Innovation Files has moved! For ITIF's quick takes, quips, and commentary on the latest in tech policy, go to


Facilities-Based Competition is Working

Readers of this blog are aware that the telephone network is a relic of the past that will someday join the telegraph terminal and the buggy whip in the dustbin of history; the only question is when. For telephone network operators, sooner is better than later because the costs of supporting an archaic network with a dwindling number of users are an unsustainable drag on investment in the up-to-date broadband networks, both mobile and fixed, that have taken its place. The Investment AT&T shows what's at stake in a blog post on two very closely related initiatives, one on the investment side and the other in the regulatory sphere, Building a Network for the 21st Century | AT&T Public Policy Blog. ... Read the rest

The Tech Industry’s Odd Relationship with Government

Two recent posts on TechCrunch about tech industry efforts to influence and work with government deserve comment, because one clearly shows the right way to go while the other just as clearly exemplifies the wrong way. We’ll take them in time sequence, starting with how not to do things.

Three geeks go into a bar. Several drinks later, they determine that all it takes to solve the world’s problems is a new web site to crowdsource amendments to acts of Congress.

If you’ve been following technogeek efforts at leveraging the Web to magnify tech political influence for very long, you’ve heard this story several times. Larry Lessig, Tim Wu, and their cronies at the Stanford Center for Internet and Society and the Harvard Berkman Center for Internet and Society have been on this mission since the turn of the century. They’ve been joined by the folks who believed blogs were going to change the world, such as the founders of Personal Democracy Forum and MIT Media Lab director Joi Ito, an early investor in blogging platform Moveable Type. When congressman Darrell Issa wrote his alternative to SOPA, the OPEN Act

Read the rest

Privacy Complaint in the Silly Season

As this is a presidential election year, it’s not surprising that the the “silly season” of politics has been extended into the baseball playoffs. A group of political extremists organized by the Competitive Enterprise Institute (CEI) has filed a complaint with the FCC over the privacy disclosures for an old  consumer broadband measurement program. This isn’t the program that the Commission conducts every year with Sam Knows that leads to an annual report comparing actual broadband speeds to advertised ones, but to a program that was developed by the National Broadband Plan some three years ago to provide the team with a snapshot of performance.

The letter has me wondering whether the advocates: (a) Have just come out of a three year coma; and (b) Have any idea at all about how the Internet works. There are also some distortions of law that will slap attorneys in the face. Please read the letter, but sit down first so you don’t hurt yourself rolling on the floor laughing at its circular logic.

Like many government programs that collect information that might be considered personal and sensitive, the FCC’s broadband measurement program

Read the rest

De-Spinning the UN Broadband Report

The United Nations Broadband Commission’s new report, The State Of Broadband 2012: Achieving Digital Inclusion For All is worth a read for all broadband policy wonks. It highlights the benefits that Next-Generation Broadband Networks (NGN) bring to economies and to citizens, explores the value of mobility, and celebrates the dramatic progress that nations are making in bringing high speed, “always-on” connectivity to everyone. By the UN’s estimate, there are nearly 6 billion mobile devices in the world already, which exceeds the world’s over-14  population by a billion or so.

Roughly 80 per cent of these connections are narrowband (voice and text only,) so we still have a long way to go in terms of universal broadband. Wireline broadband connections to the home continue to increase worldwide as more people buy computers and carriers offer low-price plans with correspondingly low usage limits, and many carriers price broadband on a pre-paid basis to reach lower income groups. This strategy has worked for cellular quite effectively, so there’s little doubt it will work for wired broadband as well.

By the U. N.’s forecast, the market for machine-to-machine connections may be as high as

Read the rest

Photograph of the NIST Advanced Measurement Laboratory (AML) building Gaitherburg, MD

Impact of Sequestration on Technology and Innovation

As required by the Sequestration Transparency Act, the White House released details about how the $120 billion in budget cuts would be applied if Congress does not stop the sequestration plan agreed to as part of the Budget Control Act. As the White House's document makes clear, these budget cuts would have a dramatic impact on the budget of defense and non-defense programs, including many projects important for technology R&D, modernizing government, spurring clean energy innovation, and developing digital platforms. Many of these cuts will have a substantial impact on specific policy initiatives. For example, these cuts include $86 million in cuts to DHS's information security program and $8 million in cuts to the Public Safety Trust Fund. It also includes $400 million in cuts to basic energy research as well as $23 million to high-risk, high-reward clean energy R&D at ARPA-E. In terms of information technology (IT), these cuts include:

