January 2015

Broadband: The Electricity of the 21st Century

President Barack Obama announced that he is challenging the federal government to remove all unnecessary regulatory barriers to broadband build-out and competition, and is establishing a new Broadband Opportunity Council. The council will bring together more than a dozen government agencies with the singular goal of speeding broadband deployment and improving access in areas that need it most.

As part of this effort, the US Department of Agriculture is accepting applications to its Community Connect broadband grant program and will reopen a revamped broadband loan program, which offers financing to eligible rural carriers that invest in bringing high-speed broadband to unserved and underserved rural areas. Commerce’s National Telecommunications and Information Administration unveiled our BroadbandUSA initiative aimed at finding new ways to assist communities seeking to ensure their citizens have the broadband capacity they need to advance economic development, education, health care, and public safety. We know that an investment in broadband infrastructure is an investment in a strong, healthy, educated workforce. With President Obama's announcement, the Obama Administration continues to underscore our commitment to keeping America connected and competitive, and to making sure we do our part to give all Americans the opportunity to succeed.

5 Things You Need to Know About President Obama’s Broadband Announcement

Here are five things you need to know about President Obama's announcement on municipal broadband:

1) Fiber optic Internet is really, really fast.
2) Cedar Falls (IA) has really, really fast fiber optic Internet. For everyone in town.
3) Fast, affordable Internet is about a lot more than watching movies or online gaming: Fast broadband can be a magnetic force for a local economy.
4) But it's not available all across the country: Around half the country's rural population cannot even get access at a quarter of the speed of Cedar Falls.
5) President Obama's announcements will help bring faster, cheaper Internet for more Americans.

Big Cable, President Obama spar over government-run broadband networks

President Barack Obama continued his push for municipal broadband networks, leading to reactions from cable companies, Commissioners of the Federal Communications Commission, and others who claim government-run networks are often taxpayer rip-offs.

“While government run networks may be appropriate in rare cases, many such enterprises have ended up in failure, saddling taxpayers with significant long-term financial liabilities and diverting scarce resources from other pressing local needs,” said Michael Powell, former FCC Chairman and current head of the National Cable & Telecommunications Association. The American Cable Association, which represents smaller cable companies, said it “applauds President Obama for recognizing the key role Cedar Falls Utilities and other municipal providers play in bringing high-speed broadband to consumers.” But these small providers should not have to face new rules, the ACA said.

Broadband facts: GON (Government-Owned Networks) with the wind

[Commentary] President Barack Obama has instructed the Federal Communications Commission to overturn laws restricting cities and towns from building and operating networks in 19 states. Should the President instruct an independent agency to do anything? No. And can the FCC overturn these state laws? Probably not, at least not legally.

I think most people wouldn’t object, in the rare case where no broadband provider exists, to a town building its own network. Given the reality that consumers have more than one option for broadband in most areas of the country, and the dismal record of Government-Owned Networks, however, municipal networks should only be a last resort.

[Brett Swanson is the President of Entropy Economics LLC]

Why two prominent Republicans are now backing network neutrality

[Commentary] Senate Commerce Committee Chairman John Thune (R-SD) and House Commerce Committee Chairman Fred Upton (R-MI) endorsed network neutrality and called for a bipartisan compromise to defend it. This is the most conciliatory note senior Republicans in Congress have sounded on this issue in years.

Chairman Thune has been calling for Congress to overhaul telecommunications law for a while, but when he talked about the topic a year ago, he didn't specifically endorse network neutrality regulations. In April, Chairman Upton called network neutrality regulations "a solution in search of a problem." Now the two men say they want to "prohibit blocking and throttling" and make it illegal for internet service providers to "charge a premium to prioritize content delivery." In other words, they're in favor of network neutrality. It would be a mistake for Democrats to dismiss Chairmen Thune and Upton's overtures out of hand. Legislation can do two things: it can cement network neutrality rules into law, and it can build bipartisan support for the concept. That would make it more likely that network neutrality will be protected regardless of who wins the White House in 2016.

The Internet Association cheers GOP lawmakers’ net neutrality moves

The Internet Association -- which represents Facebook, Google, AOL and other industry heavyweights -- said that it “appreciates” lawmakers’ desire to ban Web service companies such as Comcast from blocking, slowing or speeding up access to certain sites.

