Thursday, June 27
Yesterday, IIA partnered with the Joint Center for Political and Economic Studies and the Digital Policy Institute to host “X-Factors of Tech Policy Today: Keeping Pace in the Broadband Race.”
Participating in the discussion were:
• Ralph B. Everett, Esq. – President and CEO, Joint Center for Political and Economic Studies
• Robert Yadon, Ph.D. – Director, Digital Policy Institute
• Barry Umansky, J.D. – Senior Fellow, Digital Policy Institute
• Rick Boucher – Former Congressman; Honorary Chairman, Internet Innovation Alliance
• Maurita Coley, Esq. – Vice President and COO, Minority Media and Telecommunications Council
• John Horrigan Ph.D. – Vice President and Director, Media and Technology Institute, Joint Center for Political and Economic Studies
• Louis Peraertz, Esq. – Legal Advisor, Wireless, International and Public Safety, Office of Acting FCC Chairwoman Mignon C. Clyburn
After Ralph Everett welcomed the crowd and made introductions, Robert Yadon kicked things off by highlighting struggles in the state of Illinois to fully take advantage of technology as a driver of economic recovery. By increasing STEM graduate rates and creating a climate of entrepreneurship, Yadon argued, Illinois could greatly benefit. “States with a solid fiscal policy, light regulatory touch, and educated workforce are most attractive for business and investment,” Yadon said. “The same is true at the national level.”
During the panel discussion, moderator Barry Umansky went right at the issue of spectrum:
One key element of the IP transition is global wireless, which depends upon spectrum. Earlier this year, the U.S. Department of Justice suggested that in the upcoming incentive auctions, limits be imposed on the ability of the larger wireless carriers to participate. Why is or isn’t this a good idea?
Tackling the question, our own Rick Boucher highlighted the fact that mobile data services are growing at five times the rate of the national economy. “This is a consumer issue,” Boucher said. “Consumers have the right to assume that carriers will be able to meet increasing demand.”
Boucher also warned that limiting participation from some carriers would negatively impact more than consumers, stating:
Government needs revenue from the incentive auctions in order to build out the first responder network. Broadcasters have also been promised revenue from putting forward spectrum for auction. The more bidders included in the process, the more revenue will be generated, and the more broadcasters will be willing to provide spectrum.”
All the panelists agreed that freeing up more spectrum for wireless as especially critical for minority and economically disadvantaged communities, which are embracing mobile broadband are a rapid rate. As Minority Media and Telecommunications Council Vice President and COO Maurita Coley put it:
Policies should encourage moving forward with auctions and bringing spectrum to market, and ensure that minority entrepreneurs have the opportunity to participate in auctions. The FCC has the ability to ensure that minority and underserved consumers are not left behind.
The other hot topic during the discussion was the coming transition to all-IP networks. As Umansky asked the panelists:
The FCC Technical Advisory Committee, formerly headed by Chairman Nominee Tom Wheeler, has recommended that the FCC take the steps necessary to sunset the PSTN (Public Switched Telephone Network) by 2016. What are the policy implications of a near-term sunset for broadband deployment and consumers?
In response, Rick Boucher pointed out that current regulations are getting in the way of progress:
While only 25% of customers remain on [the PSTN] network, carriers are forced by law to maintain 100% of the old networks, and the cost of carriers maintaining older networks is the opportunity cost of investment in the new ones.
Boucher also encouraged the Commission to help speed up the transition to all-IP networks. “Consumer interest must be regarded as an informed priority,” he said. “A faster sunset will mean a faster delivery to consumers of services over modern networks.”
Back to the topic of competition, a member of the audience asked what the FCC’s ideal number of players was for a competitive marketplace. In response, Peraertz said:
For [Acting FCC Chairwoman] Mignon Clyburn, there is no set number of players. We look for ways to take a more detailed look at wireless market structure and promoting access for low income and underserved communities.
These were just some of the many highlights from what turned out to be a lively and highly informative discussion. If you’d like to watch the entire event, archived video is available here.
