IIA Statement on FCC’s Intended Regulation of Business Data Services
FCC Chairman Wheeler today released the summary on his intended regulation of Business Data Services. Here is IIA’s response:
Today, we witness, with great disappointment, the FCC Chairman’s plan to re-regulate all copper-based legacy business data services throughout the nation. We fear that American businesses and consumers will ultimately be ill-served by an expert agency that ignores record evidence of robust competition in the market and instead opts for market intervention to favor certain service providers to the disadvantage of others. We hope that a majority at the agency will recognize the potential harm of this plan and will call for a return to long-held bi-partisan policies aimed at spurring innovation and promoting greater broadband infrastructure investment.
IIA Encourages FCC to Recognize Competitive Business Data Services Market
IIA Encourages FCC to Recognize Competitive Business Data Services Market and Questions FCC’s Plan to Price Regulate
Says price regulation will inhibit next generation 5G broadband deployment and negatively impact broadband deployment in Rural America
WASHINGTON, DC – August 9, 2016 – In light of the “special access” data collected by the Federal Communications Commission (FCC), the Internet Innovation Alliance (IIA) today encouraged the Commission to recognize that the business data services (BDS) – or special access – market is increasingly competitive. In its Reply Comments in the FCC’s Business Data Services Proceeding, IIA emphasized that there is no justification for intrusive, ex ante regulation of the BDS market and made clear that regulation of the BDS market is in no way necessary to achieve the deployment of 5G technology.
“The best economic regulation proceeds from a firm foundation of data,” commented Bruce Mehlman, founding co-chairman of the IIA. “The Commission’s existing data set conclusively shows that the nation’s BDS market is very competitive and growing more so every day.”
Mehlman added, “Return to price regulation in broadband markets will discourage critically-needed investments in 5G mobile broadband networks nationwide.”
PRICE REGULATION OF LEGACY AND ETHERNET BUSINESS DATA SERVICES WILL DETER THE INVESTMENT NECESSARY FOR UBIQUITOUS HIGH-SPEED BROADBAND DEPLOYMENT
Only the private sector can provide investment necessary for BDS deployment. As the FCC previously recognized, $350 billion of investment is needed to meet the Nation’s high-speed broadband needs. Investment capital at that level can come only from the private sector, not from government. Similarly, private investors will invest only where they can reasonably envision a positive return on their investment. Thus, to meet the growing demand for ubiquitous nationwide high-speed broadband deployment – including the BDS market – government should advance only those policies that actively promote and encourage, rather than deter, private investment.
Investment has promoted and will continue to promote real competition in the BDS market. IIA’s studies affirm how the business broadband market has evolved (and continues to evolve) far past the point at which ongoing regulation of this market can be justified. By the end of 2015, wireline competitors, including cable and CLECs, had roughly the same number of business broadband lines as the Incumbent Local Exchange Carriers (ILECs). CLECs seek to continue to rely on incumbents’ networks where they can, rather than employing a business strategy based on true facilities-based investment and competition.
Further Competitive Local Exchange Carrier (CLEC) investment would be easy but continues to lag. Facilities-based competition is accessible for the vast majority of buildings for which there is BDS demand. The FCC’s record highlights how 25% of buildings connected only to ILEC services with demand for BDS services are 17 feet away from the nearest competitive provider’s fiber network, 50% are 88 feet away, and 75% are within 456 feet. If CLEC providers truly wished to serve these buildings, they would have few difficulties building out nearby fiber to them. CLECs have made a business decision to ignore direct facilities-based competition and rely on other carriers’ capital investments to reach customers, rather than to adopt policies that will promote investment and thus benefit the economy as a whole.
REGULATION OF BDS IS IN NO WAY NECESSARY FOR 5G DEPLOYMENT AND WILL IN FACT HARM AND SLOW 5G DEPLOYMENT
The rapid deployment of fiber to date has occurred without the heavy hand of regulation, and there is no reason to doubt that it will continue. The robust fiber build-out to the nation’s existing macro cell towers to facilitate the transition to 4G wireless networks is an excellent barometer of how the market responds to business opportunities presented in the wireless backhaul market.
THE NASCENT DEVELOPMENT OF 5G TECHNOLOGY ARGUES AGAINST THE COMMISSION’S JUSTIFICATION FOR BDS REGULATION
The new 5G networks will transmit data at Gigabit speeds and will, by definition, not be able to use TDM-based megabit speeds. Thus, the regulation of legacy networks is irrelevant to future 5G deployment. The Commission simply cannot use the market-driven transition to 5G networks as justification for ex ante regulation, which would seem to steer the direction of 5G evolution rather than letting the technology evolve and markets along with it.
INVESTMENT AND DEPLOYMENT OF BROADBAND NETWORKS AND SERVICES IN RURAL AMERICA WILL SUFFER UNDER THE FCC’S PROPOSED BDS PRICE REGULATION
High-speed broadband is deployed most quickly when investors have incentives to invest in these deployments. A system that imposes price regulation and lowers profit margins for investors will not provide the necessary incentives for rapid deployment of 5G technology (or even 4G technology) to rural America.
