February 2016

Net Neutrality vs. Net Reality

[Commentary] Whoever becomes our next president will want to notice that network neutrality activists and the Obama administration have locked the nation into a stance badly at odds with how the Internet actually wants to evolve.

For starters, notice all the developments in the marketplace that neut activists feel obliged to be outraged about, which they imagined the government could stop. We come to the most bizarre case of net neuties making lemons out of lemonade. A Pew survey finds a small but absolute drop in the number of American households subscribing to fixed broadband. Now, no WSJ reader would be so incautious as to conclude the value of the Internet must therefore be falling for many Americans—it costs too much, who needs it! Yet this is exactly the interpretation the neut brigade are peddling, even while Pew quietly acknowledges the truth: Fixed broadband subscriptions slipped slightly because fast wireless is increasingly seen by many customers as an adequate substitute. Especially paying note should be those frantic about a digital divide. Millions of Americans who are still offline never bought a PC in the first place, and then weren’t going to get caught up when the Internet arrived. Now these people are getting a second chance thanks to smartphones and tablets tied to speedy wireless networks. This is bad?

Neutrality is a great idea. The FCC should try it.

[Commentary] Neutrality is a foundational idea in telecommunications regulation. At the core of this concept is the expectation that regulators don’t take sides — not among competing firms, and not among complementary services in technological ecosystems such as the Internet.

The 10th Anniversary Regulatory Handbook, recently published by the international business incubator infoDev, describes how the idea of neutrality should be applied. According to the handbook, the goal of the regulator is to ensure that market participants have an opportunity to compete based on the merits of their services. Based on its recent behavior, however, it seems the Federal Communications Commission (FCC) is selective in its application of neutrality. A review of some of the agency’s recent decisions regarding municipal broadband, the Open Internet, privacy, and set top-box rulemaking provide plenty of evidence for this idea.

[Layton studies Internet economics at the Center for Communication, Media, and Information Technologies (CMI) at Aalborg University in Copenhagen, Denmark]

As News Media Changes, Bernie Sanders’s Critique Remains Constant

Bernie Sanders’s critique of the news media, as in nearly everything else, has remained constant as he has risen over the last 40 years from radical protester and protest candidate to mayor, congressman, senator and now a candidate for the Democratic nomination for president.

Despite the advent of the Internet, the diminishing of traditional news media companies and the emergence of new media Goliaths like Facebook that have helped fuel his rise, Sen Sanders (I-VT) remains orthodox in his mass media doctrine. Antagonism toward the news media is, of course, the standard posture for politicians, especially insurgent candidates. Republicans frequently try to prove their conservative bona fides by bashing the “liberal media,” and Barack Obama tried to circumvent the press filter with his own website. But Sanders’s dim view of the “corporate media,” as he refers to it, is much more than a campaign tactic; it is a pillar of his anti-establishment, socialist worldview.

Remarks of FCC Commissioner Michael O'Rielly Before the National Association of Broadcasters' State Leadership Conference

I suspect that a primary interest of many television broadcasters in each of your states is the upcoming broadcast spectrum incentive auction. In addition to its prior advocacy on the topic, the National Association of Broadcasters has appropriately raised a couple of key issues pertaining to the auction’s aftermath. Specifically, deep concerns have been voiced over whether 39 months is sufficient to repack remaining broadcasters and the sufficiency of the overall budget of $1.75 billion. In my opinion, these concerns are unlikely to be considered and addressed until the Commission and Congress can examine the lay of the land post auction...

Just a few weeks ago, the Commission adopted new rules to transition the public inspection files maintained by radio stations, cable operators, and satellite systems to an online format. In order to realize the full potential of this transition we need to make sure broadcasters can actually make a full transition. If the records are online, there should be no more need to make a physical paper file available to anyone who walks into a station. The old system subjected station personnel to a real security vulnerability that had to be tolerated in the name of transparency. But with an online filing system, we can and should fix this problem.