Thursday, September 26
At a technology conference in London this month, a BMW official gave a remarkable account of the speed at which his company is adopting wireless technologies to improve its cars’ performance.
Last year, according to Vice President of IT Infrastructure Mario Mueller, there were about one million BMWs wirelessly connecting to the web. This year, that number has grown to 2.5 million vehicles, and by 2018 he expects 10 million vehicles wirelessly feeding and receiving data.
Here’s another way of quantifying this remarkable growth: In 2012, BMW had about the same number of wirelessly connected vehicles as are registered in Suffolk County, a leafy suburb of New York City. By 2018, the company expects to have a million more wirelessly connected vehicles than are registered in the entire state of New York.
In terms of mobile data, BMW’s vehicles currently use 40 gigabytes per day. By 2018, the company expects this will grow to a terabyte per day, which is enough data to stream 366 hours of high-definition video, according to Netflix.
BMW’s mobile transformation is one more example of the increasingly urgent need for officials at the Federal Communications Commission (FCC) to hold its upcoming spectrum incentive auction, tentatively planned for late next year. This will be the first major auction of airwaves necessary to handle Americans’ growing mobile data demands since early 2008, when Apple didn’t even have a public App Store.
With more than 20% of all adult cell phone owners doing most of their web browsing on their mobile phones and more than 750,000 jobs that depend on the mobile app economy, there’s immense pressure on the FCC to move quickly.
This is why it is vital that the FCC structure this spectrum auction in a way that promotes the best possible use of this spectrum and generates the most revenue. Above all, the Commission should soundly reject the concept of favoring some bidders over others. An attempt to artificially favor or hinder bidders would be terribly unfair to tens of millions of wireless users who might see degraded service as a result of wireless providers not getting the spectrum they need to serve their customers.
Beyond that, artificial restrictions could cost U.S. taxpayers as much as $12 billion in lost revenue, according to a Georgetown study, much of which would go to fund a nationwide public safety system for first responders. This network will help police and other emergency response personnel to coordinate rescue efforts during emergencies.
The FCC has every reason — sustaining jobs, protecting taxpayers, fostering economic growth — to hold fair and unrestricted auctions. Such an auction is the best way to promote economic vibrancy and the benefits of our wireless marketplace.
For the FCC to do anything less would put our mobile economy on a road to nowhere.
Wednesday, September 11
In a post for The Hill‘s Congress Blog, Brian Fontes, chief executive officer for the National Emergency Number Association, argues that successfully building state-of-the-art public safety networks will require smart spectrum auctions from the FCC:
In order to be successful, however, the auction must generate maximum revenue by capturing the full value of repurposed spectrum. This is the best and perhaps only opportunity to raise the necessary funds for investment in a network we so desperately need. We cannot settle for half-measures and incremental moves – the FCC must take decisive steps and set up an auction that delivers the resources needed to empower our public safety officials.
An incentive auction permitting all bidders to participate will be the most effective way to deliver the funds necessary to build FirstNet and help deploy Next Generation 9-1-1. If the most likely bidders in the auction face participation limits, then as a recent study found, auction proceeds would fall 40 percent. Restrictions, including limits on bids, would likely slash $12 billion in revenue. Broadcasters wishing to make the most of their spectrum holdings will be more hesitant to offer up their airwaves for bidding. A limited spectrum inventory will reduce funds generated from the auction, and jeopardize the future of FirstNet and funding for Next Generation 9-1-1.
In a speech yesterday at the Media Institute, AT&T Senior Executive Vice President Jim Cicconi argued the FCC needed to change with the times or risk becoming irrelevant. As John Eggerton of Broadcasting & Cable reports:
Framing the speech as advice to incoming chairman Tom Wheeler, Cicconi suggested it would be Wheeler’s task to fix the problem rather than Congress’ because it was next to impossible to get any major legislation through Congress.
He said the FCC is still geared to an era when wireline voice was a monopoly, the Internet was nonexistent, broadcaster and cable divided up the video audience and wireless was a niche service.
To make his point, Cicconi offered up some stats. Skype has 500 million registered users. AT&T and Verizon together have 21 million traditional access lines. “What’sApp, a very popular over-the-top text messaging application, sent or received 27 billion texts in one single day…“It’s not complicated,” he says.
“In this situation, the FCC’s historic mission must be modernized to reflect the fundamental evolution in communications that IP technology and the Internet have wrought. If it doesn’t, the agency will become irrelevant,” Cicconi says.
