The New Network Compact: Consumers Are in Charge
NEW STUDY HIGHLIGHTS HOW SHIFT IN CONSUMER CHOICE AND MARKET PREFERENCES CREATES NEW CHALLENGES FOR 21st CENTURY REGULATORS
Paradigm shift in consumer communications preferences requires new Compact to preserve core network values
Eight times more households choose less-regulated wireless voice service over the most-regulated landline option when they rely on a single service
Policymakers seeking to craft a new Compact for 21st century networks that advances essential consumer values must recognize and address how expanding consumer choice and preferences—spurred by innovation and new competitive offerings—have fundamentally altered the telecommunications landscape, according to a new study released today by the Internet Innovation Alliance (IIA).
Policy scholar and communications industry analyst Dr. Anna-Maria Kovacs authored the 36-page report, “The New Network Compact: Consumers Are in Charge.” The paper details the impact of consumer choice in the digital marketplace and demonstrates how this new paradigm will influence future efforts to design a set of basic consumer protections for the communications platforms of tomorrow.
There is a growing bi-partisan consensus to apply traditional core values—universal connectivity, public safety and consumer protection—as well as the more recent core value of competition, to next-generation networks and services. The study points out, however, that competition has freed consumers from regulatory control. The existing model was based on granting regulators control over a monopoly market with a single service provider, treating consumers as if they were homogeneous, and forcing them to cross-subsidize one another under a price-regulated environment. The advent of new technologies and competing services now offers consumers an array of choices, including the choice and ability to utilize communications services that can circumvent regulations that protect certain core values. The challenge for regulators is to provide necessary protections for consumers without limiting their freedom of choice.
The World Has Changed: Consumers Have Choices
From voice communication to social networking, Kovacs notes how consumers make cross-platform choices depending on message, audience and context. Their purchase decisions cut across regulatory silos and providers, and their selection of a voice plan may depend on favorite shows offered in a video package that may be part of a bundle with a broadband package. Wireless voice and wireless broadband may or may not be accompanied by fixed broadband in those packages.
The study provides greater insight into how dramatic changes in consumer preferences are reshaping the communications marketplace:
• In 1996, 94% of households subscribed to plain old telephone service (POTS), and 6% did without landline telephony altogether.
• Only 5% of consumers still rely exclusively on POTS, the most-regulated voice service option.
• As of year-end 2013, two out of five (41%) consumers chose wireless-only in the voice market—eight times as many as those who relied exclusively on POTS.
• Another 26% of American households subscribed to Voice over Internet Protocol (VoIP), either alone or in combination with wireless.
• Consumers often replace multiple voice calls with a tweet or a post on social networks, services that do not support Universal Service.
• Consumers choose Internet access from a variety of platforms—mobile (62%), cable (22%), wireline DSL (8%), wireline fiber (7%), and fixed wireless or satellite (1%).
• Consumers in certain markets are choosing services and applications that do not provide automatic 911 communications capabilities.
• In today’s video market, consumers pick from a buffet of providers including wired cable (48%), broadcast (10%), telco (10%), satellite (31%) and broadband only (1%).
“Because consumers today don’t have to purchase what regulators design and a monopolist provides, they can’t be treated as a homogeneous body without choices; a ‘one size fits all’ solution is no longer viable,” commented Kovacs. “Amidst extensive and varied competition, providers survive only if they give consumers what consumers want. Otherwise, consumers move to competing providers and take their spending and the associated earnings with them. Cross-subsidies don’t work, because consumers can flee the subsidizing services. Regulators can limit providers’ earnings on the upside but can’t protect the downside.”
Kovacs added, “With the old network compact, regulators were in charge, but the new reality is that consumers are in control.”
Need for Strategically-Targeted Regulation
At bottom, the Kovacs analysis notes that the success of any future Network Compact will hinge on the ability of regulators to recognize that consumers have varied needs and desires. Regulators can only accomplish their goals if they respect consumers’ power and choices. To accomplish core values, regulators must focus on vulnerable consumers and target specific needs not addressed by the market, she says.
