIA Event: Closing the Homework Gap

By IIA

In today’s world, seven in 10 teachers assign homework that requires Internet access, but five million of the 29 million U.S. households with school-aged children lack regular access to broadband. FCC Commissioner Jessica Rosenworcel coined the term “Homework Gap” to characterize the divide and shed light on the problem: Kids without broadband are falling behind.

How is technology transforming education? Is wireless broadband sufficient for completing homework assignments? What are the major barriers to home broadband adoption? Are there any federal programs that can help bridge the divide? How can the public and private sectors, educators and parents, partner to help close the Homework Gap?

These are just some of the questions that will be addressed on Monday, April 4 when FCC Commissioner Rosenworcel will join our own Co-Chairman Jamal Simmons for a school tour, classroom visits, and a roundtable discussion at the Philadelphia Performing Arts: A String Theory Charter School.

If you’re in the area and wish to join us, see the details below:

WHAT: School tour, classroom visits, and roundtable discussions with FCC Commissioner Rosenworcel, String Theory Co-Founder & Chief Innovation Officer Jason Corosanite, and IIA Co-Chairman Jamal Simmons

WHEN: Monday, April 4 from 10 am - 12:15 pm ET

WHERE: Philadelphia Performing Arts: A String Theory Charter School, 1600 Vine Street, Philadelphia PA, 19102

For more on the event, check out this story from the Philadelphia Inquirer on FCC Commissioner Rosenworcel’s trip to the city.

Members of the media can RSVP for the event by emailing lauren@internetinnovation.org

Wednesday, March 16

Promising Signs From the FCC’s Lifeline Reform

By Rick Boucher

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“Internet access has become a pre-requisite for full participation in our economy and our society, but nearly one in five Americans is still not benefitting from the opportunities made possible by the most powerful and pervasive platform in history.”

Those were the words of FCC Chairman Tom Wheeler and Commissioner Mignon Clyburn in a post at the Commission’s website announcing a new, modern direction for the Lifeline program. They are words we can all agree with. But beyond those words are the FCC’s actual plan to modernize Lifeline and whether the path put forward by the Commission will be the most effective one they can take.

Reduced to its key ingredients, the FCC’s plan has four key parts:

1) It expands the program to cover broadband internet access services;
2) It sets minimum service standards for both voice and broadband;
3) It streamlines the rules governing the program by eliminating unnecessary regulation;
4) It utilizes a National Eligibility Verifier to take overseeing Lifeline eligibility out of the hands of the carriers

On the surface, each of these four parts are a step in the right direction. In fact, all four were, in some fashion, a part of the recommendations in our Lifeline white paper.  But as with any regulatory shift — especially for a program as large and as important as Lifeline — the true success of the FCC’s reform plan can’t be measured until all the details come to light and the plan is actually implemented. So for now we get to play the waiting game. 

Still, Chairman Wheeler and the other FCC Commissioners should be commended for listening to every interested party when it comes to reforming Lifeline. The plan the Commission has put forward may not be perfect — for example, there has yet to mention of much-needed eligible telecommunications carrier (ETC) reform. And the devil will, of course, be in the plan’s details. But what the FCC has revealed of the plan so far is definitely encouraging.

Tuesday, March 15

Anna-Maria Kovacs on Special Access

By Brad

A new paper from Anna-Maria Kovacs, Visiting Senior Policy Scholar at the Georgetown Center for Business and Public Policy, takes a deep dive into the current state of “special access” services, particularly whether there is a case for re-regulation. You can download a copy of the full report here, but here’s some findings from the executive summary to chew over:

Both the traditional U.S. CLECs and the cable companies who have entered the business broadband market are in good financial health and are generating higher free cash flow than the wireline segments of the largest ILECs. The CLECs and cable operators also have higher stock valuations, indicating that investors expect them to grow revenues and cash flow more rapidly.