  • National Institute of Standards and Technology (NIST) - $62 million
...Read the rest

Under-the-Table Subsidies

Speaking of subsidies, there's another really good example in the today of the conflict between the old and new subsidy models. The Rural Cellular Association, the small carriers' lobbying group, pressed their case for handset subsidies at an event on the Hill today. They're formed a new front group called The Interoperability Alliance. If they have their way, handsets will become larger, slower, more expensive, and heavier for the 70% of Americans who have the poor taste to buy cellular service from the two largest carriers:

The alliance wants to pressure the FCC to adopt rules that would mandate a single technology in the 700 MHz band of radio spectrum. AT&T's cell towers use a different technology in the frequency band, meaning their network is not interoperable with many devices.
As we explained in an FCC filing and our recent report on spectrum policy, the "interoperability" that the group seeks has three actual effects:
  1. It makes the low-cost spectrum licenses that RCA members bought for the lower 700 MHz band more valuable.
  2. ...Read the rest

Supply and Demand in Kansas City

A raft of stories in the press today focus on the limited deployment of Google’s fiber network in Kansas City. The Kansas City Star highlights the plight of students at schools with high Internet content and slow connections:

[The Central Academy of Excellence,] with its overwhelmed Internet connection, sits in a neighborhood lagging well behind the pre-registrations Google requires to light up its cutting-edge Web access. “It’s not fair,” said Mona Price, Central’s dean of instruction. “It’s not fair to the kids in urban settings who are trying to get an education.” Many of the schools, libraries and poorest neighborhoods given first shot at drawing Google’s ultra-fast Internet service look in danger of missing out on Kansas City’s digital revolution.
... Read the rest

Full Speed Ahead for Verizon and Cable

The Justice Department has given the go-ahead to a very interesting transaction between Verizon Wireless and the cable companies, with certain conditions. The government’s review followed the template we suggested in the comments we filed with the FCC in February, where the spectrum transaction and the other arrangements were evaluated separately. While the FCC is tasked with reviewing the spectrum transaction, the commercial arrangement was examined by Justice. Commentary by left interest groups focuses on the resale agreements between Verizon Wireless and the cable companies and ignores the much more interesting joint venture to develop intellectual property. This is a strange omission because the joint venture (“JOE LLC”) figures very prominently in the DoJ review, with its own set of conditions attached.

The long and short of the transaction is:

  • Verizon will be allowed to purchase the licenses to 20 MHz of nice AWS spectrum currently held by the cable companies, except in markets where Verizon seems to be well provisioned for the time being and T-Mobile is less well provisioned; in these cases, T-Mobile will gain licenses.
  • Cable and Verizon Wireless will be able to resell and bundle
Read the rest

Broadband Cherry-Picking

According to Akamai’s State of the Internet reports, America’s average Internet connection speed ranking improved from 22nd place in 2009 to 13th place at the end of 2011, and other sources show that a majority of the world’s LTE users reside in the United States. These trends reflect positively on U. S. Internet policy, but our friends at New America Foundation are not impressed.

Since 2008, the NAF’s Open Technology Institute has published papers arguing that American broadband service is inferior to services in the rest of the world and getting worse. They blame this (counter-factual) state of affairs on our reliance on facilities-based competition (cable vs. DSL and FTTH vs. wireless) instead of mandated wholesale access to our various networks at prices set by regulatory fiat. They also want more facilities-based competition as long as it’s from government-owned or funded networks, using TV White Spaces, FTTH, and various other technologies.

Their position stems in part from a particularly quirky reading of a provision of the 1996 Telecom Act that was meant to create a market for competitive telephone services over the lines owned by the phone companies that

Read the rest

Comcast DVR Display

The Present of Video

On Wednesday, the House Subcommittee on Communications and Technology is holding a hearing on the video business that will address the retransmission consent/program carriage issue. There is a legal requirement for cable and satellite companies to carry most local programming, and they pay a fee to the programming conduit for the privilege of compliance. These negotiations often become very ugly, as the local network affiliate typically values its programming much too dearly, but the cable/satellite company has no choice but to pay the asking price. The FCC is supposed to limit the price to “just and reasonable,” but in practice they never get involved at all.

People who get mad at the cable company for raising the price of service year after year invariably fail to realize that programming costs to the cable companies escalate year after year as well, so putting all the blame on the cable company is essentially shooting the messenger. One of the witnesses at the hearing is Gigi Sohn, founder of Public Knowledge, so I suppose the panel will get an earful of that sort of thing. Dish Networks has a clever little DVR that

Read the rest