January 2010

Obama didn't break Bush record for speed of appointments

A quick start put President Obama on track to break George W. Bush's modern-day record for getting his appointees in place. But with the first-year statistics now complete, the latter administration's mark still stands.

The Bush team, after a transition shortened by hanging chads and such, managed to fill 348 of 508 positions (just under 69 percent) that were tracked by the Brookings Presidential Appointee initiative. Seventy-two more people had been nominated for such jobs -- which did not include ambassadors, U.S. marshals, judges or federal prosecutors -- for a grand total of 420 folks.

The Obama team ended the year with 305 of 515 similar appointees confirmed (just under 60 percent), with an additional 91 nominated but not confirmed by the Senate. The final numbers, though some data could not be determined, show that 71 percent of Obama's selections are white, 32 percent are women, 15 percent are black, 10 percent are Hispanic and 4 percent are Asian American. More than half of Obama's picks (56 percent) are inside-the-Beltway types. The second-largest groups come from California and New York (each with 7 percent), while Obama's home state of Illinois ties Massachusetts for fourth with 3 percent.

Is telecom infrastructure peaking?

[Commentary] In Washington, things may finally be starting to happen that will affect the creation of advanced information infrastructure. This follows a year of mostly words, minor symbolic actions, and procedural walkabouts. A paltry one per cent of the federal economic stimulus money had been allocated to broadband communications. Of this, a year later, the first small grants are now trickling out, just as the economic crisis has hopefully turned the corner. But a second concrete activity is approaching -- a plan by the Federal Communications Commission on how to fill in the white spots on the geographic and social maps of broadband penetration.

We should keep in mind that each new infrastructure industry goes through a cycle -- early experimentation, accelerating growth, a flattening out, and eventual decline. All American infrastructure industries had their day in the sun, followed by a pronounced decline in investment. Soon, it will be the turn of communications infrastructure investments to slow, mature, and even decline.

For infrastructure technology companies this is not a positive outlook but a wakeup call. They had hoped for an ongoing growth scenario, not declining investment levels by their best customers. Their business model will have to move to the edge of the network, to users and applications providers, and to less mature markets. But it is positive news for network providers because their need to invest declines, which improves their bottom line and lowers consumer prices in the long run.

Public comments remind us why 'network neutrality' matters

Reading through people's filings in the Federal Communications Commission's network neutrality proceeding, O'Brien was reminded not only of how vital this issue is, but how fundamentally we've come to depend on the Internet.

If we want to make sure the Internet remains a source of innovation, and that consumers control what they access online, and that new services continue to boost our economy, then it's critical that the FCC adopt these rules. Network operators such as Comcast are opposed to these new rules, saying they agree with most of the principles and that there's no need for costly new regulations. They also argue that unnecessary limits on their ability to manage their networks could limit future investments in those networks. I'd heard that argument before but don't think for a moment these companies will stop or slow upgrades. Still, there were others making these arguments as well.

Dan Krimm, a Californian musician, writes: "This is a matter of freedom of communication: freedom to be heard by anyone who wants to hear you. This should be a basic right of citizenship, and it should not be treated only as an economic matter."

GAO: FCC needs more transparency (updated)

The Government Accountability Office said the Federal Communications Commission needs to make its decision-making process more transparent. The GAO said the FCC should make changes to its internal structure and procedures for collecting information and ensuring its seven bureaus all work together.

Rep Ed Markey (D-MA) requested the report last year to address complaints from staffers and commissioners about the lack of access to certain information under former chairman Kevin Martin.

GAO said the FCC's processes have systemic "weaknesses" and "lacks internal policies regarding commissioner access to staff analyses during the decision-making process, and some chairmen have restricted this access." GAO also said the FCC needs to improve its process for collecting public comment on a rule change, and needs to fix the "ex parte" process by which external parties are required to summarize private meetings at the agency for the public record. The "ex parte" process has been criticized for being an incomplete record of lobbyist meetings.

The FCC's lack of written procedures for aiding the flow of information within the agency has in some cases led to ineffective interbureau coordination and allowed prior chairmen to limit internal communication among staff.
It is unclear whether the roles of the Office of Engineering and Technology and the Office of Strategic Planning and Policy Analysis-two offices established to provide independent expertise on complex, crosscutting issues-are clearly defined or are overly subject to a chairman's preferences. Without written coordination procedures or clearly defined roles and responsibilities, FCC may be limited in its ability to address crosscutting issues.
At the commission level, the lack of statutory requirements or internal policies on commissioners' rights and responsibilities during the decision-making process, including their right to bureau and office analysis, has let some chairmen control how and when commissioners receive information from the bureaus and offices. Other independent regulatory agencies have varied in how they address this issue. Ultimately, if commissioners do not have adequate access to information, then the benefits of the commission structure-robust group discourse and informed deliberation and decision making-may be hampered.
While FCC relies heavily on public input to inform its decisions, it tends to do so without giving the public access to the actual text of a given proposal. If parties are able to submit vague summaries that may not fully reflect meetings between FCC officials and outside parties, then stakeholders will continue to question whether commission decisions are being influenced by information that was not subject to public comment or rebuttal and that, in some cases, is submitted just before a commission vote, the GAO stated.

From fiscal year 2003 to 2008, the number of engineers at FCC decreased by 10%, from 310 to 280. Similarly, from fiscal year 2003 to 2008, the overall number of economists decreased by 14%, from 63 to 54. While the number of engineers and economists has decreased from 2003 to 2008, the percentage of the workforce comprised of engineers and economists remained the same. In addition, the FCC estimates that 45 % of supervisory engineers will be eligible for retirement by 2011.