“The 21st century challenge of regulators in preserving and advancing the core values must take into consideration new platforms and the plethora of consumer choices,” echoed Rick Boucher, IIA honorary chairman who served for 28 years in the House of Representatives, where he was chairman of the Subcommittee on Communications, Technology and the Internet. “Policymakers should tailor the new Network Compact in a way that addresses specific consumer needs rather than making overly-broad attempts to regulate on a technology, platform, or service basis.”
To review “The New Network Compact: Consumers Are in Charge” in its entirety, click here.
Rick Boucher Weighs in on Initiation of IP Trials
IIA Honorary Chairman Rick Boucher Weighs In on Initiation of IP Trials in Alabama and Florida, Per Today’s AT&T Filing
Expresses confidence that IP networks and services will exceed consumers’ and FCC’s expectations for service, reliability, and consumer protection
WASHINGTON, D.C. – February 28, 2014 – Responding to today’s filing from AT&T announcing Alabama and Florida as the selected markets for FCC-authorized IP demonstration projects, the Internet Innovation Alliance (IIA) today issued the following statement from its Honorary Chairman Rick Boucher:
“Every month, 450,000 people make the transition from the old circuit-switched network to the new, IP-based world of telecommunications. Two-thirds of Americans have fled the old phone network entirely, and only five percent use it as their sole means of communication. It’s clear that consumers prefer newer products, services, and technologies in place of the old. Just as the telegraph once gave way to the telephone, and analog gave way to digital, so we stand at the threshold of another revolution in communication, as Alexander Graham Bell’s telephone network gives way to the advanced IP broadband networks of tomorrow. In fact, by the end of this decade a sunset should occur for the antiquated circuit-switched telephone network.
“As a key step in reaching that goal, in its filing today, AT&T has accepted the FCC’s call for the initiation of trials in select local markets where consumers will rapidly be transitioned from the old network to modern broadband communications platforms. The company in its filing underscored a thorough ongoing commitment to the core network values the Commission seeks to promote. Far from being a “regulation-free zone,” the future vision for an all-IP world is one in which communications services are accessible, secure, and reliable. Using the core values of universal service, consumer protection, public safety, reliability, and competition as its guidepost, the FCC can help speed investment in advanced networks that bring the benefits of high-speed broadband to everyone.
“During the upcoming trials – to be held under the direct supervision of the FCC – government, consumers, and industry will all work together, in an open and transparent manner, to learn what can go wrong when the consumers who remain on the old telephone network are rapidly transitioned to modern broadband communications. With information from the trials, solutions can be put in place to ensure that the nationwide transition is a success for everyone. And at this stage and throughout the trials, the traditional phone network will remain in place, providing protections, a kind of safety net, for those who still depend on the old system for essential communications needs.
“As we move forward, I’m confident that the IP networks and services to be tested will exceed both consumers’ and the FCC’s expectations for service, reliability, and consumer protection.”
Answering Upton and Walden’s Call
’96 Telecom Act Architect Rick Boucher Answers Upton and Walden’s Call for Comments on the Future Regulation of the Communications Industry
Says today’s laws severely lag technological and marketplace advancements, calls #CommActUpdate vital
WASHINGTON, D.C. – February 3, 2014 – Rick Boucher, honorary chairman of the Internet Innovation Alliance (IIA), today released his recommendations on modernization of communications industry regulation, in response to the House Energy and Commerce Committee’s request for input on the future of the law. Boucher served for 28 years in the House of Representatives, where he chaired the Subcommittee on Communications, Technology and the Internet and was a key architect of the Telecommunications Act of 1996.
“Since 1996, the way in which consumers receive communications services of all kinds has dramatically transformed,” explained Boucher. “Today’s laws severely lag technological and marketplace advancements—comprehensive statutory telecommunications reform for the 21st Century is vital.”
