A Pick for Chair

By Brad

Via Brendan Sasso of The Hill, some Senate Democrats are working to influence President Obama’s next pick for FCC Chairman:

Dozens of Senate Democrats are urging President Obama to consider choosing Jessica Rosenworcel to be the next chairwoman of the Federal Communications Commission.

The current FCC chairman, Julius Genachowski, has announced that he will step down in the coming weeks. If selected, Rosenworcel would be the first woman to lead the FCC.

Rosenworcel has been an FCC commissioner since last May. Before that, she served as an adviser to Sen. Jay Rockefeller (D-W.Va.), the chairman of the Commerce, Science and Transportation Committee, which has jurisdiction over the FCC. She has also served as an aide at the FCC and worked in private practice.

All told, 37 Senators signed the letter, which can be read here.

What Competition Means

By Brad

Over on his blog Maximum Entropy, Bret Swanson (who is one of our Broadband Ambassadors) digs in to the FCC’s latest Wireless Competition Report:

Each year the Federal Communications Commission is required to report on competition in the mobile phone market. Following Congress’s mandate to determine the level of industry competition, the FCC, for many years, labeled the industry “effectively competitive.” Then, starting a few years ago, the FCC declined to make such a determination. Yes, there had been some consolidation, it was acknowledged, yet the industry was healthier than ever — more subscribers, more devices, more services, lots of innovation. The failure to achieve the “effectively competitive” label was thus a point of contention.

This year’s “CMRS” — commercial mobile radio services — report again fails to make a designation, one way or the other. Yet whatever the report lacks in official labels, it more than makes up in impressive data.

For example, it shows that as of October 2012, 97.2% of Americans have access to three or more mobile providers, and 92.8% have access to four or more. As for mobile broadband data services, 97.8% have access to two or more providers, and 91.6% have access to three or more.

Swanson goes on to point out that the problem with the FCC not taking a stance on whether the wireless industry is competitive may have more to do with the definition of competitive:

The industry has grown so large, with so many interconnected and dynamic players, it may have outgrown Congress’s request for a specific label.

A Boon for the Economy

By Brad

In a smart op-ed for Politico, former FCC official David Goodfriend and former White House senior member Brad Blakeman make the case that freeing up more spectrum for wireless and accelerating the transition to all-IP networks will be a boon for the American economy:

The FCC can build on the proven economic engine of wireless networks and address the current spectrum shortage by identifying additional spectrum that can be allocated and auctioned to wireless providers for their exclusive use to serve America’s mobile consumers. The agency also can move quickly to carry out a congressional mandate that recently relinquished broadcaster spectrum be made available at auction and re-purposed for consumer mobile broadband services. And just for good measure, it should speed its decision-making process for private spectrum transactions pending before the agency.

A vibrant digital economy requires a regulatory framework that promotes 21st-century wireless and wireline infrastructure. Today, incumbent local exchange carrier wireline networks remain stuck in the past century in terms of technology and regulation. These copper-based networks, first deployed in 1878, were designed primarily to provide voice telephone service when no other network or voice service was available to a consumer. While consumers today communicate using many alternative broadband services and providers — including voice over IP (or VOIP), wireless, email, text and gaming platforms — FCC rules require only incumbent telephone companies to maintain and operate two redundant networks — the old copper network and the advanced high-speed broadband IP networks to which millions of consumers are migrating.

The full op-ed is definitely worth checking out.

The Greatest Value in the World

By Bruce Mehlman

In a smart piece for Fierce Wireless, Anna-Maria Kovacs, Visiting Senior Policy Scholar at Georgetown University, looks at the FCC’s latest Wireless Competition report:

Of course, consumers have myriad other choices with regard to their wireless experience. They choose among various types of service plans:  paid v. prepaid, individual v. family, limited v. unlimited, various mixes of voice/text/data. They also choose among hundreds of devices, a few operating systems, and millions of applications. By the time a consumer has chosen a carrier, a service plan, a device, and operating system, that individual has chosen among literally hundreds of possibilities. It is not surprising that this intense competition at various levels of the wireless ecosystem has provided Americans with the lowest prices and the greatest value in the world.