Monday, June 24
This week, the Washington Post hosted a live panel discussion titled “Spectrum Supply and Demand.” Debate was lively; however, there was no disagreement on the need for additional spectrum for the nation’s wireless and digital economy. When leaders of industry, competing companies, and government can agree on anything, it is worth taking notice.
Spirited discussion on the panel regarding wireless policy shared a common premise: The urgent need for more spectrum, a valuable resource that has transformed industries and lives. Additionally, most panelists argued that government action can help by reallocating spectrum for commercial wireless use. Debate arose, however, on the specifics and details of where and how to get more spectrum.
Wireless carriers can acquire more spectrum in three ways: by auction, through government reallocation of spectrum and transfers of spectrum between private entities. The FCC will conduct an incentive auction within the next year or two that will provide broadcasters the opportunity to sell some of their spectrum to mobile carriers. Secondary market transactions allow wireless providers to sell spectrum to other companies who are equipped to use that resource to serve consumers quickly. Both options present a number of challenges not the least because they both rely on government management. Government is the largest holder of spectrum and has the power to bring that to market for consumer use.
On-going inaction by government quickly emerged as a shared frustration, prompting an energetic discussion about the government’s role in reallocating spectrum for consumer use. Initiatives to reallocate government spectrum for consumer use and the need for speed, according to many on the Washington Post panel, are long overdue.
President Obama recently released a Memorandum calling for a federal spectrum inventory to identify possible opportunities for allocation of federal spectrum for consumers. This new initiative could present potential solutions, yet panelists were not hopeful that it would provide a quick fix to the existing spectrum crisis. At bottom, the inventory would help in providing an authoritative account of how much spectrum exists and who holds it within the federal government. Hopefully this will result in meaningful action by government not only to complete an inventory of spectrum but take steps to reallocate spectrum for consumer high-speed broadband use to help stave off the imminent spectrum crunch poised to impact America’s cities, including Washington DC, New York, Chicago, Los Angeles and San Francisco as soon as the next year.
The FCC’s upcoming incentive auction presents a faster solution to the spectrum problem but with no less controversy. Auction design provoked spirited reactions from the panelists. Congress previously mandated that qualified bidders could not be prohibited from participating in the auction and that a portion of the auction proceeds would fund FirstNet, a nationwide public safety broadband network for America’s first responders. As FCC Commissioner Ajit Pai emphasized during the panel, the auction rules must be designed so that the auction is successful for buyers, sellers, public safety and the U.S. Treasury. A complex endeavor.
With this in mind, many believe auction rules should be structured to maximize both participation and proceeds. Establishing fair rules that allow all carriers to participate without restriction will capitalize on the hypercompetitive state of the wireless market. If certain bidders are limited by rules that prevent them from buying needed spectrum (counter to Congressional intent), then auction proceeds would be reduced, jeopardizing revenues, broadcaster participation, and FirstNet’s funding.
By contrast, some panelists favor restrictions on bidding. However, that would lead to reduced proceeds and likely not guarantee greater competition. The companies that would most benefit from bidding restrictions, T-Mobile and Sprint, are both well equipped with spectrum and well-funded by their parent companies. For instance, T-Mobile is owned by Deutsche Telekom, a partly state-owned German company, and by the time the auction takes place, Sprint could have a well-capitalized foreign owner under Japan-based SoftBank. Both companies can reasonably be expected to bid competitively for valuable spectrum without U.S. government intervention to favor their spectrum acquisition goals.
The mobile revolution has transformed modern life and the American economy, and it will inevitably dynamically shape the future, too. But without additional spectrum to meet consumer demand, this could all be at risk. Leaders from a variety of companies, organizations, and government entities agree with that fundamental premise. Yet the mobile revolution can’t change an underlying fact: Ensuring both highly competitive bidding and fair, open rules of the auction will increase the benefits to our country’s broadband infrastructure, and ultimately, to U.S. consumers.