In December, House Energy and Commerce Committee Chairman Fred Upton and Subcommittee Chairman Greg Walden launched a comprehensive #CommActUpdate, including a series of white papers as the first step toward rewriting the laws governing the communications and technology sector. To read the first white paper released on January 8, visit http://1.usa.gov/1iVVvBE.
During the last significant revision of the Communications Act 18 years ago, telephone companies offered telephone service through signals delivered over circuit-switched networks; cable companies used coaxial cables to deliver multi-channel video service; the wireless industry was in its adolescence; and the Internet was in an early stage of commercial use. Today, telephone, cable and wireless companies offer the combination of voice, video, and data to their customers in digital format over packet-routed networks that employ Internet Protocol (IP); there are more wireless than wireline communications customers; and the use of the Internet for the delivery of information of all kinds is becoming ubiquitous.
“A date should be set by the end of this decade to ‘sunset’ the public switched network and replace it with Internet-based communications platforms that are highly efficient, scalable , resilient and readily capable of handling voice, data or video communications,” commented Boucher.
Boucher recommends that the Committee initiate legislative reforms that:
1. Recognize the pervasive and rapidly developing role of broadband networks in the delivery of modern communications and the urgent need for deregulatory parity among similarly situated broadband service providers.
2. Reaffirm the current light-touch regulatory approach to broadband that broadly stimulates investment in networks and promotes both job creation and innovation.
3. Realign the Federal Communications Commission’s (FCC) regulatory structure to match current marketplace and technological realities, recognizing today’s cross-platform competition in which telephone, cable and wireless carriers compete head-to-head in the provision of voice, video, and data services.
4. Eliminate existing duplicative or unnecessary functions at the FCC, including its duplication of the Department of Justice and Federal Trade Commission’s role in reviewing communications merger transactions.
5. Enable the near-term reallocation of significant swaths of government-held spectrum for commercial auction to help address the existing spectrum deficit facing commercial wireless carriers.
6. Facilitate secondary market transactions among spectrum holders and encourage streamlined processes to enhance the efficiency of spectrum use as additional mechanisms to address the nation’s spectrum crisis.
To review Boucher’s recommendations on addressing modern communications policy needs in full, visit here.
IIA Backs FCC Action to Initiate Local, High-Speed Broadband Network Demonstration Projects
Says FCC-monitored trials will bring the nation one step closer to completing the transition to 21st Century modern broadband-enabled communications networks
WASHINGTON, D.C. – January 30, 2014 – Responding to today’s Federal Communications Commission’s (FCC) action to “authorize voluntary experiments to measure the impact on consumers of technology transitions in communications networks,” the Internet Innovation Alliance (IIA) today issued the following statement:
“In launching a national framework for local trials of state-of-the-art broadband networks, the FCC ushers in the dawn of a new era of expanded consumer benefits and increased economic growth. Accelerating the ‘fourth network revolution’ will help unleash consumer benefits in education, healthcare, energy, business and rural development.
“We applaud the FCC’s new framework that enables stakeholders to address—in an open and transparent manner—the challenges posed by the nationwide move to next-generation broadband networks and creates an opportunity to establish consumer protections to ensure we ‘leave no one behind’ and pave the way for an easy and rapid transition for America’s consumers and businesses.
“We hope that, in the days ahead, the FCC’s vision for local market trials will mean more rapid deployment of next-generation networks that provide new broadband choices, better products, services and devices with enhanced functionality. Upgrading the nation’s communications infrastructure will fuel our economy, maximize investment and promote America’s global competitiveness. Conducting geographically-limited, closely-monitored IP demonstrations with consumer protections in place will build on the momentum of two-thirds of American households already choosing to live in an all-IP world.”
IIA Celebrates 10-Year Anniversary with Return of Founding Co-Chair Larry Irving
Re-emphasizes benefits for consumers, businesses and the economy of migrating America’s antiquated telephone networks to high-speed, IP-based broadband
WASHINGTON, D.C. – January 23, 2014 – Ten years after he founded the Internet Innovation Alliance (IIA) alongside still-Co-Chair Bruce Mehlman, Larry Irving this month returns to the coalition, the IIA today announced. In 2009, Irving stepped down from his role with IIA to join Hewlett Packard as vice president of global government affairs. Since 2011, he has provided strategic advice and assistance to international telecommunications and information technology companies, foundations, and non-profit organizations.