Traditional CLECs have focused on the business market exclusively and built out only in areas where high-density makes construction-cost relatively low and attainable-revenue relatively high. In other words, they build only where they can expect penetration levels high enough to ensure high free cashflow. The CLECs’ metro fiber networks have brought them into or close to most buildings that house potential business broadband customers.

The data provided publicly by U.S. CLECs and cable operators confirms the few facts that have so far emerged from the FCC’s special access data collection, i.e. that there is extensive facilities-based competition in the business broadband market.

The enterprise market’s migration from legacy TDM facilities to Ethernet over fiber or coax facilities provides the CLECs and cable operators with the opportunity to compete on equal terms with the ILECs in the fast-growing portion of the market, while decimating the legacy revenues of the ILECs.

For more on special access and regulations, check out our Co-Chairman Bruce Mehlman’s recent piece in The Hill as well as three white papers on the subject released by US Telecom.

Friday, March 11

A Conversation About Special Access

By IIA

On Wednesday, IIA Founding Co-Chair Bruce Mehlman moderated a panel at the TIA Spring Policy Summit, titled “Special Access Re-Regulation.” The robust discussion explored the FCC’s regulation of the business data services market. Below are a handful of highlights:

Berge Ayvazian, Wireless 20/20: We have seen significant competition in the special access field between companies. This competition has shaped the underlying infrastructure on which wireless exists. We must take advantage of this opportunity to apply what we have learned in the last 10 years to allow the market to evolve around the competition already happening in the marketplace. In most markets, the quality of service being delivered by an ILEC and a CLEC is the same. We need to change the way we impose regulations on the business broadband market.

Patrick Brogan, USTelecom: Competition policy has been evolving since 1996 in the business broadband marketplace. The special access market has been competitive in telecom for a very long time. The guiding policy over the past fifteen years has been to encourage facilities-based competition and this should continue to be our goal.

Fred Campbell, Tech Knowledge: I find it difficult to believe that price regulation is needed when we have seen healthy competition. During the net neutrality proceeding, Chairman Wheeler was certain that there would be no price regulation. Business services is where competition started. Consumers do not need price regulation. Something is not right about this proceeding.

Hal Singer, PPI: If you push prices down from competitive levels you will see inefficiencies at all levels. If you are going to seize someone’s property, though, you are smart to wait until they have upgraded their network. You do not want to join the old copper network; you want them to already be upgraded to fiber. Prices are not at monopoly levels. By 2014, 42% of commercial buildings were outfitted with fiber. In 2009, it was just 23%. If you step in now and impose price regulations you could do some bad things. The notion that people are competing on a non-level playing field does not make sense.

Ayvazian: We all agree there is no basis on which to introduce price regulations.

Campbell: In my view, price regulation is the last option and worst possible way to address market issues.

Singer: Before Gigi Sohn was at the FCC, she was at Public Knowledge. One of Public Knowledge’s ultimate objectives is increased regulation and unbundling. There are a lot of forces at play here that are pushing them towards the CLEC agenda.

Brogan: There is a group in the CLEC industry that benefits from price regulation and increased access to network facilities. It is easier to lease these from the incumbents than it is to build their own facilities.
Campbell: Their complaint is that, to get a certain discount, you need to commit to a 7-year term. I do not see how that is inherently problematic when facilities must be built. These contracts are long-term for a reason.

Brogan: I would continue to not regulate carrier Ethernet and rationalize regulation. Do not lower prices. This will discourage investment. That is the source of innovation within the broadband industry. Facilities-based competition is more self-sustaining.

Campbell: We need to stop moving to the left of Europe on communications policy. Many of the same consumer groups supporting price unbundling loved to point to Europe as an example of how broadband policy in the United States policy should move. In 2013, the EU’s version of the FCC drafted a lengthy report with data on developments in the EU markets and concluded that investment in the EU is lower due to unbundling. The reason is that unbundling discourages investment. If an entity has regulated access at government regulated rates, they have profit without the risk of losing investment dollars. Their conclusion was that, beyond where cable was, there was no increased investment. Now Chairman Wheeler wants to do it anyways.

