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.

Breaking Bad? Google Chairman Warns That Governments Could Effectively ‘Break Internet’

WIn a recent event hosted by Sen. Ron Wyden (D-Oregon), Google Chairman Eric Schmidt offered an alarming prediction that governments, especially our own, could end up splintering the Internet into pieces. This, he argues, is because countries may prefer to operate their own Internet instead of allowing surveillance organizations, such as the National Security Agency, to collect data on their citizenry.

Wyden added that this would hurt American tech companies — and thus eliminate some American jobs.

Be sure to read the full National Journal article about these remarks, and watch the brief video featuring Schmidt’s comments.

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.

 

Broadband in America: Alternatives to GONs Needed

Widespread broadband access is a noble goal. The question comes down to how expansion of current networks takes place. The Coalition for the New Economy wants to make sure such investments are both effective and efficient.

Read its latest study, released earlier this week. The group’s press release is below:

The Coalition for the New Economy today (Monday) released a study by Dr. Joseph P. Fuhr, Professor of Economics at Widener University in Chester, PA. The study outlines the complex and problematic history of government-owned broadband networks (GONs) and looks for alternatives for achieving universal broadband access.

“Policymakers around the country are hurriedly trying to find ways to extend high-speed broadband access to all Americans,” said Fuhr, “This is a noble goal, but in their haste some local lawmakers have made bad business decisions, opting to build public networks that often leave taxpayers deep in the red.”

The report cites several case studies that show GONs:

  • Do not meet their stated goal of universal service;

  • Fail financially because they lack clear, sustainable business plans, based on realistic cost-benefit analyses;

  • Are often duplicative;

  • Create an unfair playing field between the public and private sector; and

  • Are so costly they crowd out spending on other essential social services, including law enforcement, healthcare and education, as well as stifling innovation.

Fuhr says, “At a time of declining local revenues and rising budget deficits, taxpayers have the right to scrutinize how their local leaders are spending precious tax dollars. They deserve to know GONs are simply not the best, fairest or most cost-efficient way to achieve universal broadband access.”

In his study, Fuhr outlines a more effective way to extend broadband access, advising municipalities to explore public-private solutions. “For example, reducing the tax and regulatory burden on private telecommunications firms could be enough to compel these companies to invest in, and bring jobs to, underserved areas,” Fuhr says.

The Coalition for the New Economy (CNE), which commissioned Fuhr’s study, is dedicated to ensuring that all Americans have access to innovative technologies and that policies are fair, fiscally responsible and will allow for increased access and adoption.

Amazon Deal a Step in Right Direction

We salute Gov. Mitch Daniels and Amazon.com for coming to a recent agreement, resulting in the company collecting Indiana sales tax, beginning in 2014. We think this is a step in the right direction to level the playing field for other businesses, but, like Daniels and Amazon.com, we believe there is a clear need for a federal solution to this matter.

Governor Mitch Daniels announced today that the state has reached an agreement with Indiana’s largest online retailer, Amazon.com, Inc., to begin collecting Indiana sales tax on internet purchases.

Indiana will become the fourth state to reach such an agreement with Amazon, but the governor said he will continue to push for federal action to fairly address the issue.

“The only complete answer to this problem is a federal solution that treats all retailers and all states the same. But for now, Amazon has helped us address the largest single piece of the shortfall, and we appreciate the company working with us to find a solution,” said Daniels.

According to the agreement between Amazon and the Department of Revenue (DOR), the company will voluntarily begin to collect and remit Indiana sales tax beginning January 1, 2014 or 90 days from the enactment of federal legislation, whichever is earlier. The state will not assess the company for sales tax for other periods.

Estimates of uncollected online sales taxes are about $75 million each year. Of that, the State Budget Agency and DOR estimate that revenue from sales tax remittal by Amazon would be approximately $20 million to $25 million per year.

Workers Wasting Time Web Surfing? Study Suggests It May Not be the Worst Thing

Studies show American workers waste over an hour per day surfing online. Not ideal, right? But Harvard Business School researcher Marco Piovesan conducted a study concluding that those who are forbidden from Internet use may be even less productive. Read why (and check out the entire article):

To test the hypothesis, the researchers used a variation of the "Marshmallow Task," a classic psychological experiment in which children were shown one marshmallow, and told they would be rewarded with two marshmallows if they could resist the temptation to eat the first treat until the instructor returned to the room. Only 30 percent of the kids could hold out.

