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  2. May 2016

May 2016

Untold Stories Matter, Too

[Commentary] Pretend you’re a journalist (if you really are one, ignore that but read on anyhow) and someone calls and says “I’ve got a good and timely story that I think your readers/listeners would like to know about. There is a government agency that has both the authority and the responsibility to help clean up our broken big-money election campaigns—and it is refusing to do its job.” Let me explain.

Billions of dollars are being funneled into anonymous, misleading, special-interest TV political advertisements that fill our living rooms with politics at its ugliest. These ads are aimed at influencing and winning your vote while distorting both the issues and the personalities of the candidates running for office. People, long-since sick of these ads, are also convinced that there is no solution, with Congress unwilling to legislate and an Administration unlikely to pursue the matter on Capitol Hill. Yet there is already a law—and even government agency rules—already on the books. And the kicker: the agency charged with implementing that law—the Federal Communications Commission (FCC)—resolutely refuses to do so, maybe because of powerful big money interests, perhaps because of the power of consolidated media, probably both.

[Former FCC Commissioner Michael Copps leads the Media and Democracy Reform Initiative at Common Cause]

A cost study of fixed broadband access networks for rural areas

The deployment of high-capacity broadband access networks in rural areas in Europe lags behind that in urban and suburban areas. This study assesses the cost implications for the rollout of fixed access networks capable of providing citizens with downstream broadband capacities of 30 Mbps or 100 Mbps, which have been defined in the European Digital Agenda as targets that should be met by 2020. A cost model was employed to determine the cost of a home passed and the cost of a home connected for various fibre- and copper-based networks in rural areas. It was found that the cost of deploying a network outside a town or village in a rural area is on average 80% higher than the cost of deploying the network in the town or village. This situation may lead to a digital divide within the same rural area. Overall, it is possible that operators will need to create a combination of various broadband access networks, due to the significant cost differences between networks. Policymakers will need to address several topics to promote the rollout of broadband networks in rural areas: how the digital divide within a rural area can be avoided; a National Broadband Plan that clearly addresses the provisioning of broadband in rural areas; elaboration of studies on broadband demand in rural areas; and the assessment of costs and technical capacity of wireless networks in rural areas.

The Bright Future of Dark Fiber

[Commentary] Santa Cruz (CA) is a mid-sized city of just over 62,000 lying just half an hour’s drive — over the Santa Cruz mountains — from Silicon Valley. I haven’t been there for a long time, but I remember a sleepy, pretty town and the blaring sound produced by a bunch of those aforementioned enormous sea lions under the wharf at the sea’s edge. Sleep no more, Santa Cruz. Soon you may be known for something supercharged: a ubiquitous fiber-to-the-home network built by the city and operated by a local Internet service provider that ensures everyone in town has affordable and fast access to the Internet.

What will enable Santa Cruz to do this is something called dark fiber. Yes, that term sounds unlikely, like the title of a cyberpunk novel you might find in a musty used bookstores in a place just like Santa Cruz. But it’s actually the key to unlocking powerful high-speed Internet access. Santa Cruz is wisely tapping it in a public-private enterprise that fits into an overall city plan to ensure that younger generations stick around. But the Santa Cruz model isn’t the only one: there are several ways to finance and operate a high-speed Internet access facility that relies on dark fiber.

[Susan P. Crawford is the John A. Reilly Clinical Professor of Law at Harvard Law School]

Comcast can’t get “gigabit” tax break that was created for Google Fiber

Comcast has hit a roadblock in its attempt to get a big tax break that Oregon legislators wrote specifically for Google Fiber. It looked like Comcast had won a few months ago when Oregon's Public Utility Commission ruled 3-0 that Comcast's gigabit service qualifies the company for the tax exemption. But the exemption still needed to be certified by the state Department of Revenue, and recently the department refused to do so. Oregon law was designed to help Google Fiber, but Comcast benefits, too. The department "ruled Comcast ineligible for the tax break, at least for this year," The Oregonian reported. "The department declined to disclose its reasoning, citing taxpayer confidentiality, and referred questions to Comcast. Comcast said any information would have to come from the Revenue Department."

Comcast said it was disappointed in the decision. "The ruling conflicts with state law and has sent a message to the business community that significant investments, which were encouraged by the legislature, will not be honored by them," a Comcast spokesperson said. Comcast can appeal to the director of the Department of Revenue.

FTC: Some ISP Info Uses Should Be Opt-In

The Federal Trade Commission wants the Federal Communications Commission to require opt-in for some uses of customer proprietary network information (CPNI), whether it is by an Internet service provider, an affiliate or a third party. It would also combine that with a more finessed view of information, setting the level of protection to the level of sensitivity. As a "general matter," said FTC staff in comments to the FCC, it supports the FCC's focus on "transparency, consumer choice, and security" but has some specific tweaks, suggesting the FCC proposal would overprotect some information and under-protect other information.

What is the True Cost of a Set-Top Box?

The multichannel video industry and the consumer would love to be rid of the set-top box, and the industry has offered a path forward. Why doesn’t the Federal Communications Commission take the easy path? Why not let the industry eliminate the set-top box and put Section 629 to bed (which the 1996 Telecommunications Act specifically permits)? Why not embrace an app-based approach that the video industry, copyright owners, and consumers all prefer? Apparently, the Obama Administration has some other objective in mind. Given FCC Chairman Tom Wheeler’s repeated and unwavering use of bogus numbers and his failure to conduct any serious investigation into the role of the set-top box in the video industry, perhaps it’s time for consumers and Congress to take a look behind the veil to see what the Administration might be hiding.

[Dr. George S. Ford is Chief Economist of the Phoenix Center for Advanced Legal & Economic Public Policy Studies]

Changing Mobile Trends as Connected Car Net Adds Outpace Smartphone Net Adds

An interesting mobile industry data point of note happened in Q1 2016, when new connected car net adds outpaced smartphone net adds, according to data from industry analyst Chetan Sharma. The trend illustrates shifting trends in mobile, as smartphone penetration nears saturation in the US. Sharma follows the industry closely with his recurring mobile market updates, and notes that non-phone net adds actually dominate the net additions for devices connecting to mobile networks. Smartphones only made up 31% of new net adds in 1Q 2016, according to Sharma’s data. Connected cars are seen as a growth opportunity for large national carriers as they look to back fill declining growth for new smartphone adds. By some accounts, smartphone penetration in developed markets like the US is 80% or more, leaving diminishing growth prospects.

Bill Would Extend US Digital Service Beyond the Obama Administration

A new bill introduced in the House, the US Digital Service Act, would extend the technology fix-it squad launched in the wake of the botched HealthCare.gov rollout well beyond the end of the Obama Administration. The bill, introduced May 27 by Rep Suzan DelBene (D-WA), would authorize the tech squad for the next 10 years, ensuring it wouldn’t automatically close down in 2017 when a new president takes office. In August 2014, President Barack Obama created what he has described as a tech “SWAT team” to help turn around troubled IT projects across the government. The White House’s digital team, led by former Google engineer Mikey Dickerson, is staffed by some of the same former Silicon Valley techies who helped fix the health care website. Digital service experts work on temporary, 2-year terms.

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