Internet/Broadband

The culture wars that have consumed politics in the United States have now landed on Silicon Valley’s doorstep.

That became clear after Google fired a software engineer, James Damore, who had written an internal memo challenging the company’s diversity efforts. The firing set off a furious debate over Google’s handling of the situation, with some accusing the company of silencing the engineer for speaking his mind. Supporters of women in tech praised Google. But for the right, it became a potent symbol of the tech industry’s intolerance of ideological diversity. Silicon Valley’s politics have long skewed left, with a free-markets philosophy and a dash of libertarianism. But that goes only so far, with recent episodes putting the tech industry under the microscope for how it penalizes people for expressing dissenting opinions. Damore’s firing has now plunged the nation’s technology capital into some of the same debates that have engulfed the rest of the country.

Such fractures have been building in Silicon Valley for some time, reaching even into its highest echelons. The tensions became evident with the rise of President Donald Trump, when a handful of people from the industry who publicly supported the then-presidential candidate faced blowback for their political decisions.

Section 706 of the Telecommunications Act of 1996, as amended (1996 Act), requires the Commission to determine and report annually on “whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion.” With this Notice of Inquiry we initiate the next annual assessment of the “availability of advanced telecommunications capability to all Americans in a reasonable and timely fashion,” and solicit comment and information to help guide our analysis.

The Commission released the 2016 Notice of Inquiry on August 4, 2016, asking a number of questions about broadband deployment, but did not issue a subsequent report. In light of the changes in the industry and our recent actions to encourage broadband deployment, we propose to start this Inquiry afresh, with updated data and questions focused on the current progress of deployment of advanced telecommunications capability. In response to this Inquiry, we seek objective data and other evidence reflecting the state of broadband deployment and availability.

We encourage individual consumers, providers of broadband services, consumer advocates, analysts, companies, policy institutes, governmental entities, and all other interested parties to help us determine the most effective ways to complete this statutorily mandated task. We also encourage commenters to bring to our attention new issues concerning the deployment and availability of advanced telecommunications capability and recommend new ways to measure and evaluate deployment and availability. The information we gather in this proceeding will help ensure that our broadband policies are well-informed and backed by sound data analysis as we strive to encourage the deployment of broadband to all Americans in a reasonable and timely fashion.

FCC Commissioner Mignon Clyburn did not vote to launch the proceeding saying, “While the structure of this item may look similar to past years, and I appreciate the Chairman accepting edits that I proposed, for several reasons I must respectfully concur.” He complaints include: 1) proposing a speed benchmark that is way too low, 2) deeming an area as “served” if mobile or fixed service is available, and 3) NOI seeks to measure deployment in terms of year-over-year progress rather than whether the service is actually meeting the needs of consumers.

The Eighth Circuit Court of Appeals denied a motion to stay the effect of the Commission’s reform of its rules governing business data services. Chairman Pai issued the following statement:

“The court’s decision to let our modernization of our business data services rules take effect is an important—though unsurprising—affirmation that the Commission thoroughly analyzed our massive data collection to establish a robust, forward-looking competitive framework. These reforms will encourage vigorous investment in next-generation networks, which is critical if we are going to bridge the digital divide in our country."

The US residential median broadband price was $80 per month during the second quarter of 2017, according to research from Point Topic. Globally, the average residential download speed was 135 Mbps and the average monthly charge was $105. The best value was provided by fiber (208 Mbps for $94) and the worst by copper (14 Mbps for $68).

The range between high and low prices for broadband service tend to be more extreme in some countries than in others, according to Point Topic’s data. India (a high/low range of about $120/$5), Brazil (about $115/$20) and Turkey (about $118/$20) have a higher range, while Germany (about $50/$22), Japan (about $35/$3), South Korea (about $55/$30) and Russia (about $30/$5) tend to have less of a gap between high and low broadband speeds. The midrange seems to be comprised of China (about $60/$5), the United States (about $85/$15), France (about $55/$10) and the UK (about $55/$5).

AT&T’s CFO John Stephens said that FirstNet’s pre-emption requirements for public safety users present “a challenge with the net neutrality process because you are giving prioritized service to police, firefighters.” “But quite frankly I think everyone would agree that that’s probably a good thing,” explained Stephens. "It’s just one of the uniquenesses of some of the other arguments that we have to deal with.”