Rick Boucher, a representative for 28 years of Virginia’s most rural and mountainous congressional district who now serves as honorary chairman of the IIA, commented, “The Commission cannot simply overlook the reality of the BDS market and remain true to its and the Administration’s commitment that all Americans, and all American businesses, including rural hospitals and educational institutions that are the lifeblood of many local communities, deserve excellent and fast broadband services.”
To read the Internet Innovation Alliance’s Reply Comments in full, go to http://bit.ly/2b6bAIN.
IIA Events at RNC and DNC
IIA Hosts Events at RNC and DNC to Explore How Internet Investment and Innovation Have Empowered Americans to Shape Presidential Races
Pew Research Center to present its latest data on campaign communications, followed by panels of experts and events at both parties’ national conventions for further discussion
WASHINGTON, DC – July 18, 2016 – The light-touch regulatory framework of the 1996 Telecom Act set the stage for extensive internet network investment and innovation. To examine how this investment and innovation have empowered Americans to shape presidential races, the Internet Innovation Alliance (IIA) is today hosting “From Netscape to Snapchat: Politics in the Age of Broadband” at the Rock and Roll Hall of Fame in Cleveland from 12-2pm ET, during the Republican National Convention (RNC). To watch the event livestream starting at noon ET, visit here.
IIA will hold an event focused on the same topic with different speakers at the Democratic National Convention (DNC) next Wednesday, July 27th from 5-7pm ET. To RSVP, visit.
IIA’s events at the RNC and DNC will open with a presentation by Amy Mitchell, Director of Journalism Research at Pew Research Center, on “Presidential Campaigns & The Developing Role of Digital Connections.” At 10am ET this morning, Pew Research Center released its latest data on campaign communications, revealing findings such as the following:
• 65% of Americans now get campaign news online.
• 30% of U.S. adults have turned to the Clinton or Trump campaigns for news and information about the election.
• In a study of the Facebook and Twitter pages of each candidate from May 11-31, 2016, 78% of Donald Trump’s posts that contain links send readers to news media, compared to only 15% of Hillary Clinton’s Facebook posts that contain links. On Twitter, the numbers are 48% and 25%, respectively. Clinton, on the other hand, is more likely to direct readers to her own campaign pages. On Facebook, 80% of links in Clinton’s posts go to her campaign site, compared with none of the links in Trump’s posts. On Twitter, the numbers are 60% and 20%, respectively.
• On Twitter, 78% of Trump’s retweets are of tweets from accounts of the general public, compared to none of Clinton’s retweets. On the other hand, none of Trump’s retweets are of tweets from his campaign account, compared with 80% of Clinton’s that come from her campaign account.
• Nearly 3-in-5 Americans are already worn-out by the amount of election coverage.
For more interesting numbers on “Presidential Campaigns & The Developing Role of Digital Connections,” read Pew Research Center’s full report at their website.
After Mitchell’s presentation at each convention, she will join the distinguished speakers below for panel discussions:
• Lee Dunn: Senior Counsel, Google
• Sara Fagen: Co-Founder, Deep Root Analytics; Partner, FleishmanHillard’s specialty brand DDC
• Patrick Ruffini: Co-Founder, Echelon Insights; Chairman and Founder, Engage
• Bruce Mehlman (moderator): Founding Co-Chairman, Internet Innovation Alliance
Speakers for IIA’s event at the DNC, which will be moderated by IIA Co-Chairman Jamal Simmons with opening remarks from Congressman Rick Boucher, former Chairman of the House Energy and Commerce Committee’s Subcommittee on Communications and the Internet and Honorary Chairman of IIA, will be announced later this week.
The discussion at each event will explore:
• How has the way that presidential campaigns reach American voters evolved since 1996?
• How are Americans interacting with presidential campaigns today using social media and the web?
• Can social media have a truly significant impact on the outcome of a presidential race?
• Has the political process been effectively democratized by broadband?
“During the 1996 re-election campaign, presidential candidates primarily reached voters through traditional media – one-way communication,” explained Mehlman. “Americans were limited in how they could make their voices heard: writing or faxing a letter, picking up the phone, or visiting with candidates in-person. Today, there are many new channels for two-way and multi-way communication between presidential campaigns and voters.”
Simmons added, “Americans are not only accessing campaign news and information from an array of sources online, but they’re also shaping the conversation themselves via many of those same channels. The light-touch, bipartisan internet policy promoted by the Bill Clinton Administration paved the way for the immense investment and innovation that fostered the vibrant broadband ecosystem that we have today. Thanks to the internet, presidential campaign communications have evolved to the benefit of Americans.”
To join the Twitter conversation around IIA’s events at the RNC and DNC, use the hashtags #IIARNC16 and #IIADNC16. To learn more about the Internet Innovation Alliance, go to www.internetinnovation.org.
IIA Event on Virtual Reality
IIA Holds Event in San Francisco to Examine How Policymakers Can Support Innovation and Investment in Broadband Infrastructure to Expand Virtual Reality Ecosystem
Cocktail hour, demos and panel of experts at startup incubator Upload Collective will explore future of virtual reality
SAN FRANCISCO, CA – July 13, 2016 – Virtual reality will transform entertainment, education, business, healthcare and more. Today, the Internet Innovation Alliance (IIA) hosted, “Cocktails & Virtual Reality: Breaking Innovation Boundaries with Broadband,” an event focused on how policymakers can support innovation and investment in high-speed internet infrastructure to help unlock the opportunities of a virtual reality ecosystem.
