January 2016

As what promises to be the most expensive presidential election in US history heats up, one constituency is dreading the coming barrage of political advertising perhaps more than any other: car dealers. In some battleground markets, a presidential race can soak up a third or more of local broadcast television advertising time, crowding out auto dealers, who are typically the biggest buyers of local TV ad time, according to a Bloomberg analysis. That shift, according to the analysis of data from Kantar Media Intelligence, CMAG, and Kelley Blue Book, can hurt sales.

Take Cleveland (OH), for example, a major battleground in the 2012 campaign. The number of car ads that ran on local broadcast stations in October 2012, the final month of the race, fell to 4,553, a 16 percent drop compared to the same month a year earlier, while the number of political ads soared to more than 27,000 that month alone, according to the analysis. Actual car and light truck sales rose just 5 percent even as the nation rose 16 percent, according to data from Kelley Blue Book. The race for the White House has already pumped more than an estimated $98 million into local broadcast television advertising, according to data from CMAG, adding up to more than 95,000 ads mostly in Iowa and New Hampshire, which kick off the presidential nominating process in Feb.

[Commentary] We know that Big Cable’s plan for high-speed internet access is to squeeze us with “usage-based billing” and data caps, so as to milk ever-growing profits from their existing networks rather than invest in future-proof fiber optics. We are also seeing that Big Cable has won the war for high-capacity, 25Mbps-download-or-better wired internet access, leaving AT&T and Verizon to concentrate primarily on mobile wireless. Indeed, Big Cable’s share of new and existing wired-access subscribers has never been greater — cable got both all new net subscribers in the third quarter of 2015 and captured millions of subscribers fleeing DSL — and its control over this market is growing faster than ever. Wall Street analyst Craig Moffett predicts that, in the end, unless things change, cable will have 90 percent of subscribers in areas where it faces competition from only traditional DSL and will have the lion’s share of subscribers in areas where cable faces competition from souped-up copper-line DSL and fiber-to-the-node (aka “fiber to the neighborhood”). We’re already seeing the deadening effects of this. So where does that leave us? Are we really going to wait for the Cable Guy to bring everyone in America the same modern internet access capacity at reasonable prices that other countries have had for years? We need a better plan — a better vision — if we want to unlock the full benefits that access to the internet can bring Americans. Right now, as a country, we’re investing inefficiently and in the wrong things at a time when we should be unleashing private capital to invest in smarter, faster, and cheaper ways.

Smarter: First, Americans should invest only in technologies that can meet both our future and immediate needs. That means fiber optic networks.
Faster: We need to lower the barriers that exist to getting fiber-optic access built quickly and efficiently. One obvious place to start is to ease the process of getting permits and rights of way. Less obvious but just as important is the need to make it easier to share facilities like poles and underground conduits, which are essential to fiber-optic network construction. Faster also means making sure that funding is available to spread best practices and project management skills across the country, particularly to rural areas that don’t have infrastructure project management expertise on tap.
Cheaper: We need a program like Build America Bonds (BABs) for fiber-optic internet infrastructure around the country, particularly in the last miles between residences/businesses and local internet access points. And we need to make sure it extends beyond state and municipal issuers to include the public/private partnerships that are building that infrastructure, which we can do by relaxing restrictions on subsidies for internet infrastructure projects that serve both public and private interests.