When questioned about the topic further, Stephens said that net neutrality proponents didn’t really take FirstNet’s public-safety pre-emption requirements into account when drafting net neutrality guidelines. “We have the ability today to give [FirstNet public-safety users] preferential treatment. What we’ll have by the end of the year is what we call ‘relentless pre-emption,’ such that if there’s capacity for 10 calls and 10 calls are being used, and a firefighter gets on, one of the 10 people gets booted off and the firefighter gets in,” he said. “Quite frankly, I don’t think they thought about it [when crafting net neutrality guidelines]. The FirstNet process has been around since 9/11. It came out of the 9/11 events, and so that had been out there for a long time, and so I don’t even think it was even considered.”

House Commerce Committee staff, as expected, met with interested parties on network neutrality legislation, but they wouldn't say which companies or groups showed up. Remember, the committee originally invited the CEOs of Facebook, Alphabet, Amazon and Netflix to testify at a hearing along with chief executives of the major telecoms, but later extended (apparently indefinitely) the deadline for them to respond.

"We are pleased that so many stakeholders in the internet and tech communities have provided substantive feedback in our efforts to protect a free and open internet," said committee spokesman Zach Hunter, declining to name attendees. "We look forward to continued progress and providing certainty for both businesses and consumers alike with a permanent, legislative solution." It's all part of a Republican effort to push forward a net neutrality bill, which has been stalled amid opposition from Democrats intent on keeping the fight focused on the Federal Communications Commission. According to the committee, Chairman Greg Walden (R-OR) still plans to hold a Sept. 7 hearing on the topic.

The 8th Circuit Court of Appeals handed a victory to the Federal Communications Commission when it refused to block the agency's regulatory changes to the business data services market from taking effect. The commission voted in April to relax regulations in the $45 billion market, finding that there was strong evidence of competition for the services, which provide connections for ATMs, hospitals and other institutions for high-volume data transmissions.

Sprint and several other organizations filed suit. Trade group INCOMPAS and the Ad Hoc Telecom Users Committee, an organization of major firms that buy telecom services, along with several others, asked the appeals court to stop the changes from taking effect. The court denied the request, along with a request from Sprint to transfer the case to DC.

[Commentary] How much is being lost in economic benefits because fixed broadband connectivity is not ubiquitous? A 2017 study by Ohio State University Swank Program on Rural-Urban Policy estimated the economic benefits of providing broadband access to unserved households in Ohio. To calculate these estimates, the Ohio State study used customer surplus – what a consumer is willing to pay for a service compared to what they are actually paying. In other words, consumer surplus is the average amount of value a consumer receives from Internet service above and beyond the price.

The most conservative of scenarios, which assumes full access but only 20 percent adoption, would generate an impact of $4.5 billion per year or $43.8 billion over fifteen years in the US. In non-metropolitan counties, this same scenario would yield $2.3 billion annually or $22.7 billion over fifteen years.

[Dr. Roberto Gallardo is Assistant Director & Community & Regional Economics Specialist of the Purdue Center for Regional Development at Purdue University.
Dr. Mark Rembert is the Graduate Research Associate at the Swank Program on Rural-Urban Policy at the Ohio State University.]

[Commentary] Big Cable’s #DitchTheBox proposal is one of the most recent examples of an industry’s inability to self-regulate in the absence of federal regulation, and many of the same companies offering pay-TV services are the same companies providing broadband internet. Big Cable’s past history of discrediting its own promises via its behavior epitomizes why it cannot be left to self-regulate. Big Cable said it would do one thing for consumers when faced with federal regulation, then did nothing when that threat evaporated. Replacing the Federal Communications Commission’s network neutrality rules with a voluntary system where broadband providers dictate their own rules (or lack of them) will likely result in the same scenario. In the end, we’d be exchanging strong, court-tested net neutrality rules with a series of ISP-designed loopholes that would serve as a catalyst for market abuse -- and more consumer ripoffs.

A company that tracks Internet service providers and data caps in the US has identified 196 home Internet providers that impose monthly caps on Internet users. Not all of them are enforced, but customers of many ISPs must pay overage fees when they use too much data.

BroadbandNow, a broadband provider search site that gets referral fees from some ISPs, has more than 2,500 home Internet providers in its database. This list includes telecommunications providers that are registered to provide service under the government's Lifeline program, which subsidizes access for poor people. BroadbandNow's team looked through the ISPs' websites to generate a list of those with data caps. The data cap information was "pulled directly from ISP websites," said BroadbandNow Director of Content Jameson Zimmer. "For those that have multiple caps, we include the lowest one and an asterisk to show that they have regional variation." BroadbandNow, which is operated by a company called Microbrand Media, plans to keep tracking the data caps over time in order to examine trends, he said.