Nearly 150 individuals are registered to attend IIA’s event at Upload Collective, a hybrid co-working and incubation space in San Francisco. The group will convene at 6:00pm PT for a cocktail hour and virtual reality demos. During the second hour of the event, a panel discussion will be held to explore:
• What opportunities will virtual reality technology unlock over the next decade?
• How should the broadband network evolve to support the growth of virtual reality?
• How can policymakers best support innovation and virtual reality?
Featured speakers for the panel include:
• Evan Helda, Director of Sales and Partnerships, Meta Co.
• Anjney Midha, Founding Partner, Kleiner Perkins Caufield Byers (KPCB) Edge
• Tony Parisi, Co-Creator of the VRML and X3D ISO standards for networked 3D graphics, Upload Collective
• Alisha Seam, Product Developer and Solutions Engineer, AT&T Foundry
• Adam Thierer, Senior Research Fellow, Technology Policy Program at the Mercatus Center at George Mason University.
“Behind breakthrough virtual reality advancements sits a broadband infrastructure that must evolve with these innovations,” said Jamal Simmons, co-chairman of the IIA and moderator for the panel discussion. “Policymakers have an important role to play in encouraging the broadband investment needed to support new, bandwidth-hungry technologies and fostering an environment that promotes innovation.”
New IIA Economic Study
New IIA Economic Study: U.S. Broadband and ICT Sector Adds More than $1 Trillion in Annual Value for the American Economy under Light-Touch Regulation
Report authors Hassett and Shapiro argue that the broadband/ICT sector has grown dramatically under light regulation, and increased regulation could slow Internet ecosystem investment and impair other sectors that depend on broadband/ICT technologies
WASHINGTON, D.C. – May 5, 2016 – For the past decade, the broadband and information and communications technologies (ICT) sector has fueled enormous growth and development in the American economy, according to a new 20-page report from the Internet Innovation Alliance (IIA) that analyzes broad trends in the economic value, output, and employment in this key sector. The study concludes that the Federal Communications Commission’s (FCC) effort to impose Title II regulation on broadband providers could “adversely affect broadband/ICT sector investment, with potentially significant secondary costs for the other industries that depend on it and the overall American economy,” the study states.
Authored by Kevin A. Hassett and Robert J. Shapiro, “The Impact of Broadband and Related Information and Communications Technologies on the American Economy” highlights how steady demand for the broadband/ICT sector’s goods and services has helped spur U.S. employment and GDP growth over the past decade. Principal findings of the research include:
· In 2014, the U.S. broadband/ICT sector produced $1,019.2 billion in value added for the American economy, equal to 5.9 percent of U.S. GDP of $17,420.7 billion in 2014. “This substantial share of all U.S. economic value added has been roughly stable for the past decade and likely understates the sector’s full contribution by undervaluing technological improvements,” the paper explains.
· The use of U.S. broadband/ICT goods and services by U.S. private industries, and the information sector (and government), contributed an additional $692.0 billion in output in 2014, equal to 2.7 percent of their combined output and 4.0 percent of GDP. Including the government sector, the use of U.S. broadband/ICT goods and services by other industries and sectors contributed $843.3 billion in output in 2014, equal to 2.9 percent of their combined output and 4.8 percent of GDP.
· The companies that comprise the broadband/ICT sector employed 4,933,000 workers (full-time equivalents or FTE) in 2014, or 4.2 percent of all U.S. private employment and 3.5 percent of all non-farm employment. Demand by the broadband/ICT sector for goods and services produced by other industries was responsible for an additional 2,784,683 jobs (FTE) in 2014. All told, the broadband/ICT sector was responsible for 7,717,683 jobs (FTE) in 2014, or 6.4 percent of all U.S. private employment and 5.5 percent of all non-farm employment.
· The average compensation of broadband/ICT sector workers in 2014 was $104,390, 59.3 percent greater than the average compensation earned by other U.S. workers ($65,517).
“The large economic gains associated with the broadband and ICT sector have flourished in an environment of light federal regulation,” commented Hassett and Shapiro. “The FCC’s proposed regulation of broadband Internet Service Providers (ISPs) and their service offerings would stifle broadband/ICT sector investment, growth and employment, negatively impacting the American economy.”
“Today, high-speed Internet is the backbone for 21st century economic growth in the digital economy,” said Rick Boucher, a former Democratic congressman who chaired the Energy and Commerce Subcommittee on Communications and the Internet and now serves as honorary chairman of the IIA. “Unnecessary price regulation in competitive broadband markets will have far-reaching negative impacts on U.S. economic growth and development. Without ample investment in modern networks, consumers and the entire broadband ecosystem – from ISPs to edge providers – will suffer from reduced innovation and fewer cutting edge broadband services, as well as reduced jobs and economic growth in the nation’s Internet economy.”
Read the study.
