March 2010

Telstra Shares Rise After Australian Senate Delays Vote on Split

A vote on legislation that may lead to a break up of Telstra, the former Australian monopoly telephone company, was delayed in the Senate.

Communications Minister Stephen Conroy has been in talks with Telstra for six months to reach a split of its fixed-line network as his government seeks to spend A$43 billion ($39 billion) on the National Broadband Network Company high-speed Internet service. Debate on the bills has been delayed until March 18, the last day the house sits before a recess that will last until May 11.

"There was some concern that a rushed approval process would fail to consider all matters considered relevant by Telstra," said Angus Gluskie, who oversees $300 million including Telstra shares at White Funds Management Pty. in Sydney. "Extensions of time may give Telstra further avenues to build support for its opposition to the proposed bill."

The legislation has stalled as non-government lawmakers, who make up the majority in the Senate, seek more information on the project and a resolution to Telstra's talks with Conroy.

FCC Unveils Broadband Plan

The Federal Communications Commission released it long-awaited national broadband plan Monday -- a 360-page document that agency officials dubbed a "call to action" for extending low-cost, high-speed Internet service to all Americans by 2020.

The technology blueprint, required by last year's economic stimulus package, outlines six long-term goals, including superfast connectivity to 100 million households and transforming the U.S. into a world leader in mobile broadband use and innovation. The plan recommends the development of standardized cable set-top boxes that would enable Internet surfing on televisions, and suggests the idea of a free, advertiser-funded wireless broadband service available regionally or nationwide. During a news conference Monday, FCC officials said the plan would require dozens of new commission rulemakings, but only limited congressional action, for implementation. That action would include allocating $12 billion to $16 billion to create a nationwide wireless broadband network for public-safety officials.

Congress Backs National Broadband Plan

Rep Edward Markey (D-MA) on Monday praised the Federal Communications Commission's forthcoming broadband report as a "visionary, far-reaching plan." He later heralded that document as a set of "specific strategies and goals to help our country compete and win in the fiercely competitive global economy." "The National Broadband Plan will unleash a tidal wave of new investment and innovation," said Rep Markey, who chiefly drafted the provision in the 2009 federal stimulus that commissioned the FCC's report. "This plan will lower and remove barriers to new competition in services, networks and devices," he said in a statement. "And it will enable state-of-the-art, high-speed access to educational opportunities, improved healthcare, increased energy efficiency and other national priorities."

House Commerce Committee Chairman Henry Waxman (D-CA) said, "The Plan will be a critically important tool as Congress looks to the challenge of utilizing fully the transformative power of broadband. I look forward to exploring the recommendations in more detail and in the bipartisan manner we have traditionally addressed communications and technology issues." He announced a House Subcommittee on Communications, Technology hearing on the plan March 25. The chairman of the that subcommittee, Rep Rick Boucher, identified four areas in which the Commission's plan addresses key priorities: 1) The transition of the Federal Universal Service Fund to support broadband. 2) Achieving 100 megabits per second Internet access during the coming decade. 3) Working with television broadcasters to identify spectrum that could be reallocated for wireless commercial purposes. 4) The auction the D block of the 700 megahertz spectrum and potentially apply the proceeds to financing the build-out of communications capabilities for public safety, including fire, police and rescue departments nationwide.

Rep Doris Matsui (D-CA) applauded the plan in no small part for adopting as a recommendation a proposal in legislation she introduced (HR 3646). The plan includes expanding "Lifeline/Link-up" for universal broadband adoption in its proposed reforms to Universal Service Fund.

Klobuchar, Gillibrand, Begich introduce bill to release more broadband data to public

Sens Amy Klobuchar (D-MN), Kirsten Gillibrand (D-NY) and Mark Begich (D-Alaska) took the cue from the FCC's limited release of its National Broadband Plan to introduce their own legislation to make broadband data more transparent for consumers.

The legislation would make broadband service providers reveal the actual speeds consumers should expect to receive. The bill requires the FCC to develop uniform performance standards to consumers can compare the speeds advertised with the speeds they actually receive. The FCC's plan recommends collecting more detailed and accurate data on actual availability, penetration, prices and bundles offered by broadband providers. The FCC would undertake a rulemaking to find ways to make that information public. Currently, that information is considered "proprietary" by companies like AT&T, Verizon and Comcast, and is blocked from public view. This practice, the FCC says, will enhance competition and give consumers more information about the choices available to them.

FCC Wants Cable Industry to Adopt Gateway Device to Replace Set-Tops

The Federal Communications Commission is proposing that the cable industry to adopt an open-standard, "gateway" device to replace current set-tops by the end of 2012, and in the meantime make a bunch of fixes to its CableCARD regime by next fall, according to a copy of the FCC's National Broadband Plan.

