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.”
Preserving and Maintaining the “Open Internet” with Non-Partisan Legislative Solution
IIA’s Boucher Calls on Congress to Preserve and Maintain the “Open Internet” with Non-Partisan Legislative Solution
Says Congress Can Provide the Certainty Consumers and Industry Need without the Burdens of Utility-style Regulation
WASHINGTON, D.C. – February 26, 2015 – Responding to the Federal Communications Commission’s decision to reclassify broadband Internet services under “Title II” of the 1934 Communications Act, Rick Boucher, a former Democratic congressman from Virginia who chaired the Energy and Commerce Subcommittee on Communications and the Internet and serves as honorary chairman of the Internet Innovation Alliance (IIA), today released the following statement:
“The FCC’s decision to embrace Title II regulation over the Internet now creates an opportunity for Congress to craft a non-partisan legislative solution that provides the legal certainty necessary to preserve and maintain an “open Internet” without the burdens of utility-style regulation. After more than a decade of wrangling about the proper regulatory classification of broadband services and the scope of the FCC’s authority, it is time for Congress to provide the certainty that consumers and industry need. IIA looks forward to working with members of Congress to ensure that the promise of broadband remains available for entrepreneurs, innovators and America’s consumers without a return to the days of utility regulation.”
New IIA Research Report Highlights Europe’s Failed Embrace of Title II-style Regulation
By every relevant measure of broadband capability, the US is ahead, with greater levels of broadband deployment, competition and access to the fastest wireless and next-generation wired facilities
WASHINGTON, D.C. – February 12, 2015 – A light-touch regulatory approach to broadband leads to greater deployment, competition and coverage than Title II-style regulation, according to a new 36-page report from the Internet Innovation Alliance (IIA) that compares the state of broadband in the United States to Europe.
Authored by Fred Campbell, executive director of the Center for Boundless Innovation in Technology and former Wireless Bureau Chief at the Federal Communications Commission (FCC), “Impact of Title II Regulation on Communications Investment” sheds light on the different outcomes resulting from Title II-style Internet policy adopted by the European Union (EU) in 2002 and the deregulatory approach to broadband that the United States (US) adopted that same year.
The IIA study reveals the European Commission’s acknowledgement that:
➢ High-speed broadband investment is taking place more quickly in the United States;
➢ Title II-style regulations are the reason European broadband networks have fallen behind the United States; and
➢ Europe must adopt investment-friendly broadband policies in order to maintain its global competitiveness.
“It is ironic that, as the EU embarks on relaxing its Title II-style approach to broadband regulation to mimic US success, the FCC is now about to reverse course and embrace failed public utility regulation for the Internet,” commented Campbell. “Instead, as the data in the study reveals and the EU experience demonstrates, the US has had it right all along. We should maintain a bi-partisan light-touch regulatory approach to ensure continued innovation, investment and rapid deployment of 21st century broadband networks.”
According to the study, the EU’s wholesale access regulations have posed major barriers to network investment, to the introduction of facilities-based competition and to the availability of the fastest wireless services and next-generation networks.
It notes that even though the EU is smaller in geographic size, has greater population density and surpasses the United States in gross domestic product, US wireline broadband providers have invested nearly three times more capital in their networks than their European counterparts. Our nation’s broadband investment greatly overshadowed European investment despite the fact that total European service provider revenues exceeded those of US providers by $15 to 20 billion annually.
“Rhetoric and partisanship have derailed the net neutrality debate,” 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. “Rather than basing regulatory choices on philosophical principles and hypothetical concerns, policymakers should rely on real numbers that tell the success story of broadband in the US.”
Boucher added, “The EU has acknowledged that its Title II-style regulatory approach is the reason European broadband networks have fallen behind those in our nation. The FCC has ample authority to assure Internet openness without imposing utility-style regulation on broadband. We should learn from the European example and avoid gambling on the future of the world’s most innovative Internet economy.”
The study highlights how US mobile operators have invested twice as much capital in their networks as EU mobile operators, and have reinvested a significantly greater percentage of their revenues (15-16%) in their wireless network infrastructure versus their EU mobile operator counterparts (7-8%).
Data from the study demonstrate how these higher levels of capital investment in the US correlate with high levels of facilities-based competition and next-generation coverage:
➢ US competitors have a larger share of the telephone market (US 65% vs. EU 41%); competitors also hold a larger percentage of the US broadband market.
➢ The vast majority of US households have access to multiple facilities-based fixed broadband operators while a majority of Europeans lack access to any alternative fixed facilities-based broadband alternative;
➢ US has 5 or more facilities-based mobile operators in most markets, while EU averages fewer than 4 facilities-based mobile operators per market (typically 3-4);
➢ 82% of Americans are covered by next-generation broadband at 50 Mbps download speeds vs. 63% of Europeans covered by broadband networks offering at the most 30 Mbps speed; and
➢ As late as 2012, high-speed wireless broadband (LTE) coverage in the US was more than double that in the EU (79% of US population had LTE coverage vs. 30% of EU households).
To read the full IIA study, go to http://bit.ly/1vlikB0.