The Homework Gap
FCC Commissioner Jessica Rosenworcel Visits String Theory Charter School for IIA-Hosted Discussion on Closing the “Homework Gap”
Tours school campus and visits classrooms to see first-hand the transformation of education through technology at an Apple Distinguished School
Philadelphia, PA – April 4, 2016 – Federal Communications Commissioner (FCC) Jessica Rosenworcel today traveled to Philadelphia to tour String Theory Charter Schools’ Vine Street Campus (5th grade through 12th grade) and make classroom visits to see the application of modern technology in a next-generation, “Apple Distinguished School” setting.
Commissioner Rosenworcel has championed changes to U.S. Internet and Wi-Fi policies to provide American students greater access to 21st century broadband technologies. She coined the term “Homework Gap” that now commonly refers to the difficulty students experience completing homework when they lack high-speed Internet access at home.
According to Pew Research, seven in 10 teachers assign homework that requires Internet access, but five million of the 29 million U.S. households with school-aged children lack regular access to broadband. Unfortunately, a 2015 Consortium for School Networking (CoSN) survey reveals that three in four U.S. school districts report that they are not currently doing anything to address technology access outside of school.
“The Homework Gap is real – for one in five kids in our country, it’s a daily struggle that is standing in the way of them reaching their full potential,” commented Internet Innovation Alliance (IIA) Co-Chairman Jamal Simmons. “Affordability is a barrier to high-speed Internet access for low-income families. The FCC’s decision to add broadband to the Lifeline subsidy program last week is a significant step toward closing this digital divide.”
After touring the digital accomplishments of the Vine Street Campus, Commissioner Rosenworcel and Jason Corosanite, Co-Founder & Chief Innovation Officer of String Theory Schools, joined String Theory educators, administrators, parents and local business supporters in a roundtable discussion moderated by IIA’s Jamal Simmons that focused on “Closing the Homework Gap: Technology Lessons Learned in Advancing Education.”
Commissioner Rosenworcel’s in-depth conversation on the Homework Gap generated thoughtful discussion and innovative ideas in response to the following issues:
• How is technology transforming education?
• Is wireless broadband sufficient for completing homework assignments?
• What are the major barriers to home broadband adoption?
• Are there any federal programs that can help bridge the divide?
• How can the public and private sectors, educators and parents, partner to help close the Homework Gap?
“Technology is pervasive in today’s world, and the educational environment should reflect that to keep kids interested and engaged, and enable them to be innovative and productive,” stated Corosanite. “Rather than taking place in a vacuum, a well-rounded educational approach should train students to perform later in life. Kids without digital skills will fall behind.”
Half of all jobs now require some level of technology skills, according to the U.S. Bureau of Labor Statistics. Experts say that number will surpass three-quarters (77%) within the next decade.
To see photos from Commissioner Rosenworcel’s tour of String Theory Schools in Philadelphia today, and to learn more about the digital divide, go to www.internetinnovation.org.
IIA Outlines 7 Principles for Internet Policy in Memo to the Presidential Field
Advises the next President on an agenda to continue progress of the broadband revolution
WASHINGTON, D.C. – March 17, 2016 – Today, the Internet Innovation Alliance (IIA) sent a four-page, bipartisan letter to presidential candidates Hillary Clinton, Ted Cruz, John Kasich, Bernie Sanders, and Donald Trump. IIA’s “Memorandum for the Next President” focuses on the success of the broadband and wireless revolutions to-date, enabled by policies that promoted investment and innovation, and identifies fundamental principles for Internet policy to continue growth.
“Broadband policy is an issue on which we can unite to advance economic growth and prosperity for all,” commented IIA Honorary Chairman Rick Boucher, who was a member of the U.S. House for 28 years and chaired the House Energy and Commerce Committee’s Subcommittee on Communications and the Internet. “With the Telecommunications Act of 1996, Congress and the President took a visionary path and said the best way forward was to promote investment, competition and innovation. Now, we have an opportunity to build on the foundation established over the past two decades and extend the benefits of the broadband revolution to more Americans.”
IIA outlined the path forward for Internet policy as follows:
• Show preference for private sector investment. Government alone can’t build out broadband networks or find the tens of billions of dollars every year necessary to keep pace with technological change and demand. Maintain the conditions under which private sector investment can flourish.
• Promote competition – and recognize that it exists. Cross-platform competition is a reality and will only continue to become more intense if government does not interfere.
• Effectively manage spectrum resources, balancing the needs of the private sector and government spectrum users, and licensed and unlicensed uses. Continue efforts to make spectrum available for mobile broadband by either reallocating spectrum currently used for other purposes or making underutilized government-controlled spectrum available for commercial wireless services. Policymakers should also continue to ensure the right mix in making spectrum available for licensed and unlicensed services.
• Maintain an open Internet, with appropriate protections for non-discrimination. The courts may strike down the Federal Communications Commission’s (FCC) new net neutrality rules. The FCC had it right the first time in 2010 when it published reasonable rules necessary to preserve the Open Internet and ensure non-discrimination among network providers and access to information. Encourage Congress to codify those rules in statute law.
• Assure access to connectivity, irrespective of geography or income, through universal service. More rural investment and more investment in schools and educational institutions is needed. In November 2014, the FCC put forward great ideas on universal service reform, focused on modernizing the Lifeline program, expanding it to cover broadband, closing the “homework gap,” and giving consumers more power over how they spend their Lifeline dollars – while deterring waste, fraud and abuse. Continue moving forward with reform efforts.
