FCC’s Official Net Neutrality Decision Coming This Week

On Thursday, the Federal Communications Commission (FCC) will decide whether to overturn the Obama-era net neutrality regulations that currently govern the internet. It is highly anticipated they will decide to return to the pre-2015 regulations.

Net neutrality implies an open internet environment that internet service providers should enable access to all content and applications regardless of the source, and without favoring or blocking particular products or web sites.

The 2015 net neutrality laws reclassified high-speed broadband as a public utility under Title II of the 1934 Communications Act rather than the 1996 Telecom Act. These regulations applied to both mobile and fixed broadband networks. The reclassification changed how government treats broadband service and gave the FCC increased controls over internet service providers.

The office of FCC Chairman Ajit Pai recently issued this Myth vs. Fact statement on returning to the pre-2015 regulations. One issue the public is concerned with is if internet providers would block or “throttle back” certain content to the public. Another is if content developers would pay internet providers for accelerated data transfer. The bigger issue is whether internet providers can operate their businesses as businesses rather than as a public utility. Data show that private investment in internet services has slowed under the post-2015 regulations.

The Indiana Chamber supports free-market competition in the delivery of advanced communications services. The competition in a free-market environment among industry service providers is consistent with providing choice to consumers and an adequate service of last resort in extended service areas.

The Chamber opposes any attempt to impose new regulations on broadband and other next-generation telecommunications services by the FCC, especially through the unilateral reclassification of such services under Title II of the Federal Communications Act.  The Indiana Chamber supports the U.S. Congress examining and deciding issues such as net neutrality. We believe that advanced communications and digital infrastructure are critical to long-term economic development. Since 2006, private companies have invested more than $1.5 billion in new broadband capacity in the state, expanding service to more than 100 Hoosier communities and creating 2,100 new jobs within the industry.

If the FCC rules to return to the pre-2015 regulations, it is expected that Congress will entertain legislation to promote some of the concepts of net neutrality and limit the ability to stifle content.

Tech Talk: Guidance, Insights From the ‘Rise’ Experts

Last week’s Rise of the Rest tour stop in Indianapolis was a powerful testament to the continued emergence of central Indiana’s tech and innovation prowess. Before sharing some of the panel insights and a few observations, a little dose of reality must be included.

This was the 31st stop in recent years for AOL co-founder Steve Case and his traveling team. That means a lot of other cities and regions are also upping their games. In other words, we must keep advancing. Plenty in the Midwest and beyond are also pulling out all the stops to attract innovators, entrepreneurs and the jobs that come with their ideas.

Union 525A daylong series of events included a fireside chat at The Union 525 (recall our BizVoice® story earlier this year on the then emerging venue). Case, author/investor J.D. Vance, Federal Communications Commission (FCC) chairman Ajit Pai and former U.S. chief technology officer Megan Smith shared these gems, among others:

  • Case referred to ExactTarget as the “type of breakout iconic success that puts cities on the map.” He added that Indianapolis should be proud of what has been accomplished “but the next five to 10 years is the time to really accelerate.”
  • Calling the internet the “great equalizer,” Pai contends: “To me, no issue for the FCC is greater than closing the digital divide.”
  • Giving the example of doctors serving in the surgeon general role, Smith reminds that it’s important to “make sure entrepreneurs are in the room when determining entrepreneurship policy.” (A dictionary entry on that might point to Indiana and the 2017 legislative session).
  • Vance, speaking of the “downstream effects of the start-up economy” and the need for additional talent: “How do we take that person who has been out of the labor force and bridge the gap – marshal the resources that are on the sidelines.”

Case wrote The Third Wave: An Entrepreneur’s Vision of the Future. He notes the first wave was a decade-long effort (with 300 partners) in going from 3% of Americans online an average of one hour a week in 1985 to truly getting America online. The second wave was building out software services with a focus on apps, not partnerships.

“The third wave is integrating the internet in a much more pervasive way. It’s not about software but getting people and companies to integrate. Companies that think they can go it alone will fail. It’s the old proverb: If you want to go quickly, you can go alone. If you want to go far, go together.”

Asked about lessons they were taking away from their day in Indianapolis, several agreed on the strong culture and passion in the community. Vance added, “Entrepreneurs who had success are reinvesting in the ecosystem. It absolutely makes a difference. It’s not just the money, but the mentoring and the relationships.”

A student in the audience sought their advice for a young entrepreneur …:

Vance: “Don’t think you have to be the person with the idea. Being the fourth, fifth, 12th person in a high-growth company is a good thing.” (Stay tuned for a similar local sentiment in the coming weeks).