Boucher and Irving of IIA Caution against FCC’s Imminent Net Neutrality Action
Says Congress should resolve the Open Internet debate with targeted legislation aimed at reinstating the 2010 Open Internet Rules and not imposing public utility regulation on broadband
WASHINGTON, D.C. – February 4, 2015 – In response to press reports highlighting the Federal Communication Commission’s (FCC) policy direction on new Open Internet rules, IIA issued the following statements from Rick Boucher, a former Democratic congressman who chaired the Energy and Commerce Subcommittee on Communications and the Internet and serves as honorary chairman of the Internet Innovation Alliance (IIA), and former Assistant Secretary of Commerce under Clinton – now IIA Founding Co-Chairman – Larry Irving:
From Congressman Boucher:
“I urge Chairman Wheeler to reconsider his plan to treat broadband services under common carrier rules. Subjecting broadband to public utility regulation under Title II is unnecessary for assuring continued Internet openness and would carry deeply harmful consequences. Internet infrastructure investment would be stifled at a time when we have a national goal of extending high-speed Internet service to 98 percent of Americans.
“A better way to preserve the open Internet, protect consumers and promote innovation is to encourage the private investment necessary to support the deployment of high-speed, next-generation broadband nationwide. I’m confident in Congress’ ability to secure a win for our nation with a bi-partisan legislative solution that empowers the FCC to re-promulgate the 2010 Open Internet Rule but precludes the imposition of onerous Title II regulations. This outcome would protect the Open Internet by remedying the D.C. Circuit’s objection that the Commission lacks the statutory authority to act and maintain the existing light-touch regulatory environment that is welcoming to high-speed broadband investment.”
From Larry Irving:
“Imposing Title II regulation on broadband Internet primarily will benefit lawyers. Endless litigation will create additional uncertainty in the market and impact Internet innovation and investment as companies and investors try to figure out what provisions do or do not apply in a new Title II world.
“Democrats primarily have driven the net neutrality debate, but today Republicans in Congress stand ready to work on a bipartisan basis on legislation aimed to ‘keep the Internet open.’ If an open Internet is the goal, why is the only acceptable mechanism for achieving that goal a centuries-old regulatory framework? Preserving the open Internet through bi-partisan legislation, achieving and declaring victory on an important issue, steering clear of interminable and disruptive litigation, and reducing consumer costs by veering away from antiquated Title II regulation would seem to be the better alternative.
“For more than two decades, from the earliest days of the Internet, I along with most Democrats involved in development of our nation’s Internet policy, have advocated a light regulatory touch for the Internet. I still believe that to be preferable to utility-style regulation for the fast-moving and constantly evolving Internet. But, as important, to craft the right solution for America, we need to end the partisan politics around the Open Internet issue and work towards and embrace bi-partisan solutions.”
LIFELINE PROGRAM REFORM TO EXPAND BROADBAND ACCESS FOR AMERICA’S LOW-INCOME CONSUMERS
NEW IIA WHITE PAPER URGES LIFELINE PROGRAM REFORM TO EXPAND BROADBAND ACCESS FOR AMERICA’S LOW-INCOME CONSUMERS
Outlines recommendations to modernize, improve and transition the existing voice-centric program in order to empower consumers with greater choice and service availability in a competitive marketplace
WASHINGTON, D.C. – November 6, 2014 – The Internet Innovation Alliance (IIA) today released a white paper, titled “Bringing the FCC’s Lifeline Program into the 21st Century,” that calls for fundamental reform of the Federal Communications Commission’s (“FCC”) existing Lifeline Program to provide access and enhanced consumer choice to 21st Century broadband services for the nation’s low-income consumers.
“The FCC’s Lifeline Program is a 20th Century government program aimed at spreading a 19th Century technology, voice service,” said former Congressman Rick Boucher, honorary chairman of the IIA. “It’s time to start a new conversation in Washington on how best to provide America’s low-income communities with greater access to 21st Century broadband communications services.”
IIA’s report highlights how this antiquated, cumbersome and complex program currently perpetuates a market imbalance that obligates only wireline telephone providers to participate and maintain the administrative systems and processes required to operate the program.
IIA recommends streamlining the program to provide the flexibility necessary to broaden participation among various communications providers to help bring the benefits of competition to low-income consumers—more innovation, better service, lower prices—while also lowering administrative costs. One step toward attaining this goal, according to IIA, is to transition the current program toward a voucher model, by providing eligible consumers with a “Lifeline Benefit Card” that empowers them to purchase a range of communications services, including broadband, wireline or wireless voice services.
Today, service providers determine the eligibility of consumers for the Lifeline subsidy. The white paper recommends that, given the economic incentives that service providers have to increase enrollment, eligibility determinations for Lifeline benefits and core program administration oversight should be performed by a governmental agency rather than by communications service providers.
IIA’s report offers the following recommendations on how best to modernize and transition the Lifeline program so that it can help ensure next-generation broadband access for low-income consumers:
1. Bring the Lifeline Program into the 21st Century by making broadband a key part of the program’s rubric;
2. Empower consumers by providing the subsidy directly to eligible people instead of companies;
3. Level the playing field between service providers to broaden consumer choice and stimulate competition for their purchasing power;
4. Safeguard and simplify the program by taking administration away from companies that are not accountable to the American public, instead vesting that governmental responsibility with an appropriate government agency.
“Only five percent of U.S. consumers still rely solely on the antiquated, circuit-switched telephone network for their communications needs,” commented Boucher. “This trend is reflected in the FCC’s Lifeline Program, with 80 percent of its dollars currently going to wireless carriers.
“As consumers abandon their wireline telephones for modern broadband services, the Lifeline Program—adopted during the 1980s—should be modernized and upgraded to reflect the realities of the current IP-based world,” Boucher added. “Expanding the program to focus on broadband, and simplifying its administration to welcome participation by more service providers, will help millions more Americans access modern communications services.”
To read IIA’s new report, “Bringing the FCC’s Lifeline Program into the 21st Century,” go to http://internetinnovation.org/library/special-reports/lifeline.