• Protect the privacy and security of users. Today, different privacy rules apply to the same information traversing the Internet, depending on the regulatory classification of a particular service provider. Policymakers should engage in open discussions across the broadband industry, along with privacy advocacy groups, on the best way to reach agreement on future consumer protections.
• Think through a new Telecommunications Act. While the 1996 Act has been a great success, it’s time to update the Act to reflect current conditions and the competitive markets that now exist. A new regulatory model that ensures government does not slow down the pace of innovation is needed.
“Wise policy choices over the last 20 years have given the country a spectacularly successful run of innovation and investment, but our continued success will hinge on the choices the next Administration makes with regard to broadband policy,” said IIA Founding Co-Chair Bruce Mehlman. “Policymakers have an opportunity to build bipartisan cooperation, a better economy, and maintain America’s technological edge.”
To read IIA’s full Memorandum for the Next President, go to http://internetinnovation.org/library/special-reports/to-the-next-president/.
Sprint’s Conflicting Stories to Wall Street and Washington
IIA Fact Check Reveals Sprint’s Conflicting Stories to Wall Street and Washington on the Need for Regulated Special Access Services and Competition in the Market
Sprint tells Wall Street that competitive market eliminates need for special access, yet lobbies Washington to continue regulation for competitive advantage
WASHINGTON, D.C. – February 17, 2016 – Today, the Internet Innovation Alliance (IIA) released a Sprint Fact Check document that highlights Sprint’s continuing conflicting statements regarding special access. The document, “Fact Check: Sprint’s Tale of Two Stories on FCC Special Access Regulation,” highlights multiple instances of Sprint telling Wall Street how the competitive communications marketplace eliminates the need for regulated special access services, while at the same time lobbying Washington to continue and extend outdated regulations over antiquated networks to advance its own competitive standing.
In a September 2015 Federal Communications Commission (FCC) filing, Sprint lobbied Washington regulators on its need for regulated access to copper-based business data lines. According to Sprint access to this antiquated technology is vital since “Sprint and other competitors will depend on both TDM and Ethernet special access more than ever to be able to compete.” This echoed a similar plea from Sprint in comments to the FCC in February 2013.
Sprint, however, alters its tune to Wall Street, where it consistently boasts of cost savings achieved by its investment to modernize and upgrade its network, aimed at reducing its dependency on FCC-mandated incumbent business data circuits. Sprint has repeatedly informed the Securities and Exchange Commission (SEC) that it purchases alternative Ethernet services in the competitive marketplace as a replacement for special access. In SEC filings every year from 2011 to 2015, Sprint repeated these messages. For example, in multiple filings, Sprint contends that it is: “…modifying [its] existing backhaul architecture to enable increased capacity to [its] network at a lower cost by utilizing Ethernet as opposed to [its] existing time division multiplexing (TDM) technology.”
“As the FCC moves forward on whether to extend mandated access to copper-based incumbent business services in a highly competitive market, it should give significant weight to what rent-seeking competitors are saying to the SEC and Wall Street about the wide availability and competitive prowess of their next-generation fiber-based business services,” commented Bruce Mehlman, founding co-chairman of IIA.
IIA contends that, “Instead of managed competition [through special access regulation], it’s time for everyone who wants to compete in the telephone system of the future to invest in new technologies rather than in trying to convince the government to hold on to the past.”
Read IIA’s Fact Check on Sprint
IIA REPORT: CONSUMERS CAN SET ASIDE $10,500 ANNUALLY
IIA REPORT: CONSUMERS CAN SET ASIDE $10,500 ANNUALLY BY UTILIZING HIGH-SPEED INTERNET AS A MONEY-SAVING TOOL
Potential broadband-enabled savings rose 55 percent over five-year period thanks to new online offerings, virtual marketplaces, Internet tools and mobile applications
WASHINGTON, D.C. – December 10, 2015 – High-speed Internet enables Americans to save an average of $11,944 per year on household spending, the Internet Innovation Alliance (IIA) today announced. After factoring in the average annual cost of a mobile data plan and a home broadband connection ($1,440), the annual savings still add up to more than $10,500. The financial analysis, “10 Ways You Can Be Money-Savvy with Broadband,” was authored by Nicholas J. Delgado, certified financial planner and principal of Chicago-based wealth management firm Dignitas, in partnership with IIA.
Since 2010, IIA has calculated potential Internet-enabled savings in 10 different categories, factoring in data from the Bureau of Labor Statistics’ annual Consumer Expenditure Survey and opportunities to take advantage of online offerings that replace traditional consumption, along with virtual marketplaces, Internet tools and mobile applications for web-exclusive discounts and effective comparison shopping. Over the past five years, the amount of money that consumers can keep in their pockets by utilizing high-speed Internet as a tool has shot up 55%, from $7,707 annual savings in 2010 to $11,944 annual savings in 2015, largely thanks to innovators who continue to reimagine the consumer experience. Of note, household income before taxes rose 6.4% from $62,857 in 2009 to $66,877 in 2014, and average annual expenditures per consumer unit climbed 9.0% from $49,067 in 2009 to $53,495 in 2014.