For economists, FCC faces an even higher share of staff eligible for retirement by 2011. FCC reports that, as of April 2009, 67 % of supervisory economists will be eligible to retire. The FCC may face challenges in addressing these impending retirements because 56% of nonsupervisory economists are also eligible to retire, and FCC has not hired any economists in fiscal years 2007 and 2008, the GAO stated.

Evidence of a Modest Price Decline in US Broadband Services

The authors construct a price index for broadband services in the United States between 2004 and 2009, analyze over 1500 service contracts offered by DSL and cable providers in the United States, and employ a mix of matched-model methods and hedonic price index estimations to adjust for qualitative improvements.

In general, they find some evidence of a quality-adjusted price decline, but the evidence points towards a modest decline at most. The estimates of the price decline range from 3% to 10% in quality-adjusted terms for the five-year period, which is faster than BLS estimates for the last three years. These modest price declines look nothing like other parts of electronics, such as computers or integrated circuits, which raises many questions.

The findings raise an open question about the economic gains to households from switching between standalone and bundled contracting forms after adopting broadband. These gains do not play a role in standard price indices for Internet access. Properly estimating them requires information about the extent of the discount and the prevalence of the switching among experienced households. For BLS to properly estimate such switching it would have to sample household expenditure at greater frequency than every three or four years, as it presently collects. Notably, this example adds to a growing list of examples which underwent a rapid change in a short period of time - such as dial-up Internet access, pharmaceuticals coming off patent, personal computer - where frequent surveying would have measured gains more accurately.also inform a range of policy discussions concerning US broadband services.

Modernizing the Universal Service Fund

In meetings at the Federal Communications Commission, Free Press is urging modernization of the federal Universal Service Fund.

The proposal centers around shifting the fund from ongoing support towards forward-looking infrastructure cost support, with better information on total revenue earning potential.

1) Modernize the current regulatory support structure to reflect the lower cost and increased revenue opportunities brought by broadband infrastructure.

2) Many Rural LECs are earning far more in unregulated revenues using USF-supported infrastructure. Part 32 accounting and Part 64 cost and revenue separations is anachronistic in a world of convergence.

3) The need for ongoing high-cost support should be based on forward-looking infrastructure costs and total revenue earning potential. This modernized regulatory structure will reduce the need for ongoing support, as many current Fund-recipients will be able to recoup network costs from the higher per-customer revenues earned from "triple-play" phone, Internet and TV services.

Panelists Debate Copyrights, Open Internet in U.S. Broadband Plan

Communication and intellectual property experts debated whether a national broadband plan is the right vehicle for addressing copyright and network neutrality issues and whether the Federal Communications Commission is overstepping its bounds by dabbling with copyright issues.

Public Knowledge President Gigi Sohn sparred with officials from the Recording Industry Association of America, telling RIAA's executive vice president and general counsel that the recording and Hollywood industries along with some song writers want Internet service providers to filter networks for copyright infringement. She pressed Steven Marks, of RIAA, to come clean about his group's wishes for ISPs to adopt a "three strikes and you're out" policy, referring to the suggestion that a consumer would be penalized if he violates a copyright more than three times.

Leibowitz Gives Strong Support to FCC's Network Neutrality Proposals

The Federal Communications Commission's network neutrality proposals got strong support from Federal Trade Commission Chairman Jon Leibowitz, who said that transparency and the open Internet are "critical" to consumer-friendly broadband service.

His remarks came at an FCC workshop Tuesday (Jan. 19) focusing on the FCC's proposal to add a new transparency principle to the Internet Openness policy statement the commission's democratic majority argue needs to be expanded and codified. Chairman Leibowitz said that effort to expand and codify the principles was necessary because, without it, "those principles are not certainties in the Internet of tomorrow." He also said the FTC would be teaming up with the FCC to insure openness. "I welcome the FCC's involvement in this area. If this principle of transparency and disclosure is promulgated, I look forward to a close working relationship between our agencies that leverages the expertise of both on behalf of consumers."

Transparency Is Good But Intelligence Is Better

[Commentary] Sending bits across the web is far more complicated than most people may realize. Those bits pass through pipes owned by different companies, multiple routers, a variety of servers and even your home equipment, which means a transparent window on what an ISP is doing doesn't always mean you can watch a live broadcast without significant skips, buffering and other problems that may have a web user railing against their broadband provider. Not to say that the FCC rules aren't a good thing, but getting a quality video or even web site experience isn't just an ISP issue, nor will network neutrality ensure high-quality video delivered via broadband. So what does this mean for those of us who just want their online video to work? Knowing what your ISP is doing to your traffic is a key step, but for the best experience, I think there's a market for a network intelligence-gathering service offered ideally by the content provider that a user can click on to get a sense of what issues might be halting content between the provider and the user's home. Maybe the button starts a ping test and delivers the results in a user-friendly format noting which servers may be causing problems.

US has met with China on Internet freedom: official

The United States has had multiple meetings with Chinese authorities over Internet freedom and will have more in the coming days, a top State Department official said on Tuesday amid continuing tensions between Google and Beijing. Assistant U.S. Secretary of State Kurt Campbell told reporters that Washington viewed free and open Internet use as a "universal right that should be available to all people." "The ability to operate with confidence in cyberspace is critical in a modern society and economy," he said. "The U.S. government has had multiple meetings with Chinese authorities on this matter and will have more in the coming days," Campbell added.

Benton

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