Friday, June 21
In an op-ed for The New York Times, Verizon chairman and chief executive Lowell C. McAdam argues that a light regulatory touch has kept America’s wireless industry booming, and that if we’re going to continue leading the world in mobile broadband, that light regulatory touch needs to continue:
Fifty-six percent of American adults have smartphones that give them access to mobile broadband data and video. Our country is the center of a booming mobile ecosystem in which new devices and applications are being used to do everything from personal health monitoring and e-commerce to tracking deliveries and saving energy.
Contrast this with the European Union, where innovation and investment in advanced networks have stagnated under an onerous regulatory regime that limits investment and innovation, and where today only about 2 percent of households have access to broadband networks with 100-megabit-plus speeds. “Once, Europe led the world in wireless communication: now we have fallen behind,” Neelie Kroes, the European Union official responsible for broadband policy, said in a speech in January. “Europe needs to regain that lead.”
Tuesday, June 18
In an op-ed for Roll Call, our Honorary Chairman Rick Boucher praises FCC Commissioner Jessica Rosenworcel fresh take on spectrum policy, writing:
FCC Commissioner Jessica Rosenworcel… is one official advocating for a more comprehensive approach toward spectrum policy. “To successfully solve this puzzle, we must look at the whole picture. We must address these pieces together,” she said.
Rosenworcel urges an open process, including public hearings, to set rules for the incentive auction in which TV broadcasters who choose to participate will say how much spectrum they will give up and at what price, so the FCC can then resell that spectrum to wireless providers.
She also called for speed and a clearly stated timetable so that wireless service providers can plan their spectrum strategy, TV broadcasters can make final decisions about giving up some of their spectrum, and consumers can be confident that wireless services will be reliable.
“All good deliberations must come to an end,” she explained in calling for a traditional auction of 65 MHz of spectrum in the third quarter of 2014 and the larger incentive auction in the fourth quarter. To make that happen, she said a “bandplan” for assembling the auctioned spectrum must be in place by the third quarter of this year. She has proposed a new approach for spectrum now in the hands of federal government agencies, which control approximately 60 percent of the critical asset.
You can read Boucher’s full op-ed at Roll Call.
Monday, June 17
Our own Bruce Mehlman has penned an op-ed for the Silicon Valley Mercury News on the perils of over-regulating the FCC’s upcoming spectrum auction. Here’s a taste:
In March, 37 senators urged President Barack Obama to appoint Jessica Rosenworcel to chair the Federal Communications Commission. The president instead named the well-qualified venture capitalist and industry veteran Tom Wheeler. Rosenworcel is sure to continue contributing mightily to the FCC as a commissioner, but perhaps the president should consider her for another job—attorney general.
This is not another criticism of the controversies embroiling the Department of Justice. Rather, Rosenworcel’s real contribution would be to offer a breath of fresh air in economic policy in the department, especially with regard to the dynamic tech marketplace.
The Justice Department doesn’t get it. Rosenworcel does. And the department’s anachronistic worldview threatens to delay our mobile broadband future.
You can read the full op-ed over at the Mercury News.
Friday, June 14
As my colleague Rick Boucher has already stated, the spectrum-related initiatives President Obama announced this morning are a “great step” toward getting mobile broadband providers the airwaves they need in order to meet the demands of their customers. That’s the first nugget of good news.
The second nugget of good news, which was also included in this morning’s announcement, is the White House’s report on the state of broadband, which highlights just how far our country has come in providing high-speed Internet access to citizens. Some bullet points from the report:
• In the year 2000, 4.4% of American households had a home connection to broadband; by 2010 that number had jumped to 68%.
• Broadband networks at a baseline speed of >10 megabits per second now reach more than 94% of U.S. homes.
• Overall, average delivered broadband speeds have doubled since 2009. In 2012, North America’s average mobile data connection speed was 2.6 Mbps, the fastest in the world, nearly twice that available in Western Europe, and over five times the global average.