But instead of measuring wait time, the team measured the ability of children to complete actual work tasks—folding paper per instructions—at an Italian summer camp in 2008. Children facing temptation got less work done, even given the promise of eventual reward of candy and soda: They not only completed fewer tasks, but also made more mistakes, which downgraded their performance.

"We’d expect to find that being more flexible in monitoring Internet use could increase productivity."(The effect was particularly pronounced for children below age 9, who were found to be on average 21 percent less productive than the children in the control group—while for children over age 9, there was shown to be no significant difference, a finding consistent with previous research showing that children begin developing willpower between the ages of 8 and 10. For more, see their article "Temptation and Productivity: A Field Experiment with Children," forthcoming in the Journal of Economic Behavior & Organization.)

Despite the fact that the study was done with children, Piovesan saw clear implications for adults—hypothesizing that the effects would change not only with age, but also with the degree of temptation. "If we used the same temptation of candies in an office, probably we wouldn’t find anything, but using a different temptation that is stronger for older subjects, the effect would be stronger."

In a recent set of experiments detailed in "Temptation at Work," Piovesan and his colleagues tested exactly that using 20- to 25-year-old college students in an office environment. Instead of paper-folding, the test subjects were given a simple task of counting the number of times people passed a ball back and forth in a video. Between tasks, however, half of the subjects were allowed to watch a video of the British comedy TV show Mr. Bean. The other half were confronted with a flashing red button at the bottom of their screens warning them not to play the video. Upping the temptation, the latter group was able to overhear the video playing nearby and laughter of the students.

As with the summer camp kids, the researchers found that the students facing temptation were more apt to make mistakes and were less productive overall than the control students, underscoring that no matter how much willpower we adults think we have, we are still susceptible to tempting distractions.

Read All About It! (On the Internet)

Thank goodness we didn’t have the Internet in the 1800s, as we never would have been blessed with newsies… God bless those kids. Anyhow, it seems a majority of Americans under 30 are getting their news from the Internet. Not too suprising, but the stats are worth viewing. Mashable writes:

The Internet is now the main national and international news source for people ages 18 to 29, a study from the Pew Research Center reports.

In 2010, 65% of people younger than 30 cited the Internet() as their go-to source for news, nearly doubling from 34% in 2007. The number who consider television as their main news source dropped from 68% to 52% during that time.*

Of all 1,500 American adults surveyed, 41% say they get their national and international news from the Internet, up 17% from 2007. Sixty-six percent cite television — down from 74% — indicating the trend is spreading among other age groups.

Forty-eight percent of those ages 30 to 59 cite the Internet as their main news source, up from 32% in 2007, while television went down from 71% to 63%. Though the number of those in the 51 to 64 age group who consider television their main news source (71%) is about the same, those who turn to the Internet (34%) is nearly equal to the number who cite newspapers (38%). The amount of people 65 and older who get their news from the Internet has risen from 5% to 14%, but television remains the chief source for 79% of respondents.

These numbers fall in line with the rise of the personalized news stream online. Both Facebook’s news feed and Twitter() launched in summer 2006 but didn’t catch on until 2007. Both sites have seen explosive growth since 2008. Tweet counts have increased from 5,000 daily in 2007 to 90 million daily in 2010, while Facebook() went from 30 million users in 2007 to more than 500 million users today.

In addition, the television viewership culture has shifted in the past few years. Between media streaming services on the web and, more recently, Internet-TV connection devices like Roku and Boxee(), people have more viewing options than ever before. With the ability to personalize what news and entertainment you consume, these television watching methods have become more desirable for many.

Tennessee Battles for Top Billing in Internet Speeds

Hearing a dial-up computer tone today is a little like listening to the crackling sound of a phonograph from the early 20th century. It’s out of place and just a little creepy.

In Indiana, we’ve come a long way from the days of waiting for our computers to connect to the Internet. Some of the most rural areas now have access to broadband capabilities and advanced mobile services.

Much of that is due to the Telecom and Video Reform Act (HEA 1279) that the Indiana General Assembly passed and Gov. Mitch Daniels signed in 2006. The act deregulated the telecommunications industry and put Indiana on the map as a leader in expanding broadband services. The capabilities have also attracted investments from a number of entities.

