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 http://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 http://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 http://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.
IIA Confronts Myths Surrounding Net Neutrality
Debunks Claims that Title II reclassification of broadband is necessary to preserve an Open Internet
WASHINGTON, D.C. – October 2, 2014 – The Internet Innovation Alliance (IIA) today presents powerful facts to refute commonly disseminated myths aimed at perpetuating confusion and misinformation during the pendency of the Federal Communications Commission’s (FCC) Open Internet proceeding. The facts IIA presents further the argument and rationale as to why the FCC can and should move forward with Open Internet rules designed under its Section 706 authority rather than reclassifying broadband services under Title II of the Communications Act.
“The rhetorical downpour regarding how to best preserve an open Internet has often drowned out results-driven, reality-based reasoning,” observed IIA Founding Co-Chairman Bruce Mehlman. “The truth cuts through the clutter and helps regulators focus on practical, pro-broadband investment outcomes that will ultimately provide consumers with tangible public interest benefits.”
TITLE II AND SECTION 706: Myths vs. Facts
Myth: Title II regulations helped bring about the Internet boom of the early 2000s.
Fact: Although an initial investment spike occurred immediately after the passage of the 1996 Act, that investment was short-lived. That initial spate of investment was primarily directed at technologies and business models that were quickly outstripped by more modern technologies. In fact, the majority of the investment in our country’s broadband infrastructure occurred after the FCC’s 2003-05 decisions to decrease regulations on the broadband industry. This surge in investment laid the groundwork for high-speed Internet to become a leading driver of our nation’s economic growth and to spur the incredible innovation consumers enjoy today.
Myth: Title II-like regulations helped Europe leapfrog the U.S. on broadband deployment.
Fact: Europe gave up its leadership position when it began its path toward heavy-handed regulation that deterred broadband investment and deployment.
According to an independent study, today nearly 82% of U.S. consumers enjoy access to next-generation, high-speed broadband networks (over 25Mbps) while only 54% of Europeans have comparable access. In rural areas, the U.S. again leads in access, 48% to 12%. Next-generation wireless broadband (LTE) is available to 86% of Americans but only 27% of Europeans.
European broadband policies are built on extensive, public utility-style regulation that has depressed broadband investment. In contrast, the U.S. light-touch regulation model has enabled U.S. broadband network operators to invest more than double per household than Europe does: $562 versus $244 in Europe.
Myth: Applying Title II regulations to broadband networks and providers will prevent companies from creating Internet “fast lanes”.
Fact: The FCC has stated that no ISP has ever engaged in paid prioritization schemes. No evidence exists that ISPs have ever or are likely to create fast lanes and slow lanes.
Reclassifying broadband under Title II would not prevent such. In fact, under Title II, public utilities have always been allowed to offer prioritized services. Telephone companies routinely offer installation and repair priority along with service level guarantees to those willing to pay extra money.
According to FCC Chairman Wheeler, the 2010 net neutrality rules were never intended to cover these privately-negotiated business deals, only the last mile of the Internet.
Myth: Wireless networks and wireline networks are virtually interchangeable these days and should have the same net neutrality rules.
Fact: In the 2010 rules, to which all carriers committed, the FCC stated that special characteristics of mobile broadband infrastructure make it essential to give mobile providers additional flexibility in how they manage the traffic on their networks. Due to resource constraints, such as the limited amount of spectrum available for consumer use, mobile networks operate differently than wireline networks. A stringent regulatory environment established under Title II, and intended primarily for a monopoly-era copper wireline world, would be onerous.
The FCC still imposed two conditions on wireless networks in 2010. First, wireless networks cannot block access to legal websites, with exclusions for reasonable network management. Second, wireless network providers were required to disclose their network management practices, performance and terms and conditions of their broadband services.
The current approach acknowledges how wireless networks are different from fixed networks but still protects consumers and enables investment and innovation in the intensely competitive wireless marketplace.
Myth: ISPs harm the open Internet through discriminatory practices. The only way to keep the Internet open is to reclassify Internet services as telecommunications services.
Fact: The Internet, without Title II regulations, is and has been open since its first public use. It continues to thrive in the current regulatory environment. In contrast, Title II regulation would stifle investment and hinder innovation. Innovative new services and business models would have to be vetted and approved by the FCC, slowing the Internet’s vitality and growth.
Ensuring a fair and open Internet through authority granted by Section 706 is a better path. Section 706 permits the FCC to prevent paid prioritization while encouraging innovation and investment from ISPs and other Internet companies.
Myth: Title II can be easily adapted to today’s modern communications systems.
Fact: The past 20 years have seen stunning technological advancements in the communication industry. Americans can now access a wealth of information in myriad new ways. The transformation of the communications industry has caused companies to no longer fit neatly into legal categories envisioned by the 1996 Telecommunications Act or, even more obviously, the Title II rules written in 1934. That’s why companies not normally thought of as “broadband providers” could find themselves categorized and regulated as telecommunications carriers because their service overlaps with the services provided by ISPs if Title II regulations are placed on broadband services. For example, when Google connects you to a business you searched, should it be considered subject to Title II? Or if a provider of email enables a video messaging session, would it open itself up to Title II regulation on the grounds that it is a facilities-based provider or reseller? Could be. And that’s the fear.
Myth: The FCC could apply Title II to broadband, but exercise its forbearance authority when dealing with innovative companies and services.
Fact: Reclassifying broadband services as telecommunication services under Title II would burden 1/6 of the nation’s economy with stringent, investment-inhibiting government regulation. The government would have expansive power over all broadband services, likely including all edge providers and consumer broadband applications and services. The process necessary to analyze and identify which areas of the nation’s broadband economy the FCC would spare from heavy government intrusion would be both lengthy and costly. Additional time and resources would probably be squandered in the litigation that will inevitably follow.