Singer: If you want to maximize broadband deployment, we should be free of regulations.

Campbell: Chairman Wheler uses the word “competition” a lot, but when he uses it, he means something completely different than I do when I say competition.

Singer: When you say competition three times, it is static and not dynamic. Chairman Wheeler’s competition does not mean anything.

Campbell: Our FCC just makes up competition in market segments as if it is a new thing. Europe has imposed standards on how to impose these regulations. This has given them enormous power to do unhealthy things for a viable and competitive communications market.

Singer: We are not going to get to a Communications Act rewrite until we solve the net neutrality problem. The idea is to figure out a way to give the FCC authority to regulate allegations of discrimination on a case-by-case basis. Republicans should go forward on a broadband subsidy so we do not have to raise taxes on the back of broadband users.

Campbell: If we want to talk about politicized decision-making, let’s look at net neutrality. One of the arguments raised in favor of Title II regulations were the number of comments received in favor of it. It did not matter who these were from, but simply the volume of responses. The question we all asked was the relevance of each of these comments. There are arguments about the FCC’s political form of decision-making.

Wednesday, March 02

Encourage Competition

By Brad

Over at Forbes, Fred Campbell has a smart piece on the issue of Special Access and how the FCC should encourage competition rather than rely on old regulations. An excerpt:

The only businessmen who claim that cable and CLECs can’t compete with telcos in the market for business communications service are those who are already profiting from the FCC’s existing special access regulations and who want the agency to apply these outdated rules to new IP-based technologies. As NCTA put it, these CLEC companies’ “entire argument boils down to the simple proposition that they would prefer to pay less than they do today.”

A fair and unbiased agency would reject this self-serving argument as an invalid justification for imposing new rate regulations — regulations that would also have the effect of discouraging competition and investment in new IP-based facilities.

But don’t be surprised if the FCC decides to regulate business rates anyway.

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

Tuesday, March 01

Elevate Broadband Access

By Brad

Yesterday, The Root published an op-ed from our Co-Chairmen Larry Irving and Jamal Simmons on the need for sensible reform of the Lifeline program. An excerpt:

These days, new social media platforms emerge regularly. Individuals have become broadcast channels with audiences rivaling some small radio stations. The barrier to new technologies reaching even wider audiences is lack of high-speed Internet access, and for many people who need it most, the barrier to access is cost. This Black History Month, reforming the federal Lifeline program to include broadband should be elevated as a key step to increasing access for Americans with the lowest incomes.

Check out Irving and Simmons’ full op-ed over at The Root.

Tuesday, February 23

The Data Dead End

By Brad

Earlier today, the Phoenix Center released a new paper titled “The Road to Nowhere: Regulatory Implications of the FCC’s Special Access Data Request.” Penned by Chief Economist George S. Ford, the paper predicts that the FCC’s data collection efforts will not serve those who want more regulations on Special Access services. In fact, Ford argues that the “FCC’s Special Access data will likely show that regulation is unnecessary in many geographic areas and already adequate, if not too strict, in others.”

Ford also reports that comments so far received at the Commission aren’t helping the process either. As he writes:

The first round of comments based on the data have been submitted to the Commission, but the comments and reports aren’t terribly helpful to the general public; the Commission, perhaps concerned the data would not support its pro-regulatory agenda, has not only restricted access to the data but those with access are required to redact from their comments and reports even the most summary of statistics indicating the extent of competition and other facts.

The Phoenix Center’s concerns about the FCC’s Special Access data gathering are shared by our own Bruce Mehlman, who penned an op-ed for The Street back in December that argued:

The commission’s new investigation into special access rates gives short shrift to these aggressive competitors and relies on an old vision of the marketplace to protect the business models of a few companies, even as it is supposed to be promoting deployment of ever-faster broadband. Those hardworking crews you see from the road, and that rumbling sound you can feel, represent investment taking place. Competition works and is working in the real world—but it apparently remains unseen and unfelt at the FCC.

