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Some good ideas in the FCC's National Broadband Plan

by on December 17, 2009 · 2 comments

Good ideas, supported by evidence, eventually matter.

That’s the conclusion I reached after reviewing the outline the FCC’s broadband task force presented to the commission yesterday. Here are some ideas perceptive scholars have been discussing for a long time that are apparently going to be part of the National Broadband Plan:

  • “Private sector investment is essential; new funding is limited.” So I guess the Interstate Highway System won’t be the funding model for universal broadband. Whew!
  • “Policy changes require the consideration of unintended consequences.”
  • “Competition drives innovation and better choices for consumers.”
  • Wireless broadband needs a big new chunk of spectrum, and policymakers need to consider reallocating broadcast TV spectrum and spectrum reserved for use by the federal government.
  • “Market forces should be applied to all [spectrum] bands, though other policy objectives should play a role in allocation decisions.”
  • Fundamental reform of the Universal Service Fund, which subsidizes phone service very inefficiently, should actually be done, not just talked about.
  • Universal service reform should include reform of “intercarrier compensation,” the charges phone companies pay each other when they hand off traffic.
  • “USF policies should be designed to achieve measurable outcomes with transparency, oversight, and accountability.”

Most of these ideas were considered wacky, ideological, politically unrealistic, or just not relevant a few decades (or even a few years) ago.  Now they are the mainstream.

That doesn’t mean everything is wonderful with the National Broadband Plan. The FCC is supposed to plan how broadband will be used to promote consumer welfare, civic participation, public safety, education, health care, energy independence, community development, worker training, and a host of other legislative goals. In many cases there may be a fundamental tension between consumer welfare — a term of art in economics that means resources are allocated so that consumers get the selection of goods and services they are most willing to pay for, with the quality attributes they most prefer, at the best possible prices — and the other goals, which often involve planners deciding what consumers should want. Similarly, FCC Chairman Genachowski’s comments illustrate some decisionmakers’ disturbing tendency to conflate access (the service is available to those who want it) with adoption (everybody actually chooses to use it). Technophiles sometimes have an annoying habit of assuming that those of us who fail to adopt the latest info tech gadget or service must be ignorant rubes who don’t understand the glories of being hooked up to a fat information pipe 24/7 — rather than careful shoppers who have better things to do with our time than read Yahoo OMG! while driving. For this reason I fully expect to be annoyed by the National Broadband Plan, as well as gratified to see that some good ideas have finally made it from the Ivory Tower to real-world policy application.

But there’s enough good stuff in there to stick with “gratified” for at least one day.

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Is the FCC jumping the gun on broadband and the universal service fund?

by on December 2, 2009 · 0 comments

In a speech yesterday, FCC Chairman Julius Genachowski pledged to revisit the Federal Communications Commission’s universal service programs for telecommunications as part of the National Broadband Plan: 

 The key points for today are these: USF is a multi-billion dollar annual fund that continues to support yesterday’s communications infrastructure. The goal of universality is as important as ever — and to meet our country’s innovation goals, we need to reorient the fund to support broadband communications. This is a thorny issue, with no shortage of practical and statutory challenges. We need to wring savings out of the system, protect consumers, avoid flashcuts, while ultimately moving USF in the direction it needs to go to support our 21st century platform for innovation. 

The USF program spends approximately $7 billion annually. Most of the money goes to subsidize phone service in “high cost” areas. Eeuww – phone service.  So twentieth century! All of us who have not yet shifted 100% of our personal communications to Facebook and Twitter pay for the universal service fund via surcharges of about 12 percent on our wireless and  wireline phone bills, including VOIP. (Dirty little secret: you also pay for universal telephone service if you use a wireless broadband card, because each card is assigned a phone number.) 

Genachowski’s comment follows some rather interestingly-timed announcements from the FCC’s broadband task force. On November 13, the task force asked for public comment on the role the universal service fund and “intercarrier compensation” (another, more opaque set of transfers from consumers in general to rural phone companies) should play in the national broadband plan. Comments are due December 7. Five days after soliciting comments, on November 18, the FCC announced that the structure of the universal service fund is one of the “critical gaps” in the path to universal broadband.

I doubt the FCC has telepathically determined what the parties will say in the comments they file on December 7, but there’s no need to. The FCC has ground through so many rounds of comments on universal service reform that the problems and potential solutions are well-known. At a conference on universal service about five years ago, I recall one speaker commented, “Everything that can be said about universal service has already been said, but not everyone’s had a chance to say it, so that’s why we still have conferences on it.” About a year ago, the FCC almost used a court-imposed deadline as an opportunity to actually reform universal service and intercarrier compensation, but the commissioners failed to reach consensus.