Now, it looks like another quasi-Midwestern state is gaining attention in the world of broadband. Chattanooga’s city-owned electrical utility has started offering an Internet service that is among the fastest in the world.

The Chattanooga Electric Power Board’s new Fiber Optics network will provide a 1 gigabit-per-second Internet service. The utility said the service is more than 200 times faster than the average national download speed today.

At a cost of $350 a month, it’s also much more expensive than the typical residential plan. Harold DePriest, the Chattanooga Electric Power Board’s president and CEO, said residential customers don’t really need that fast a service, but businesses might.

He said the high-speed service won’t be costly for EPB to operate, yet it should put the Chattanooga community at the forefront of attracting businesses – possibly Internet providers – that can benefit from having it.

“Chattanooga represents the next frontier in communications technology, with limitless potential for new applications for education, entertainment, health care, industrial development, and more,” DePriest said in a statement.

The article goes on to quote Chattanooga Mayor Ron Littlefield saying the announcement has put the city “on the short list of progressive communities in the world.” A New York Times article says that only Hong Kong and a few other cities in the world offer such fast services and that Chattanooga will be the first in the United States to do so.

Fast, but not cheap. Would you pay $350 a month for this kind of capability?

Broad Reach for Broadband?

By a 53 percent to 41 percent margin, Americans say they do not believe that the spread of affordable broadband should be a major government issue. After an extended period of sustained growth, there was little change this year in the adoption of broadband service across the United States. A new survey from Pew Internet has these results and more:

Americans have decidedly mixed views about the problems non-broadband users suffer due to their lack of a high-speed connection. There is no major issue on which a majority of Americans think that lack of broadband access is a major disadvantage.

  • Job opportunities and career skills: 43% of Americans believe that lack of broadband is a “major disadvantage” when it comes to finding out about job opportunities or gaining new career skills. Some 23% think lack of access is a “minor disadvantage” and 28% think it is “not a disadvantage.” 
  • Health information: 34% of Americans believe that lack of broadband is a “major disadvantage” when it comes to getting health information. Some 28% think lack of access is a “minor disadvantage” and 35% think it is “not a disadvantage.”
  • Learning new things to improve and enrich life: 31% of Americans believe that lack of broadband is a “major disadvantage” when it comes to learning new things that might enrich or improve their lives. Some 31% think lack of access is a “minor disadvantage” and 32% think it is “not a disadvantage.”
  • Government services: 29% of Americans believe that lack of broadband is a “major disadvantage” when it comes to using government services. Some 27% think lack of access is a “minor disadvantage” and 37% think it is “not a disadvantage.”
  • Keeping up with news and information: 23% of Americans believe that lack of broadband is a “major disadvantage” when it comes to keeping up with news and information. Some 27% think lack of access is a “minor disadvantage” and 47% think it is “not a disadvantage.”
  • Keeping up with what is happening in their communities: 19% of Americans believe that lack of broadband is a “major disadvantage” when it comes to finding out about their local community. Some 32% think lack of access is a “minor disadvantage” and 45% think it is “not a disadvantage.”

A fifth of American adults (21%) do not use the internet. Many non-users think online content is not relevant to their lives and they are not confident they could use computers and navigate the web on their own.

“Mooooooom, Grandma Won’t Get Off the Computer!”

A survey from the AARP shows further evidence that what you thought you knew about social networking might be wrong. While much has been made about how pervasive middle-aged Americans are on Facebook and Twitter, it seems 50-64 year-olds are also "LOLing" and "OMGing"  with each other on the fabulous Interwebs.  Reuters Life! reports:

Social networking isn’t only for the under 40s. More than 25 percent of Americans 50 years and older stay connected using sites such as Facebook, MySpace and Twitter, according to new research.

And nearly half of older adults, aged 50 to 64, say they are savvy about the Internet.

"The latest data tells us that more and more, social networking is becoming a part of everyday life for Americans 50 plus, and boomers in particular," said Kevin Donnellan, the chief communications officer at AARP, which released the report.

The powerful lobbying group for older Americans said Facebook is by far the most popular networking site, followed by MySpace, LinkedIn and Twitter.

Nearly a quarter of older Americans are on Facebook and 73 percent said they use it to stay in touch with relatives, but not just their children and grandchildren.