“Larry is ‘one of the greats’ when it comes to the tech world, having helped write our nation’s Internet success story,” said Mehlman. “We indeed are amidst the ‘fourth network revolution’, and IIA is excited to take advantage of Larry’s seasoned insight to help make the IP Transition yet another win for Americans in education, healthcare, business and rural development.”
Mehlman added, “High-speed broadband is essential for powering economic growth, maximizing investment and promoting America’s global competiveness.”
Irving and Mehlman teamed up in 2004 to help solve, through technology, many of the challenges facing our country. Today, they are joined by IIA Co-Chairman Jamal Simmons and Rick Boucher, honorary chairman of the organization, and are committed to helping achieve national priorities in areas such as education, healthcare, energy and environmental sustainability through the upgrade of America’s communications infrastructure.
A central focus for IIA, and identified by the Federal Communications Commission (FCC) as a national priority, moving all Americans from 20th Century copper telephone lines to 21st Century IP-based networks will ensure faster broadband speeds and meaningfully expanded services. The IIA is dedicated to helping guide the IP Transition with recommendations to fast-track local IP demonstration projects while preserving core consumer values:
a) When the transition is complete, all consumers should be connected with services that are at least as good as what they have now.
b) Public safety must be upheld with access to first responders, as well as access for the vision or hearing impaired.
c) Competition should be encouraged, and consumers should have a place for ready resolution of complaints regarding services.
d) Putting in place a backup plan to keep networks working through power failures and natural disasters must be a chief objective.
Irving brings extensive knowledge and experience that will be invaluable to IIA as it supports the modernization of America’s telephone networks and anachronistic regulations. He played an integral role on the Obama-Biden Transition Team, served for nearly seven years as Assistant Secretary of Commerce for Communications and Information during the Clinton Administration, and as Administrator of the National Telecommunications and Information Administration (NTIA), advising the President, Vice President and Secretary of Commerce on domestic and international information technology issues. Irving is widely credited with coining the term the ‘digital divide’ and was the principal author of the landmark Federal survey “Falling Through the Net,” which tracked access to telecommunications across demographic lines. He also was named one of the 50 most influential persons in the ‘Year of the Internet’ by Newsweek.
“I’m thrilled to come home to IIA at such a critical point in time, when policymakers’ decisions truly will determine whether our nation continues leading the world in the broadband race. In addition to profiting America as a whole, getting it right with the IP Transition will enhance consumer benefits with new choices, greater functionality, and better products, services and devices.”
IIA Gives Regards to Wheeler and O’Rielly in Light of Senate Confirmations
Encourages new FCC Chairman and Commissioner to get down to business on spectrum auctions, IP Trials and ConnectED
WASHINGTON, D.C. – October 30, 2013 – The Internet Innovation Alliance (IIA) today issued the following statement in response to Senate approval of Tom Wheeler and Michael O’Rielly for Chairman of the Federal Communications Commission (FCC) and FCC Commissioner, respectively, by unanimous consent:
“IIA sends its best wishes to Tom Wheeler, an astute, technology-industry veteran who is well-equipped to take the reins of the FCC at this important juncture in time. We also warmly welcome Michael O’Rielly to his post as FCC Commissioner and look forward to his valuable contributions on highly important policy issues standing before the federal agency. There are both great opportunities and challenges before the FCC and, given the exponential growth in wireless broadband use and the larger technology transition to IP-enabled services that is underway across the country, their vision and influence will be instrumental in redefining and shaping America’s communications sector for decades to come.
“We urge Wheeler and O’Rielly to quickly roll up their sleeves on the IP transition, spectrum policy and ConnectED. To jumpstart network modernization, the Commission should give the green light on IP trials that will pave the way for a smooth transition to next-generation networks. With wireless users multiplying and available spectrum at a standstill, it’s critical that more spectrum be made available for commercial mobile services in short order, before demand hurdles supply. The FCC should take swift action to conduct open incentive auctions, approve secondary market transactions, and repurpose federal spectrum.
