May 2017

Breaking down the FCC’s proposal to destroy net neutrality

[Commentary] The first half of the Federal Communications Commission’s Restoring Internet Freedom notice of proposed rulemaking (NPRM) sets out the FCC majority’s proposal for reversing classification of broadband internet access services as “telecommunications services” governed by Title II of the Communications Act. Among other things, this section discusses the effect this reversal would have on the FCC’s ability to enforce its privacy laws and implement its Lifeline program, which provides a subsidy to low-income households for broadband. The second half purports to “re-evaluate” the existing net neutrality rules, the mechanisms that enforce them and any legal authority (other than Title II) that could be used to support them.

The FCC majority proposes to eliminate the “general conduct standard,” which prohibits ISP practices that “unreasonably interfere or unreasonably disadvantage” the ability of consumers to access the online content and services of their choosing, and the ability of online content and service providers to freely access customers. With regard to the remaining rules (no blocking, no throttling, no paid prioritization, transparency), the majority doesn’t make firm proposals on whether to retain or repeal them. Instead, it asks questions about whether the rules are even necessary.

Municipal Fiber in the United States: An Empirical Assessment of Financial Performance

The authors conducted an analysis of every municipal fiber project in the United States based on the authoritative documentation issued by the cities, specifically the official legal disclosures filed with securities regulators when issuing municipal bonds and their audited financial statements.

We identified 88 municipal fiber projects. Of these only 20 of them report the financial results of their broadband operations separately from the financial results of their electric power operations. We then apply the conventional tools of financial analysis to determine the likelihood that municipal fiber projects will remain solvent. Specifically, we focus on Net Present Value (NPV), which provides a more accurate picture of the cash flowing into and out of an organization than do analyses based on a project’s operating profits and losses.

We also take a closer look at seven projects that either have been successful or have received substantial publicity: Bristol, Tennessee; Vernon, California; Chattanooga, Tennessee; UTOPIA, Utah; Burlington, Vermont; Lafayette, Louisiana; and Wilson, North Carolina.

An examination of the NPV covering the five-year period from 2010 to 2014 reveals that of the 20 municipal projects that report the financial results of their broadband operations separately, 11 generated negative cash flow. Unless these projects substantially improve their performance, they will not be able to cover the costs of current operations, let alone generate sufficient cash to retire the debt incurred to build the project. For the nine projects that are cash-flow positive, seven would need more than sixty years to break even. Only two generated sufficient cash to be on track to pay off the debt incurred within the estimated useful life of a broadband network, which is typically projected to be 30 to 40 years. One of the two success stories is an industrial city with few residents that is unlikely to serve as a model for other cities to emulate.

Frontier CAF Investments Support Broadband Expansion in Four States

Approximately 140,000+ rural homes across four states -- West Virginia, North and South Carolina, and Tennessee -- have improved broadband access, due in part to Frontier and the Federal Communications Commission’s Connect America Fund (CAF) investments. Impacted states include. With 134,000 homes, West Virginia saw the bulk of these broadband improvements. The CAF directly funded new broadband expansion to 16,900 homes there, with an additional 117,000 households seeing improved broadband capability.

“My” Media Versus “The” Media: Trust in News Depends on Which News Media You Mean

For years, studies have shown Americans’ trust in the news media is steadily declining. In recent months, the rise of so-called fake news and the rhetoric of President Donald Trump about journalists being “the enemy of the people” have made the question of trust in a free press an even more prominent issue facing the country. At the same time, data show that over the past decade, people have been consuming more news than ever. How are we to explain the apparent paradox?

New research suggests public attitudes about the news media are more complex and nuanced than many traditional studies indicate, with attitudes varying markedly depending on what media people are asked about. The findings show that on many fronts, Americans are skeptical of “the news media” in the abstract, but generally trust the news they themselves rely on. And most people mention traditional or mainstream news sources as the ones they turn to.