Monday, September 09
In an op-ed for FireceTelecom, our Co-Chairman Jamal Simmons highlights a sensible path forward as America transitions to all Internet-based networks. Here’s a taste:
Antiquated telephone networks were built to handle one-to-one voice communication, but modern fiber-based broadband networks can provide Internet, video and voice services. They enable everything from voice and text messages to social networks, video conferencing, online gaming, digital TV and streaming video. These modern fiber-based networks and services can unlock a world of opportunity, drive technological innovation, create and sustain new jobs, foster powerful economic growth, and spur immense capital investment so that the United States can continue to lead the world.
One of the nation’s largest phone companies AT&T recently proposed to work with the Federal Communications Commission (FCC) to roll out this new technology through real-life test trials in a couple of markets around the country. AT&T seeks to engage federal regulators in a public and transparent process to help bring 21st century networks and services to American consumers. These cautious experiments would replicate the closely observed and very helpful FCC-sponsored DTV market trial in Wilmington, N.C., conducted in advance of the nationwide digital TV broadcasting switchover. When the Wilmington trial revealed a lack of significant switchover problems, the FCC and Congress proceeded more confidently to the nationwide transition, with consumer groups less fearful of the change.
Check out Simmons’ full op-ed over at Fierce Telecom.
Wednesday, August 21
While the FCC continues to design its critical spectrum auctions, there’s grumbling from some corners of the broadcasting world that many broadcasters won’t be voluntarily coughing up their airwaves. As Brendan Sasso of The Hill reports:
Television stations affiliated with the major networks have no interest in selling their broadcast licenses back to the Federal Communications Commission, according to Preston Padden, the director of a coalition of broadcasters who want to sell their licenses.
“To the best of my knowledge, the commission is extremely unlikely to attract affiliates of ABC, CBS, NBC and Fox to this auction,” Padden said during a panel discussion at a Technology Policy Institute conference. “I am not personally aware of any affiliate of a major network who is planning to participate in the auction.”
Hopefully the FCC figures out a way to incentivize affiliates to put their spectrum up for auctions, otherwise it will be hard for the entire auction to succeed.
Friday, August 16
At Light Reading, our Honorary Chairman Rick Boucher argues that open spectrum auctions will open the door to growth. Here’s a taste:
The Federal Communications Commission (FCC) could hand its equivalent of a winning Powerball ticket to select communications companies in the upcoming spectrum auctions. As the FCC creates rules for the incentive auctions, it has the ability to stack the odds, restricting participation in the auctions by some mobile providers and essentially picking winners and losers among our nation’s carriers.
Today, the wireless industry’s future is in the hands of policy makers. The federal government expects to hold spectrum auctions in 2014 in which air frequencies currently used by broadcast television stations, but well-suited for mobile broadband, will be put up for sale. Much is at stake in the way that the auction is structured and in its ultimate success.
Check out Boucher’s full op-ed over at Light Reading.
Monday, August 12
As the FCC prepares for its spectrum incentive auctions next year, there’s a mind-boggling amount of details to be sorted out. Case in point: The FCC’s TVStudy software, which will gauge areas covered by broadcasters and pinpoint possible areas of interference once spectrum one more spectrum is allocated for wireless. As John Eggerton of Broadcasting & Cable reports, while the proposed software is being criticized by some broadcasters, FCC Commissioner Ajit Pai recently took a strong stand in its defense:
Broadcasters have argued the software and data used should be that in existence when the incentive auction law was passed, and that to do otherwise does not square with that law, and in any case is fundamentally flawed.
But in his comments on Friday’s presentation on the status of the incentive auctions, Pai said: ”[B]roadcasters should support updating our software so that it can work on modern computer systems, run more quickly, and perform the type of analysis that will be necessary to support the incentive auction. Likewise, they should be open to including the most recent census data in that software.”
Obviously, this is all very complicated. Which is all the more reason for the FCC to ensure it gets its auction guidelines right.
Wednesday, August 07
IIA Urges FCC to Move Forward to Approve “Real-World Trials” to Accelerate Transition to High-Speed Broadband Internet Services across America
Says regional market trials will provide FCC with evidence to develop forward-looking, pro-investment, pro-consumer policies for build out of next-generation, IP-enabled networks and services
WASHINGTON, D.C. – August 7, 2013 – The Internet Innovation Alliance (IIA) today issued the following statement based on its Reply Comments to the Federal Communications Commission’s (FCC) request for input on the proposed “real-world trials” designed to advance the transition toward nationwide consumer access to next-generation Internet Protocol (IP)-based networks and services:
“Local market trials provide the next step toward speeding the modernization of America’s legacy telephone networks. Initiating market trials for IP network deployment would continue innovation and enhance economic growth resulting from the deployment of next-generation technologies. The Commission’s principal focus should be on how high-speed broadband networks should replace antiquated telephone networks and how market trials can contribute to the development of a new regulatory model that promotes broadband growth, increases subscribership and maintains fundamental and essential consumer protections.