Kovacs’ analysis echoes our own take on the FCC’s report.

More Bands on the Way

By Brad

Via Phil Goldstein of Fierce Wireless, the FCC is aiming to free up some significant frequencies for wireless use within a year:

The FCC signaled it plans to auction new spectrum blocks, the 1695-1710 MHz band and the 1755-1780 MHz band, as early as 2014, giving the CTIA and wireless carriers another victory in their quest to free up more radio waves for mobile broadband.

FCC Chairman Julius Genachowski wrote about the planned auction in a letter to Lawrence Strickling, head of the National Telecommunications and Information Administration. By law the FCC needs to notify the NTIA at least 18 months prior to the start of any auction.

FCC Changes & Net Neutrality

By Brad

Last Friday, FCC Chairman Julius Genachowski announced he would be stepping down from the Commission. Today, The Hill‘s Brendan Sasso highlights what could be a major challenge for Genachowski’s successor:

The next chairman of the Federal Communications Commission (FCC) could face a high-stakes and politically explosive decision.

If a federal court strikes down the commission’s net neutrality rules, the next chairman will have to decide whether and how to try to reinstate them.

The next chairman’s response to a negative court ruling could spark a vicious fight with congressional Republicans on one hand, or leave the agency almost powerless to regulate modern technologies on the other.

Sasso goes on to report that the outgoing Chairman believes the FCC’s net neutrality rules will stand:

In an interview on Friday, Genachowski said he is confident that the commission will defeat Verizon’s challenge, noting that the same court recently sided with the FCC over data-roaming regulations.

“I think that we won the debate on whether to have an open Internet and whether the government has an appropriate role,” Genachowski said, adding that he believes the regulations have spurred innovation and investment. He declined to comment about the potential for reclassification.

Of course, Genachowski wasn’t the only member of the FCC to announce he was leaving. Commissioner Robert McDowell also announced his departure last week, and in an interview with Jon Brodkin of Ars Technica, he took a parting shot at the Commission’s net neutrality work:

First of all, I’ve been a strong advocate for a free and open Internet. What I opposed really focused on, first of all, there is no market failure that needed to be addressed. Second, the FCC did not have the statutory authority to do what it did. Third, if there had been a problem there were laws already on the books that would have addressed the problem.

There wasn’t a problem before the rules and there’s not a problem with any danger of a closed Internet in this country after the rules. For those who think the rules have preserved an open Internet, that’s sort of like a rooster taking credit for the sunrise.

The FCC Fails to Acknowledge the Success of the Wireless Market

By IIA

Today, the FCC released its 2013 Wireless Competition Report. Rather predictably, the Commission has once again avoided concluding that the wireless market is competitive — despite the fact that four out of five consumers have a choice of five or more wireless service providers. In 2010, the Commission reversed the findings of six successive reports that acknowledged the mobile market’s success.

More Americans are choosing smartphones when they purchase a new phone (67 percent in 2012), and more are using them to go online (104 million in 2011). And according to today’s FCC report, “It is estimated that U.S. mobile data traffic increased 270 percent from 2010 to 2011, and that it has more than doubled each year for the past four years.”

The Commission is painting a picture of the market with this shade of gray to leave room for justification of future wireless regulation. But interestingly enough, FCC Chairman Julius Genachowski this morning stated: “Today, the U.S. broadband economy is thriving. The United States has regained global leadership in key areas of broadband innovation and infrastructure. Thanks to innovative American companies and entrepreneurs — and smart government policies — the U.S. is now the envy of the world in advanced wireless networks, devices, applications, among other areas.”

When measured by availability of consumer choices, options for consumer plans, device alternatives, apps or services, the American wireless market is extraordinarily competitive, far more so than practically any other sector of our economy. Failing to find “effective competition,” as the FCC has again done in this report, is not reflective of market realities.

Federal policy makers should redouble their efforts to make additional spectrum available for auction to commercial broadband providers by quickly conducting incentive auctions, approving secondary market transactions, enacting spectrum sharing arrangements and initiating a process to repurpose additional federal spectrum.

Reactions to Changes at the FCC

By IIA

With the news that Chairman Julius Genachowski will reportedly join Commissioner Robert McDowell and leave the FCC, our leaders reflect on the departures.