Myth: Unlike Title II, the FCC does not have the power to promote an open Internet under the limited provisions of Section 706.
Fact: Relying on Section 706 to protect consumers and ensure an Open Internet is a superior choice to the overbroad, utility-style Title II regulatory framework of the 1934 Communications Act.
The FCC’s Section 706-like approach in 2010, created rules that found the right balance between regulations necessary to advance consumer protection goals and the need to attract new investment to broadband to ensure future deployments of modern high-speed networks. Under those rules, access to capital grew and we saw massive growth in the digital app economy, video over broadband, VoIP, the advent of tablet computing, and the rise of mobile e-commerce.
Moreover, a Federal Appeals court has given Section 706 its seal of approval and the FCC can assert this authority with confidence. In fact, the courts have said that the FCC is empowered to create rules “governing broadband providers’ treatment of Internet traffic…that they will preserve and facilitate the “virtuous circle” of innovation that has driven the explosive growth of the Internet.”
“The facts are clear: Reclassification of broadband under Title II is unnecessary to ensure continued Internet openness and would backfire with harmful consequences for innovation and investment,” commented former Congressman and IIA Honorary Chairman Rick Boucher. “The FCC should instead make use of its powers under Section 706 to protect consumers, promote innovation and encourage nationwide deployment of next-generation broadband.”
To learn more about Title II reclassification of broadband and Section 706 authority in the context of net neutrality, visit the IIA’s website at http://www.internetinnovation.org.
IIA Urges FCC to Rely on Section 706 Authority, Reject Calls for Title II Reclassification
IIA Urges FCC to Rely on Section 706 Authority, Reject Calls for Title II Reclassification of Broadband
Says Section 706 presents the better alternative to preserve the open Internet, protect consumers, and promote innovation
WASHINGTON, D.C. – September 15, 2014 – Today, the Internet Innovation Alliance (IIA) urged the Federal Communications Commission (“FCC”) to rely on its Section 706 authority rather than reclassify broadband Internet access services as telecommunications services under Title II of the Communications Act. In its Reply Comments in the Open Internet Proceeding, IIA warned that reclassification would reverse decades of Commission precedent and threaten the Internet ecosystem’s continued success and future innovation, likely deterring investment with years of further litigation.
“Section 706 has worked well to protect the open Internet that everyone wants to preserve, while minimizing harm to investment and innovation,” commented Bruce Mehlman, founding co-chairman of the IIA. “Section 706 remains viable and effective. By contrast, Title II is an antiquated regulatory framework designed for the era of monopoly telephone service that would undermine today’s competitive broadband marketplace and disserve consumers, dissuade entrepreneurs and inject unnecessary regulatory uncertainty threatening future dynamism in the broadband ecosystem.”
SECTION 706 PRESENTS A BETTER ALTERNATIVE TO PRESERVE THE OPEN INTERNET, PROTECT CONSUMERS, AND PROMOTE INNOVATION
IIA’s filing highlights how, by proceeding under Section 706 authority, the Commission can restore the rules disturbed by the recent Court decision and bring balance to the Internet ecosystem. Under the 2010 rules, access to private capital for investment in broadband networks has grown, and the nation witnessed a period of continued exponential growth in the digital app economy, video over broadband, and VoIP; the surge in tablet computing; and the rise of mobile e-commerce.
Reliance on Section 706 enables proper balance between necessary regulation to advance goals such as consumer protection and the imperative of attracting new investment to broadband to ensure further deployments of ever-faster systems that will support the applications of tomorrow. Only through innovation and continued explosive growth can the Nation meet the ambitious goals set forth in the National Broadband Plan and realize the benefits derived from the 21st century digital economy.
“The FCC already has enough authority under Section 706 to keep the Internet open with high-speed access for consumers and flexibility for entrepreneurs to innovate,” IIA Co-Chair Jamal Simmons said. “Reclassifying broadband as a utility is like using a sledgehammer when a screwdriver will suffice. Title II is a blunt instrument that might break the Internet’s record of innovation and investment, while Section 706 is a better tool for fixing any problems that arise.”
RECLASSIFICATION WOULD DETER INVESTMENT THROUGHOUT THE BROADBAND ECOSYSTEM
IIA notes how Title II was not the primary catalyst that spurred investment that occurred after the enactment of the 1996 Act. The great bulk of investment in the broadband Internet ecosystem following the implementation of the Act – and unquestionably all of the investment from “edge” and cable companies – occurred within a competitive and significantly less regulatory environment.
After the dot-com bubble of the late 1990’s, IIA highlights how broadband investment climbed steadily only after the Commission began its policy of regulatory forbearance under the 2003 Triennial Review Order. Saddling new regulations on broadband now would deter private investment on which the Internet ecosystem depends.
IIA’s filing also points to the European broadband experience as instructive as to why the Commission should resist from experimenting with Title II regulation for broadband networks and services here at home.
“European policies built on extensive, public utility-style regulation and wholesale network unbundling have depressed broadband investment and access to next-generation networks overseas, as fully 82% of U.S. consumers enjoy access to high-speed broadband networks compared to only 54% of European consumers,” noted former Congressman Rick Boucher, honorary chairman of the IIA. “Section 706 fortunately offers us an alternative path that will enable the private investment necessary to deploy modern broadband networks—wireline, wireless, and cable—and continue the virtuous circle fueled by light-touch regulation of the Internet ecosystem.”
Boucher added, “Title II reclassification would not only harm the broadband Internet, but would delay the broadband deployment goals of the Commission.”
To read the Internet Innovation Alliance’s Reply Comments in full, visit here.
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.”