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February 2016

The Emerging World of Broadband Public–Private Partnerships: A Business Strategy and Legal Guide

Local governments increasingly see before them exciting new opportunities to develop next-generation broadband in their communities—and to reap the many benefits that broadband will deliver to their residents and businesses. Many localities are likely aware of Google Fiber and municipal fiber success stories—but emerging public–private partnership models present an alternative for the many communities that lack the capital or expertise to deploy and operate fiber networks, or to act as Internet service providers (ISP), on their own. This report explores three business models for broadband public–private partnerships:

Private investment, public facilitation – The model focuses not on a public sector investment, but on modest measures the public sector can take to enable or encourage greater private sector investment. Google Fiber is the most prominent example, but there is significant interest among smaller companies
Private execution, public funding – This model, which involves a substantial amount of public investment, is a variation on the traditional municipal ownership model for broadband infrastructure—but with private rather than public sector execution.
Shared investment and risk – In this model, localities and private partners find creative ways to share the capital, operating, and maintenance costs of a broadband network.
As localities evaluate broadband public–private partnerships, they should consider both the opportunities and potential pitfalls, and pay particular attention to three interwoven issues: risk, benefit, and control. These factors are the key considerations not only for state and local governments, but also for private sector network operators and service providers. A successful partnership must align each side’s needs, and will inevitably involve trade-offs within this framework.

The report also examines, with a public sector audience in mind, the major legal issues that may arise in a broadband public–private partnership project, from early planning through the negotiating stage.

February 16, 2016 (Spectrum Sharing)

BENTON'S COMMUNICATIONS-RELATED HEADLINES for TUESDAY, FEBRUARY 16, 2016

Events this week https://www.benton.org/calendar/2016-02-14--P1W


SPECTRUM/WIRELESS
   Why Sharing is the Answer to Rising Demand for Spectrum - NTIA
   FCC Denies LPTVs Auction Participation [links to Broadcasting&Cable]
   Google Says It’s Not Leaping Into the FCC Spectrum Auction [links to Revere Digital]
   White space: Definitional perspectives and their role in exploiting spectrum opportunities [links to Telecommunications Policy]

INTERNET/BROADBAND
   Twin Cities families get needed lift across digital divide
   CenturyLink joins Comcast in bringing data caps to home Internet
   Online sales tax supporters hope gamble pays off
   FCC poised to flex new privacy powers [links to Benton summary]
   Project Loon Heads Into Carrier Testing [links to Benton summary]

TELECOM
   Do customers still want landlines? Telecom industry doesn't want anyone to hear the answer - analysis

ELECTIONS AND MEDIA
   If Facebook Likes Were Votes, This Is How the 2016 Presidential Race Would Play Out [links to AdWeek]
   President Obama dines with Hollywood donors [links to Hill, The]

OWNERSHIP
   FCC OKs Gray-Schurz Deal With Strings

DIVERSITY
   Female Coders are rated More Highly Than Men – Except When People Know They’re Women [links to nextgov]

RADIO
   In Queens, Broadcasting Banter From a Bar in a Garage [links to New York Times]

SECURITY/PRIVACY
   Commentary: Scalia’s privacy impact will be felt for years to come [links to International Association of Privacy Professionals]
   Op-ed: Fast Data Will Revolutionize Cybersecurity in 2016 [links to Forbes]

GOVERNMENT PERFORMANCE
   Idea to retire: IT-led service innovation - Brookings op-ed [links to Benton summary]

LOBBYING
   Fantasy Sports Industry Mounts Lobbying Blitz [links to Wall Street Journal]

AGENDA
   Silicon Valley vs Washington: the new digital divide - analysis
   For tech, a bumpy year ahead - analysis

STORIES FROM ABROAD
   GCHQ hacking does not breach human rights, security tribunal rules [links to Guardian, The]
   ‘Privacy Shield’ Has Sticking Points [links to Morning Consult]
   French data regulators have given Facebook three months to stop transferring data on French users to the US and to refrain from tracking nonusers [links to Christian Science Monitor]
   Radio: Reliable Communications in Emergency and Disaster [links to International Telecommunication Union]
   Facebook India’s managing director Kirthiga Reddy resigns [links to Guardian, The]

