What impact will regulatory decisions made in Washington have on broadband investment, job creation, and economic recovery? A substantial one, according to a group of notable economists and investors who joined together yesterday at an event hosted by the New York Law School Advanced Communications Law & Policy Institute.
The message was clear: increased broadband regulation and potential classification under Title II of the Telecommunications Act would only create investor uncertainty, harming broadband investment and deployment, and the jobs that this sector creates. Mike Rollins, Managing Director of Research at Citi Group, stated, “When investors are looking at policy decisions they’re not just looking at what the FCC wants to accomplish today but what those policies can do over time.” For this reason, investor eyes are on Washington as the FCC began receiving public comments today as part of their Notice of Inquiry on how the regulatory framework of the Internet should look.
Earlier today, experts in communications policy gathered for the Phoenix Center event titled “The Broadband Credibility Gap.” The purpose of the event was to address the question of whether the FCC has the credibility to live up to its promises, particularly in the area of forbearances of the Title II regulatory authority it seeks. George Ford, Chief Economist of the Phoenix Center, argued that the evidence demonstrates the FCC will not be a light-touch regulator, citing research he and Larry Spiwak, President of the Phoenix Center, shared in their recent paper on the topic.
Ford believes the FCC should not be trusted to impose and maintain light-touch regulation under Title II authority. Aside from issues around the commitment of future commissions, he cited examples of price regulations, unbundling regimes, and policies set out in the National Broadband Plan, as examples of the evidence against light-touch. Ford warned of wireless being pointed to as an archetype of the type of regulation the FCC seeks, when so much of wireless is being regulated. Ford concluded jobs and investment are the real national priority, with some of the most compelling evidence in investment effects, as cable stocks were down 10% on the announcement of the Title II reclassification.
A panel of experts largely agreed. One of the panelists, Jon Nuechterlein, a Partner with WilmerHale, warned of three dimensions of uncertainty by Title II approach.
1) The uncertainty of direct appeal itself since legal risks attendant to an appeal.
2) The implementation of cramming Internet players into regulatory silos that were designed for an older market.
3) Under Title I, there were no rules that could be imposed against any provider unless FCC spelled it out ahead, whereas Title II rule is very different and not case-by-case.
Kathy Brown, Senior Vice President for Public Policy and Corporate Responsibility at Verizon Communications similarly warned against going backwards. She believes the answer is in Congressional consensus, if at all, since she sees little harm to be addressed. She believes that the case-by-case approach with a complaint-driven, factual showing may be appropriate since it would protect both consumers and competition.
At this morning’s Phoenix Center forum, Lawrence Spiwak sat down with Federal Communications Commissioner (FCC) Robert McDowell. They discussed the current prospect of regulating broadband Internet under an outdated 1934 telephone law.
Everyone wants an open, unfiltered Internet and Commissioner McDowell believes the great policies in place today have given us that outcome. But the idea of Net neutrality has unfortunately created further confusion in this unnecessary debate.
McDowell says Net neutrality is really about transparency and blocking anticompetitive actions. These two factors could easily be monitored under Title I, the current and existing law. There are plenty of legal tools at the FCC’s disposal if a broadband company were to act in an anticompetitive way. McDowell said, “The notion that consumers are not protected is false.” A consensus on transparency is a topic the Commissioner sees as important and necessary, but not reclassifying broadband Internet under an outdated law.
Broadband companies have invested over $500 billion in the past ten years in our nation’s broadband communication infrastructure. However, rural areas continue to be the most challenging to reach with broadband due to tough terrain and lower density populations. So when Oklahoma Governor Brad Henry shared his state’s broadband success story with Tulsa World, in support of a hands-off approach by the FCC, we thought we should share it:
In 2002, our state stood at the fork in the road, too. The path we chose was one of less regulation for broadband service, not more, and the results could not be more definitive and clear. A hands-off approach delivered real results.
Since the passage of our broadband parity legislation, we have seen expanded access into the most rural parts of our state. Families in Bessie (population 190) and Rattan (population 241) are beginning to compete with the larger urban areas when it comes to broadband access, choice and price. Prices, too, have dropped by 50 percent, and broadband subscribers have grown by more than 1,000 percent since 2001.
The Oklahoma experience in broadband regulation demonstrates a better way to ensure access to all the rich resources of the Internet. At the fork in the road, we chose the path to eliminate regulation of broadband service, and we have no regrets.
A panel of experts gathered at the United States Capitol earlier this week to share their perspectives on the best policies to facilitate broadband access and adoption in the Latino community. The session was a part of the Latinos in Information Sciences and Technology Association (LISTA) conference. LISTA advocates for Latinos in the science and technology fields.