“Real-world market trials offer the best means for assessing the costs and benefits of accelerating the IP Transition and should not be used to help advance certain outmoded business models. Fear of theoretical and unproven harm to certain competitor business models dependent on never-changing regulatory mandates is simply not a compelling reason for inaction. The trials represent a unique window of opportunity to gather information to ensure that the IP Transition will occur with minimal disruption to consumers.
“Market trials should proceed under the same lighter regulatory framework applied to other rapidly-proliferating IP networks, rather than the outmoded and shrinking TDM-based networks. Any market trial should enable IP-based networks to demonstrate their capabilities and the impact of the transition on consumers subject to the same real-world environment in which all other IP networks currently operate. A regulatory hand applying pressure on the scale and conditioning the trials toward certain outcomes is, of course, a prescription for trials that will not be truly scientific and will fail to achieve their basic purpose. Just as we seek to avoid locking in old technology, such as the rotary phone or dial-up Internet service, the nation cannot afford to permanently lock-in old rules that would ultimately harm innovation, job creation and economic growth.”
You can read our full comments both here and at the FCC website.
Monday, August 05
With wireless providers in desperate need of more spectrum, the FCC has been working toward making its incentive auctions happen sometime next year. But as John Eggerton of Broadcasting & Cable reports, Sen. Mark Pryor, chairman of the Senate Communications Subcommittee, believes the Commission may not hit the target:
Asked about the state of the FCC incentive auctions, Pryor said he would be “totally fine” with holding those auctions in 2014, but has heard “rumors” it could slide into 2015 and “guessed” it might just make that slide.
Broadcasters have been arguing that the FCC should not hold itself to 2014, but work on getting the auction “done right rather than right away.” The FCC’s incentive auction point people have suggested it can get it right and meet that 2014 deadline, though that deadline is not set in stone.
Not so fast, the FCC told Eggerton in a follow-up report:
“The Commission’s world-class incentive auction team of economists, auction experts, and engineers is making steady progress towards holding the world’s first incentive auction in 2014; which will free up significant spectrum for mobile broadband use,” said [acting chair Mignon Clyburn’s] spokesman. “The auction is a top institutional priority and we are on track to help deliver faster speeds, greater capacity, and more ubiquitous wireless connectivity to consumers and businesses across the country.”
Friday, August 02
The FCC roster is finally getting back to full strength, as President Obama has nominated Michael O’Reilly for the vacant Republican chair. As Brendan Sasso of The Hill reports:
O’Rielly’s nomination could help pave the way for the confirmation of Tom Wheeler, Obama’s choice for FCC chairman. Republicans were unlikely to back Wheeler unless he was paired with a Republican commissioner.
O’Reilly was previously an aide for Sens. Jon Kyl and John Sununu.
Tuesday, July 30
Our Honorary Chairman Rick Boucher has taken to the digital pages of The Street to argue for smart spectrum policies. Here’s a taste:
Limiting the amount of spectrum these carriers can acquire would potentially rig the auction results, prevent some carriers from getting the spectrum necessary to give customers the service quality they demand, and forestall future wireless innovation. It’s also at odds with Congress’ clear preference for a competitive, level playing field among qualified bidders.
With fewer qualified participants, the auction is less likely to meet Congress’ desire to maximize auction proceeds to fund a planned nationwide public safety broadband network, to compensate broadcasters for the auction of their spectrum and to reduce the federal budget deficit. A recent Georgetown University study contends that severe bidding restrictions could cut revenues by as much as 40%.
Check out Boucher’s full op-ed at The Street.
Monday, July 29
At The Hill, Brendan Sasso reports President Obama’s pick for FCC Chairman will finally get a nomination vote this week:
The Senate Commerce, Science and Transportation Committee is scheduled to vote on Tom Wheeler’s nomination to lead the Federal Communications Commission on Tuesday afternoon.
According to Sasso, it will be a busy week for the committee, which is scheduled to vote on 21 bills and nominations. Not included, though, is a nominee for the FCC Commissioner seat formerly occupied by Robert McDowell. The White House has yet to name a nominee, but rumors inside the Beltway are that Michael O’Reilly, a staffer for Sen. John Cornyn, has the inside track.