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SPECTRUM/WIRELESS

SPECTRUM SHARING
[SOURCE: National Telecommunications and Information Administration, AUTHOR: Paige Atkins]
It is clear that we can’t meet the challenges that arise from increased demand by using the traditional methods of spectrum reallocation, which often take too long and cost too much money. Innovation in spectrum use must be met with innovation in spectrum allocation. The answer is spectrum sharing, a flexible and evolving option that is helping to optimize this resource to the benefit of both the public and private sectors. Sharing offers increased access to both federal and non-federal users. It’s also more flexible and efficient than the typical process of relocating federal operations. And it’s an improving science – researchers at the Center for Advanced Communications (CAC) in Boulder are focused on cutting-edge spectrum sharing research and development, experimentation and testing. At its core, however, spectrum sharing is nothing new. Business and government already share a large amount of spectrum today. Take the spectrum within the 225 MHz to 3700 MHz range, which has historically been viewed as the most valuable spectrum for commercial use. One of the myths that has entered the conversation around spectrum policy is that the federal government controls as much as 70 percent of that range. However, that figure fails to account for the significant number of shared frequencies that are assigned to both federal and non-federal users on a primary basis.
benton.org/headlines/why-sharing-answer-rising-demand-spectrum | National Telecommunications and Information Administration
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INTERNET/BROADBAND

PCs FOR PEOPLE TEAMS WITH COMCAST
[SOURCE: Minneapolis Star Tribune, AUTHOR: Gail Rosenblum]
The divide is deep in our Twin Cities. Only 57 percent of residents of the Phillips neighborhood have computers with Internet access, as do 65 percent of residents on the Near North Side, compared with 82 percent of households citywide. That’s why an 11th-hour save by Internet provider Comcast deserves our thanks. Comcast leapt in to partner with St. Paul-based PCs for People to offer 8,500 Twin Cities families low-priced Internet services that they were about to lose. PCs for People’s executive director, Casey Sorensen, explained that along with giving away nearly 10,000 refurbished computers this year, his nonprofit has offered Internet services to thousands of low-income Twin Citians through a wireless-data network from Sprint. When Sprint suddenly announced it was shutting down its outdated network in early November, Sorensen scrambled to keep his clients connected. Comcast’s “Internet Essentials” offers high-speed home Internet for $10 a month, plus free Wi-Fi, free installation and free Internet training. No contract or credit check is required, which sets it apart from other providers, Sorensen said. Families getting wind of the news are jumping in to register.
benton.org/headlines/twin-cities-families-get-needed-lift-across-digital-divide | Minneapolis Star Tribune
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CENTURYLINK TO EXPLORE DATA CAPS
[SOURCE: The Verge, AUTHOR: Jacob Kastrenakes]
CenturyLink — home to just over 6 million broadband providers — said that it's looking into using data caps. "Our competition is using metered plans today," said Stewart Ewing, CenturyLink's chief financial officer. "And we think it's an area we have to explore and consider." Ewing added that CenturyLink intends to start trials, likely later in 2016.
benton.org/headlines/centurylink-joins-comcast-bringing-data-caps-home-internet | Verge, The
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ONLINE SALES TAX
[SOURCE: The Hill, AUTHOR: Mario Trujillo, Naomi Jagoda]
Supporters of online sales tax legislation have been promised a vote in the Senate in 2016, but the timing is vague and House consideration is uncertain. To secure considerations of the online sales tax bill known as the Marketplace Fairness Act, advocates traded away one of their major bargaining chips by allowing a separate long-term ban on local Internet access taxes from going forward. There is no guarantee the tactic will pay off amid a condensed election-year schedule, but advocates are bullish, nonetheless. And they are putting pressure on the House to deliver. House Speaker Paul Ryan’s office, however, said he had made no commitment nor had he set a timeline. In the past, the real roadblocks to passage have been grounded in the House, and Ryan’s office has simply “encouraged” committee work on the issue.
benton.org/headlines/online-sales-tax-supporters-hope-gamble-pays | Hill, The
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TELECOM

