I participated in a panel about the “Wired Home and Wireless Policy” at the Broadband Breakfast Club this morning. The panel was aimed at the impact of convergence on communications policy, though it touched on a number of current policy issues, including the current debate about incentive auction legislation (see my separate post about the spectrum crunch here). I focused my remarks on four emerging trends that are likely to disrupt wireless regulation in 2012: convergence 2.0, cloud computing, hotspot 2.0, and small cells. Read the rest of this entry »
Posts Tagged ‘ broadband ’
Four Trends that Will Disrupt Wireless Regulation in 2012
TAGS:
broadband FCC mobile spectrum wireless wireless competition
The House Spectrum Bill Is Already a Compromise
The House recently approved spectrum legislation granting the FCC incentive auction authority. In his statement responding to the bill, Federal Communications Commission (FCC) Chairman Julius Genachowski recognized that the legislation would promote investment, innovation, job creation, and U.S. leadership in mobile broadband. He expressed concern, however, that the bill limits the FCC’s authority to allocate spectrum cleared by auction on an unlicensed basis and restrict auction eligibility.
Although I appreciate the FCC’s desire for unlimited authority, it isn’t surprising that the House has proposed to limit the scope of the FCC’s delegation over spectrum policies granting special market privileges to favored technologies, services, or industry groups. Rather than make things better, FCC attempts to fine tune the market through government privilege typically result in unintended consequences that make things worse. Read the rest of this entry »
TAGS:
auction broadband public safety spectrum T-Mobile wireless
The Relationship between Universal Service Reform and Incentive Auction Legislation
Captain, Road Prison 36: What we got here is… failure to communicate. Cool Hand Luke (1967).
“People love to categorize.” Categorization helps us make sense of a complicated world. But, when categorization doesn’t reflect substantial similarities, it obfuscates as much as it illuminates. So it is with communications policy, which is categorized primarily by the technologies used to deliver communications services (“stovepipes”) rather than their impact on consumers. This approach to categorization obfuscates the relevant question – whether a particular regulatory approach maximizes consumer welfare (rather than the prospects of particular competitors).
If the government subsidizes universal broadband, it would render government subsidization of over the air broadcast duplicative.
The ongoing debates about broadcast incentive auctions and universal service reform offer a poignant example of such obfuscation. Because the services that are the subjects of these debates use different technologies, and are thus categorized separately, these debates are being conducted independently. When viewed from the perspective of consumer welfare, however, these debates are inherently interrelated. They both involve regulations that are intended to address the same concern – the widespread dissemination of information to consumers from a multiplicity of sources.
The core question in both debates is to what extent the government should subsidize consumer access to information. Because broadband service provides access to far more information than is possible through over the air broadcast, answering this question in the universal service debate informs the incentive auction debate: If the government subsidizes universal broadband, it would render government subsidization of over the air broadcast duplicative.
TAGS:
broadband mobile spectrum Universal Service Fund USF wireless
FCC’s Broadband Speed Measurements Debunk Advertised Speed Myth
Annie: Well, I should probably tell you that I’m taking the bus because I had my driver’s license revoked.
Jack: What for?
Annie: Speeding.
Speed (1994).
Yesterday the FCC released its “Measuring Broadband America” report, “the most comprehensive and rigorous assessment ever of broadband performance in the United States.” (See FCC Chairman Genachowski’s statement here.) The report debunks one of the most widely believed broadband myths with actual data.
Myth: “[C]onsumers aren’t getting the service that they are paying for.”
Fact: “DSL, cable, and fiber-to-the-home are all delivering quality service generally consistent with what they advertise.” (Chairman Genachowski’s statement.)
In fact, consumers are sometimes getting service that is faster than that for which they are paying even when measured during periods of peak usage. The report found that, on average during peak periods, fiber-to-the-home services delivered 114% of advertised speeds (DSL-based services delivered 82% and cable delivered 93% of advertised speeds).
It’s refreshing to see an FCC report based on actual data that sets the record straight.
Netflix CEO Advocates for Internet Price Regulation – the Net Neutrality Endgame
Many have noted that net neutrality regulations are in essence price controls. (See this post at The Technology Liberation Front.) In his statement proposing a “third way” to achieving net neutrality, however, Chairman Genachowski said his net neutrality regulations would “not [regulate] broadband prices or pricing structures.” Given the negative history of Title II pricing regulation, sidestepping the implicit price regulation issue has been critical to the pro-net neutrality movement’s narrative. Netflix CEO David Hyman must have missed the memo.
In a recent op-ed in the Wall Street Journal (subscription required), Mr. Hyman urged regulators to prohibit usage-based broadband pricing and bandwidth caps. (Well, to be fair, he used a metaphor about a frog and a pot of boiling water in lieu of an express request for regulation, but strip away the metaphor, and the intent is the same.) Of course, there is nothing anticompetitive or anti-consumer about usage-based pricing: Mr. Hyman admits that usage-based pricing is a standard pricing mechanism in other contexts, e.g., electricity. So what is his real complaint?
Mr. Hyman’s real complaint is that usage-based pricing and bandwidth caps don’t maximize consumer access to the particular service his company provides. Unfortunately for Netflix, that’s not the relevant question. The government doesn’t (or rather, shouldn’t) regulate pricing to maximize the profits of particular companies or services, and it shouldn’t intervene in the market for broadband access service to maximize the profits of Netflix.
TANSTAAFL, and adding more pricing controls to the existing net neutrality regime would impose costs on everyone. As I’ve posted previously, the business case for fiber deployment already entails considerable risk. Further reducing broadband infrastructure investment incentives to boost Netflix’s profits, when millions of Americans still don’t have access to the best broadband technologies available, would be absurd. In its letter to shareholders describing its Q1 2011 results, Netflix showed 95% growth in operating income and 94% growth in net subscriber additions. That hardly sounds like a company that needs government intervention to “compete.”
At the end of the day, those who oppose net neutrality might be thanking Netflix for making its request for Internet price regulation so transparent – a transparency that often appeared lacking in last year’s net neutrality debates. Net neutrality advocates, however, might be wishing they’d gotten Mr. Hyman the memo.
TAGS:
broadband net neutrality