“Without question, the return on investment in broadband connectivity outweighs the cost, with unmatched chances for deal comparison, competitive pricing, and group-buying,” said Delgado. “Online-only discounts, coupons and sales can be exciting, so it’s important to keep your impulses in check to avoid over-spending.”
Drawing from the 2014 Consumer Expenditure Survey released on September 3, 2015 by the Bureau of Labor Statistics, IIA’s 2015 installment in its Cost Campaign series analyzed what the typical American family can save yearly on necessities like housing, food and clothing; basics including entertainment, gasoline and health insurance; and everyday services like bill pay and news, through opportunities only available via the Internet.
The savings are based on average spending in each category for the typical U.S. household, according to the Bureau of Labor Statistics.
Compared to IIA’s financial analysis in 2013, the greatest increases in savings opportunities emerged in the Entertainment and Automotive categories. As part of the Entertainment category, IIA this year calculated savings that consumers can garner by cutting the cord. The average annual cost for cable TV is $1,188.00, whereas the price for a year of online streaming via Netflix is $119.88, allowing consumers to save $1,068.12 over 12 months by making the switch. For the Automotive category, in previous years IIA applied a $500 one-time savings factor cited in the Edmunds article “Dealership Internet Departments vs. Traditional Car Buying” to the average new car price ($30,748.00 in 2012, for example, according to TrueCar.com). This year, IIA applied a $3,000 average, one-time savings factor available to TrueCar.com users, according to the company, to the average new car price in 2014 ($32,386, according to Edmunds).
“Closing the digital divide has never been more important,” said IIA Co-Chair Jamal Simmons. “Not having broadband access has real consequences, such as missed opportunities to save that add up to a significant amount of money.”
Simmons added, “It’s critical that policymakers continue encouraging the investment needed to expand broadband networks to every corner of the nation and advance educational efforts that increase digital literacy and show Americans how the Internet is relevant to their lives. The benefits of saving money, I might add, are universal.”
For more information on the study’s sources, methodology and a “Top 10 Ways Being Online Saves You Money” infographic that can be added to a website or blog, go to www.internetinnovation.org/savings.
Ensuring 21st Century Connectivity for Low-Income Americans
Fundamental reforms should include expanding the Lifeline Program to cover broadband and completely overhauling program administration
WASHINGTON, D.C. – August 31, 2015 – Today, the Internet Innovation Alliance (“IIA”) urged the Federal Communications Commission (“FCC”) to embrace fundamental and sweeping reform as the agency moves forward in its effort to modernize the existing federal Lifeline Program. Only a “sea change” in the program’s current design will advance the goal of creating a 21st Century program capable of efficiently and effectively delivering broadband Internet technologies and meaningful opportunities to America’s low-income consumers, according to IIA.
IIA’s comments filed today in response to the FCC’s Further Notice of Proposed Rulemaking (FNPRM) on Lifeline Program modernization emphasize the core need to include broadband as a new eligible service under Lifeline. IIA contends that the failure to update the program to include high-speed Internet would potentially jeopardize Lifeline’s future existence.
“The time for bold action is now. As Commissioner Clyburn aptly noted, Lifeline reform gives us a unique opportunity to ‘rid us of antiquated constructs’ and ‘design a future-proof program that enables low-income consumers to have access to broadband services comparable to everyone else,’” commented Rick Boucher, a former Democratic congressman who chaired the Energy and Commerce Subcommittee on Communications and the Internet and now serves as honorary chairman of the IIA.
Beyond making broadband an eligible Lifeline service, IIA’s filing urges the FCC to squarely address existing structural flaws that today hamstring the program and the Lifeline marketplace. IIA proposes that the Commission move swiftly to adopt the following essential reforms:
1. Safeguard the Lifeline Program by taking eligibility determinations away from self-interested service providers.
In its comments, IIA enthusiastically supports the FCC’s proposal to remove the responsibility of consumer eligibility determination from Lifeline providers. IIA points out that determining eligibility for receiving benefits from a government program is an inherently governmental function; as such, eligibility determinations should not be left to service providers that may have improper economic incentives to increase enrollment.
2. Simplify and protect the Lifeline Program by vesting administration in a state agency using a “coordinated enrollment” and de-enrollment process.
IIA supports relying on state governmental agencies as the neutral entities charged with using a coordinated enrollment process to verify consumer eligibility and administer the enrollment and de-enrollment processes. Under this process, consumers determined eligible to receive Supplemental Nutrition Assistance (SNAP) by the State would automatically be deemed eligible to receive Lifeline assistance. IIA believes that a reformed federal Lifeline program should link eligibility determination to a single, mature assistance program – SNAP – which would increase administrative efficiency, promote participation by both consumers and service providers, and reduce the potential for waste, fraud, and abuse.
3. Empower consumers and promote dignity with a “Lifeline Benefit Card” – a direct-to-consumer benefit.
To preserve and advance the personal dignity of Lifeline beneficiaries, IIA believes that Lifeline Program benefits should be transferred directly to the consumer using a “Lifeline Benefit Card” or similar approach (e.g., coordinated enrollment taking advantage of existing SNAP EBT cards and adding the Lifeline benefit to that EBT card). Eligible consumers could use the “Lifeline Benefit Card” as a voucher to buy whichever communications service meets their needs from authorized and registered providers, whether broadband, wireline, or wireless voice service (on a stand-alone or bundled basis).