“And for the benefit of communities across the nation, Wheeler and O’Rielly should crystalize a vision for ConnectEd, an initiative that should help ensure access to high-speed broadband for our nation’s students both at school and at home. Technology is the fuel of the modern economic engine.”
REPORT: Broadband Delivers Over $9,300 in Annual Savings to American Consumers
Move to next-generation networks and additional spectrum for mobile services will help more American families achieve Internet-enabled cost savings
WASHINGTON, D.C. – October 29, 2013 – High-speed Internet – and, increasingly, mobile broadband – allow Americans to save an average of $9,363.85 a year on household spending, the Internet Innovation Alliance (IIA) today announced. Potential Internet-enabled savings increased nearly $500 from last year, along with a rise of 3.5 percent in average annual expenditures in 2012 reported by the U.S. Bureau of Labor Statistics. Authored by Nicholas J. Delgado, certified financial planner and principal of Chicago-based wealth management firm Dignitas, “Mobile Broadband and Money: Top 10 Ways to Save” is the fourth edition of the annual financial analysis. This year, the IIA-identified cost savings – achieved by having access to and using broadband – were calculated with the mobile consumer in mind.
U.S. Must Modernize Regulatory Framework to Spur High-Speed Broadband Deployment
95% of U.S. households no longer rely solely on the traditional home telephone to stay connected, leaving the current regulatory framework lagging behind marketplace realities and diverting investment away from 21st century broadband infrastructure
Outdated regulations that force companies to build and maintain obsolete copper-based legacy telephone networks are unnecessarily diverting investment away from modern broadband networks and services that 95% of U.S. households prefer, desire and use.
Policy scholar and communications industry analyst Dr. Anna-Maria Kovacs authored a new 45-page analysis, “Telecommunications Competition: The Infrastructure-Investment Race,” that examines the existing regulatory framework’s impact on the communications marketplace.
The report finds that the overwhelming majority of U.S. consumers have a plethora of choices to meet their voice, video, and Internet-access communications needs. They rely on the use of smart wireless devices, cellphones, wired Internet-enabled VoIP services, and over-the-top Internet-enabled applications (i.e. Skype), far more than on traditional telephony to stay connected in today’s digital age.
IIA Co-Chair Mehlman Comments on PPI Investment Heroes Report
IIA Co-Chair Mehlman Comments on PPI Investment Heroes Report, Says Government Should Create Environment for Sustained Investment
Emphasizes that FCC wireless spectrum auctions should proceed in open manner and allow all carriers to bid equally and without restrictions
WASHINGTON, D.C. – September 19, 2013 – The Internet Innovation Alliance (IIA) today issued the following statement from Co-Chairman Bruce Mehlman in response to the Progressive Policy Institute releasing its 2013 list of Investment Heroes, in which – this year, like last year – the telecom and cable sector is a big winner:
“AT&T and Verizon once again lead the way in domestic investment, and telecom is second only to the booming energy sector in total U.S. investment. PPI shows that these two companies combined invested nearly $34.5 billion to build-out nationwide high-speed broadband networks and infrastructure. AT&T alone invested almost $19.5 billion. As a sector, telecommunications and cable invested $50.5 billion last year, over a third of the nearly $150 billion invested by the Fortune 150 last year. Such levels of investment are remarkable, but not surprising. With each passing day, Americans witness and benefit from the emergence of the nation’s “data-driven economy,” all fueled by U.S. telecom and technology company capital investment. Our data-driven economy is at the forefront of creating new jobs in entirely new industries—like mobile apps—and is a driving force in improving cost structures and the delivery of services in sectors such as healthcare, education, and agriculture.
“Broadband providers have done their part to improve the path to economic recovery, demonstrated by their significant investments in America. The progress we’ve seen, however, needs to continue. Billions of dollars of additional private investment is necessary to bring ubiquitous high-speed broadband to every American.
