May 2009

Commerce readies contract for broadband grant support

The Commerce Department intends to award a contract by June 30 to obtain assistance in distributing the $4.7 billion in economic stimulus law funds devoted to broadband expansion, according to a planning document published May 15. The National Telecommunications and Information Administration intends to publish a notice of funds availability in June and conduct initial proposal processing and review from September to December, with initial grant awards made in December. A second solicitation of proposals will be made from October to December, and a third solicitation will occur from April to June 2010. All awards must be made by September 2010. The target date for awarding a contract for grants program support is June 30.

How 'Buy American' Could Ruin Broadband Stimulus Plans

Should the government require broadband buildouts funded by economic stimulus grants to use only goods produced in the United States? Is such a stipulation even realistic in a global economy in which tech companies have offshored much of their manufacturing for decades? Those are the questions facing the National Telecommunications and Information Administration, the agency tasked with allocating about $4 billion in grants to further broadband's reach in the United States as part of the 2009 American Reinvestment and Recovery Act. The bill contains a "Buy American" clause that, if enforced by NTIA, would exclude most America-based vendors from helping cities, states, nonprofits and other entities install new infrastructure for high-speed Internet and data access. And if U.S. giants that manufacture many components overseas, such as Motorola, Cisco, and Alcatel-Lucent, can't participate, who can? Grant recipients could look to such businesses as Zhone Technologies that do make their products in the United States. But such companies are few and far between. Recently, the federal Office of Management and Budget said the paragraph in the "Buy American" rider applies just to public buildings and public works built by government agencies receiving grants. Therefore, some analysts say, low-cost Chinese vendors such as Huawei and ZTE Corp. could be well-positioned to take advantage of the situation. That's because the term "public works" is not well-defined; cities using broadband funds might have to adhere to made-in-America labels but a rural service provider expanding to connect communities might not. Thus, that service provider could, if NTIA doesn't clarify, resort to buying from the cheapest-priced vendors, which could be those headquartered overseas.

Health IT Standards Committee Discusses Stimulus Provisions

The initial meeting of the HIT Standards Committee was held Friday, May 15. Much of the initial work by the new committee will be focused on reviewing earlier work done by its precursor, the Health Information Technology Standards Panel, according to John Halamka, a physician informaticist who serves as chairman of the HITSP and vice chairman of the new HIT Standards Committee. Halamka is the chief information officer at CareGroup Healthcare System, Boston. Also, the new HIT Standards Panel members will be trying to anticipate and work in advance of policy recommendations around the recommendations of another stimulus act-mandated advisory panel, the HIT Policy Committee, that first met earlier this week. Both groups are working under a deadline contained in the stimulus act that an initial set of standards, implementation specifications and certification criteria go through federal rulemaking and be published by HHS by Dec. 31 of this year.

The Next-Generation of the Fiber-Powered Internet

[Commentary] Over the last couple of years there's been a steady, though sporadic, push to suggest that we need to rebuild the Internet. Daily thought those calls to be alarmist and not practical. Then recently it dawned on him: the deploying of full fiber networks is in essence rebuilding the Internet. Or put more precisely, fiber points to what the next generation of the Internet can be. So what does the next generation of the Internet look like? To find out Daily thinks it's important to look at Lafayette, LA, as that's where he thinks it's being built.

How "Fast" is Broadband?

[Commentary] Akamai recently released its quarterly The State of the Internet, a rich trove of information concerning Internet usage around the world. One portion of the Akamai report that has been widely quoted in the mainstream media covers broadband speeds. The Q4/2008 report, for the first time, ranks countries by average speed: tiny, dense South Korea (surprise) is #1 at 15 Mbps, the US ranks 17th at 3.9 Mps (others of note include Japan at 7 Mbps, Canada at 3.8 Mbps, Germany at 3.8 Mbps, France at 3.2 Mbps, India at 0.8 Mbps China at 0.8 Mbps, and Syria at a blistering 0.3 Kbps). All interesting data and useful fodder for activist governments wanting to spend taxpayer money to fix things. But while we don't really know the average "speed" of broadband connections around the world, the capacity of broadband networks is most likely higher than the Akamai report indicates. How much higher is impossible to determine. The primary problem is (most often) not the capacity of the broadband pipe but rather congestion within the overall broadband network. This congestion, while not deleterious to garden variety web browsing and emailing, severely hampers streaming video which, according to industry research firm IDC, will constitute slightly more than half of all downstream web traffic in the US by 2013. Consequently, as we endeavor to "fix" broadband with the $7.2 billion in stimulus funding, let's not lose sight of the fact that these are complex and heavily congested networks. Simply upping the size of the broadband pipe may not yield the performance improvements everyone professes to want.