• Annual investment in U.S. wireless networks grew more than 40% between 2009 and 2012, from $21 billion to $30 billion, and exceeds investment by the major oil and gas or auto companies; investment in European wireless networks remained flat during this time period, while wireless investment in Asia (including China) rose only 4%.
• There are over 500 million Internet-connect devices now in American homes and businesses.
Those are some impressive numbers, especially on the investment front, and they underscore just how vibrant and competitive the U.S. wireless market really is.
The numbers also tell us that in order to keep the party lights on, the Federal Communications Commission must pursue policies that encourage investment and innovation. Currently the FCC has two issues burning up its docket. The first is the upcoming spectrum incentive auctions, which need to be transparent and open in order to get the most out of those airwaves. Competition is important – which is already occurring in the telecom market – and so is raising as much money as possible for the U.S. Treasury. Also, we need to ensure companies that can quickly put new spectrum to work powering mobile broadband are in the mix.
The other issue facing the FCC is the upgrade of America’s wired networks so they are better suited for the Internet age. While the baseline speed of >10 megabits per second cited in the White House’s report is good, we can do better. The upgrade to all-Internet based networks will mean substantially faster broadband in more places, but getting there will require substantial investment. It will also mean a close examination — and potential overhaul — of regulations currently governing our nation’s networks.
Neither of these issues is insurmountable, but it will take continued partnership between the government and private industry to keep America at the forefront of both wired and mobile broadband. The numbers in the White House report are encouraging. The President’s push to free up more government spectrum is inspiring. Smart policies when it comes to spectrum auctions and network upgrades will help us hit the trifecta.
Wednesday, June 12
Senator Jay Rockefeller has marked June 18 as the day the Senate Commerce Committee will hold its hearing over FCC Chair nominee Tom Wheeler, according to Broadcasting & Cable’s John Eggerton.
Monday, June 10
Speaking of spectrum and the FCC, in an op-ed for the Wall Street Journal, Robert Hahn and Peter Passell — the former a professor at the University of Oxford, the latter editor of the Milken Institute Review — argue the Commission’s spectrum auctions must be open to all bidders willing to invest and deploy airwaves quickly:
There is still an important role for the FCC in regulating wireless, but it is limited. The first priority should be making more spectrum available to the highest bidders by accelerating the pace of government auctions. Once spectrum is sold, owners should be free to resell it to other wireless carriers (or to other industries that value it more). For without more bandwidth (and free-market allocation of privately controlled spectrum), access to data-hungry services like HD video will be undermined, along with the incentives to develop the next generation of wireless devices.
There’s no denying the temptation to intervene on behalf of the underdogs in the marketplace. But the lessons from the long, checkered history of economic regulation are painfully clear: The cures are often worse than the disease.
For similar thoughts, see this blog post from our Honorary Chairman Rick Boucher.
In an opinion piece for Politico, former FCC advisor David Goodfriend weighs in on recent remarks from FCC Commissioner Jessica Rosenworcel regarding the Commission’s upcoming spectrum incentive auctions:
Rosenworcel articulated how reforms to the FCC’s wireless licensing policy — which allows us to use devices like cellphones and tablet computers — can help millions of consumers and drive job growth in one of the most dynamic sectors of our economy. But her approach should not be limited to telecommunications policy.
Goodfriend goes on to highlight what he’s calling the “Jessica Principles” for crafting spectrum auctions. Among them is putting consumers first, making the process open and transparent, adhering to simplicity:
Well-intentioned, bright people in government often come up with ridiculously complex answers to difficult questions. Every good manager will tell you, though, that simplicity is its own virtue. We should pursue it wherever possible. Rosenworcel addressed one of the most complex tasks facing the FCC today: how to design a license auction where broadcasters have an incentive to sell their licenses back to the public and wireless providers have an incentive to buy those licenses and turn them into useful wireless broadband services for the public. Complex recommendations abound. Rosenworcel’s call for simplicity should be heeded.