As the President of ASPIRA Robert Blackburn-Moreno noted in his introduction, “we must be literate, capable, and trained in broadband or we risk permanent second class citizenship.” With Latinos falling behind in national broadband adoption rates (45% for Hispanic communities vs. a 65% average), most of the panelists urged for policies that focus on investment and adoption, and avoiding current distractions like broadband reclassification and Network neutrality.
Gus West from the Hispanic Institute urged policymakers to consider Hispanics in implementation of the National Broadband Plan. West expressed deep concern with the FCC’s announcement to reclassify broadband. West says these efforts pose serious risks for service providers and worse as will delay delivery of services where they are needed the most. “We must focus on connecting our communities to the economic and social backbone of broadband.”
David Honig, President and CEO of the Minority Media & Telecom Council (MMTC) agreed, noting that many civil rights organizations have come together against Net neutrality for the reasons outlined above. He believes additional regulations will only protect the top 2% of bandwidth, as costs will shift to lower bandwidth users, which could hinder adoption.
Watch the video below for more from David Honig. And Click here for more information on broadband and the Latino community.
Earlier this week, ITIF hosted a debate on broadband rankings , specifically focused on this resolution: “The US is lagging seriously behind other countries on broadband access and this is due primarily to a failure of U.S. telecom regulation.” Of course, this is not the way that ITIF sees it (nor we at NextGenWeb), but this is what made the topic ideal for debate.
Proponents of the resolution, Matt Wood from Media Access Project and Sascha Meinrath from New America Foundation, argued there is a need for increased competitive pressure to achieve desired industry outcomes like lower prices and higher speeds. However, Rob Atkinson from ITIF and George Ford from the Phoenix Center, were very convincing that the problem isn’t broadband access or affordability. It’s that only 62% of homes in the U.S. have computers. “We’d be ranked 6th if we had higher computer adoption like Japan and other countries,” Atkinson said.
Another issue that negatively affect the U.S. in broadband rankings is “urbanicity,” or the density of urban areas, since it’s is easier to reach many at a lower cost the more dense an area is, Atkinson also noted. Nations like South Korea have an advantage since 50% of units are multi-dwelling, versus only 3% in the U.S. having more than 50 units.
These reasons suggest that competition and regulation are not the policies needed to improve upon broadband adoption. To go even further, George Ford was adamant that adding another entrant to the market, particularly government as a provider, when there is currently so much intermodal competition would be a huge step backwards in where we should focus our energy.
Watch the video below for more from Rob Atkinson, President of ITIF.
A new research report warns Net neutrality regulation is a catalyst for severe job loss and diminished investment for the broadband industry. Research authors Charles Davidson and Bret Swanson believe policymakers should be doing what they can to foster not stifle job creation. The report shows “large investments and rapid innovation across the ecosystem have been spurred by the light-touch regulatory approach taken by the FCC over the last several years.” Without regulatory burdens, experts forecast continued investment and job growth. On the other hand, enacting regulation on broadband Internet could have damaging effects.
Yesterday, technology and telecom companies came together to form the Broadband Internet Technical Advisory Group (BITAG). The group includes heavy-weights with diverse membership from AT&T, Cisco, Comcast, DISH Network, Echo Star, Google, Intel, Level 3, Microsoft, Time Warner and Verizon.
Under the direction of former FCC Chief Technologist, Professor Dale Hatfield, TAG’s goal is to work together to create guidelines that quickly resolve technical problems and generally bring compromise to broadband network practices. In an effort to minimize policy disputes, TAG hopes to help educate U.S. policymakers. The move is also focused at creating open dialogue between policy makers, federal agencies, companies and broadband users.
Former commissioner of the Federal Communications Commission (FCC), Deborah Taylor Tate penned an op-ed for AOL News telling the FCC they’ve gone down the wrong road with regard to regulating the Internet. Ms. Tate asks both the FCC and Congress to review the successes the Internet has given all of us under what she called “light touch regulation,” and particularly to look at “the massive boom in advanced technologies that continue to offer completely new tools to American consumers each day, provide new jobs and keep us globally competitive.” Ms. Tate hopes that “the FCC will be guided down a path that leaves broadband free of burdensome regulation and open to innovation and investment — especially in this historic economic downturn.”
In a Detroit News letter to the editor, Mike Jude discussed the potential impact of Net neutrality on the 95% of Americans who access high speed Internet services. Dr. Jude oversaw a study by Frost & Sullivan, finding “that even with a light regulatory touch, net neutrality could impose a $7 billion a year overhead on the economy with a commensurate loss of 70,000 anticipated jobs in 2011.”
Frost & Sullivan’s study also says Net neutrality legislation could “hamper the FCC’s stated goal of universal broadband — helping every American get online,” costing customers nearly $55 more per month. The legislation would force service providers to charge customers to “support network deployment and management.”
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