American Enterprise Institute

[Commentary] Senator Marco Rubio has made a strong move for spectrum policy leadership, announcing a plan to introduce three bills that substantially reform America’s spectrum policy.

The Wireless Innovation Act (WIA) directs the National Telecommunications and Information Administration (NTIA), the previously toothless agency that coordinates the use of spectrum by federal agencies, to compile recommendations for the transfer of 200 MHz from the government to the people.

The WIA is not the kind of sweeping reform of the government spectrum status quo that we’re going to need eventually, but it’s a strong step in the right direction that tests the resolve of two key constituencies: Senate Democrats and NTIA. Perhaps the best thing about the WIA is the absolute deadlines it applies to government spectrum users: Three years from the delivery of the NTIA report, they’ll lose their authorization to use the 200 MHz of spectrum (even if they lose the memo.)

This is exactly the kind of sensible, rational, and technologically efficient approach to spectrum that’s long overdue.

[Bennett is a visiting fellow at AEI and was vice-chair of the Institute of Electrical and Electronics Engineers (IEEE) task group]

[Commentary] What is the future of cybersecurity policy? How do we maintain the innovative Internet ecosystem, protect consumer privacy, and ensure national security?

The Center for Internet, Communications, and Technology Policy took its first steps towards answering those questions with its conference at AEI: “After Snowden: The Road Ahead for Cybersecurity.”

Two key steps to lead us down the right path emerged from our conference: 1) we need more effective public-private partnerships with freer opportunities for sharing information and 2) the government needs to educate the public about cyber threats.

Achieving these goals will require rapid, legislative action. The success of any cybersecurity policy will hinge on the effectiveness of the relationships between government and industry and the open exchange of information between the two -- as well as both inter- and intra-agency communication. Any effective cybersecurity policy must entail legislation, such as the Cyber Intelligence Sharing and Protection Act, which Chairman Rogers and his ranking member, Rep Dutch Ruppersberger (D-CA) have championed.

As General Keith Alexander (ret) explained, legislation should ensure that companies are able to share information with each other and with the government, while protected from liability. The challenge will be identifying the limits on that liability, on the extent of corporate responsibility, and on government engagement.

[Tews is the Chief Policy Officer at 463 Communications; Cunningham is a Research Assistant at the Center for Internet, Communications, and Technology Policy]

[Commentary] Just when we thought the tales of the Australian government-funded nationwide fiber-to-the-home network could not get more incredible, news emerges that that the Telecommunications Industry Ombudsman has been called upon to make a ruling on the legality of private sector firm TPG’s plan to provide fiber-to-the-basement services to high-rise apartment buildings in the inner-city Melbourne suburb of Docklands.

Docklands does not yet feature on any National Broadband Network (NBN) rollout plans, and residents are apparently crying out for better broadband services. If this were the United States, then TPG’s plans would be manna from heaven, not cause for administrative inquiry. The problem is that, under anti-cherry-picking provisions governing the NBN, competing network operators must offer services under the same terms as the NBN. So the ombudsman is being asked to determine whether a new service, which offers capabilities not currently available to residential consumers, is illegal because it does not provide its services under the same institutional arrangements as another service which could be (but is not) offering services presently in the area.

If the ombudsman decides that it is illegal, then the good citizens of Docklands will have no choice but to continue with their current ADSL and wireless services. Not because there is no fiber available, or because no-one is prepared to invest, but because allowing a non-approved business model may stand in the way of forming a new government monopoly super-fast internetwork in the manner intended.

[Howell is general manager for the New Zealand Institute for the Study of Competition and Regulation]

[Commentary] Online video continues to assert its claim to the title of Killer App of the Early 21st Century.

Cisco Systems has released its annual Internet traffic forecast, which Re/code amusingly summarized with the headline “Cat Videos, Binge TV Watching Will Account for 84 Percent of Internet Traffic.”

