Bronwyn Howell

President Joe Biden’s American Jobs Plan prioritizes “building ‘future proof’ broadband infrastructure in unserved and underserved areas so that we finally reach 100 percent high-speed broadband coverage.” Many considered this an imperative to spend the funds on fiber-to-the-home connections. Yet is fiber—and more precisely, fiber-optic "last mile" connections into residences—really future proof? As the amount of devices and data generated have multiplied, fixed connections to them have diminished.

As America gears up for President Joe Biden’s (trimmed down) $65 billion plan to connect every American to affordable high-speed internet, almost inevitably the focus turns to rolling out infrastructure — notably terrestrial fiber — into unserved (or underserved), predominantly rural communities. Yet the focus on building more infrastructure glosses over the reality that the number of urban households without an internet connection — despite some of the world’s best infrastructure passing their doors — exceeds the number of unconnected rural households by a ratio of nearly three to one (13.

The problem with using speed alone in assessing the capabilities of broadband networks is that it represents only one product characteristic, and is not necessarily linked with the requirements of the applications commonly used by end consumers.

[Commentary] To be sure, the Department of Justice has a right to appeal [the Sinclair/Tribune decision], and it has done so well within the 60 days allowed from the handing down of the Judge Leon decision on June 12.

[Commentary] As much as “making America (or any country) great again” addresses the consequences of flows of production offshore, it behoves policy-makers to consider the parallel responsibilities of ensuring that American consumers (and indeed those of all other jurisdictions) pay their fair share of taxes as part of the social contract with their fellow countrymen. Given new technologies coming available (such as blockchain technology), rethinking internet taxes to focus upon the primary interest — the consumption of goods and services by taxpayer-citizens — warrants further consideration.

[Howell is a faculty member at the School of Management, Victoria University of Wellington, New Zealand.]

[Commentary] Reflecting on the deadweight loss of Christmas inevitably leads (for a technology policy scholar) to considering the deadweight losses associated with government and municipal beneficence in gifting fiber broadband networks to constituents. If fiber is to be gifted by governments, the deadweight loss of taxation attends every dollar of public funds applied to the network. This begs the question of whether, given competition for the use of these funds, a fiber network represents their most productive use. Would the same amount of money deliver more benefit if applied, for example, to improvements in other government or municipal infrastructures, such as roads or schooling? While this question appears self-evident, it rarely enters into discussion when government funding of fiber networks is proposed.

[Howell is a faculty member at the School of Management, Victoria University of Wellington, New Zealand.]

[Commentary] The recent downscaling of Google Fiber’s ambitious network rollout shows that appetite for these projects is waning, even among the shareholders of the most highly-valued firms in the internet sector. Hence, governments relying on taxpayer money appear to be the last resort for underwriting such ventures. However, even gung-ho governments – such as Australia’s, with its infamous $43 billion National Broadband Network (NBN) – are pulling back.

Following political fallout and a change of government in 2013, the ambitious project to provide fiber-to-the-premises (FTTP) to over 90% of Australian residences by 2018 was scaled back to a much more modest initiative, the Multi-Technology Mix (MTM). New Zealand’s Ultra-Fast Broadband (UFB) project now remains the sole OECD survivor in the nationwide fiber deployment experiment.

[Bronwyn Howell is a faculty member at the School of Management, Victoria University of Wellington, New Zealand.]

[Commentary] What few commentators have so far identified is that the body of competition law instruments likely to be called upon to examine these mergers may not be well suited to analyze a modern economy consisting of complex, interconnected internet platforms serving a market of heterogeneous individuals.

The “Structure-conduct-performance” model is dead: Competition law has long been predicated upon the “Structure-Conduct-Performance” view of economic interaction. Market structure (the number of firms in the market, the ease of entry and exit by new firms) governs the conduct of firms (how they interact upstream with suppliers and downstream with customers), which determines market performance (the distribution of the gains arising from those interactions).

Long live multi-sided platforms and complex systems: The disintermediating effect of the internet has enabled consumers to interact directly at many different points along the value chain, often simultaneously.

Modern media mergers are messy: Applying any requirement for competitive neutrality (e.g. undoing apparently anti-competitive cross-subsidies) in just one of these markets will lead to ripples across all of the interconnected platforms as complex relationships recalibrate to the new settings.

[Howell is a faculty member at the School of Management, Victoria University of Wellington, New Zealand.]

[Commentary] The Federal Communications Commission’s open Internet rules address free data and zero rating on a case-by-case basis. The Body of European Regulators of Electronic Communications’ (BEREC) non-binding guidelines for implementing network neutrality in the European Union also support this approach. While case-by-case assessment may be a workable solution for zero rating, it is not unproblematic. Allocating scarce regulatory resources and selecting the forum in which the analysis takes place is not straightforward. Given the dearth of academic literature on the topic, here are four questions to help regulators assess the economic merits of specific zero rated offers and to prioritize whether a given zero-rated offer warrants scrutiny.

1. What perfect or very close substitutes would the zero rating offer foreclose?
2. Is the zero-rated offer intended to increase the number of individuals using the Internet?
3. Which party makes the zero rating complaint?
4. Is free data being used to lower consumers’ search costs, thereby boosting competition?

[Roslyn Layton is a PhD Fellow at the Center for Communication, Media, and Information Technologies (CMI) at Aalborg University in Copenhagen, Denmark. Bronwyn Howell is a faculty member at the School of Management, Victoria University of Wellington, New Zealand.]

[Commentary] The digital strategies of countries in the developed world are predicated on the aspiration that all citizens, no matter where they choose to live and work, should be connected at all times to a broadband Internet connection. The fundamental content of these policies has been unchanged since the Internet first became a commercial reality – the only substantive change has been to the definition of a broadband connection. Whereas once a broadband connection was defined as “anything faster than dial-up,” over time it has changed to reflect the current technological frontier and the needs of applications deemed necessary for citizens to fully participate in their respective societies.

Despite grand digital policy aspirations, and substantial investments in programs to connect citizens facing financial and physical impediments to accessing broadband services, most countries see a certain portion of citizens steadfastly refusing to connect to broadband Internet services because they see no benefit in doing so. Furthermore, a significant number of citizens choose to buy slower connections, even though they face neither financial nor physical barriers to purchasing faster ones.

[Bronwyn Howell is a faculty member at the School of Management, Victoria University of Wellington, New Zealand]