February 2014

[Commentary] A rash of consumer-friendliness has broken out across the mobile data industry. In 2013, the four major carriers -- AT&T, Verizon, Sprint and T-Mobile -- cut prices and offered greater flexibility in how they sell their voice, text and broadband services. The industry could be on the verge of an all-out price war. Who is responsible for this blessed state of affairs? Credit must go to the United States government. T-Mobile’s resurgence, and the effect it has had on the larger market for cellular service, may hold important lessons for regulators who will soon sit in judgment over the latest enormous broadband proposal, Comcast’s deal to gobble up Time Warner Cable.

I joined Commerce Secretary Penny Pritzker and other Commerce Department leaders in travelling to Silicon Valley to promote the Department’s initiatives to spur US economic growth, innovation, and competitiveness. We’re meeting with leaders of technology powerhouses, fledgling start-ups, and venture capitalists funding the next big idea. Yet, we recognize that not everyone in the region has shared in the wealth created in Silicon Valley.

I had the privilege of meeting with a number of groups including the California Emerging Technology Fund (CETF), the Chicana/Latina Foundation, the Latino Community Foundation, and others that are working tirelessly across the state to close the digital divide. Even as Silicon Valley is experiencing economic growth on the whole, income inequality in the region continues to rise. For instance, African American and Latino residents earn 70 percent less on average than the region’s top earners, the biggest gap ever recorded by the Silicon Valley Index. Computer and Internet training provided by our broadband grant projects offers users 21st century skills that can lead to better employment. While high-speed Internet is widely available throughout Silicon Valley, not everyone has the means or the skills to access it.

When the Kansas state senate proposed legislation barring local governments from providing high-speed Internet to their citizens, one small community, which was effectively exempt from the legislation, spoke out the loudest.

The proposed legislation, Senate Bill 304, prohibited the creation of municipal broadband networks for areas in the state that were deemed “unserved.” This meant that, in the event that an Internet service provider declined to invest in small Kansas communities that were unlikely to provide a return on their investments, the local governments were legally barred from providing broadband to their citizens themselves. Larry Gates, utilities director for the city of Chanute (KS), played a big role in the effort that ultimately persuaded State Sen Julia Lynn (R-KS) to withdraw SB 304 so her committee could “tweak” its language. Chanute launched a webpage on its city website urging Kansans to sign a petition against the bill, issued press releases denouncing the bill and the cable lobbyists who were behind it, and posted YouTube videos detailing what was at stake. Moving ahead, Gates wants to put the vitriol that resulted from the bill aside -- he’s apologized for calling out Senator Lynn and KCTA President and cable industry lobbyist John Federico by name -- and work to find a way to improve services in the state without the legal battles and confrontation.

The version of the Federal Information Technology Acquisition Reform Act that passed the House of Representatives contains a handful of revisions from the version passed out of committee in 2013. Most importantly, the law’s mandate that all agencies employ a single official with the title chief information officer and the authority to manage that agency’s IT budget has been expanded to include the Defense Department, which was previously exempted. Changes to the bill were made on a bipartisan basis by the IT Reform Act’s Republican and Democratic cosponsors and aimed at raising the likelihood the bill would pass both the House and the Senate, Rep Darrell Issa (R-CA) said while introducing the bill. Rep Issa, who chairs the House Oversight and Government Reform Committee, co-sponsored the bill with Rep Gerry Connolly (D-VA), who is ranking member on the committee’s government operations panel.