Response from Our Co-Chairs on the FCC’s Latest Open Internet Public Notice

By IIA

We commend the FCC for responding to the recommendations of expert analysts, economists, civil rights organizations, industry groups and members of Congress by continuing to seek consensus rather than pursue burdensome and unnecessary regulations.

The Commission deserves credit for seeking additional input from interested parties, including actual market participants who are innovating, investing and deploying networks. As a bipartisan majority of Congress has urged, on such an important issue we should take the time necessary to get this right and to base policy on facts and reality rather than fear and political rhetoric.

— David Sutphen

Over the past decade, minimal regulation has led to extraordinary investment and adoption of broadband by more than two-thirds of American citizens. The shared goal of an open Internet is best served by a thoughtful, fact-based, targeted and bipartisan approach to new policy directions.

It is critical that processes to find consensus continue. With a well-planned strategy based on input from industry players across the spectrum, we can get every American online and build a world-class Internet ecosystem that makes our country a better, more prosperous and fairer society.

— Bruce Mehlman

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The FCC’s Public Notice

By Bruce

Yesterday, the FCC announced it was delaying a decision on Title II regulations for Internet providers in order to seek more comment on two sticking points in the debate: managed services and whether wireless should be included in new regulations.

Here’s the FCC’s Public Notice about the need for more inquiry (PDF).

Making Progress

By Brad

The Information Technology Industry (ITI), an industry group formed in the wake of the FCC’s Title II announcement last May, continues to hold discussions. From Juliana Gruenwald at Tech Daily Dose:

Information Technology Industry Council President and CEO Dean Garfield put out a progress report Tuesday on his group’s efforts to find some middle ground among the stakeholders battling over the issue of network neutrality, saying there has been “significant progress” while declining to provide any details.

Among ITI’s members are Apple, Microsoft, Intel, and Internet providers.

Seeking More Comments

By Bruce

Sara Jerome at the Hill reports that the FCC will likely seek more comment on proposed net neutrality regulations. Specifically, managed services and whether wireless traffic should be included.

Time for Congress to Step In

By David

Writing for the Daily Caller, Debra Berlyn, president of Consumer Policy Solutions and director of the Consumer Awareness Project, says it’s time for Congress to take the reigns of the net neutrality/Title II debate:

For the past year, a chorus of voices from every corner of the American landscape have expressed to the FCC that onerous regulation of broadband and the reclassification of broadband as a telephone service can result in unintended consequences that limit benefits for consumers. Congress has introduced a resolution to decide if the FCC even has the authority to have jurisdiction over the regulation of broadband. Non-profit and consumer voices have come forward to support this resolution.

As an advocate for consumers on this matter, I have listened to the voices of minority organizations, labor unions, disability rights advocates, women’s groups, senior advocacy groups, rural and farming voices, suppliers, manufacturers, thought leaders on health care and others. They’re all saying the same thing: a quick-fix regulation of broadband services by the FCC isn’t the best approach. Let Congress handle it.

Compromise is Needed

By Brad

At Fierce Telecom, our Co-Chairman Bruce Mehlman says it’s time for the FCC to move past the net neutrality gridlock:

Impossible to miss, headlines highlighting the debate over so-called “net neutrality” have splashed across newspapers around the country for months. While ensuring “a free and open Internet” is a laudable and universally-shared goal, the degree to which it is at risk is very much in dispute. At some point it becomes necessary to weigh real-world problems against hypothetical possibilities, going with what is real and waiting to see if the theoretical threats materialize. From expert analysts to civil rights organizations to members of Congress on both sides of the aisle, thoughtful voices across the spectrum have warned that excessive regulations could chill investment, hinder innovation by failing to anticipate technological development and ultimately kill jobs at a time when our economy needs all the investment, innovation and jobs it can get.

Read the whole thing at Fierce Telecom.

The Sensible Approach

By Bruce

From a must-read editorial in today’s Washington Post on the perils of regulating Internet providers:

The FCC stands poised to reclassify broadband service providers as content carriers, a category that would subject them to the same sort of regulation that telephone companies are saddled with, even giving the FCC the ability to set rates. The agency’s chairman says that the FCC won’t use this power—but this could change in another administration. Such a move would be a serious step backward.

A better route would be legislative enactment of something like the Google-Verizon plan, with an emphasis on transparency about decisions that providers are making. Giving the FCC the authority to nudge things in the right direction will be a good first step. As the Internet evolves, the nature of needed oversight will evolve as well. Establishing a clearly limited power to take action against anti-competitive violations, rather than encumbering this vital sector with detailed and prescriptive regulation, is the sensible approach.