On Genachowski:

“Chairman Genachowski has provided a valuable service as FCC chairman. He oversaw the adoption of a comprehensive reform of the federal universal service fund. He has set the stage for the FCC’s consideration of the transition to all Internet Protocol networks. I commend him on his success and wish him well in his future endeavors.” — Honorary Chairman Rick Boucher

“Chairman Genachowski has shown remarkable composure and resilience as FCC chairman while facing cross-pressures to ensure competition while encouraging the innovation necessary to achieve the President’s goal of 98% broadband coverage for Americans. Under his leadership the commission has moved toward freeing up more spectrum and giving fair consideration to the IP transition.
“On a personal note I wish Julius and his wife Rachel well in their future endeavors.”— IIA Co-Chairman Jamal Simmons

On McDowell:

“Rob exemplified the very best traditions in his years on the Commission, serving with honor, intelligence, humor and grace. He had a hand in shaping a great number of policies that improved American competitiveness and helped lay the groundwork for future innovation and tech-led growth. He will be missed.” — Co-Chairman Bruce Mehlman

The Great Online Video Migration

By Brad

Speaking of milestones, online video service YouTube has hit a rather big number. As USA Today reports:

YouTube says more than 1 billion people are now visiting its online video site each month to watch everything from zany clips of cute kittens to sobering scenes of social unrest around the world.

YouTube has always been popular, but a billion people a month is quite the achievement. It also highlights the major shift in viewing habits, with more and more people turning to online video — especially on mobile devices — for entertainment and information. Keeping up with this consumer migration will require a smart path forward from both providers and the government. As our own Jamal Simmons wrote yesterday:

As media companies look for new ways to deliver content directly to mobile devices, wireless companies and the FCC should find new ways to provide the broadband capacity for consumers to enjoy these choices. It is critical that we have a regulatory environment that encourages innovation like freeing up spectrum and exploring the transition to all-IP networks which holds great promise for satisfying consumer broadband demand.

McDowell Moving On

By Brad

FCC Commissioner Robert McDowell, who has been a strong supporter of Internet freedom and allocating more spectrum for wireless use, has announced he is leaving the Commission. As Brendan Sasso of The Hill reports:

“Rob McDowell has been an extraordinary colleague — deeply knowledgeable about the vital and growing communications and tech sector, creative, wise, and a great partner on the Commission,” Genachowski said, adding that he was essential for “landmark reforms,” including overhauling the multibillion-dollar Universal Service Fund and efforts to provide more frequencies for cellphone carriers.

Interestingly, McDowell was regarded as the top pick to head the FCC if Republican Mitt Romney had been elected president last November.

Spurring Investment in Faster Broadband

By Brad

Earlier this week, Robert E. Litan penned an editorial for Bloomberg in advance of his new report (co-authored by Afzal Bari) titled “Faster Broadband: Policies and options for spurring expanded access to the next generation of Internet speeds.” Both in his opinion piece and study, Litan argues that when comes to achieve faster broadband, the FCC should be focusing more on spurring competition than on regulations. From the Bloomberg piece:

We are encouraged that the FCC seems intent on proceeding with its spectrum auctions in 2014 (though we wish this had happened earlier), but are less optimistic that the commission will reverse its policies of the past four years that are inconsistent with the deregulatory agenda that would really unleash competition in the broadband market and accelerate the race for faster broadband speeds.

In Litan and Bari’s study, they dig a lot deeper — specifically when it comes to steps the FCC can take:

One policy that would surely help is speeding up the auctions of wireless spectrum. Other deregulatory measures, aimed primarily at reducing the costs and increasing incentives for wireline broadband providers to build fast broadband networks, also are available:

• Removing legacy regulations on telecom carriers designed for outdated copper networks that discourage investments in modern broadband networks.

• Allowing broadband providers to charge for premium delivery services (just as on-line retailers do for more rapid shipping, and airlines and railroads do for first-class seating).

• Adopting the current case-by-case approach to resolving complaints of discrimination against vertically integrated cable video providers for resolving similar disputes in the broadband arena.