Thursday, July 25
At Broadcasting & Cable, John Eggerton highlights a speech from FCC commissioner Ajit Pai earlier today:
FCC commissioner Ajit Pai said Thursday that the commission still had work to do on the mobile spectrum allocation and process reform fronts. He also said the FCC either needs to set an internal schedule for various elements required for holding a broadcast incentive auction in 2014, or if that is not possible reconsider that 2014 date.
That is according to a copy of a speech commissioner Pai was giving on Thursday in Pittsburgh, the city where he delivered his first speech as FCC commissioner a year ago.
Commissioner Pai also spoke to B&C about ongoing efforts to reform the FCC:
“Some of [the reforms] are pretty simple. Establishing more deadlines for ourselves and giving those deadlines some teeth, whether that it is in the context of a rulemaking, saying the FCC should act by such and such a date, or in the context of an adjudication.” He said similarly adding sunset clauses to rules unless they are necessary in the public interest. “I don’t see process reforms like these as partisan and I hope in the coming year we can see some meaningful reforms.”
At The Hill, Brendan Sasso reports on some movement from the House Energy and Commerce Subcommittee on FCC reforms:
Democrats allowed the subcommittee to approve the bills on a voice vote on Thursday after Rep. Greg Walden (R-Ore.), the chairman of the subcommittee and author of the legislation, promised to work to address their concerns over the August recess.
Republicans argue the bills would provide more openness and transparency at the FCC, but Democrats warn they would open the agency up to more litigation and would hamper its ability to protect consumers.
Most agree the FCC needs to tweak its practices given our new technological landscape, but whether a bipartisan agreement can be reached is still up in the air.
Monday, July 22
In an op-ed for Fierce Wireless, Anna-Maria Kovacs, Visiting Senior Policy Scholar at Georgetown University’s Center for Business and Public Policy, makes the case for open spectrum auctions in order to maximize proceeds:
The FCC has tremendous expertise in running auctions, both internally and via external advisors. But it has shown that it can undervalue spectrum radically. Because Auction 73 was open to all bidders, the auction proceeds were not limited to the FCC’s low revenue target. The full market value of the spectrum was revealed in the auction process and obtained for the Treasury. Having built in the safe-guard of openness, the FCC had every reason to be proud of a very successful auction, and to brag in its post-auction press release that it raised $9 billion more than anticipated.
Now imagine that Auction 73 had been run as an exclusionary auction, with some bidders relegated to the bench, to be called out only if that $10 billion revenue target were not reached. The bidders on the field would have had every incentive, collectively, to reach that $10 billion target in order to keep the pinch hitters out of the game. Once they had accomplished that, they would have had no incentive to exceed the target.
Wednesday, July 17
Yesterday, FCC Commissioner Ajit Pai laid out his vision for reforming the E-rate program, which helps connect schools with broadband. At Broadcasting & Cable, John Eggerton has a recap:
[Pai]... enumerated his proposed fixes: “First, I propose that we start by allocating the E-Rate budget across every school in America so that every school board and every parent knows up front, on day one, how much E-Rate funding is available… Second, I propose that we redirect spending away from outdated services and toward next-generation technologies that directly benefit students… Third, I propose that we vastly simplify the E-Rate application process…Fourth, I propose to add real accountability and transparency to the E-Rate process.”
The full text of Pai’s speech, which was delivered to the American Enterprise Institute, is available at the FCC website.
Tuesday, July 16
In a letter to the FCC, eight members of Congress — Rep. John Dingell, Rep. Eliot Engel, Rep. G.K. Butterfield, Rep Gene Green, Rep. Bruce Braley, Rep. Jim Matheson, Rep. John Barrow, and Rep. Paul Tonko — urged the Commission to resist bidding restrictions in its upcoming spectrum incentive auctions. From the letter:
[W]e hope the Commission will avoid any action that would serve as an impediment to the successful build-out of FirstNet. More specifically, we are concerned that the Commission may take action which would have the effect of excluding entities in the forward auction authorized by the Act. All carriers should have a meaningful opportunity to bid for spectrum. Since September 11, 2001, Congress, the Commission, the 9/11 Commission, and others have recognized the urgent need for nationwide interoperable public safety communications. Nearly 12 years later, however, we have failed to achieve this goal. Indeed, the Commission’s prior effort to auction the Upper 700 Megahertz D Block spectrum for public safety use failed due to overly complex and uncertain auction rules adopted by the Commission. We very respectfully request that the Commission avoid repeating that mistake in carrying out the Act’s forward auction.
Back in February, our Honorary Chairman Rick Boucher had similar thoughts when he wrote:
The simple truth is America’s wireless industry continues to be fiercely competitive (in fact, when it comes to spectrum holdings, letter signee Sprint is in arguably the best position due to its partnership with Clearwire). 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.
