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All Signs Point to Go for Zero-Rating

Mobile carriers across the world have been rolling out what are called zero-rated or free data products, allowing consumer access to certain data traffic without it counting against their monthly cap. The motivations for these services are different in different markets, but at least in the United States mobile carriers are trying to differentiate their services in a competitive fight over who can best meet consumers’ ever-increasing demand for streaming video.

Zero-rating has run into opposition from some of net neutrality’s more puritanical followers. Susan Crawford offered one of the more eye-opening harangues, claiming that allowing some of the world’s poorest people the choice to access basic information online for free is a “malignant” “surrendering of the Internet” that should be outlawed immediately.

Thankfully, the Federal Communications Commission (FCC) is not quite so hostile to pragmatic solutions to expand access and use of the Internet. In the Open Internet Order, the FCC laid out a case-by-case approach for overseeing zero-rating programs. Later, in a speech discussing zero-rating at the Computer History Museum, Chairman Tom Wheeler explained that “the Open Internet Order did not discourage this type of two-sided market”

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Federal Spectrum Opportunities

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

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Foreclosing Incentives: Spectrum Set-Asides in the Incentive Auction

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

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Premature Privacy Concerns Over Verizon-AOL Deal

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.

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Channel Sharing Pilot Holds Promise

Yesterday two Los Angeles broadcast TV stations announced a plan to enter a pilot program to demonstrate the feasibility of channel sharing. They plan to experiment with broadcasting the streams of both stations over the infrastructure and, more importantly, the spectrum of only one. This is exciting news – channel sharing potentially allows for significant amounts of spectrum to be unleashed for mobile broadband. Broadcasters also win though the deal. When two stations are able to squeeze into a single 6 megahertz channel, they maintain virtually all of their previous revenue streams (including retransmission fees) plus gain a cash infusion by putting their extra spectrum up for sale in the incentive auctions. In the end, channel sharing means more efficient use of valuable low-band frequencies, more spectrum available for mobile broadband, a higher chance of a successful incentive auction, all while those few who watch TV over the air remain able to do so. This is one of those rare win-win-win situations.

Channel sharing has been a long time coming. The National Broadband Plan identified the first step in recommending that the FCC “establish a licensing framework to permit two

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