Network management

The Fiber Broadband Association commended the Federal Communications Commission’s efforts towards removing regulatory roadblocks to nationwide broadband deployment. FBA also offered significant barrier-reducing steps to help make that happen. First, FBA suggested that the Commission should amend its pole attachment rules to address practices of many pole owners and existing attachers that delay and increase the cost of access. Second, FBA urged the Commission to repeal the 2015 network change notification rule, which imposes an unnecessary and costly process, thereby hindering investment in fiber infrastructure. Third, FBA proposed that the Commission adopt criteria that can be used to readily determine which state and local laws and regulations violate Section 253 of the Communications Act and inhibit broadband deployment.

This study evaluates the estimated impact of the Federal Communications Commission’s recent efforts to remove barriers to investment into next-generation wireless and wireline broadband networks, and thereby to accelerate the transition from legacy copper networks to next-generation services.

We estimate that these proposed changes could have a significant impact not only on new wireless and wireline broadband infrastructure investment, but could also positively impact job creation, economic output and consumer welfare. Our models forecast that with these new rules in place, up to an incremental 26.7 million premises would become economical to serve with next generation networks, driving up to $45.3 billion in capital investment. This investment would be made by incumbent service providers across the country and is expected to take place over at least five years.

This reply to "The Curious Absence of Economic Analysis at the Federal Communications Commission" (Faulhaber, Singer, & Urschel, 2017) makes three claims.

First, we document the paper's undisclosed origins as a white paper commissioned by an advocacy group with deep ties to the telecommunications industry. Second, we describe two of the authors' active participation, on behalf of clients, in a range of contested issues before the FCC in recent years, none of which they disclose. Finally, our review of FCC workshops, roundtables, seminars, dockets and rulings—including during its landmark 2015 Open Internet Order and several blockbuster mergers and acquisitions—provides detailed evidence to refute the paper's core "curious absence" charge. The stakes could not be higher, we conclude, as the new FCC chair Ajit Pai has repeatedly referenced the paper to justify his rollback of FCC regulations—including, crucially, the common carriage/net neutrality rules so vigorously opposed by the paper's funders.

A $130 billion to $150 billion fiber infrastructure investment is required in the US to unleash innovation, close the digital divide, and fully prepare the country for 5G, according to a report from management consulting firm Deloitte. The report says the investment is needed over the next five to seven years to enable ‘deep fiber,’ or fiber infrastructure closer to the end user.

Much of the premise behind the report focuses on 5G, which requires a dense fiber network for backhaul and fronthaul. But it also stresses the discrepancy between rural and urban broadband options. Deloitte is calling on regulators and the broadband carrier community to address this issue, or risk losing leadership for the global digital economy opportunity. The report says the US currently lacks the fiber infrastructure necessary to take advantage of 5G. Many tier one carriers, including Verizon, have expressed their plans to ramp up fiber investments. Deloitte seems to suggest it’s not enough.

[Commentary] For some time now, the related issues of control and intelligent infrastructure have fuelled the network neutrality debate. Proponents of network neutrality are concerned that if internet service providers get to charge Netflix, YouTube or any website for the privilege of being downloaded at a faster speed than others - allowing some companies to avoid becoming slowed down - society would allow deep pockets to hijack our attention.

It's tempting to back Federal Communications Commission Chairman Ajit Pai if it means we'll be able to stream movies faster and buffer-free. But while smart systems seem attractive, they'll inevitably be optimised for corporate profit and control. The principle of first-come, first-served is our best protection against interference. We need it on the web - and on the roads.

[Brett Frischmann is a professor at Cardozo Law School in New York City. Evan Selinger, Professor in the Department of Philosophy at the Rochester Institute of Technology]

[Commentary] Recently, without any reference to the Net Neutrality debate, the cable industry trade association NCTA made the unsurprising observation that broadband speeds in the US continue to rise, as they always have. Seeing all things through the lens of Net Neutrality, Public Knowledge Senior Vice President Harold Feld immediately laid claim to the trend, asserting that the data in NCTA’s post supports the FCC’s reclassification decision. According to Feld, the speed trend confirms that the “Title II Virtuous Circle” is “totally working” because “the rate of increase has accelerated since the FCC adopted the Title II Reclassification Order in February 2015.”