4. Incentivize voluntary participation in the Lifeline Program by cutting red tape.
IIA recommends delinking the ETC designation from the Lifeline Program so subsidy recipients receive the complete benefits of robust competition that full service provider participation could offer. Removing existing regulatory roadblocks will make it easier for service providers to participate in Lifeline and incentivize them to compete for the purchasing power of Lifeline consumers.
Boucher added, “IIA stands with Commissioner Clyburn and her fellow Commissioners in the belief that the time for comprehensive Lifeline reform is now to ensure the relevance and fiscal integrity of the program so that all Americans may participate fully in the broadband century.”
To read IIA’s Lifeline filing in full, go to http://bit.ly/1Ubontg.
IIA Calls FCC Tech Transitions Vote a Missed Opportunity that Holds Back the IP Transition
Says giving select competitors the ability to influence copper retirement plans creates harmful market incentives that ultimately favor some providers over others
WASHINGTON, D.C. – August 6, 2015 – Responding to the Federal Communication Commission’s (“FCC”) tech transitions vote, the Internet Innovation Alliance (IIA) issued the following statement:
“The FCC today missed a unique opportunity to accelerate the nation’s transition toward an IP future.
“With less than five percent of Americans relying exclusively on traditional, copper-line plain old telephone service (POTS), and three out of four communications users having already transitioned onto IP-based services, setting ‘rules of the road’ to protect consumers and advance these modern services is appropriate, welcomed, and timely.
“Today’s FCC decision, however, takes an unnecessary and harmful detour to the past. Instead of focusing exclusively on how to accelerate IP-based broadband network investment, deployment and consumer adoption, the Commission has chosen to micromanage life support for the fading wireline copper network.
“The agency’s action translates into burdensome rules that create greater obstacles to retiring antiquated 20th century copper-based telephone equipment. By impeding the retirement of outdated technology, the FCC’s requirements will divert resources necessary to invest in the upgrade toward new, next-generation, high-speed broadband Internet networks.
“Giving a select group of competitors, which continue to rely on the copper telephone network due to their failure to invest in their own advanced networks, the ability to influence copper retirement plans creates harmful market incentives that ultimately favor some providers over others, and runs contrary to the Administration and FCC’s National Broadband Plan goal of modernizing our nation’s communications networks for the benefit of the American consumer.
“Today’s consumers want the benefits of high-speed, reliable IP-based networks, and there is no turning back. Americans stream millions of hours of video content, stay in touch with friends and family in video chats daily, and are integrating online learning into their lives at a rapid pace. The new world we have entered relies on these services and untold others that we can’t predict today. It’s important for industry and the FCC to give consumers more access to the benefits on the horizon—with common sense rules—and not hold on to the sentiments of the past.
“IIA supports a wired network transition that makes IP-based networks and services more widely available and improves the quality of life for all Americans. We believe the Commission should embrace initiatives that speed the nation toward an IP-based future, and revisit and reject those that unnecessarily anchor us to the past.”
IIA Sends Letter to FCC Supporting Action to Modernize Federal Lifeline Program
WASHINGTON, D.C. – June 11, 2015 – On the heels of Federal Communications Commission (“FCC”) Chairman Tom Wheeler’s proposal to restructure and modernize the Commission’s Lifeline program, the Internet Innovation Alliance (“IIA”) issued the following statement regarding its letter to the FCC, sent today in support of the rulemaking proceeding soon to be initiated to advance Lifeline reform:
From the letter, signed by IIA Chairmen Rick Boucher, Bruce Mehlman, Larry Irving and Jamal Simmons:
“The Internet serves as a 21st century tool that promotes civic engagement and enables citizens to access education, healthcare, government services and job opportunities. Not having high-speed broadband service limits access to the benefits and opportunities offered in today’s global digital economy.
“In the U.S., consumers with economic means have nearly ubiquitous access to broadband, yet almost two-thirds of our nation’s low-income community continues to seek that similar opportunity. Without broadband availability, low-income families face an uphill battle in obtaining the American dream.
“In bringing Lifeline into the 21st century, broadband should be included as an integral, more affordable offering of the program, and consumers should be empowered by providing the subsidy directly to eligible people instead of companies. Moreover, to enhance administrative efficiency, we urge the FCC to shift program eligibility verification away from companies that are not accountable to the American people, and instead allow states to verify eligibility for Lifeline at the same time they determine consumer eligibility for other federal low-income programs. Such ‘coordinated enrollment’ would benefit consumers by streamlining the eligibility process and ultimately enable subsidy recipients to receive a ‘Lifeline Benefit Card’ where consumers could apply the funds to the provider of their choosing. These reforms would make program participation for all service providers more attractive, thereby broadening consumer choice and stimulating competition for the low-income consumer purchasing power.
“IIA applauds the Commission for quickly moving forward to initiate a new proceeding aimed to advance Lifeline reform this year. The time for reform is now, the need is great, and the goal is achievable. “
To read IIA’s full letter to the FCC, go to www.internetinnovation.org/library/special-reports/regarding-the-future-of-lifeline/.