You can download the Phoenix Center’s “The Road to Nowhere: Regulatory Implications of the FCC’s Special Access Data Request” at their website.

Wednesday, February 17

The Special Access Dance

By Bruce Mehlman

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As the nation turns its eyes to political primary seasons, one of the things voters most dislike is politicians saying one thing to one group and then saying something else to others.

All politicians inevitably pander, and the smart voter needs to review the full body of a candidate’s comments to appreciate where they really stand.

The same challenge often exists with companies. For businesses also try to tell one audience, such as government regulators, one thing and Wall Street another.

Take Sprint. Sprint tells Wall Street it is incredibly well-positioned to thrive in a competitive marketplace, while begging the government to maintain regulations protecting and advantaging it against other competitors.

Start with what Sprint is telling the government: last September, Sprint told the FCC that it needs regulated access (“special access”) to business data lines: “Every one of these sites will require additional backhaul and Sprint and other competitors will depend on both TDM and Ethernet special access more than ever to be able to compete.”  Sprint said essentially the same thing in 2013 in the same docket (yes, the “05” in the FCC’s proceeding refers to “2005” – this one has been going on for an absurd length of time).

But to Wall Street, Sprint sings a very different tune: it claims to save money by not relying on FCC-mandated business data circuits and writes, in its filings to the SEC, that it is purchasing alternative, more modern Ethernet circuits in the competitive marketplace. Sprint said that every year from 2011 to 2015, repeating the message that “We are also modifying our existing backhaul architecture to enable increased capacity to our network at a lower cost by utilizing Ethernet as opposed to our existing time division multiplexing (TDM) technology.”

Sprint said that it’s using Ethernet to save money; it’s apparently applying the technology for use as wireless backhaul to reduce its network costs – an effort that BITG analyst Walter Piecyk estimated “could save between $600 million to $1.2 billion a year of network expense.”

Sprint has been offering Ethernet to businesses since 2007. It’s spending money to modernize its own network, selling newer lines to customers, and talking up its technology to both Wall Street and customers. Those are all great things to do in a competitive market (and, in fact, hard evidence of a competitive market), but Sprint still wants the government to keep its hand on the scale.

So Sprint wants to sell service on those newer lines to business data customers, use others for wireless backhaul to save money, and still force its competitors to pay for regulated “special access” lines that rely on outdated technology.

There’s no reason the FCC should fall for such double speak. Sprint does not need special access regulation; it’s merely using this as a tool to increase its competitors’ costs while reducing its own.

Wall Street accepts (and has for several years) that Sprint has made the investments (a 53% increase in 2012, for instance) to make it a competitor in a competitive Ethernet market.  It doesn’t need “special access” regulations or special protection from the refs (in this case, the FCC).

Like sophisticated voters, government regulators should consider all of the candidates’ statements, not merely those pandering to a single audience.

For more, check out our report “Sprint’s Tale of Two Stories on FCC Special Access Regulation.”

Friday, February 12

Business Broadband Buffet

By Brad

Special Access is receiving a lot of attention these days, mainly due to the FCC’s controversial stance on the topic. And now US Telecom has released three white papers on Special Access and the competitiveness of business broadband. Describing the papers, US Telecom’s Walter McCormick said, “These papers document the huge successes in this marketplace, which are exactly the competitive outcome Congress envisioned, and that the FCC has said it wants to see. We hope the FCC will innovate with us by modernizing policy and regulation so industry can leverage the competition we have today to a greater future for tomorrow.”

Links to the papers below. Happy reading!