Pai: “Seek out people who fascinate you. People are happy to talk with you and share ideas.” (That is certainly the case in Indiana).

Case: “Pick a battle worth fighting. Don’t pick an easy problem. You only live once.” He recalls this comment from Nelson Mandela: “It always seems impossible until it happens.”

Bad News on the Broadband Front

Announcing a national priority and making private sector investments apparently isn’t enough to improve broadband penetration across the United States.

A fall 2009 survey by the FCC found that 65% of Americans had broadband at home. A February 2012 survey came up with an identical number. Why? According to a report from TechNet, that last third of non-adopters (older, less educated and poorer) is a difficult audience to reach. Add in the recession — 9% in the latest survey said they had to cut back or cancel Internet service due to economic troubles — and the picture begins to clear.

The10-page TechNet report is here, with some brief analysis below by the State Science & Technology Institute:

The study identifies several reasons behind the plateau and calls for better coordination among policymakers and private stakeholders to improve adoption rates. Meanwhile, some states have big plans in the works to improve their broadband networks, including governors in Hawaii and New York pushing for funding to expand Internet access to underserved areas. Ohio’s governor is taking a different approach in hopes of attracting new employers and cutting-edge researchers with a $10 million state-led initiative boasting broadband speeds that officials say would far exceed the rest of the nation.

The TechNet report finds the number of Americans with broadband at home has remained around 65 percent since 2009 when the National Broadband Plan was implemented under the American Recovery and Reinvestment Act (ARRA). At the same time, smartphone adoption and apps usage has grown significantly. However, this is not because smartphone users are swapping broadband service at home with smartphone usage; rather, connected individuals are increasing their access while others are left behind. A society more "digitally excluded," the authors contend, contributes to a smaller domestic market for tech goods and services and a less innovative economy.

Coordination and assessment is seen as key to pushing past the plateau. A clearinghouse for best practices that assembles program information would help local authorities better understand broadband opportunities and help states understand what other states are doing, the report finds.

 

Spending in America: The Unfunny Story of Where Some of it is Going

In the recent debt deal, there was plenty of debate from pundits and voters about the need — or lack of need — for more taxation. But one thing almost everyone seemed to agree on — politicians included — was that the U.S. simply must start cutting its spending. The Heritage Foundation has an interesting post showing some places we could likely start:

Late-night comedian Conan O’Brien’s blog has a new post parodying Washington’s excessive spending. “Team Coco has found out why our government is so broke,” the blog explains, “They’ve been spending all our hard earned tax dollars on some pretty ridiculous programs.” The post contains a list of humorous fake programs and encourages readers submit their own.

But sadly, there’s no need to turn to a crack team of comedy writers to gin up examples of ridiculous government spending. Instead, one need only look to the shenanigans on Capitol Hill to find a list of absurd expenditures of taxpayer dollars. As Heritage has reported, in addition to long-term, substantive reforms, $343 billion of wasteful government spending could be cut immediately. And while Conan’s list is populated by a number of outlandish (but fake) programs, there are plenty of REAL government programs that are just as ridiculous. Conan, try these on for size:

  • Washington will spend $2.6 million training Chinese prostitutes to drink more responsibly on the job.
  • Because of overstaffing, the U.S. Postal Service selects 1,125 employees per day to sit in empty rooms. They are not allowed to work, read, play cards, watch television, or do anything. This costs $50 million annually.
  • Stimulus dollars have been spent on mascot costumes, electric golf carts, and a university study examining how much alcohol college freshmen women require before agreeing to casual sex.
  • Washington will spend $615,175 on an archive honoring the Grateful Dead.
  • The Securities and Exchange Commission spent $3.9 million rearranging desks and offices at its Washington, D.C., headquarters.
  • Congress recently gave Alaska Airlines $500,000 to paint a Chinook salmon on a Boeing 737.
  • Washington spends $25 billion annually maintaining unused or vacant federal properties.
  • The Federal Communications Commission spent $350,000 to sponsor NASCAR driver David Gilliland.
  • Washington has spent $3 billion re-sanding beaches—even as this new sand washes back into the ocean.
  • Taxpayers are funding paintings of high-ranking government officials at a cost of up to $50,000 apiece.
  • The Conservation Reserve program pays farmers $2 billion annually not to farm their land.

And the list goes on and on. When it comes to government spending, the truth is often stranger than fiction.

FCC Report: Media Needs to Serve Somebody

There was big news in the world of journalism yesterday (for those who follow such things and/or care what the Federal Communications Commission has to say) when the FCC released a 470-page report on the state of the U.S. media. In summary, their conclusion wasn’t exactly a positive one, with the overall finding seeming to be that American media isn’t serving the public. What’s most interesting — or perhaps most telling — is that the Democratic and Republican commissioners seemed to have two entirely different takes on the report. Imagine that. National Journal reports

Federal regulations designed to ensure that broadcasters serve the public interest are broken, allowing stations to dump local-news reporting and lowering standards for news ranging from international developments to government scandals, the Federal Communications Commission said on Thursday.