“For this to take place, government should adopt policies that create an environment for sustained investment. As PPI notes, government can ensure that upcoming FCC wireless spectrum auctions proceed in an open manner and allow all carriers to bid equally and without restrictions. No one company should be given favored treatment to the disadvantage of its competitors. Moreover, government can also proactively promote additional investment by eliminating existing regulatory barriers and helping to speed the upgrade and modernization of our nation’s antiquated telephone networks, so that more Americans can benefit from the high-speed Internet and video services that next generation broadband networks offer.
“It is uncertain that the nearly $50.5 billion in existing telecom and cable investment will continue unless government helps promote additional regulatory and business certainty by adopting wise and timely pro-market investment policies. In the meantime, we owe our gratitude and thanks to the tech and telecom companies who invest in America and help spur innovation, create jobs, and contribute to the nation’s economic growth.”
IIA Urges FCC to Move Forward to Approve “Real-World Trials”
IIA Urges FCC to Move Forward to Approve “Real-World Trials” to Accelerate Transition to High-Speed Broadband Internet Services across America
Says regional market trials will provide FCC with evidence to develop forward-looking, pro-investment, pro-consumer policies for build out of next-generation, IP-enabled networks and services
WASHINGTON, D.C. – August 7, 2013 – The Internet Innovation Alliance (IIA) today issued the following statement based on its Reply Comments to the Federal Communications Commission’s (FCC) request for input on the proposed “real-world trials” designed to advance the transition toward nationwide consumer access to next-generation Internet Protocol (IP)-based networks and services:
“Local market trials provide the next step toward speeding the modernization of America’s legacy telephone networks. Initiating market trials for IP network deployment would continue innovation and enhance economic growth resulting from the deployment of next-generation technologies. The Commission’s principal focus should be on how high-speed broadband networks should replace antiquated telephone networks and how market trials can contribute to the development of a new regulatory model that promotes broadband growth, increases subscribership and maintains fundamental and essential consumer protections.
“Real-world market trials offer the best means for assessing the costs and benefits of accelerating the IP Transition and should not be used to help advance certain outmoded business models. Fear of theoretical and unproven harm to certain competitor business models dependent on never-changing regulatory mandates is simply not a compelling reason for inaction. The trials represent a unique window of opportunity to gather information to ensure that the IP Transition will occur with minimal disruption to consumers.
“Market trials should proceed under the same lighter regulatory framework applied to other rapidly-proliferating IP networks, rather than the outmoded and shrinking TDM-based networks. Any market trial should enable IP-based networks to demonstrate their capabilities and the impact of the transition on consumers subject to the same real-world environment in which all other IP networks currently operate. A regulatory hand applying pressure on the scale and conditioning the trials toward certain outcomes is, of course, a prescription for trials that will not be truly scientific and will fail to achieve their basic purpose. Just as we seek to avoid locking in old technology, such as the rotary phone or dial-up Internet service, the nation cannot afford to permanently lock-in old rules that would ultimately harm innovation, job creation and economic growth.”
To read the IIA’s full comments, go to http://bit.ly/18ahAEr, or the FCC’s website. To learn more about IIA, visit http://www.internetinnovtion.org.
Reply Comments to the FCC
Comments of Internet Innovation Alliance
On behalf of the Internet Innovation Alliance (IIA), we appreciate the opportunity to submit Reply Comments to the Federal Communications Commission’s (“FCC” or “Commission”) request for input on the proposed “real-world trials” designed to advance the transition toward nationwide consumer access to next-generation Internet Protocol (IP)-based networks and services.2 In this pleading, IIA responds to significant issues raised by commenters. Our comments focus exclusively on the TDM-to-IP transition (the IP Transition).
Download IIA’s full Reply Comments (PDF)
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.”
To learn more about the Internet Innovation Alliance (IIA), visit http://www.internetinnovation.org.