Thursday, June 06
An item from reporter David Jackson of USA Today, about President Obama’s plan to stump for education around the country, caught my eye this morning. Specifically, this line:
Obama is likely to call on the Federal Communications Commission to expand a program to bring high-speed Internet connections to 99% of the nation’s students within five years.
That’s an aggressive call to action. It’s also long overdue, given the profound effect high-speed Internet access has on education. The FCC’s bold National Broadband Plan, launched way back in 2010, has been slow to gain momentum, so any sort of kick-start the president can give it is more than welcome.
But as with anything, the devil will be in the details. Funding — especially in cash-strapped municipalities — will be a significant challenge, which means hitting the mark of 99% of students will require a massive amount of private investment.
The good news is, providers are willing to make that investment. The upgrade to all Internet-based networks will greatly expand the reach of broadband access, especially in rural areas. And the FCC’s upcoming spectrum incentive auctions will hopefully deliver much-needed capacity for mobile broadband providers so they can both keep up with demand and connect new customers.
While the FCC can certainly expand its program for deploying high-speed Internet, its true effectiveness in achieving President Obama’s goal will arguably be on the regulatory front. The upgrade to all-Internet based networks and the allocation of more spectrum for wireless face hurdles. For the former, it’s a phone book of regulations enacted way back in 1996, if not decades before. For the latter, it’s the issue of whether certain wireless providers should be limited in participating in spectrum auctions — an unwise move, given the billions the FCC would leave on the table from auction proceeds.
Connecting every student in America to high-speed Internet is certainly achievable. But it will take the government and private industry working together to negotiate the regulatory minefield.
President Obama is setting the target. Now we just need to make sure we can hit it. Every student in America deserves nothing less.
Wednesday, June 05
Yesterday, Sen. John Thune, Ranking Member of the U.S. Senate Committee on Commerce, Science, and Transportation delivered prepared remarks for the Committee’s hearing on the State of Wireless Communications. TMCnet has posted the entirety of Thune’s remarks, but here’s a couple highlights.
On the pressing need for more spectrum, Thune said:
“Without enough spectrum, the private sector will not be able to keep pace with consumer demand, which is growing exponentially. We must make it a priority to increase the availability of spectrum for commercial use, both licensed and unlicensed, as quickly as possible.”
As for how the FCC’s upcoming spectrum incentive auctions should be crafted:
“Getting more spectrum into the marketplace, to the parties that value it most, is ultimately the best way for Federal policymakers to encourage new services and spur competition. Unfortunately, some voices, including the Department of Justice, are calling for the Federal Communications Commission to micromanage the allocation of spectrum among wireless carriers. I stand with Chairman Upton, Chairman Walden, and my other colleagues in the House who challenged this perspective in a letter to the FCC in April. I believe the Commission should not pick winners or losers among individual companies, but instead let all interested participants freely compete against one another in the open market.”
Sen. Thune’s full remarks are definitely worth checking out.
Monday, June 03
There are currently two empty seats at the FCC, and as John Eggerton of Broadcasting & Cable reports, at least one outgoing member believes it’s going to take a while to fill them:
Former FCC commissioner Robert McDowell warned Friday that the replacements for FCC chairman Julius Genachowski and himself might not be installed until late fall, if then.
McDowell was being interviewed by former FCC commissioner Harold Furchtgott-Roth at a Hudson Institute event Friday on “The FCC: Past and Future.” McDowell is now a senior fellow at the Institute.
The FCC currently has a number of pressing issues on its plate, including its upcoming spectrum incentive auctions. With just three members at the moment — Commissioners Pai and Rosenworcel, and Acting Chairwoman Clyburn — a roadblock in the nomination process is bad news for everyone.
Thursday, May 30
Last week Apple announced the 50 billionth app download, despite the App Store being open less than five years. This benchmark is compelling evidence of a vibrant wireless market. However, as more and more Americans embrace mobile technology, wireless providers are running out of spectrum, the wireless airwaves that underpin the mobile industry.
