June 2016

[Commentary] Hi. I’m the “economics-free zone” guy. For those of you not deep in the weeds of network neutrality policy in the United States, I’m the former chief economist of the Federal Communications Commission who used that line as part of a self-deprecating joke I told to defuse tensions at a small but contentious conference on the FCC’s Open Internet Order. In the Order, the FCC controversially redefined broadband provision as a service subject to “Title II” common carrier regulation. It claimed it was doing so to prevent broadband providers – cable, fiber, wireless – from charging content suppliers for delivery at all or for higher quality service, a practice known in the trade as “paid prioritization.”

The phrase “economics-free zone” ended up in a Wall Street Journal op-ed and went somewhat viral, to my regret and chagrin. A panel of the DC Circuit Court of Appeals recently upheld the Open Internet Order by a 2-1 vote, but the dissenting judge, unfortunately from my perspective, made reference to what was part of an off-hand joke. I do not deny saying the Open Internet Order was an “economics-free zone,” although I did not say it intending to slap the FCC. As will be apparent, I do disagree with the Order. But I do so in the belief that the FCC was pursuing its genuine view of the public interest. But now with allusions to this phrase in a judicial opinion, I want to set the record straight.

[Tim Brennan is a member of the Free State Foundation’s Board of Academic Advisors, a professor of public policy at the University of Maryland, Baltimore County, and former Chief Economist at the FCC]

From ride-hailing apps to shopping services, the sharing and on-demand economy has grown in the US, yet a relatively small minority of the public is incorporating shared and on-demand services deeply into their day-to-day lives. Still, some Americans are “super users”: 7% have used six or more services (out of a total of 11), according to a Pew Research Center study. Unsurprisingly, super users are deeply immersed in digital technology. Just under half (45%) report that they are online “constantly”; 99% indicate that they use some type of social media site; 95% own a smartphone; and 91% have high-speed broadband service at home. Even so, like other Americans this group is largely unfamiliar with some key terms relating to the sharing and on-demand economy. Nearly half (45%) have never heard of the term “sharing economy,” and 64% have never heard of the term “gig economy.”

Even as they use technology to connect with gig workers who can help them with their day-to-day needs and tasks, these super users engage in a fair amount of sharing on their own. In the year before the survey was conducted, 85% have driven a friend or family member somewhere as a favor; 82% have loaned a book, DVD or household item to someone they know; 60% have helped watch someone’s house while that person was out of town; and 44% have shared their login to a paid website or streaming service. For this group of users, the technological advances of the shared and on-demand economy seem to supplement – rather than replace – sharing behaviors in the traditional, informal sense of the word.

While the front sections of the quarterly Total Audience reports typically dive deep on media usage by certain demographics—age, ethnicity, income, etc.—the first-quarter 2016 report focuses on tables and exhibits typically included in the back of the report that provide comprehensive data on media behavior.

The report examines large trends in penetration, users and usage across all platforms; shows how different demos and race/ethnicity groups spend their media time; and explores the contributions of heavy users. One of the key findings of this quarter's report? An important milestone in US media has been reached: availability of subscription video on demand (SVOD) programming (Netflix, Hulu Plus, Amazon Prime) is now equal to DVR penetration, with both available in 50% of US TV households.

[Commentary] Overall, the United Kingdom ranks sixth among 28 European Union countries. In digital connectivity, it has 100 percent household coverage and 85 percent household take-up by of fixed broadband networks. Take-up of mobile broadband at 87 percent is significantly above the EU average as well. The UK also has a 90 percent rate of internet use in its population. There is a high proportion of digital literacy among the public at large—67 percent of the population now has sufficient digital skills to operate effectively online (better than all but five EU countries).

The English language also is advantageous, since UK citizens have a widespread market for producing and consuming some of the most attractive digital content in the world. But as the scorecard analysis shows, “the United Kingdom is lacking skilled [information and communications technology] professionals. Demand for skilled ICT professionals within the economy is rising rapidly, while the supply is not keeping pace…young people need to be attracted to ICT studies and jobs, which provide good career opportunities, are well paid and which are key skills for deriving the benefits of ICT for the economy and society.” Despite Brexit, the EU will forge ahead this year with concrete proposals to implement the DSMS. The UK will find itself in a weak bargaining position in any negotiations to substitute digital trade agreements for integrated EU membership. On balance, it will come to realize that the realities of digital interdependence make political independence a difficult aspiration to maintain.