We’ve uploaded the full letter from members of Congress to the FCC here.
Friday, July 12
Last Wednesday, just before Americans fired up barbecues and fireworks, the FCC approved the sale of Sprint to SoftBank. The deal is worth a reported $21 billion, with SoftBank now owning 78% of America’s third largest wireless company.
Acquiring Sprint gives SoftBank more than a foothold in the highly competitive U.S. wireless market. Thanks to Sprint’s long-standing deal with wireless broadband provider Clearwire — a deal fully consummated when Sprint recently purchased 100% of the company — the Japanese firm is also taking control of a company with a clear lead when it comes to all-important spectrum holdings. In fact Sprint now owns more spectrum than any other wireless carrier.
There’s certainly nothing wrong with that. Due to the explosive growth of mobile broadband, providers are constantly on the hunt for more airwaves. But there is an issue in how Sprint positions its vast spectrum holdings with the FCC.
The last time the FCC updated its spectrum screen — its guide for keeping the wireless market competitive, among other things — was in 2008. In that update, the Commission decided to leave out the majority of Clearwire’s 2.5 GHz spectrum — airwaves that were then, and continue to be, used for mobile broadband.
That’s a sizable chunk of airwaves left out of the FCC’s screen, and as the Commission continues to crafts its upcoming spectrum auctions, it should definitely reconsider its previous decision to exclude it.
That is precisely the opposite of what Sprint wants to happen. The company, despite now being the clear spectrum winner in the U.S. wireless market, continues to argue that two-thirds of Clearwire’s 2.5 GHz spectrum — which was a driver of Sprint’s decision to buy all of Clearwire in order to better position itself for SoftBank’s interest — should still be excluded. They argue, even though they employ these airwaves for mobile broadband, that it’s essentially unsuitable for mobile broadband.
If that argument seems confusing and confoundingly at odds with reality, that’s because it is.
Sprint’s endgame is not confusing, however, as they’re clearly trying to position themselves as a weaker player when it comes to spectrum holdings. It’s a savvy business move, but given how important mobile broadband is becoming to the American economy, it’s also an unfortunate one.
Every provider is in need of more spectrum. They need it to keep up with the demands of their customers, and they need it to keep up with the speed of innovation. The FCC’s spectrum screen is an important tool in the Commission’s toolbox. But it needs to encompass all holdings in order to be effective.
Monday, July 08
In an op-ed for The Hill, our own Jamal Simmons argues that banning some bidders from the FCC’s upcoming spectrum auctions just doesn’t make sense. Here’s a taste:
An independent study by Georgetown University’s Center for Business and Public Policy analyzed the economic impact of restricting participation in the upcoming auctions. The study finds that completely barring Verizon and AT&T from participating in the bidding would reduce auction revenues by about 40 percent, lowering federal auction proceeds as much as $12 billion. Rules that deprive the largest carriers of having a shot at buying more spectrum would also slow down the nationwide transition to faster 4G, fourth generation wireless broadband, and would result in estimated, cumulative losses of 118,400 jobs by 2017. Overreaching restrictions that have the effect of reducing auction proceeds would mean that less spectrum is available for mobile broadband use – a double-whammy that would hurt the American consumer and taxpayer.
Favoring certain bidders in the past, without enough concern for effectiveness, negatively impacted auction proceeds, left major blocks of spectrum unused, and led to what former FCC Chairman Julius Genachowski identified as “America’s looming spectrum crisis.” Going forward, the FCC should instead focus on setting up a fair process that gives all qualified bidders an opportunity to compete in the wireless market.
Check out the full op-ed over at The Hill.
Monday, July 01
Last month, President Obama put forward a bold initiative to connect 99% of American schools with high-speed Internet within the next five years. On Friday, Brendan Sasso of The Hill reports, acting FCC Chairwoman Mignon Clyburn did her part to kickstart the initiative:
In a statement on Friday, Clyburn said the agency’s proposal answers the president’s call “to close our education system’s bandwidth gap by modernizing the E-Rate program and providing our schools and libraries with a path towards affordable access to high-speed broadband.”
“Since its inception, the E-Rate program has succeeded in connecting nearly all U.S. classrooms to the Internet, and in 2010 we took a number of initial steps to cut red tape and help schools get faster speeds for less money. But now, to ensure a robust future for our children, we must equip them with the necessary tools to compete and flourish in an increasingly global and high tech economy,” she said.
For a look at the benefits broadband has on education, check out our “Not Just Generation Text” infographic.