This shortage could affect wireless service. Without additional spectrum, wireless broadband service will deteriorate. Mobile videos could freeze; downloads might take longer; phone calls could drop. None of the nearly half of Americans who own a smartphone want this to happen.
To avoid this looming problem, more spectrum must be made available for consumer wireless use. A wireless auction, designed to reallocate broadcasters spectrum to wireless carriers, is scheduled for 2014.
Not only could this auction provide much-needed additional spectrum for consumer use, but it could raise as much as $26 billion for the federal treasury. A recent study by the Center for Business and Public Policy at Georgetown University sees it as high as $31 billion. Some of this money will go toward building out a nationwide interoperable public safety network. Other monies will go to reimbursing broadcasters for their spectrum.
However, the FCC is considering adopting auction rules that would favor certain wireless service providers over others. Rather than pushing for an open and competitive auction in which all qualified bidders can bid, the Department of Justice and others seek restrictions on who can fully participate in the auction. The aforementioned study found that limiting who can participate in the auction risks the auction’s success. It went on to say that restricting some bidders could mean $12 billion in lost revenue to the federal government.
Moreover, in addition to the monetary cost, tampering with the auction could delay President Obama’s goal of delivering broadband to 98% of Americans by curtailing the expansion of mobile broadband access. The Georgetown study estimates that predicted higher prices could cause fewer Americans to adopt 4G by 2017.
In short, consumers will pay a cost unless the 2014 spectrum auction is done right. However, if the same rules are applied to all, the auction will succeed and all Americans will benefit from the availability of better mobile broadband connections.
Wednesday, May 22
Via John Eggerton of Broadcasting & Cable, acting FCC Chairwoman Mignon Clyburn reiterated the Commission’s focus on mobile broadband while maintaining a “light” regulatory touch:
In her first speech as acting FCC chairwoman, Mignon Clyburn told a CTIA convention audience in Las Vegas Tuesday (May 21), that “maximizing the benefits of mobile communications will continue to be a top priority for the FCC” and that “mobile innovation is key to U.S. competitiveness.”
She said the FCC is on track to issue incentive auction rules by the end of the year.
Friday, May 17
In a speech before the Media Institute yesterday, Craig Silliman, Senior Voce President of Public Policy for Verizon, argued that outdated regulations risk holding back innovation and investment. It’s a similar argument other telecom providers have made recently. As Silliman told the crowd:
[W]e need to ensure is that we do not let an increasingly outdated regulatory regime for the Internet ecosystem slow innovation and investment. The 1996 Telecom Act succeeded in what it was designed to achieve, but almost two decades later it is leaving the FCC struggling to shoehorn Internet-era technologies into phone-era regulations. I am not suggesting that the answer is to abolish all regulation. But I am suggesting that we need a 21st century policy framework that is designed for 21st century technologies and marketplaces, not 19th century ones.
We need to start by asking the right questions. It has been suggested that a key question for the next FCC chairman will be how to keep the FCC relevant in the Internet era. I believe that is the wrong question. I recognize, of course, that tactical battles to secure budgets and resources are part of any organization or entity, including the federal government. But a strategic view of policymaking starts by asking what objective we are trying to achieve, and then asking whether regulation is needed, why it is needed, and who is best placed to administer it.
The full speech is worth checking out.
Tuesday, May 14
Late last week, the FCC’s Technology Transitions Policy Task Force announced it was issuing Public Notice seeking comment on proposed “beta” trials to transition America’s networks to all-IP. Below are reactions to the announcement from IIA leadership.
From Honorary Chairman and former Congressman Rick Boucher:
”The FCC’s recognition of the importance of the move from TDM to all-IP networks is a welcome building block, but it’s disappointing that comprehensive IP transition trials have not been authorized. Only through a comprehensive examination can potential issues be identified and addressed and consumers be protected.”
From Co-Chairman Bruce Mehlman:
“The Commission is steering in the right direction, but traveling at the wrong speed. Fully committing to all-IP networks would bring the greatest benefits to consumers and best-equip America to compete on a global scale. Baby steps won’t keep pace with technology.”