• Eliminating duplicative merger authority by making the FCC an advisor on telecom mergers, with ultimate authority resting with the Justice Department, where it belongs.

• Eliminating the FCC’s ability to condition spectrum purchases on the identity, business plans or spectrum holdings of the bidder, practices which inhibit wireless competition to wireline broadband providers.

You can download of a PDF of Litan and Bari’s study here.

Percentage of the Day

By Brad

25%, which is the amount of American teenagers who now access the Internet on smartphones, according to new results from Pew. As Cecilia Kang of the Washington Post reports:

These young users between the ages of 12 and 17 stand out from adults. About 25 percent of teens use their cellphones to access the Internet, compared to 15 percent of adults.

Pew said this group of “cell-mostly” Internet users portend an explosion of mobile Internet use in the future.

“This is the first time we have measured the cell-mostly population among teens, and we expect this to be an important measure moving forward,” said Mary Madden, a researcher at Pew.

That bolded section from Kang’s article is key. Given that wireless providers are already flirting with capacity on their airwaves, it’s no wonder allocating more spectrum and the transition to all-IP networks are near the top of the FCC’s to-do list.

Swanson on Spectrum

By Brad

At his blog Maximum Entropy, Bret Swanson (who is one of our Broadband Ambassadors) writes about a recent op-ed from FCC Chairman Julius Genachowski in the Wall Street Journal:

Chairman Genachowski is right to herald the incentive auctions that could unleash hundreds of megahertz of un- and under-used spectrum from the old TV broadcasters. Yet wrangling over the rules of the auctions could stretch on, delaying the the process. Worse, the rules themselves could restrict who can bid on or buy new spectrum, effectively allowing the FCC to favor certain firms, technologies, or friends at the expense of the best spectrum allocation. We’ve seen before that centrally planned spectrum allocations don’t work. The fact that the FCC is contemplating such an approach is worrisome. It runs counter to the policies that led to today’s mobile success.

Swanson’s full post is worth checking out, as is a recent post from our own Bruce Mehlman on Genachowski’s spectrum vision..

Tech & Texas

By Bruce Mehlman

The city of Austin is some 1,500 miles away from Washington, D.C., but during my time at the South by Southwest tech conference over the weekend, I couldn’t help but see a strong connection between what was happening at the conference and what is currently being debated inside the Beltway.

SXSW is all about startups, gadgets, and apps, and this year’s conference was especially heavy on the hardware. From wearable computers and smart thermostats, to new game consoles and miniscule cameras, cool devices were everywhere. Exploring the conference, you can’t help but think over and over again that we live in truly amazing times. But as a tech policy wonk, I was constantly reminded there are crucial issues on the table in Washington that could have a dramatic effect on the gadgets of tomorrow.

One is the critical need for more spectrum for mobile broadband providers, a problem the FCC’s upcoming incentive auctions could go a long way toward solving — as long as they are open to all bidders.

The other is the coming transition to all-IP networks, and the regulatory hurdles that could slow the process down. Last week, FCC Commissioner Ajit Pai said he strongly supported pilot programs to explore sun-setting legacy copper network in favor of IP. Hopefully, his fellow Commissioners agree.

If SXSW attendees this past weekend thought about the networks that power all the cool devices on display, they were probably focused on signal strength or how fast a tweet made it off their smartphone. Mobile broadband has come so far so fast that it’s already close to an afterthought. But without ongoing investment and smart policies, all the innovation on display in Austin could be hampered by congested networks and red tape applied 1,500 miles away. SXSW is an event where cool ideas take off. Washington is a place where regulatory hurdles can easily ground ideas before they have a chance to leave the runway.

Commissioner Pai Strongly Supports Pilot Programs for IP Transition

By Brad

At an event hosted by the Hudson Institute earlier today, FCC Chairman Ajit Pai discussed the transition to all-IP networks. During his speech, Pai spoke of two paths the Commission could take when it comes to regulations and technology. One path is rooted in the past — and outdates rules — that could hinder investment and innovation. The other path leads to the future, or the “all-IP world,” as he called it, which has great benefits for health care, education, public safety, and most of all consumers.