Another study suggests that Netflix is making significant inroads into traditional pay television markets.

This growth disrupts old business models, putting pressure on traditional media providers to find innovative new ways to connect with viewers. But it also puts pressure on regulators, who face the unenviable task of protecting consumers in a dynamic, chaotic business environment. Too little regulation risks anticompetitive behavior that harms consumers. But importantly, too much regulation also risks consumer harm, by preventing companies from testing new, innovative business models that may benefit consumers.

When navigating uncertain competitive terrain, the regulator must resist the urge to reflexively apply old rules to a new business environment where they may do more harm than good.

[Lyons is associate professor at Boston College Law School]

[Commentary] Developers do not typically create software based on regulatory requirements; rather, they orient their efforts towards solving a specific problem or providing functionality not otherwise available to consumers. So why should regulation created for an industry built decades ago govern their designs?

Allowing regulations to dictate how new programs will operate and be delivered runs counter to the principles of technological innovation. Requiring the developers of the innovation economy to adhere to decades old telephone company regulations is a large step in the wrong direction for technology advancement.

Potential obligations to regulatory burdens like federal, state, and local reporting requirements, service level agreements, direct consent agreements, and privacy regulations could be an expensive and cumbersome burden to both large and small start-up technologies. Not to mention the deleterious effects of subjecting innovative businesses to the tariff regimes of an analog business model that is struggling to move forward into a digital world.

[Tews is also the Chief Policy Officer at 463 Communications]

[Commentary] The European Union just released the 2014 Digital Scoreboard, which tracks member nations’ progress towards their digital goals and a digital single market, something the US already enjoys.

Though some objectives have been achieved, the EU is still far from meeting its goals in two key areas: closing the digital skills gap and deploying next generation networks. The EU reports that 90% of jobs require at least some digital skills but 39% of the workforce lacks those skills. Indeed, 100 million Europeans have never used the Internet, according to the report. That’s about 20% of the region’s population.

[Layton studies Internet economics at the Center for Communication, Media, and Information Technologies (CMI) at Aalborg University in Copenhagen]

[Commentary] In the net neutrality debate, commentators such as Susan Crawford have repeatedly called for a “public option for Internet access because Internet access is just like electricity or a road grid.” The argument typically goes along the lines that the Internet is simply a utility, like roads or electricity, so at the very least should be regulated in the same manner as these networks. Alternatively, in some utopian world, they should be owned and operated by governments -- local, state or municipal -- to ensure that they are operated in the ‘public good’.

At some point, the issue of needing only one wire to every house is brought up as some sort of justification for this stance. They also argue that, because consumers have paid a (fixed -- i.e. ‘all you can eat’) fee to connect to the network, they are entitled to the uninhibited right to consume as much content as they wish without either themselves or the providers of the content they consume being billed any further. But are the analogies really as simple and useful as these commentators imply?

Analogies comparing the Internet to electricity and roads illustrate some of the implications for regulating the Internet. But it is neither simple to consider the Internet in the same way as other utilities, nor axiomatic to invoke incomplete similarities in calls for changes to regulation or ownership. To do so denies the Internet’s unique characteristics and vastly different potential. The Internet IS different and needs to be considered on its own merits where regulation is concerned

[Howell is general manager for the New Zealand Institute for the Study of Competition and Regulation and a faculty member of Victoria Business School]

[Commentary] There is a subversive plan to slow the Internet, and it must be stopped. The new plan, now being contemplated by the Federal Communications Commission, could alter the Internet forever.

It could slow speeds, limit the content and applications consumers can access, and create a two-tier system that favors some companies over others. The plan even has a code name: it’s called “Title II.” For all of Title II’s potential for catastrophic harm, it offers no upside, even for its most hearty proponents. The bête noire of the neutrality fundamentalists is so called “paid priority,” where some bits (like high resolution videos that require fast and reliable delivery) are prioritized over mundane applications (like data backups or routine emails, where it doesn’t matter if the bits arrive now or a few milliseconds later).