From Co-Chairman Jamal Simmons:
“The three areas on which the FCC seeks comment are all important pieces of the puzzle, but instead of a piecemeal approach to figuring out challenges with the IP Transition, the Commission should quickly adopt a holistic strategy, including well-defined trials in designated wire centers, to bring broadband-enabled benefits in health care, education and entrepreneurship to all Americans.”
For further reading, check out FCC Commissioner Ajit Pai’s statement on the FCC’s Public Notice.
Friday, May 10
It’s official: current Federal Communications Commission (FCC) Chairman Julius Genachowski will be handing over the gavel on May 17th. While Commissioner Mignon Clyburn will lead the agency until Obama nominee Tom Wheeler gets confirmed and sworn in, it’s worth taking a look at the top two pressing issues Wheeler will face once he takes the helm of the Commission.
Agenda Item: IP Transition
The trend is undeniable. Americans are leaving their traditional phone service, dropping their standard connection in favor of wireless and IP-based phone connections. You’re probably one of them. If you have your home phone service bundled with cable, you might not even realize you no longer rely on the plain old telephone service (POTS) network.
With scores of people changing the way they communicate (some estimates peg the number at 500,000 people each month), network providers want to gradually sunset their old networks so they can concentrate billions in investment dollars to new, Internet-based services. In other words, they want to put their money where consumers want to go … and are going.
This transition to all-IP (Internet Protocol) networks won’t be as easy as flipping a switch. Ensuring everyone still has a reliable connection, especially seniors and those living in rural areas, is critical. That’s why AT&T submitted a proposal to the FCC for “beta trials” in select markets to identify potential pitfalls, an idea FCC Commission Ajit Pai strongly endorsed in a speech sponsored by the Hudson Institute back in March. As Pai said in his speech:
Right now, the most critical choice we face is whether to move forward with an All-IP Pilot Program. This program would allow forward-looking companies to choose a discrete set of wire centers where they could turn off their old TDM electronics and migrate consumers to an all-IP platform. Now, you may have noticed that when it comes to the IP transition, everyone has a prediction about what will or will not happen if carriers are allowed to provide services exclusively through an all-IP platform. But as we found out during yesterday’s “snowstorm”—what we Kansans call “weather”—predictions are no substitute for hard facts. Albert Einstein had it right: A “pretty experiment is in itself often more valuable than twenty formulae extracted from our minds.”
Fortunately, we don’t need to rely on formulae any longer. The FCC has sought and received comments on a proposal to create an All-IP Pilot Program. I’ve reviewed the record carefully. And having done so, I am proposing today that the FCC move forward with this program.
Going forward with beta trials is just part of the greater IP transition discussion Wheeler will no doubt be having as head of the FCC. Also on the burner will be regulations — specifically, what will be the regulatory framework in an all-IP world? The 1996 Telecommunications Act is by all accounts painfully outdated. Modernizing rules to keep pace with today’s technology in ways that encourage continued investment in network infrastructure and protect consumers will be critical for the IP transition to succeed. And Wheeler, from the driver’s seat of the FCC, will need to lead the discussion.
Agenda Item: Spectrum
Outgoing Chairman Julius Genachowski deserves a ton of credit for recognizing the coming “spectrum crunch” (as he’s coined it), but the FCC’s proposed solution to the problem — incentive spectrum auctions — is barely past the 50-yard line. The auctions are still being shaped, the details still being argued over. Some are pushing for limited involvement in the auctions by certain wireless providers. Others question whether enough broadcasters will participate to make a difference.
Meanwhile, thousands of Americans are adopting mobile broadband every day. They are firing up smartphones and tablets for the first time and pushing data into the ether. And all that data is joining the bits and bytes being pushed out from tens of millions of other people who are already relying on a wireless connection to the Internet for their daily activities.