CALIFORNIA PUC POLL
[SOURCE: Los Angeles Times, AUTHOR: Michael Hiltzik]
[Commentary] The deregulation lobby operates on faith — the faith that government regulation is unnecessary because the magic of competition is all that's needed to keep consumer prices under control. But is it so? California has been running a sort of laboratory test of this theory since 2006, when the state Public Utilities Commission deregulated telephone landline prices. The PUC's rationale was that competition from wireless, cable phone service, and voice-over Internet protocol (VoIP) carriers such as Vonage had become strong enough to keep landline rates in check. In November 2015, the PUC decided that after 10 years "the time seems ripe" to check on whether its expectations were fulfilled. The commissioners issued an order requiring landline, wireless and other telecommunications providers to deliver data on the price, availability and quality of all forms of competing offerings, including how they service the state's geographically, ethnically and economically diverse communities. AT&T's flat rate for basic phone service rose from $10.69 in September 2006 to $24 in January 2015, according to PUC figures. California's other big landline provider, Verizon, also jacked up its landline prices, although not quite at AT&T's pace. Consumer advocates want to know whether the big carriers are goading landline customers into shifting to their wireless or Internet plans by raising prices on the traditional service, letting its quality go to hell, and steering unhappy customers to newer, more lucrative and largely unregulated options.
benton.org/headlines/do-customers-still-want-landlines-telecom-industry-doesnt-want-anyone-hear-answer | Los Angeles Times
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OWNERSHIP

GRAY-SCHURZ OK
[SOURCE: TVNewsCheck, AUTHOR: ]
Following approval by the Justice Department in December 2015, the Federal Communications Commission gave its blessing to the proposed acquisition of Schurz Communications’ TV and radio stations by Gray Television for $442.5 million. The FCC told Gray that it granted the applications to purchase the TV stations, granting some waivers of local ownership rules in five markets, but denying it a waiver to continue a JSA in Wichita-Hutchinson (KS).
benton.org/headlines/fcc-oks-gray-schurz-deal-strings | TVNewsCheck | see FCC letter
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AGENDA

SILICON VALLEY VS WASHINGTON
[SOURCE: Financial Times, AUTHOR: John Thornhill]
[Commentary] Turning on the television while visiting Silicon Valley, in a bid to catch up with the presidential election campaign, is to crash back to Earth with a thud. The talk is of income inequality, the collapse of the middle class, the banning of Muslim visitors and the building of walls to stop immigrants pouring into the US. The optimism of forward-looking West Coast entrepreneurs clashes with the pessimism of the backward-looking East Coast politicians. That coastal divide is particularly stark in the US but it exists metaphorically in many other countries, too. At its simplest, it is a tussle within ourselves, both as consumers and as citizens. The techno-optimists of California promise a further bonanza for our inner consumer, largely powered by the supercomputer smartphones in our pockets. They aim to dissolve remaining inefficiencies in just about every consumer transaction. But when the Silicon Valley crowd pause for breath, even they worry about some of the consequences of this technological turmoil: the impact on so many traditional jobs, the erosion of employment rights and the unequal distribution of the fruits of technology.
benton.org/headlines/silicon-valley-vs-washington-new-digital-divide | Financial Times
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A BUMPY YEAR AHEAD
[SOURCE: San Jose Mercury News, AUTHOR: Michelle Quinn]
[Commentary] This isn't going to be tech's year. Tech stocks are down, most notably the so-called "FANGs" (Facebook, Amazon, Netflix and Google). The one tech-ish presidential candidate, Carly Fiorina, is out of the running. That wasn't a surprise, but for Silicon Valley folks, there won't likely be another familiar face on the stump this year. It's not just US politics. The Europeans want to tax tech's profits sitting overseas. Indian regulators ruled last week to ban Facebook's Free Basics, its limited but free Internet service. Tech, we're not as cool as we used to be. How bad is it? Tech leaders like Marc Andreessen can't tech-splain like they used to. "We need more respect in our conversations across borders and more recognition that there are worthy debates to be had, for example, around issues like limits on free speech, as well as more humility, which was the opposite of what was exhibited in that exchange around Andreessen's tweets," said Irina Raicu, director of Internet ethics at Santa Clara University's Markkula Center for Applied Ethics. That's a good idea. And another one: Start talking about how to make the world we want, business models for the 100 percent, not just cool products for just a few.
benton.org/headlines/tech-bumpy-year-ahead | San Jose Mercury News
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Silicon Valley vs Washington: the new digital divide