But common carrier regulation of phones or trains (of which Title II is an example) explicitly allows service discrimination (paid priority) as long as all similarly situated customers get the same offer. Title II thus doesn’t even solve the supposed problem — but would cause new problems of its own. Far from a burden on small Web start-ups, paid priority could be an inexpensive and crucial tool. Behemoths like Google, Amazon, and Netflix have built out vast networks and content delivery systems of their own -- to speed the delivery of their own bits.

But small firms focusing on a first time product don’t have the wherewithal to match that physical infrastructure. They often use CDNs to deliver static content. But for other real-time services like gaming, or education, or health care, they may prefer to pay a network provider to move their bits and provide their customers with a first-rate experience. Prohibiting paid priority and other network services could thus harm start-ups and reinforce the big Web firms’ position of dominance.

[Swanson writes for Forbes]

[Commentary] Nearly 25 years ago, George Gilder wrote a book called “Life After Television.” Moore’s law of microchips and similarly powerful forces in fiber optics, digital storage, and wireless radio transmission, Gilder said, would enable the construction of new networks of computers that would end the stultifying era of mass media.

George famously got rid of the rarely used televisions in his home to support the thesis of his book -- that the coming “worldwide web of glass and light” would blow up the lowest-common-denominator world of dumb terminals, dumb content, and even dumber mass advertising and replace it with a network of choice, quality, interactivity, and intelligence.

So, is ours a life after television world? Whatever we call it, broadband computer networks have dramatically boosted choice and quality (better quality at the top end and overall, although there’s more worthless stuff, too). Instead of a mainframe, we’ve got 1.4 billion PCs, 5 billion mobile phones, 2 billion smartphones, and the immense resources of the cloud. We’ve got more networks -- broadcast, cable, broadband, mobile, satellite, Wi-Fi.

More distribution channels -- cable, telecommunications, mobile, satellite, Amazon, iTunes, Netflix, YouTube. More content aggregators. More content producers. And it’s often difficult to tell which is which. The upshot for policymakers is that choice and competition are proliferating, often at a dizzying pace. Every effort to regulate this space runs into the most basic definitional problems because no one knows what’s what, or what will happen next week. Better to let everyone keep enjoying this golden age of life after television.

[Swanson is president of Entropy Economics]

[Commentary] On May 19, the Obama Administration announced indictments of five Chinese military officers for cyber-espionage against US companies. The named individuals work for Unit 61398 of the Chinese People’s Liberation Army (PLA), a cyber-espionage organization. The problem of Chinese hacking of US companies is real, but these indictments are an unwise step.

They are unlikely to achieve any positive result and could well have significant negative consequences for the United States. Indicting PLA officers for cyber-espionage is not merely pointless, it is dangerous. The precedent we have set here is that uniformed military personnel can be indicted by foreign powers for activity conducted lawfully in their home country.

The NSA analyzes large volumes of foreign telecommunications traffic -- we almost certainly have wiretapped millions of Chinese citizens. Any hostile government, or impish prosecutor, would be able to use our actions here as justification for indicting NSA employees and contractors, or other Americans who work for our intelligence services. As a result, these indictments have the potential to impose more costs on us than on China. National courts are sometimes used as tools of foreign policy.

The term “lawfare” has been coined to describe the process of manipulating international legal standards for strategic ends The Obama Administration is in effect trying something of the sort here, normalizing new and aggressive cross-border prosecutions. However, these indictments are a dangerously slapdash sort of lawfare.

We have introduced and thereby legitimated a new tactic in our conflict with China. There is no evidence that we have considered the implications. Our government has expressed no guiding principles for when and how this tactic might be used in the future, either by us or by our adversaries.

[Rabkin is a researcher interested in techniques for building and debugging complex software systems and a guest contributor to TechPolicyDaily.com]