Paper 1: “The Broadband Internet Economy is Thriving”

Paper 2: “The Competitive Business Broadband Marketplace”

Paper 3: “The FCC Should Not Pick Winners and Losers”

Monday, February 08

Telecommunications Act Turns 20

By Brad

Late last week, the San Jose Mercury News published an op-ed from our own Rick Boucher and Larry Irving marking the 20th anniversary of the Telecommunications Act of 1996. In the piece, Boucher and Irving discuss how the relatively “light-touch” regulation helped spur broadband growth in America, and how the FCC would be wise to stay the course. An excerpt:

The act’s framers promoted light-touch regulation and a structure that led to an expanding Internet driven by new technologies, devices and applications. These forward-looking Clinton-era policies placed competition and investment as the central catalysts to drive innovation and advance consumer benefits.

Two stark paths now lie before the Federal Communications Commission (FCC): It can advance pro-investment, facilities-based broadband competition or it can discourage investment and broadband build-out.

Check out the full op-ed over at the San Jose Mercury News.

Tuesday, January 26

No Free Rides

By Bruce Mehlman

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In 1973, the Edgar Winter Group scored a Top 20 hit with “Free Ride.” In 2016, Competitive Local Exchange Carriers (CLECs) are trying to score a free ride from the FCC via heavy regulation of special access rates.

While the CLECs like to claim there is a monopoly in the business broadband market, investment numbers say otherwise. Hundreds of billions are being invested in broadband networks, and all that money is not coming from CLECs. No wonder they want the FCC to impose heavy regulations on special access. The CLEC business model is to rely on the regulatory hammer to give them access to networks others have built, and as networks across the nation are upgraded to run on all-IP — and businesses require ever-faster broadband — the CLECs are quickly finding their business model is on thin ice — with spring around the corner.

Still, they continue to bend the FCC’s ear, which is why I continue to write about special access. It’s also why the organization US Telecom has launched a new initiative called “Innovate With Us” to remind policymakers that the broadband market in America is thriving across the board, and in order to keep the good times — and investment dollars — rolling, sensible regulations need to be in place. Or, as US Telecom succinctly put it in the intro to the initiative:

[T]he FCC should champion pro-investment policies that work for business customers, not specific companies, and look beyond yesterday’s technologies toward the networks of the future.

Check out what else the smart folks at US Telecom have to say about special access at the Innovate With Us website. You can also download and share a handy infographic they’ve put together on competition in the special access market and how regulators can continue encouraging private investment in networks.

Thursday, January 14

Asymmetric Regulations

By Bruce Mehlman

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“Competition” is one of those words that make policymakers tingle. And yet, time and time again, private industry finds itself wrestling with regulations that not only harm competition but — in the most extreme cases — actively benefit one party over another.

Case in point: wireline broadband competition. Providers have invested billions to expand the reach and speed of their networks, and yet recent actions taken by the FCC are threatening to stifle ongoing investment. But don’t just take my word for it. Check out this latest study from the American Consumer Institute titled “Concentration by Regulation: How the FCC’s Imposition of Asymmetric Regulations Are Hindering Wireline Broadband Competition in America.”

Yes, that title is quite the mouthful (as most study titles are), and to be honest, unless you’re someone who enjoys diving into studies (with charts) on regulations, investment, and the economy, you might find the report’s 18 pages a bit of a slog. But those of us who do read through ACI’s study will find a convincing — and rather damning — case that the FCC is mistepping rather badly as it continues to amass more and more power over broadband. For example, here’s what the report has to say about one of the biggest regulatory marks the Commission made in 2015:

Title II regulations are preserving and maintaining duplicative and costly copper networks. That cost is an impediment to fiber deployment that keeps ILECs more reliant on older copper-based DSL technologies. Instead of the FCC relieving non-dominant ILECs of Title II regulations in more competitive markets, the FCC has recently chosen to make broadband service providers subject to Title II regulations.