Noting that the FCC up until now had a foot on each path, Pai didn’t shy away from his belief that the Commission should be working toward the future, stating the FCC’s decisions around the IP transistion will have “dramatic and real world consequences.” He then made plain his preference for a pilot program — put forward to the FCC by AT&T — to upgrade legacy copper networks to all-IP. As John Eggerton of Broadcasting & Cable reports:

“The FCC has sought and received comments on a proposal to create an All-IP Pilot Program,” Pai said in a speech to the Hudson Institute. “I’ve reviewed the record carefully. And having done so, I am proposing today that the FCC move forward with this program.”

Pai also noted that in 2011 alone, there were over 317 million wireless connections in the U.S., and at least 47% of all households had “cut the cord” — meaning, dropped traditional landline service in favor of wireless or VoIP. This, he joked, pointed to the IP transition being as “inevitable as another reality series starring a Kardashian.”

You can watch a replay of Pai’s speech here.

Genachowski on Spectrum Auctions

By Bruce Mehlman

In today’s Wall Street Journal, FCC Chairman Julius Genachowski goes over the many steps the Commission is taking to free up more spectrum from wireless use. Calling broadband the “engine for economic growth,” he starts out his op-ed by backing up that statement:

To sustain long-term economic health, America needs growth engines, areas of the economy that hold real promise of major expansion. Few sectors have more job-creating innovation potential than broadband, particularly mobile broadband.

Genachowski then highlights how the U.S. now leads the world in 4G LTE deployment (along with the fact that private investment in mobile infrastructure is “more than 50% higher than in Europe”), but warns that in order to keep both deployment and investment happening, more airwaves are critical. As he writes:

Spectrum is finite, and the demand for airwaves being created by data-hungry, Internet-connected devices is on pace to exceed supply. How significant is the spike in demand? Today’s smartphones generate 50 times more mobile traffic than a traditional cellphone. For tablets, it’s 120 times more traffic. As a result, American wireless networks are running at the highest utilization rate of any in the world.

One solution to this problem, Genachowski tells readers of the Journal, is the Commission’s upcoming spectrum incentive auctions, which have the potential to both free up airwaves and deliver much needed revenue to the Federal Government. That’s potentially a win-win, as they say. But as our own Rick Boucher wrote this past February, the key to making the FCC’s initiative successful for consumers and the economy is ensuring spectrum auctions are open to all bidders. Boucher:

History has shown that when the FCC has tried to pick winners and losers in the wireless market, American consumers have lost. Past attempts by the Commission to favor certain bidders and/or impose rigid regulations on auction winners have drastically diminished auction proceeds, left major blocks of spectrum unused, and led to what FCC Chairman Julius Genachowski himself has labeled “America’s looming spectrum crisis.”

The simple truth is America’s wireless industry continues to be fiercely competitive… Allowing the FCC to impose conditions on spectrum auctions will not make the industry more competitive. And the spectrum critically needed by all providers to keep up with increasing demand will not be put to its full use, leading to spectrum shortages, reduced investment and innovation, and higher prices for consumers.

Only through truly competitive, open spectrum auctions will America’s wireless industry continue to thrive. After all, the best way to ensure competition is to encourage everyone to compete.

Genachowski and the entire FCC deserve praise for their tireless work to keep this critically important issue on the front burner. But given mobile broadband’s benefits — not just to consumers and the economy, but to communities, education, and the health care industry — ensuring spectrum incentive auctions are open to all those willing to make the substantial private investment to keep rapid deployment going should be at the top of the list. As Genachowski himself wrote in his op-ed:

Private-sector innovation in mobile broadband has been extraordinary. But maintaining the creative momentum in wireless networks, devices and apps will need an equally innovative wireless policy, or jobs and growth will be left on the table.