Additionally, last November IIA publicly released a white paper noting how the federal Lifeline Program “is outdated in today’s highly competitive broadband environment” and needs to be retooled for the modern broadband communications age. To review “Bringing the FCC’s Lifeline Program into the 21st Century”, visit http://internetinnovation.org/library/special-reports/lifeline/.
IIA Highlights Legal Infirmities of FCC’s Recent Net Neutrality Decision
Timeline infographic and two-pager underscore the need for a bi-partisan congressional solution that preserves Internet openness and restores light regulatory touch for broadband
WASHINGTON, D.C. – May 21, 2015 – The Federal Communications Commission’s (FCC) decision to apply public utility-style Title II regulation to the broadband ecosystem reversed nearly 50 years of communications policy that gave consumers a vibrant Internet, according to two informational documents released by the Internet Innovation Alliance (IIA). A timeline infographic created by IIA makes clear how decades of Congressional, FCC, and Court decisions have consistently held that Internet access service was not a “telecom service” and was therefore exempt from Title II regulation. IIA’s two-pager that accompanies the timeline – titled “Permanently Securing Net Neutrality” – reveals the legal infirmities of the FCC’s net neutrality rules.
“Some believe that network neutrality principles are secured through the FCC’s reclassification decision that treats broadband as a common carrier, but the reclassification rests on a bed of sand,” explained Rick Boucher, a former Democratic congressman who chaired the House Energy and Commerce Subcommittee on Communications and the Internet and now serves as honorary chairman of the IIA. “It can be washed away in the next presidential election that could produce a Republican FCC majority or it could be overturned in the courts given its legal vulnerability.”
Boucher added, “The best way forward is for Congress to pass bipartisan legislation, which gives statutory permanence to network neutrality and returns broadband to its information services, lightly-regulated status.”
According to IIA’s release, the FCC’s decision to reclassify broadband Internet access service as a “telecommunications service” subject to Title II common carrier regulation is contrary to all FCC and U.S. communications policy since computer technology issues emerged nearly 50 years ago. Since Congress adopted the 1996 Telecommunications Act, the FCC, in multiple decisions, has consistently found that Internet access service is an information service and therefore not subject to Title II regulation.
The IIA release states that the FCC failed to legally and factually justify its policy decision that abruptly reversed course. From the two-pager:
The Commission justifies its abrupt reversal in course on the increased use of web services, such as email, that are provided by parties other than the party that provides the Internet access, as well as increased advertisement by Internet access providers of transmission speeds. These considerations are legally irrelevant. These changes in the marketplace do not affect the fundamental capabilities offered by Internet access and do not provide a basis to ignore the clear and broad statutory definition of an information service that Congress provided and the FCC has repeatedly adopted.
As part of IIA’s informational document rollout, Boucher was today joined by Kathleen Sullivan – a partner of Quinn, Emanuel, Urquhart & Sullivan, a constitutional law expert, and former dean of Stanford Law School – during a press teleconference to discuss the political and legal fragilities of the FCC’s recent decision, as well as the broader implications of Title II broadband reclassification. To listen to the call recording and download IIA’s new timeline infographic and two-pager, go to www.internetinnovation.org/library/special-reports/permanently-securing-net-neutrality/.
IIA Encourages Congress to Craft Legislation
IIA Encourages Congress to Craft Legislation to Avoid Legal Challenges and Market Uncertainty with FCC’s Net Neutrality Decision
Says permanent net neutrality rules will advance Internet openness, continued investment and innovation in broadband economy
WASHINGTON, D.C. – April 13, 2015 – Responding to the publication of the Federal Communication Commission’s (FCC) Title II Net Neutrality decision in the Federal Register, the Internet Innovation Alliance (IIA) issued the following statement:
“Today’s Federal Register publication of the Federal Communication Commission’s Title II Net Neutrality decision starts the clock on potential legal challenges of the agency’s decision, given that its rules will soon take effect. Instead of relying on the uncertain future of public utility regulation soon to be imposed on the Internet, we encourage Congress to use this window of opportunity to craft legislation that sets forth permanent rules to advance Internet openness, and continued investment and innovation in the nation’s vibrant 21st Century digital broadband economy.”
IIA Calls for Narrow, Bi-Partisan Legislation to Permanently Protect Net Neutrality Principles
Says Congress should step in with a non-partisan and long-lasting legislative solution that preserves and maintains the “open Internet” without the burdens of utility-style regulation
WASHINGTON, D.C. – March 12, 2015 – In response to the Federal Communications Commission’s (FCC) release of its net neutrality order, the Internet Innovation Alliance (IIA) issued the following statement:
“Market uncertainty accelerates today with the release of the FCC’s decision to impose public utility regulation on the Internet. Long drawn out legal challenges to the agency’s embrace of Title II regulation without clear statutory authority now await the Internet ecosystem. Yet, Congress can still rescue the nation from this fate by crafting a non-partisan and long-lasting legislative solution that would preserve and maintain an ‘open Internet’ without the burdens of utility-style regulation. Now is the time for a bi-partisan Congressional effort aimed at creating statutory permanence that helps advance innovation, investment, and broadband deployment for the benefit of all Americans.”