Unless there is action soon, the shift in concentration is likely to be permanent. A decade ago, the rollback of asymmetric regulations permitted modest rebound in broadband services for ILECs, because there was brisk growth in subscribers. Today, because the broadband market is so widespread, growing slower and more mature, asymmetric broadband regulation will likely have longer term consequences that could permanently displace and weaken wireline competition. Even if a rebound is possible, ILECs will face a major cost to win back customers. Regulations are costly and delays in lifting these regulations will be even more costly.

Translation: Old regulations that effect some providers and not others are forcing companies like Verizon and AT&T to invest billions in the copper networks of old. Meanwhile, other providers don’t face such regulatory roadblocks, even as they aim to invest in the very same thing legacy providers are investing in — fiber-backed, high-speed broadband networks. Not exactly the spirit of competition, is it?

The ACI study isn’t all doom and gloom for America’s communications infrastructure, though, for the group has thoughtfully included a three bullet points that can help level the playing field:

• Policymakers need to end Title II regulations for all providers.
• There needs to be less emphasis on regulation of wholesale services. Less regulation will encourage more facility-based investments, which will lead to the natural development of a healthy, wholesale market; and
• If regulators truly believe that some regulation of wholesale services is necessary – and that may be the case in some rural markets – then regulators need to apply these regulations on a symmetrical and competitively neutral basis.

In short, get rid of the bad regulations, be careful when imposing new ones, and make sure everyone is playing under the same rules. Wise words, but the question is: Will the FCC listen?

Monday, January 11

Set “No Rate Regulation of Broadband” in Stone

By Rick Boucher

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In advocating for new regulations, Net Neutrality proponents have consistently made clear that any new rules should not include rate regulation over Internet access services. For example, when President Obama announced his support for regulating the Internet as a Title II service under the Communications Act, he explicitly stated that such effort should include “forbearing from rate regulation.” Likewise, in applying Title II to broadband last May, FCC Chairman Wheeler stated that the Commission’s net neutrality effort would “forgo sections of Title II that pose a meaningful threat to network investment” and specifically declared that the “goal is not to have rate regulation.” Tomorrow, the House Energy & Commerce Subcommittee on Communications & Technology will consider the bill H.R. 2666, “No Rate Regulation of Broadband Internet Access Act,” aimed at codifying these clearly stated intentions into law.

President Obama and Chairman Wheeler were right to reject rate regulation. Any attempt to introduce pricing rules over the dynamic broadband sector would harm consumers by retarding future network investments. Such actions would also strike a blow to the American economy with lost jobs and decreased productivity. H.R. 2666, authored by Rep. Kinzinger, offers a smart, protective measure to help continue the virtuous cycle of innovation that has fueled the Internet’s success. If enacted, his bill would turn the stated intentions of President Obama and Chairman Wheeler into law.

And adopting that law would remove a substantial part of the uncertainty stemming from Title II reclassification of broadband and have the highly positive effect of giving broadband providers greater confidence to increase network investments.

Technological advancement is synonymous with American ingenuity. Successful bi-partisan, light-touch regulatory policies over the past two decades have made the American technology sector the envy of the world, increasing competition, spurring innovation and inviting greater private investment. These polices opened the door to Gigabit level network deployments by AT&T, Comcast, CenturyLink and Google Fiber, and these advances have increased broadband throughput tenfold and made high-bandwidth streaming easier for consumer connected devices.

The subcommittee should approve H.R. 2666, which would bar the FCC from regulating the prices charged for broadband. Without legislation, no guarantee exists to prevent future Commissions from rate regulating the Internet. Congressional action in this area is welcome given that promises are mere words until they are set in stone by statute.

Tuesday, December 08

Let’s Get Nerdy — Larry Irving Talks Title II, Part 4

By IIA

In the final installment of Larry Irving’s Title II discussion, he talks about the role he believes Congress should play in preserving the open Internet, and whether Congress should seek a bi-partisan compromise on net neutrality.

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