Telecom analysis including broadband
President Obama has now signed into law the Bipartisan Budget Act of 2015, which puts into force a title specific to radio spectrum auctions. Telecom legislation is a rare bird, and many were excited to see authorization for the next tranche of spectrum auctions. There is some good and some bad—here is a rundown of what’s in the new law, and what we at ITIF would have liked to see.
First the good. The title of the legislation specific to spectrum, a.k.a. the “Spectrum Pipeline Act of 2015,” makes much needed changes to what is known as the spectrum relocation fund, or “SRF.” The SRF is a pot of money managed by the Office of Management and Budget to pay for federal entities to transition radio systems when their spectrum is repurposed for other uses. Eight years after the creation of the fund in 2004, the 2012 Tax Relief Act—which extended the FCC’s auction authority and set the upcoming 600 MHz incentive auction in motion—expanded the types of costs which federal agencies could recover from the SRF. However, those funds were still limited to planning and research directly
Through a sleepy August, the Title II imbroglio continues, extending along two main fronts: glimmers of a legislative solution possibly gaining traction when Congress returns, and the DC Circuit Court marching through its briefing schedule. On the latter, initial industry briefs are now in, along with those of their friends, and we can start to see the shape of the legal fight to come. The court has expedited the briefing schedule, with final briefs due the middle of October, and oral argument expected in December.
It is looking to be a fairly complex case, with multiple petitioners arguing in different directions, interveners on both sides, and plenty of amici weighing in. There are many ways in which the FCC’s order could unwind. Here I want to focus on a few of the most basic legal challenges that stakeholders have advanced.
First, a point that still seems lost on many—the major Internet service providers (ISPs) are not challenging the basic net neutrality rules; instead they are focused on the FCC’s decision to classify broadband as a common carrier service under Title II of the Communications Act. Op-eds that argue carriers should
To listen to the debate about Internet governance, the world faces a Manichean choice between an open Internet—where everyone is free to share any information they wish—and a closed one, where governments block and prohibit vast troves of information. Given this stark choice, the only sensible side to take is openness. After all, as ITIF has shown, global information flows are critical not only to commerce but to the general flourishing of the knowledge economy and democracy.
But as in all other aspects of society, we don’t actually face such a binary choice. Reality is far more nuanced. The Internet is not completely open, nor should it be. As a case in point, the world should welcome the recent announcement by major Internet firms including Facebook, Google, Microsoft, and Yahoo, which are taking steps to block images of child sexual abuse. In this particular case, leading Internet companies are using a database of digital fingerprints compiled by the Internet Watch Foundation to identify known child sex abuse images and block their distribution.
Because what is being blocked is rightly deemed to be horrific and socially corrosive, even the
At last Wednesday’s Senate Commerce, Science and Transportation hearing on wireless spectrum, senators and witnesses alike expressed a general desire to “free up” more spectrum for wireless broadband. Sen. Bill Nelson (D-FL) said, “Spectrum legislation is not only necessary, but it has traditionally been bipartisan.” Along the same line, Sen. Brian Shatz (D-HI) said, “there is a real opportunity for bipartisan consensus” on spectrum legislation. It’s true, spectrum policy, although often difficult and complex, is rarely mired in partisan disagreement. Growing demand for additional wireless capacity for streaming video, Internet of Things (IoT), and machine-to-machine communications makes clear that relatively low-cost opportunities to repurpose spectrum are no-brainers we can all get behind.
However, a bit further down in the weeds there was a point of disagreement among the witnesses that is worth teasing apart. It has to do with mechanisms to seek out inefficient uses of spectrum by the federal government. There was general agreement on the panel that federal users will be a significant source of spectrum in the future, but not exactly consensus on the particular mechanisms to repurpose that spectrum.
There has been a lot of talk
The months are ticking down to the historic spectrum swap between broadcasters and wireless providers. With time running out to craft the incentive auction rules, a coalition flying the banner “Save Wireless Choice” is pushing for additional spectrum to be set aside for those carriers who have not acquired much in the way of airwaves below 1 GHz. To be clear, we are talking about an additional spectrum reservation; the FCC already plans on setting aside up to 30 megahertz of valuable 600 MHz spectrum only accessible by bidders with less than 45 megahertz of sub-1 GHz spectrum.
It is worth digging into the specifics of the Save Wireless Choice ask. The group is asking that the FCC raise the maximum reserved spectrum available for carriers with limited spectrum below 1 GHz in the incentive auction from 30 megahertz to 40 megahertz. While this may sound simple, the ask is surprisingly bold, though it takes a bit of unpacking to explain why.
