MEMORANDUM FOR THE NEXT PRESIDENT
DATE: March 17, 2016
FROM: The Internet Innovation Alliance (IIA)
SUBJECT: Economic Growth, Innovation and Prosperity
As you know all too well, the 2016 Presidential race has been one of the most divisive in recent years. In these unsettled times, with uncertainly about economic prospects, a troubling and dangerous world abroad, and a sharply divided populace at home, wouldn’t it be good to find an issue that unites us and advances economic growth and prosperity for all?
Such an issue exists: the broadband Internet.
Twenty years ago (or, if you prefer, five Presidential elections ago), Congress enacted the Telecommunications Act of 1996, the first major rewrite of our telecommunications laws in over 60 years. At that time, only 20 million American adults had access to the Internet. Virtually no American had access to broadband at that time (which was defined in kilobits, not the megabits or gigabits of the networks being deployed today). Fewer than 35 million Americans subscribed to a wireless telephone service at that time, none of which included data; today, it’s flipped – over one-third of households don’t even have a landline phone.
It was almost impossible to foresee the broad changes in the telecommunications and technology landscape that would result from the broadband and wireless revolutions that followed. But Congress and the President took a visionary path and said the best way forward was to promote investment, competition and innovation.
Look at what has happened since: these revolutions have impacted virtually every sector of our economy and society (finance, commerce, manufacturing, media, music, transportation, tourism, energy, healthcare, education – and even government). The Internet and related technologies spurred trillions in private investment and venture capital, innovation, job growth, and broadly-based economic growth far beyond the telecommunications and IT industries. None of that would have been possible but for our telecommunications infrastructure.
The U.S. economy today is driven by Internet-based concepts that almost no one had conceived of 20 years ago: cloud computing, social media, streaming, big data, and the gig economy.
Nor will this progress stop anytime soon. Numerous developments are just over the horizon, including virtual reality, the Internet of Things, Machine2Machine communications, advanced machine learning, and others. These will benefit both business and consumers. All of them will require continued investment in a robust broadband infrastructure, both wired and wireless.
Policymakers in 1996 understood that growth of the then still-nascent Internet would require policies that promoted investment and innovation. All of us have benefited from their insight and foresight. The explosion of innovation and connectivity here in the United States is a direct result of the regulatory and policy climate established by the 1996 Act. We have made progress because policymakers on both sides of the aisle, on both ends of Pennsylvania Avenue, and (for the most part) at the FCC have generally agreed on fundamental principles for development of the Internet and on broadband policy.
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.
So what should the agenda be? There are several clear principles for progress:
Show preference for private sector investment. Government alone can’t build out these networks. Where would government find the tens of billions of dollars every year necessary to keep pace with technological change and demand? Cut Medicare, farm subsidies, education? Of course not. Some things are core functions of government, but there are others at which the private sector is simply better and more efficient – and building telecommunications networks is one of them. In the last two decades, the U.S. private sector has invested over $1.5 trillion in networks. Imagine what the multiplier effect has been considering the total impact of that investment – new companies, applications, platforms, services, entirely new industries that have grown up because of this investment in networks. So the first principle is to maintain the conditions under which private sector investment can flourish.
Promote competition – and recognize that it exists. The 1996 Act was about promoting competition, and that’s exactly what happened. 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. Spectrum is the lifeblood of the mobile broadband revolution. As a finite resource, it is vital that spectrum resources be made available for mobile broadband services. We should 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 we find the right mix in making spectrum available for licensed and unlicensed services.
Maintain an open Internet, with appropriate protections for non-discrimination. Here’s the good news: you don’t need a new policy on this. The FCC already did it for you in 2010, when it published reasonable rules necessary to preserve the Open Internet and ensure non-discrimination among network providers and access to information. Don’t confuse this with the rules the FCC put out in 2015; those rules inappropriately and unwisely apply decades-old, monopoly-style regulation to vibrant, competitive broadband and wireless Internet. They deter investment, not foster it. They limit innovation, not promote it. Their impact has been small at first, but it will become more evident over time. Europe had a lead in broadband at one point, too, and then it chose the path of regulation and fell dramatically behind the United States. Don’t let that happen here. Fortunately, the courts may strike down the FCC’s new rules, perhaps even before you take office. At that point, all you have to do is to say that the FCC had it right the first time – and perhaps even encourage Congress to codify those rules in statute law.
Assure access to connectivity, irrespective of geography or income, through universal service. This is easy: everyone deserves access to broadband, which is the key to the 21st-century economy – but the trick is to do it right. We need more rural investment and more investment in schools and educational institutions (50 percent of students today don’t have the tools they need to do their schoolwork). 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.
Protect the privacy and security of users. Protecting the privacy of Americans in the broadband ecosystem is vital. 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. Cybersecurity is a hugely important issue for both business and consumers. Only by working together with network providers can we achieve the strongest possible level of defense against cyber-attacks of all kinds.
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 with a new regulatory model that ensures government does not slow down the pace of innovation. Support for a new Act would be a major accomplishment of your Administration and would show the public that bipartisan cooperation in Congress is still possible – no small achievement in this time of sharp partisan division.
Wise policy choices over the last 20 years have given the country a spectacularly successful run of innovation and investment, the results of which you see every time you look at your smartphone. Our continued success in this area – and continued economic growth on the foundation of broadband – will hinge on the choices you make with regard to policies affecting this often ignored but extremely robust sector of our economy. You have an opportunity to build bipartisan cooperation, a better economy, and maintain America’s technological edge. Don’t pass it up.
Former Congressman (D-VA)
Honorary Chairman, Internet Innovation Alliance
Co-Chairman, Internet Innovation Alliance
Co-Chairman, Internet Innovation Alliance
Co-Chairman, Internet Innovation Alliance