"Over time, court rulings, constitutional concerns, and FCC decisions have left a system that is unclear and ineffective,” the agency said in a long-awaited report on the U.S. media. “The current system operates neither as a free market nor as an effectively regulated one; and it does not achieve the public-interest goals set out by Congress or the FCC.”

The 470-page study turns the tables, with the FCC reporting on media outlets that usually are the ones doing the reporting.

To promote public-interest programming on public airwaves, the report recommends more disclosure from broadcasters. It also calls for C-SPAN-like public-affairs networks in each state.

Too often, the report asserts, the FCC rubber-stamps broadcast licenses without ensuring that the outlets involved cover the local community.

Further, the proliferation of Internet-based news outlets has not improved the quality of journalism, the researchers found.

“It turns out you can have an abundance of media outlets and a shortage of real news,” said the report’s lead author, former journalist Steven Waldman. At the root of the growing dearth of quality reporting, he concluded, is the fact that advertising is increasingly disconnected from content.

“If ad rates were the same online as they are in print, we wouldn’t be having this conversation,” Waldman said. In a first for the agency, the report urges lawmakers to consider the “positive benefits” of online tracking when drafting privacy legislation. Such tracking, the report states, offers a possible way for news websites to attract more ad revenue.

To help strengthen the public service potential of media, the report makes six broad recommendations: emphasize online disclosure as a pillar of FCC media policy; make it easier for citizens to monitor government by putting more information online; consider directing more existing government spending to local media; foster an environment for nonprofit media outlets to succeed; promote broadband access; and ensure that media policy helps historically underserved communities.

The highly anticipated report didn’t go far enough for Democratic FCC Commissioner Michael Copps, who has long called for tighter public-interest regulations.

“Enlightened policy that promotes the public interest is basically glossed over by the staff report as having been tried and failed,” Copps said at Thursday’s commission meeting, where the findings were presented.

He took the report’s authors to task for “tinkering around the edges” by not calling for major overhauls. “In the recommendations, there is some hedging about whether all that consolidation we are living with today—all these local, independent stations bought up by mega-media interests—has been good or bad,” Copps said.

But Republican Commissioner Robert McDowell said that the report highlights the competitive and innovative nature of the media market. Regulations and policies will only hurt, he argued. “The government should keep its heavy hands off of journalism,” McDowell said.

McDowell stressed that the report is only the beginning of a debate over potential solutions.

The findings contained few surprises in their evaluation of the media market, noting that many traditional news outlets have been decimated by economic challenges and shifting technology.

So what’s your take?

Broadband Buildout: Public or Private?

Australia has an intriguing plan to build a state-of-the-art broadband fiber network covering most of the nation. A public-private investment of $33 billion over eight years would reach 90% of homes and businesses, with wireless and satellite technology used to access the remaining 10%.

A senior adviser to President Obama is reportedly a big fan of the idea. Susan Crawford, a member of the National Economic Council, noted in a recent policy forum that Singapore is making a similar investment and that plans are being considered in Britain and the Netherlands.

The Federal Communications Commission is to present a national broadband strategy to Congress by early next year. A public network in the U.S. would equal the $33 billion in Australia — and an estimated $400 billion more.

Benefits: increased access and lower monthly rates. Pitfalls: another huge tax increase to pay for the project and a potential decline in private sector investment — decreasing competition in the long run.

In local communities, there are a few stories of public ownership success, but more examples of failures. Increasing access is critical, but at what cost? With government already on a spending spree, a better alternative would seem to be to make it easier for enhanced private sector investment.

Should Government be in Charge of Cleaning Internet Pipes?

Is your Internet running slowly due to all the video content and advanced applications straining your provider? Does it have you angrier than a surly fishgator? Well calm down, fella. The government might be here to help.

But is that a good thing? The Small Business & Entrepreneurship Council says they’d rather let the private sector handle this one.

Robert McDowell:

"If we choose regulation over collaboration, we will be setting a precedent by thrusting politicians and bureaucrats into engineering decisions. Another concern is that as an institution, the FCC is incapable of deciding any issue in the nanoseconds that make up Internet time. And asking government to make these decisions could mean that every few years the ground rules would change based on election results. The Internet might grind to a halt in such a climate. It would certainly die of clogged arteries if network owners had to seek government permission before serving their customers by managing surges of information flow."