FCC Fails to Acknowledge Success of Wireless Market to Justify Future Regulation, Says IIA
Commission should focus on making more spectrum available for commercial mobile services to meet skyrocketing consumer demand
WASHINGTON, D.C. – March 22, 2013 – The Internet Innovation Alliance (IIA) today issued the following statement in response to the Federal Communications Commission (FCC) releasing its 2013 Wireless Competition Report:
“Rather predictably, the FCC has once again avoided concluding that the wireless market is competitive, despite the fact that four out of five consumers have a choice of five or more wireless service providers. In 2010, the Commission reversed the findings of six successive reports that acknowledged the mobile market’s success.
“More Americans are choosing smartphones when they purchase a new phone (67 percent in 2012), and more are using them to go online (104 million in 2011). And according to today’s FCC report, ‘It is estimated that U.S. mobile data traffic increased 270 percent from 2010 to 2011, and that it has more than doubled each year for the past four years.’
“The Commission is painting a picture of the market with this shade of gray to leave room for justification of future wireless regulation. But interestingly enough, FCC Chairman Julius Genachowski this morning stated: ‘Today, the U.S. broadband economy is thriving. The United States has regained global leadership in key areas of broadband innovation and infrastructure. Thanks to innovative American companies and entrepreneurs – and smart government policies – the U.S. is now the envy of the world in advanced wireless networks, devices, applications, among other areas.’
“When measured by availability of consumer choices, options for consumer plans, device alternatives, apps or services, the American wireless market is extraordinarily competitive, far more so than practically any other sector of our economy. Failing to find ‘effective competition,’ as the FCC has again done in this report, is not reflective of market realities.
“Federal policy makers should redouble their efforts to make additional spectrum available for auction to commercial broadband providers by quickly conducting incentive auctions, approving secondary market transactions, enacting spectrum sharing arrangements and initiating a process to repurpose additional federal spectrum.”
IIA Chairmen Commend Genachowski and McDowell on Successes upon Departure from FCC
Say Genachowski has helped pave way for FCC consideration of IP Transition, McDowell for future innovation and tech-led growth
WASHINGTON, D.C. – March 22, 2013 – Responding to the news that Federal Communications Commission (FCC) Chairman Julius Genachowski will be departing from the Commission and that FCC Commissioner Robert McDowell will be leaving, as well, the Internet Innovation Alliance (IIA) today released the following two statements from its Chairmen:
On Genachowski’s departure, from IIA Honorary Chairman Rick Boucher:
“Chairman Genachowski has provided a valuable service as FCC chairman. He oversaw the adoption of a comprehensive reform of the federal universal service fund. He has set the stage for the FCC’s consideration of the transition to all Internet Protocol networks. I commend him on his success and wish him well in his future endeavors.”
On McDowell’s departure, from IIA Founding Co-Chairman Bruce Mehlman:
“Rob exemplified the very best traditions in his years on the Commission, serving with honor, intelligence, humor and grace. He had a hand in shaping a great number of policies that improved American competitiveness and helped lay the groundwork for future innovation and tech-led growth. He will be missed.”
BROADBAND & BASKETBALL
Evolution of March Madness Consumption Underscores Importance of IP Transition, Sound Federal Spectrum Policy and Regulatory Modernization
WASHINGTON, D.C. – March 19, 2013 – In conjunction with the kick-off of the NCAA Men’s Division I Basketball Championship, one of the most online-watched sports events in America, the Internet Innovation Alliance (IIA) today released a timeline detailing the evolution of March Madness consumption. Beginning in 1996, the same year that Congress passed a landmark Telecom Act that referenced the Internet just once, the timeline shows how consumer demand for March Madness has exponentially increased the need for Internet Protocol (IP)-enabled services like real-time online video and mobile data, underscoring the need for a move to next-generation networks and sound federal spectrum policy.
“While many things in college basketball have not changed over the years – games are still 40 minutes, upsets are guaranteed and Duke remains the team you love to hate – how consumers follow their favorite teams has radically and rapidly evolved,” observed Bruce Mehlman, IIA founding co-chairman. “Telecommunications policy makers should take note of the vastly different market landscape. Rather than trying to force-fit legacy telecom rules to the broadband era, policy makers should show humility and address today’s dynamic marketplace.”