Importantly, the trade group noted that Senate Commerce Committee Chairman John Thune (R-SD) called for the new law to apply to Internet delivered both over a landline and wirelessly on people’s cellphones and tablets. “What really matters is the Internet user's online experience and the creation of strong enforceable rules to protect an open Internet,” the Internet Association said. “As we review Congressional proposals, we will continue to push the Federal Communications Commission to produce enforceable rules.”

Sen Franken blasts GOP's 'watered-down' Internet proposal

Sen Al Franken (D-MN) is lashing out against a "watered-down" Republican proposal to enforce rules governing the Internet, blasting the new Republican framework as the work of "big telecom companies and Internet service providers."

"In a few weeks, the Federal Communications Commission is expected to vote on a set of rules that would enshrine network neutrality and protect consumers against monopolistic Internet service providers. (That’s a good thing.)," he wrote in an email to supporters. He added, "But Congressional Republicans are expected to file a watered-down bill that’s exactly what the opposition and their lobbyists want. (That’s a bad thing.)." Sen Franken's email then urged supporters to sign a petition in support of strong rules.

How regulations from the rotary-phone era could impact the Internet

[Commentary] If Federal Communications Commission Chairman Tom Wheeler does indeed follow President Barack Obama's lead on Title II reclassification, it could cut an indiscriminate path through both core and edge Internet innovators, exposing Internet companies of all shapes and sizes offering any sort of transmission component to a puzzle palace of potential obligations and fees, from pricing restrictions to universal service funding requirements, and a raft of government reporting rules.

It would also pour molasses over the nation’s mobile broadband ecosystem which remains by far the most innovative, competitive, and fastest-growing of all broadband services precisely because it has never been subjected to this most burdensome and restrictive of our nation’s regulatory regimes. Old rules designed for early 20th century technologies like the rotary phone shouldn’t be allowed to impede the Internet’s future.

[Jonathan Spalter is the Chairman of Mobile Future, a lobbying organization which includes AT&T and Verizon]

Dispelling the Myth of a Terminating Access Monopoly

Central to the rationale that Title II advocates persist in using to justify common carrier regulation is the claim that broadband providers supposedly enjoy a “terminating access monopoly” that allows them to restrict consumer choice and disadvantage competitors. This is simply not true.

We filed a declaration by Professor Janusz Ordover, former Deputy Assistant Attorney General for Economics in the Antitrust Division of the US Department of Justice, and Dr. Andres Lerner confirming that there is no “terminating access monopoly” for wireless broadband. As Drs. Ordover and Lerner explain, the basic premise for that case is both flatly inconsistent with the competitive reality of the mobile broadband marketplace and deeply flawed as a matter of economic theory. The declaration also makes clear that there is no terminating monopoly in the case of Verizon’s wireline broadband services, including Verizon’s FiOS broadband service, since these services face near-ubiquitous competition with next generation cable broadband. The lack of a “terminating monopoly” eviscerates the case for Title II reclassification. When these economic considerations are added to the many other legal, factual and public policy arguments against Title II regulation, the risk of pursuing the radical Title II path becomes all the more clear.

Fox News Pushes Debunked Claims About Net Neutrality

Fox News promoted debunked claims about President Barack Obama's proposed network neutrality regulations, falsely asserting that the regulations are unpopular, would stifle innovation, and raise costs for consumers. Fox News' Special Report recycled debunked conservative claims about net neutrality during the January 13 edition of the show. Host Bret Baier described net neutrality as "a slew of unnecessary regulations that hurt competition and ultimately consumers." Fox correspondent Doug McKelway claimed the new net neutrality regulations will raise costs, citing an "estimate of 15 billion dollars in new state and federal taxes a year," and suggested that most Americans do not support the proposed regulations.

But, net neutrality has been described by Vinton Cerf, one of the founders of the Internet as the guiding principle that made the Internet successful. In a letter to the FCC, Google's Director of Communications praised net neutrality, explaining that the new rules would promote competition, and would be good for the economy. The National Bureau of Economic Research also explained that "there is unlikely to be any negative impact from such regulation on [Internet Service Provider] investment," and companies are telling investors they'll continue to improve their networks under new net neutrality rules.

Benton

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