Statement on Beta Trials For All-IP Transition

By IIA

IIA Says Proposed Beta Trials Are Best Way to Accelerate the Transition to All-IP Networks and Services in America

Emphasizes that consumer trends and explosive broadband growth have ended ILEC dominance in voice market

WASHINGTON, D.C. – February 25, 2013 – The Internet Innovation Alliance (IIA) today issued the following statement regarding its reply comments on AT&T’s Internet Protocol Transition Petition and its comments on the United States Telecom Association’s (USTA) Petition calling on the FCC to declare incumbent local exchange carriers (ILECs) as non-dominant in the provision of switched access services:

“AT&T’s proposed limited beta trials epitomize sound policy-making and will provide an open and transparent process in which the FCC can accelerate the transition to all-IP networks and services in America. Initial comments fail to make a compelling argument on why the FCC should not move forward with the beta trials. Consumer trends, particularly the overwhelming preference for wireless and Internet-based services as the primary means of communications over plain old telephone service, demonstrate that ILECs are no longer dominant in thevoice market. The evidence suggests the consumer benefits associated with the IP transition far outweigh any potential costs identified by opponents.

“Failing to acknowledge the dynamic innovation, economic growth, and overall benefits the broadband market offers to consumers and businesses as a result of a ‘light touch’ regulatory approach ignores the primary reason why the Internet has flourished in the U.S. Despite this success, certain commenters now seek torevisit the FCC’s previous forbearance decisions by looking for ways to bring ‘old rules to all networks.’ To continue expanding the array of social and economic benefits for American business and consumers, the Commission should ignore the call of entities seeking to expand legacy regulations in an all-IP world.”

To read the IIA’s full comments, visit here, or go to the FCC’s website.

Minor Changes

By Bruce Mehlman

The last major revision of the Teleommunications Act occurred way back in 1996 (our Honorary Chairman Rick Boucher, who was chair of the Energy and Commerce Subcommittee on Communications, Technology, and the Internet at the time, recently wrote about the Act for Roll Call). Given how radically things have changed since then, it’s a good thing the law included provisions, such as in Section 10, that allow the FCC to forebear.  But as Paul Barbagallo of Bloomberg reports, at least one former FCC Chairman believes any changes to the Act will be minor:

Congress is likely to make small tweaks to the Communications Act, despite calls for a major rewrite of the statute, Richard Wiley, chairman of Wiley Rein LLP, said Feb. 19.

The last revision to the Communications Act, in 1996, took Congress nearly ten years to complete, and was itself the first major update to the law since 1934, Wiley noted during an event hosted by the Hudson Institute, a conservative policy and research group in Washington.

“I would like to see a big new statute,” Wiley said. “I think that would make sense for the country. But I’m not sure how soon that would happen.”

On the FCC Decision to Make More Spectrum Available for Unlicensed Devices in the 5 GHz Band

By IIA

We applaud the FCC’s notice of proposed rulemaking (NPRM) that seeks to explore the possible future release of frequencies in the 5 MHz band for Wi-Fi.

As more Americans continue to depend on the anytime, anywhere advantages of mobile technology — the nation faces new opportunities and challenges in making next-generation services more widely accessible to the public. Explosive growth in wireless broadband services continues as consumers’ demand for the latest mobile devices, services and applications increases the need for additional spectrum in the wireless market. Government must take a multi-pronged approach to alleviate the imminent spectrum crunch to advance the benefits of wireless broadband for all Americans.

Allocating the 5 GHz band for unlicensed Wi-Fi devices makes sense, given that it provides limited geographic coverage to avoid radio frequency interference. Consumers stand to benefit from this unlicensed spectrum through increased speeds and decreased congestion at a variety of locations including airports, Internet cafes and community anchor institutions across the nation.

Beyond this proceeding, the FCC should move quickly to launch its incentive auction to unlock additional spectrum for high-speed wireless broadband for both licensed and unlicensed spectrum use to maximize the benefits for America’s businesses and consumers.

Profile of the Commish

By Brad

Over at Bloomberg Businessweek, Todd Shields looks at the tenure of FCC Chairman Julius Genachowski, specifically his heavy focus on broadband:

Genachowski has warned U.S. economic growth could be compromised if wireless demand from smartphones overwhelms available airwaves. His pending initiatives include auctions, perhaps next year, that will encourage television-station owners to give up their airwaves for use by smartphone networks.

His focus on broadband has broken with some priorities of his predecessors. Genachowski’s FCC has levied no fines for broadcast indecency, after a flurry of penalties under Republican chairmen from 2003 to 2008, and he hasn’t completed a loosening of media-ownership rules.

Shields’ full profile is worth checking out.