Timeline: Evolution of March Madness Consumption
1996: The NCAA creates the first online computer page for the Final Four.
2003: CBSSports.com, CBS Sports, and the NCAA first partner to produce NCAA March Madness on Demand, the official online platform of the tournament offering basketball live feeds, as well as on demand video streaming.
2005: CBS begins a two-year deal with CSTV.com for exclusive Internet video streaming rights for out-of-market game coverage for the first 58 games of the championship.
2006: March Madness on Demand sees 19 million video streams and 5 million visits.
2007: Due to 2006 traffic, CBS Sportsline doubles its bandwidth capacity for March Madness on Demand, which offers free live Internet streams of each game of the first three rounds of the championship.
2008: CBSSports.com and March Madness on Demand launch a developer platform that allows more than 200 websites to carry live video of the championship online, including sites such as ESPN.com, Yahoo, SI.com, YouTube and Facebook. CBS allows users to watch all 63 games that it telecasts during the tournament for the first time, and sees the total number of unique visitors from first-round games through the regional championship games grow from 1.75 million to 4.33 million.
2011: Akamai’s global network is used to provide live and on-demand streaming video across broadband and mobile applications. Akamai delivers live games and on demand content to more than 1.9 million unique visitors per day on broadband sites and more than 680,000 daily visitors to mobile applications. By the event’s end, there is a 63 percent increase in total visits across the 2011 NCAA March Madness on Demand broadband and mobile products, and a 17 percent increase in online video consumption throughout the tournament compared to the previous year. This year, for the first time, live streaming video of every game of the tournament is available online.
2012: The Android phone is added as a viewing platform for NCAA March Madness Live (formerly March Madness on Demand). NCAA.com/March Madness Live, CBSSports.com, SI.com, TruTV.com, TNT.tv and TBS.com deliver over 220 million visits across online and mobile platforms. This marks an 11% increase from 198 million in 2011.
What’s in store for 2013?
“From March Madness to the Olympics and the Super Bowl, consumers are increasingly relying on a high-speed broadband Internet connection to tune into their favorite sporting events,” said IIA Co-Chairman Jamal Simmons. “Moving to all IP networks is a promising way to expand services like the online delivery of real-time video consumers want and services like remote health monitoring consumers need.”
Simmons added, “With smartphone adoption continuing to climb, mobile consumption is sure to boom during the 2013 tournament. It’s clear that demand will soon outpace supply, and policy makers should thoughtfully tackle spectrum policy now.”
In Multichannel News, Mark Johnson, Turner Sports vice president of business operations explains, “Broadband connections at work on that first Thursday (3/21) and Friday (3/22) are still huge for us. On those two days, we’ll do forty to fifty percent of our streams.” From the article: “Whereas broadband dominates the aforementioned days, when it comes to weekends March Madness Live on mobile is the fashion, as people are ‘running to the mall, or their kids’ soccer practice. They are checking the scores, looking at streams. Mobile has become the weekend device,’ said Johnson.”
According to IIA Honorary Chairman Rick Boucher, the first step to meet this challenge is to conduct a successful Federal Communications Commission (FCC) incentive spectrum auction that will be open to all bidders and provides additional spectrum for consumer mobile broadband services:
“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.’
“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. Ultimately, sound spectrum policy translates into a win for America’s consumers and economy.”
To learn more about what policy makers can do to help accelerate the transition to all-IP networks and make more spectrum available to meet consumer demands, visit http://www.internetinnovation.org.
About The Internet Innovation Alliance
The Internet Innovation Alliance was founded in 2004 and is a broad-based coalition supporting high-speed broadband availability and access for all Americans, including underserved and rural communities. It aims to ensure every American, regardless of race, income or geography, has access to this critical tool. The IIA seeks to promote public policies that leverage the power of entrepreneurs and the market to achieve universal broadband availability and adoption.
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