A Real Threat to the Internet

By Brad

With the net neutrality/Title II debate inspiring voices on both sides to declare the the future of the Internet is at risk, The Hill has a quote from former FCC official Blair Levin that needs to be highlighted:

“I think the biggest threat to the Internet ecosystem 10 years from now is a lack of spectrum to be put on the market five years from now.”

Exactly right. The future of the Internet is wireless, and given the amount of spectrum needed — and the time it takes to allocate and auction it — the U.S. is already dangerously behind. That’s what makes the distraction of the current regulation debate so frustrating.

Photo: Ryan Godfrey

The High Price of the Digital Divide

By IIA

IIA Co-Chairman David Sutphen has an article on RollingOut on the high cost the African American community — and other communities currently languishing across the digital divide — are paying:

Unfortunately, too many African Americans are at a competitive disadvantage because they don’t have an important asset in today’s digitally driven society — a broadband Internet connection. At a time when the Internet has become our society’s economic, political and cultural glue, the lack of high-speed broadband access means you’re not competing on a level playing field.

Read David’s full piece at RollingOut.

Leave the Internet Alone

By Brad

At Network World, Michael Morris takes a realist view of the net neutrality debate:

The scare mongering that goes on about Net Neutrality - “those evil companies will block your content” - is overblown just to allow big government bureaucrats to get their hands on the Internet; which for the last 15 years has grown and worked fine by itself.

The proper role of government is to protect your liberty so you can pursue happiness, not grant you happiness by mandating all your P2P traffic gets through. Does any reasonable person believe that Comcast is going to block or slow Google or Facebook traffic? Please. The customer outcry and public relations disaster would be all the shame that is needed to prevent an ISP from blocking meaningful content.

What If Indeed

By Brad

Writing on his blog, Navarrow Wright of Maximum Leverage Solutions (and an IIA Broadband Ambassador) pinpoints an unfortunate reality of the endless net neutrality debate:

What if every ounce of energy, every creative brainstorm session, every dollar, every speech, every rally, every minute that has been devoted to the pseudo issue of Net Neutrality could instead have been aimed at the all-too real problem of broadband access in America’s inner cities, small towns, and low-income neighborhoods? What if?

The Internet and the Role of Government

By Brad

Yesterday, former FCC Chairman Michael Powell discussed the net neutrality debate on Fox Business Channel. Check it out:

Exempting Wireless

By Brad

In an op-ed for the San Jose Mercury News, Larry Downes of the Stanford Law School Center for Internet and Society defends exempting wireless from proposed net neutrality rules:

Why the distinction? As anyone with a smartphone knows, wireless broadband access is seriously constrained by overburdened cellular networks.

There are ways to increase the speed and reliability of cellular networks, but they require a combination of new technologies, additional spectrum allocation and the cooperation of local communities, many of whom resist additional towers and other infrastructure.

So for now a growing consensus of Internet service and content providers acknowledges that wireless network operators need flexibility. To ensure service to all customers, for example, some wireless broadband users may not be able to use cell phones to transfer large files or watch high-definition videos.

Back to the Bargaining Table

By Bruce

The Hill reports that industry talks about net neutrality are once again underway in Washington D.C. without the involvement of the FCC:

“While we’re not involved in these new discussions, we’re glad that there is ongoing dialogue,” said FCC spokeswoman Jen Howard.

Google is also missing from this round of discussions.

Railroading the Internet

By Brad

In the Wall Street Journal, L. Gordon Crovitz warns that the FCC’s move to regulate Internet providers under Title II would just be remaking mistakes from the past:

The Web works best when companies invest in its infrastructure. Google speeds delivery of its services by placing warehouse computer servers near its users around the world. This is not a “neutral” Web, since Google services perform better than others, but accelerating services like Google’s YouTube helps everyone else’s performance on the Web. Network operators need more regulatory certainty that they can get paid—and get new customers—for offering new services, which will make the Web function better for all.

Few seem to realize the similarities between today’s rallying cry of net neutrality and the demands in the 19th century that Washington regulate the rails. The railroads were the Internet of their day, a network of communications, goods and services linking the country together. The Interstate Commerce Commission (ICC) was created in 1887 to ensure fairness and set rates, much as net neutrality proponents today want the Federal Communications Commission (FCC) to regulate traffic on the Web. The unintended result: Regulators protected incumbent railroads from competitors, suppressed new technologies, and left consumers with fewer choices and higher prices.

Lunch in Kansas

By Brad

Last week, IIA Co-Chairman Bruce Mehlman participated in luncheon in Wichita, Kansas to discuss Internet regulation and its effect on investment and innovation. Both the Wichita Eagle and Wichita Liberty have coverage of the event.