Feld sets up a direct test of the wisdom of Title II reclassification based on the pace of speed increases following the 2015 Open Internet Order. An empirical question requires an empirical answer. Using the Akamai speed data, Ford subjects Feld’s “theorem” to a battery of statistical tests. Without exception, the data reveal a statistically significant decline in the rate of average broadband speed increases for the US subsequent to the 2015 Open Internet Order. Ford finds that “but for” the FCC’s 2015 Open Internet Order, US broadband speeds would have been about 10% higher—or about 1.5 Mbps faster—on average. Thus, in direct contradiction to Feld’s claim, reclassification appears to have significantly retarded expected broadband speed increases.

Expanding high-speed internet access to rural areas has been one of the few issues that’s drawn bipartisan support in a sharply divided Congress. And while nothing’s assured, backing by Federal Communications Commission Chairman Ajit Pai may help push those congressional efforts across the finish line.

Chairman Pai recently talked up the Senates Gigabit Opportunity Act (S 1013), that would effectively legislate his proposal for spurring broadband investment in remote areas, where internet access is available through 1990s-era dial-up service. The legislation — introduced May 3 by Sen Shelley Moore Capito (R-WV) and co-sponsored by Sen Chris Coons (D-DE) — would provide tax benefits for investments in “gigabit opportunity zones,” primarily in low-income and rural communities. On the other side of the Capitol, Rep David Loebsack (D-IA) introduced related legislation, the Rural Wireless Access Act (HR 1546), which would require the FCC “to establish a consistent methodology for its collection of coverage data about the available speed tiers and performance characteristics of commercial mobile and data service” for use in deciding on the eligibility of areas that can receive funds from the FCC-administered Universal Service Program or similar initiatives.

Legal challenges to the Federal Communications Commission's business data services (BDS) reforms have been consolidated in the US Court of Appeals for the Eighth Circuit. Petitions to deny some or all of the FCC's BDS report and order updating the framework for regulating business data services had been filed in three separate federal appeals courts. Those appeals came from CenturyLink, Citizens Telecommunications Company of Minnesota and a consortium of telecoms including Sprint.

The DC Circuit is the one with primary jurisdiction over telecommunications, but in the case of multiple filings, the US Judicial Panel on Multidistrict Litigation holds a lottery to determine the venue. CenturyLink told the US Court of Appeals for the Fifth Circuit that the FCC's regulation of rates on DS1 and DS3 service in areas deemed noncompetitive was arbitrary, capricious, an abuse of discretion and otherwise illegal. It said the FCC forced those price caps on competitive carriers despite evidence the cost of service had actually gone down.

This paper reviews experiences with subsidizing telecommunications services, and broadband in particular, in the United States and around the world. Based on those lessons it proposes a path forward intended to yield the biggest broadband bang for the subsidy buck.

Specifically, an effective broadband subsidy program would:
Set a single, clear objective: bring broadband service to populated areas that do not have it.
Define “broadband” by taking into account consumer demand characteristics. This definition should be use-centric, not technology-centric. Any technology should be eligible to participate in the auction.
Make the program a one-time subsidy.
Rank-order the bids in terms of cost-effectiveness in terms of new locations, not area, connected per subsidy dollar. Fund the most cost-effective project first, the next most costeffective second, and so on until the budget is exhausted.
Rigorously evaluate the results and have organizations other than the one implementing the program conduct the evaluations.

[Commentary] Because infrastructure supply-siders wield considerable influence in this debate, connectivity efforts have taken center stage, pushing inclusion efforts and research to the side. Yet, effective policy will require customized approaches that focus on specific places and communities, matching both demand and supply concerns. Researchers agree. Broadband policy needs to move towards a more nuanced view. Hopefully policy makers will adopt it.

[Will Rinehart is a tech policy analyst in DC]