[Commentary] Turning on the television while visiting Silicon Valley, in a bid to catch up with the presidential election campaign, is to crash back to Earth with a thud.

The talk is of income inequality, the collapse of the middle class, the banning of Muslim visitors and the building of walls to stop immigrants pouring into the US. The optimism of forward-looking West Coast entrepreneurs clashes with the pessimism of the backward-looking East Coast politicians. That coastal divide is particularly stark in the US but it exists metaphorically in many other countries, too. At its simplest, it is a tussle within ourselves, both as consumers and as citizens. The techno-optimists of California promise a further bonanza for our inner consumer, largely powered by the supercomputer smartphones in our pockets. They aim to dissolve remaining inefficiencies in just about every consumer transaction.

But when the Silicon Valley crowd pause for breath, even they worry about some of the consequences of this technological turmoil: the impact on so many traditional jobs, the erosion of employment rights and the unequal distribution of the fruits of technology.

Online sales tax supporters hope gamble pays off

Supporters of online sales tax legislation have been promised a vote in the Senate in 2016, but the timing is vague and House consideration is uncertain.

To secure considerations of the online sales tax bill known as the Marketplace Fairness Act, advocates traded away one of their major bargaining chips by allowing a separate long-term ban on local Internet access taxes from going forward. There is no guarantee the tactic will pay off amid a condensed election-year schedule, but advocates are bullish, nonetheless. And they are putting pressure on the House to deliver. House Speaker Paul Ryan’s office, however, said he had made no commitment nor had he set a timeline. In the past, the real roadblocks to passage have been grounded in the House, and Ryan’s office has simply “encouraged” committee work on the issue.

Project Loon Heads Into Carrier Testing

Google’s “moonshot” to deliver Internet to remote parts of the world using high-flying balloons has survived a brutal development phase, and will enter testing with carriers in Indonesia and elsewhere in 2016.

Alphabet is in talks with carriers around the world, said Astro Teller, head of Alphabet’s X unit, adding that the prospect is very real that a further five billion people will have Internet access within five to 10 years. “It will change the world in ways we cannot possibly imagine,” he said.

For tech, a bumpy year ahead

This isn't going to be tech's year.

Tech stocks are down, most notably the so-called "FANGs" (Facebook, Amazon, Netflix and Google).

The one tech-ish presidential candidate, Carly Fiorina, is out of the running. That wasn't a surprise, but for Silicon Valley folks, there won't likely be another familiar face on the stump this year.

It's not just US politics. The Europeans want to tax tech's profits sitting overseas. Indian regulators ruled last week to ban Facebook's Free Basics, its limited but free Internet service. Tech, we're not as cool as we used to be. How bad is it? Tech leaders like Marc Andreessen can't tech-splain like they used to.

"We need more respect in our conversations across borders and more recognition that there are worthy debates to be had, for example, around issues like limits on free speech, as well as more humility, which was the opposite of what was exhibited in that exchange around Andreessen's tweets," said Irina Raicu, director of Internet ethics at Santa Clara University's Markkula Center for Applied Ethics. That's a good idea. And another one: Start talking about how to make the world we want, business models for the 100 percent, not just cool products for just a few.

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