Clearing the Air

By Brad

Receiving criticism for its recent net neutrality proposal with Verizon, Google yesterday attempted to clear the air on its Public Policy Blog:

MYTH: Google has “sold out” on network neutrality.

FACT: Google has been the leading corporate voice on the issue of network neutrality over the past five years. No other company is working as tirelessly for an open Internet.

But given political realities, this particular issue has been intractable in Washington for several years now. At this time there are no enforceable protections – at the Federal Communications Commission or anywhere else – against even the worst forms of carrier discrimination against Internet traffic.

With that in mind, we decided to partner with a major broadband provider on the best policy solution we could devise together. We’re not saying this solution is perfect, but we believe that a proposal that locks in key enforceable protections for consumers is preferable to no protection at all.

Guest Blog: Mike Jude

By IIA

Stratecast has released a new study entitled “Net Neutrality & Broadband Access: Hindrance or Help?” which examines the possible effect proposed regulations on broadband providers would have on investment, broadband deployment, and the National Broadband Plan. We’ve asked Mike Jude, Ph.D. of Stratecast to distill some of the study’s findings. — IIA.

Following the Federal Communication Commission’s announcement that it was pursuing reclassification of broadband service until Title II, network operators warned that, even with promises from the FCC about forbearance, an uncertainty of regulation can severely hurt investment.

Our findings back up network operator concerns. For the most important elements influencing investment decisions (such as ARPU [average revenue per user], CAPEX, OPEX, and innovation), risk is the enemy of investment since it inserts uncertainty into the expectations of revenue and return of investment. Put another way, network operators decide how much to invest based on the outlook for long term return. As we note in the study:

ARPU growth is impacted by net neutrality since one can make the assumption that, to the extent that net neutrality impacts the ability of an operator to offer competitive services, it could reduce the revenue per user. The model predicts that such erosion can be significant…ARPU— the amount that an operator can generate per subscriber in the presence of net neutrality — can be as much as $80 per month less at the limits of this projection. Since this amount is almost exclusively derived from premium services, above the access rate, the impact on the operator is obvious — a dubious investment.

Obviously, this loss will have a major impact on network operator revenues — as much as $4-$5 billion per year, as soon as next year. The ripple effect of this loss would also effect the U.S. economy through the loss or prevention of up to 70,000 jobs by the end of 2011.

These are just some of our findings. Overall, we see the potential for great harm in imposing broadband reclassification and net neutrality.

Mike Jude, Ph.D.
Program Manager — Consumer Communications Services, Stratecast

Adoption Up, Support for Broadband Plan Down

By Bruce

The latest report from the Pew Center finds that nationwide home broadband adoption has increased — from 63 percent last year, to 66 percent so far in 2010. That’s the good news. The bad news, the Washington Post reports, is that support for the FCC’s National Broadband Plan is relatively lackluster:

When asked their views about efforts by the government to provide affordable high-speed Internet access to everyone in the country, 53 percent said the government shouldn’t attempt the effort or that it was “not too important” a priority, according to the Pew Center report. The phone survey of 2,252 adults comes as the Obama Administration and Federal Communications Commission have made it a priority to bring broadband Internet connections that are faster and more affordable to all homes.

Obviously, more needs to be done to educate the public at large that bringing broadband to everyone will benefit America as a whole. Unfortunately, the FCC’s current Title II distractions may be getting in the way of that effort.

The full Home Broadband 2010 report is available at the Pew Internet & American Life Project.

Skiing Squirrels and Wireless Traffic

By Bruce

When Google and Verizon announced their agreed upon framework for net neutrality earlier this week, one of the loudest complaints from net neutrality advocates was the plan’s exclusion of wireless broadband outside of transparency rules. But as Fortune Tech reports, the realities of wireless broadband technology — which is still in its infancy — make excluding it from strict net neutrality rules the best option:

If wireless carriers using today’s technology wanted to mimic the capacity of DSL or cable, they’d have to triple the number of towers for each subscriber. Upgrading the network is neither simple nor quick. While it only takes a minute for one anime-over-Android addict in a neighborhood to bring down everyone’s cell service, it takes three years in some cities for a new cell tower to get approved. The carriers want to be able to control their traffic; customers should, too.

Or, as Bernstein Research analyst (and IIA Broadband Ambassador) Craig Moffett describes later in the article:

“Someone gave a very good example… ‘My mother just got a pacemaker that will wirelessly contact the hospital if she suffers from cardiac arrhythmia. Are you telling me it would be illegal to prioritize that traffic over a video of a squirrel on waterskis?’”

For more on the challenges of wireless broadband, see this smart piece from Larry Dignan at ZDNet.