The cable industry has warned against a one-size-fits-all approach to set tops. The FCC wants the new "gateway" to be a standard interface that "bridges" conditional access, tuning and reception functions, with no additional functionality. The FCC says it should be cheap and allow consumer electronics companies to sell network-neutral devices that can access content independent of any particular MVPD or third party, allowing those consumer electronics companies to design to a common interface, and to open standards. The device will also need to pass through content protection flags from cable operators. The FCC proposed interim milestones to make sure operators were gearing up for the switch, and penalties for those who are not installing the gateways in all new homes, or all box replacements, by Dec. 31, 2012.

FCC Suggests Federal Approach To Taxing Online Digital Goods, Services

As part of the National Broadband Plan, the Federal Communications Commission wants the federal government to look into establishing a "national framework" for taxing digital goods and services.

According to the FCC, one of the impediments to increasing the benefits of broadband, and in particular e-commerce, is the "current patchwork" of state and local laws and regulations on taxes of services like ringtones and digital music. It says that patchwork quilt of requirements is of little comfort to entrepreneurs, who may lack the resources to "understand and comply" with the various tax regimes. "Recognizing that state and local governments pursue varying approaches to raising tax revenues, a national framework for digital goods and services taxation would reduce uncertainty and remove one barrier to online entrepreneurship and investment."

Will the FCC get tough or play nice with broadband providers?

Federal Communications Commission Chairman Julius Genachowski and Blair Levin, executive director of the FCC Broadband Initiative, have performed a Dance of the Seven Veils over the last several months, disclosing tantalizing tidbits about the problems they perceive and potential ways to address them.

Don't be surprised to hear about efforts to empower consumers --- for example, making it easy to access and control medical records, to connect to broadband at schools and libraries, and use the Web to learn about government information and services. But the media and tech worlds want to know: Will the FCC propose other bold changes that might antagonize large companies, including broadband giants Comcast and Verizon, or will it try to accommodate them with relatively moderate reforms? Some public interest groups have urged the FCC to get tough, for example, by including provisions that would promote net neutrality, fight Internet hate speech and encourage competition.

Broadcasters Wary Of Broadband Plan's Spectrum Proposal

Broadcasters voiced concern Monday with a provision in the national broadband plan released by the Federal Communications Commission that urges broadcasters to give up some spectrum, saying it doesn't appear as "voluntary" as promised.

"We were pleased by initial indications from FCC members that any spectrum reallocation would be voluntary, and were therefore prepared to move forward in a constructive fashion on that basis," National Association of Broadcasters Executive Vice President Dennis Wharton said in a statement. "However, we are concerned by reports today that suggest many aspects of the plan may in fact not be as voluntary as originally promised. Moreover, as the nation's only communications service that is free, local and ubiquitous, we would oppose any attempt to impose onerous new spectrum fees on broadcasters." The statement added that broadcasters have already returned 108 megahertz of spectrum as part of the transition from analog to digital television.

FCC's Broadband Plan: The Role Of Competition

[Commentary] We finally know how the Federal Communications Commission plans to treat the issue most responsible for the current state of broadband in the U.S. — the lack of competition.

The FCC has proposed collecting more data, which is good, but what matters is how it uses that data, which isn't outlined in the plan. If the FCC uses the data it hopes to collect as a means to rule and impose conditions on mergers, as well as enforce certain polices around special access reform or sharing fiber, then that's going to have an impact. Taken together, better information about broadband speeds and pricing, special access reform, making it easier to build out municipal fiber, and open set-top boxes will likely have the greatest impact on consumers, while the ability to get better data on services could have the most far-reaching effect if the FCC decides to use that information to promote competition.

Day 1 of the National Broadband Plan

[Commentary] For weeks, the National Broadband Plan team at the Federal Communications Commission has operated under a clock counting down the days to today. But today, for all of us, is . We will all scurry to absorb the conclusions and recommendations of the plan. And, tomorrow, we will -- we must -- roll up our sleeves to make sure we all enjoy the promise of truly universal, affordable broadband.

The promise of the plan is broadband access for all Americans, affordability, and maximum use of broadband to improve consumer welfare, civic participation, public safety and homeland security, community development, health care delivery, energy independence and efficiency, education, worker training, private sector investment, entrepreneurial activity, job creation and economic growth. I am thrilled to read the FCC's plan. But as relieved as I am that the FCC has delivered the plan -- and fully cognizant of the incredible work done inside and outside the Commission to get us here -- let me be among the first to identify our new challenge: we must implement this plan - quickly - while evaluating our investments in broadband to inform our next national broadband plan.

Benton

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