Cisco: Smart grid will eclipse size of Internet

Cisco sees a $100 billion market opportunity in the smart grid. The company make communications equipment for the electricity grid -- everything from routers in grid substations to home energy controllers. Cisco's move is a sign that the creaky electricity distribution system is poised for a digital upgrade. Other high-tech companies, including IBM, Intel, and several start-ups, are ramping up smart-grid efforts to capitalize on expected investments from utilities and federal governments. Cisco estimates that the communications portion of that build-out is worth $20 billion a year over the next five years. The idea of the "smart grid" is to modernize the electricity industry by overlaying digital communications onto the grid. Smart meters in a person's home, for example, can communicate energy usage to utilities in near real time. That allows the utility to more efficiently manage the electricity supply and potentially allow a consumer to take advantage of cheaper rates.

Copps Is Wrong To Regulate Content

[Commentary] There is certainly no language in the Constitution implying that operating under a government license diminishes one's First Amendment rights. But Federal Communications Commission Chairman Michael Copps endorses reduced license terms and increased "public interest obligations" for broadcasters. Broadcasters have always made their product available free to the American people.What could be more "in the public interest" than that? In the broadcasting business model, if a station doesn't provide programming that garners a sufficient audience, it won't sell enough advertising and goes out of business. This is surely the most democratic system for regulating media content ever devised by man.

FCC Opens Inquiry into Arbitron PPMs

The Federal Communications Commission has opened an inquiry into Arbitron's Portable People Meters (PPM), citing requests from broadcasters and its own Advisory Committee on Diversity. Critics of the meters allege it underreports minority radio listening and could harm diversity and competition. The Diversity Committee argued that "Arbitron's use of an audience measurement service that may not accurately measure minority audiences could lead to 'irreparable' financial harm to stations serving such audiences and, thus, lead to the loss of service that such stations provide to the public," the FCC said in laying out its reasoning for the inquiry. The FCC seeks comment and evidence on PPM methodology and its effect on minority and urban listeners, as well as suggestions for what to do about it if PPM critics are correct. While it is primarily about radio listening, the issue is important to TV stations as well.

Big Media Myopia

[Commentary] It's hard to empathize with struggling newspapers when those running them continue to suffer from the short-sightedness that got their industry into a mess. The editors at the Washington Post put on a display of such backward thinking on Saturday, when they published an op-ed by two lawyers from the influential DC firm Baker Hostetler. In writing this op-ed, the lawyers hide certain conflicts of interest that should weigh heavily against their analysis. The Post 's editors might have connected the dots for readers, but didn't. But the piece is just so stunningly stupid that it falls apart all by itself. In it, Esq. Bruce W. Sanford and Bruce D. Brown call for reactionary legal measures that would stifle access to news and information and return us to the grand old days of consolidated ownership, bloated media giants and information gatekeepers. To save journalism, Brown and Sanford argue, we must "eliminate ownership restrictions" and open floodgates to a new wave of media concentration.

Pay Walls Alone Won't Save Newspapers

[Commentary] Will May 2009 mark the beginning of the end for the free, unfettered Internet? I wouldn't put my money on it. Why? Let's start with newspapers. The case for charging online readers seems pretty clear, if only because publishers have relatively little to lose if they don't. Few newspapers generate even 10 percent of their revenue on the Internet, even after years of double-digit growth in advertising. Now online advertising has gone into reverse. But "pay walls" alone are not going to save the industry. Even The Financial Times and The Wall Street Journal, whose Web sites are perhaps the best examples of paid-for digital news, generate only small fractions of their budgets from Internet subscriptions.

Benton

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