The FCC’s incentive auction is an unprecedented attempt to coordinate a two-sided auction, playing match maker between spectrum-hungry mobile carriers and TV broadcasters willing to part
The recent announcement that Verizon Communications Inc. intends to acquire AOL Inc. generated a surprising amount of media coverage, and unfortunately some groups are using the news as an excuse to push for expanded privacy regulations that would stifle innovation and competition in the burgeoning mobile ecosystem.
By telecom standards, this is not a huge transaction. At $4.4 billion, it is a full order of magnitude smaller than either the AT&T-DirecTV deal or the ill-fated Comcast-Time Warner Cable merger. And Verizon’s purchase of the 45% stake Vodafone had in Verizon Wireless was almost 30 times larger. Nevertheless, reporters flocked to the story, perhaps drawn by potential jokes about promotional CDs or the opportunity to poke fun at the 2 million Americans who remain AOL dial-up subscribers.
More likely interest in the deal was driven by its implications for the business Verizon wants to become. AOL is well known for its content, such as Huffington Post and TechCruch, but its growth is now in online ad sales—especially in video ads. The nation’s leading wireless company is looking down the road and seeing mobile video (presumably sprinkled with advertisements) as the future.
Earlier this week the Center for Public Integrity (CPI) published what purports to be an investigative look at broadband competition, speed, and prices, concluding that “U.S. Internet users pay more and have fewer choices than Europeans.” This is a common myth that we at ITIF have long worked to dispel, but apparently some myths die hard.
CPI duplicates the usual argument made in this space, attempting to compare a handful of French and U.S. cities, claiming that because French cities offer more broadband “choices,” they have lower price, and higher adoption. CPI suggests that the supposed success demonstrated in their “snapshot” should push us to emulate France’s open access policies. There are a number of problems with this picture.
CPI compares a set of advertised broadband rates in a handful of French cities to American cities. Let’s start by pulling back a bit and looking at country-wide data. If you are going to opine on national policy direction, it’s worthwhile to at least take a passing glance on the statistics at a national level, instead of comparing five French cities with five American ones. Compiled below are
I keep telling myself that the claims of tech populists about net neutrality could not get wackier, but then they go and say something that makes you realize, “yes they can.” Case in point, Alex Nogales, of the National Hispanic Media Coalition, writing this week:
“We just won a historic victory, a critical step towards equality for Latinos in the digital age. Yet many American Latinos are unaware of this win and the tremendous potential it brings for us and our families to achieve full participation in the American Dream: better educations, better jobs, more financial stability and more political power. No, unfortunately, I am not talking about important and much needed reforms to education, immigration, criminal justice, and the other major issues before us today. But this victory has far reaching implications for the way we leverage our burgeoning political power in these kind of fights in the months and years to come. So what is this beautiful, mysterious victory? On February 26, the Federal Communications Commission voted to adopt “Network Neutrality” rules.”
If Cesar Chavez were alive, I wonder what he would say. How would a man who
Recently, FCC Chairman Tom Wheeler gave a speech arguing that “A 25 Mbps connection is fast becoming ‘table stakes’ in 21st century communications,” with the implication that anything less than 25 mbs is not really broadband.
This is an odd sort of statement, as it appears to be based not on any real analysis, but simply on the Chairman’s opinion. He tried to provide some rationale for this number when he stated “It’s not uncommon for a U.S. Internet connected household to have six or more connected devices – including televisions, desktops, laptops, tablets, and smartphones. When these devices are used at the same time, as they often are in the evenings, it’s not hard to overwhelm 10 Mbps of bandwidth.” I don’t know about you, but I personally am generally not using two devices at once. And as the Census Bureau reports, the average household size in the U.S. is 2.58 people with the median size being less. So, the majority of households are not overwhelming 10 Mbps of bandwidth.
So, if sub-25 Internet connections are not really broadband what does this mean in terms of what nations have
I can see the headlines now: “ISPs tell Wall Street and Washington mostly, but not quite exactly, the same thing about Title II.” Doesn’t quite have the right ring to it…
Instead, Brian Fung at the Washington Post has been reporting a number of stories attempting to show that network operators are telling Wall Street and Washington two entirely different stories and musing on some potential policy implications of such possible discrepancies.
Yesterday afternoon, Bob Quinn with AT&T expressed his surprise at the line of stories. I must say I agree with Mr. Quinn – Fung is really stretching his interpretations. Here I suggest we go to the primary sources: The transcripts of interviews with executives from Comcast and Time Warner Cable that Mr. Quinn reproduces are quite up-front with their thinking on Title II. They clearly state that the Title II framework is bad policy and bad for investment. Nobody in D.C. has claimed that the world will melt under Title II. But, let’s be clear, to the extent any of these statements can be read to say carriers can live under Title II with forbearance done properly (a