To keep up with this flood of data traveling on their networks, wireless providers have been trying to make deals for spectrum left and right. But it’s still not enough, which means a lot will be riding on the FCC’s spectrum auctions. Will Wheeler and the other Commissioners successfully put together proceedings that are open to all qualified bidders? Auctions that maximize much-needed revenue for the Federal government? As my colleague Rick Boucher succinctly put it:
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.
These are the two most critical issues Wheeler will face once he’s in charge of the FCC (and underlying both of those issues is the most important part of his job — increasing access for all Americans to participate in the technological revolution we are experiencing. High-speed access to the Internet only increases in importance as job searches, entrepreneurial opportunities, education and health care are all enhanced by being online). While some have criticized his selection given his past life running both the NCTA and the CTIA, such experience offers encouragement that he has the ability to successfully get the job done. As President Obama remarked during the announcement of his selection:
”If anybody is wondering about Tom’s qualifications… [He] is the only member of both the cable television and the wireless industry hall of fame.”
Here’s hoping Wheeler will one day be inducted into the FCC hall of fame as well.
Monday, May 06
In an op-ed for the Huffington Post, American Consumer Institute for Citizen Research President Steve Pociask worries the FCC may end up hurting consumers with its upcoming spectrum incentive auctions:
A basic principle of any well-designed auction process is that it is open and competitive. However, there are some unsettling news reports that this basic principle may be in jeopardy. For one, there has been some recent coaxing by the Department of Justice that the FCC may want to consider favoring its auction to benefit some small wireless providers over larger ones. Along the same lines, there have been suggestions that the FCC may consider rules to prevent the largest two wireless providers, AT&T and Verizon, from participating in the upcoming auctions. If recent headlines and comments from the FCC Chairman are any indication, Sprint and T-Mobile are “getting stronger” and the reality remains: “Every mobile operator out there, including the largest ones, needs more spectrum.”
Here is the problem—protecting competitors does not help competition, and that hurts consumers. Any action by the FCC that would intentionally benefit some competitors at the expense of others runs counter to the intent of Congress to constrain the FCC’s ability to limit participation in the upcoming spectrum auctions. When it comes to picking favorites in the market, that choice should stay with consumers, not regulators.
Back in February, our own Honorary Chairman Rick Boucher had similar thoughts on the FCC’s auctions:
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.”
Wednesday, May 01
Below is our statement on President Obama nominating Tom Wheeler to replace Julius Genachowski as head of the FCC:
IIA Congratulates Wheeler on Nomination to Be Next FCC Chairman
Recommends modernization, innovation and humility as goals for regulators
WASHINGTON, D.C. – May 1, 2013 – The Internet Innovation Alliance (IIA) today issued the following statement in response to President Obama’s nomination of Tom Wheeler to be the next Chairman of the Federal Communications Commission (FCC):
“Tom Wheeler is well-equipped to lead the Federal Communications Commission during a time that is crucial to the continued expansion and advancement of Internet technology. We congratulate him on his selection to serve as the next chairman of the Commission.
“In this new role, we hope he focuses on enabling the infrastructure investments required to put high-speed broadband access in the hands of more Americans. This resource is critical for education, health and entrepreneurship, and government and business must work together to increase its availability.
“As the leadership transition at the FCC takes shape, we look forward to our continued work with FCC Commissioner Mignon Clyburn who has been named interim Chair of the Commission. Her strong vision and focus on driving programs that will help bring high-speed broadband to more Americans is critical to the Administration’s technology policy goals.”
“As no one can predict the outcome of technological investments made today, modernization, innovation and humility should be the focus of regulators.”
The Hill‘s Brendan Sasso reports President Obama has made his pick to replace outgoing FCC Chairman Julius Genachowski:
President Obama on Wednesday will nominate Tom Wheeler, a former telecom industry lobbyist, to head the Federal Communications Commission (FCC), a White House official confirmed to The Hill.
Commissioner Mignon Clyburn will be named as acting chairman until the Senate confirms Wheeler, the source said.