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  2. January 2017

January 2017

An Economics Bureau for the FCC

[Commentary] The Federal Communications Commission needs some structural reform. In particular, it should create an Economics Bureau tasked with conducting economic analyses of proposed rules, mergers, and other important actions, much like the Bureau of Economics at the Federal Trade Commission.

This is not a radical proposal. In addition to the FTC’s Bureau of Economics (with 78 PhD-level economists), the Department of Justice has an Economic Analysis Group within the Antitrust Division and the Securities and Exchange Commission has a Division of Economic and Risk Analysis. The FCC has no such group, although it is largely concerned with competition and consumer protection and has a similar need for economic analysis to inform its decisions. By creating an Economics Bureau similar to the FTC’s, the commission can institutionalize the role of economics. The FCC leadership should ensure that its Economics Bureau is involved in all major issues, including significant enforcement actions, and can submit its analyses directly to the commissioners to be considered alongside the recommendations of the other operating bureaus. And the FCC should require that a preliminary cost-benefit analysis be completed and put out for public comment at the same time as the corresponding notice of proposed rulemaking. Executive branch agencies operate this way; there is no substantive reason independent agencies should behave differently.

[Lenard is senior fellow and president emeritus at the Technology Policy Institute]

Virginia Governor Threatens to Veto Broadband Bill

The Republican sponsor of a bill to put conditions on municipal broadband buildouts in Virginia has recrafted the bill after Gov Terry McAuliffe (D-VA) said he would veto it, according to a group opposing the bill. The bill allows for municipal buildouts but only targeting unserved areas, which it defines as an average speed of less than 10 Mbps download speed, 1 Mbps upload. It also requires an independent study to identify unserved areas before any buildouts and puts conditions on overbuilding of any existing service at any speed. The municipality must also provide access to rights of way on a first-come, first-serve basis to commercial providers and can't cross-subsidize its broadband with regulated utility money.

The Institute for Local Self-Reliance, which backs municipal broadband buildouts, says the bill still does nothing to help connect rural Virginia. It says that while the bill allows for buildouts, it is a way for "big cable companies" to limit broadband competition in Virginia.

TDS A-CAM Broadband Support Will Total $75 Million Annually

TDS Telecom will be able to improve broadband service to a majority of the company’s wireline locations in the US thanks to a 10-year $75 million annual cash infusion from the Federal Communications Commission high-cost universal service program. TDS is one of about 200 rural rate-of-return carriers that have committed to building out broadband service at specific speeds to a specific number of locations in exchange for receiving the funding based on the alternative Connect America model (A-CAM). TDS A-CAM broadband support will enable the company to upgrade service to nearly 160,000 homes in 25 states.

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