Here are some major problems with the universal service fund, in no particular order:

  • It subsidizes voice phone service with built-in incentives for inefficiency on the part of providers.
  • It subsidizes wireless voice service without limiting the subsidy to one essential connection per household, so it has effectively created an entitlement to both wired and mobile phone service in rural areas.
  • The FCC does not measure or track the outcomes produced by the subsidies to see what they actually accomplish for the public. (Section 201 of the draft Boucher-Terry USF reform bill would require the FCC to adopt outcome-oriented performance measures.)
  • The contribution mechanism acts like a percentage tax that discourages use of price-sensitive services like long-distance, wireless voice, and wireless broadband.
  • The “death of distance” has slashed long-distance phone charges, which means wireless bears a growing percentage of the burden and the funding mechanism may well be unsustainable.

(For more detail on these issues, read the assortment comments on USF reform by various Mercatus Center colleagues and me here, here, here, here, here, here, here, here, here, and here. BTW, did I mention this issue has been beaten to death?)

So is the FCC jumping the gun, rushing to judgment on universal service before the comments are in?  Heck no. It’s about time.

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TPW 40: Obama, e-Government & Transparency

by on January 27, 2009 · 25 comments

On this week’s show, we discuss government transparency—a topic a number of us here at the TLF have written about lately.  Among other things, we discuss:

  • Why transparency is important
  • What data the government should provide and how
  • Good and bad examples of transparency
  • President Obama’s promise to have the most accountable administration in history
  • Obama’s plans to appoint a Chief Technology Officer

My guests for this show are:

You can subscribe to our podcast here or through iTunes here.  Or, you can play or download this podcast using the online player below.

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“Will Obama Have A Computer?” Seriously?

by on January 24, 2009 · 17 comments

I can’t believe we’re actually asking whether Obama—the candidate who promised to bring the Federal government (and perhaps everyone else) into the Web 2.0 era whether they like it or not—will have a “personal computer.”

The “webiness” of Obama’s predecessors is just embarrassing:   

Clinton famously sent only two e-mails while he was president, one to test whether he could push the “send” button and one to John Glenn, sent while the former Ohio senator was aboard the space shuttle… During his presidency, George W. Bush didn’t have a personal log-in to the White House Internet server, nor did he have a personal whitehouse.gov e-mail address. (He gave up his private e-mail account, G94B@aol.com, just before his first inauguration.) When he did go online, there were some things he couldn’t access. During Bush’s tenure, the White House’s IT department blocked sites like Facebook, YouTube, Twitter, and most of MySpace. The ability to comment on blogs was blocked, as was certain content that was deemed offensive. According to David Almacy, who served as Bush’s director for Internet and e-communications from 2005-07, only two people had access to the iTunes store during that period: Almacy, who had to upload speeches to the site, and the president’s personal aide, so that he could download songs for Bush’s iPod.

Pipes and tubes, pipes and tubes, my friends…  

If Obama decides not to implement whatever legal or technical changes would be required for him to do something so simple as having a computer on his desk, I suppose we’ll know that he’s not really all that interested—at least on a personal level—in all his rhetoric about the power of the Internet to make government more transparent and accountable.  Let’s hope that doesn’t happen.

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Obama’s CTO: Fixing Government IT or Setting Nationwide Policy?

by on January 16, 2009 · 10 comments

In early December, Jerry Brito asked whether Obama’s proposal to create the post of  Chief Technology Officer (CTO) should be feared or welcomed:

I think the question turns on whether this person will be CTO of the United States or CTO of the U.S. Federal Government. While I personally believe the former should be feared, the latter should be welcomed.

I agree completely—and it now seems that this is in fact where the incoming Administration is heading.  BusinessWeek reports that the Obama Administration has narrowed its choices down to two Indian-American CTOs:

  • Vivek Kundra, D.C.’s CTO
  • Padmasree Warrior, Cisco’s CTO

Judging by BusinessWeek’s short descriptions, both candidates sound terrifically well-qualified to lead implementation of Obama’s oft-repeated promises to bring the United States government into the Web 2.0 era.  More importantly, the fact that the two likely candidates are CTOs—rather than, say, advocates of any particular technology policy agenda—strongly suggests that the Obama administration isn’t contemplating giving the CTO authority to set technology policy outside the Federal government.  

Whomever Obama chooses in the end will have his or her work cut out for them.  While free marketeers may indeed have much to fear from Obama’s technology policy agenda in terms of over-regulation, increased government control and market-distorting subsidies, e-government is one area where we ought to be able to cheer the new President on:   The Federal government could be made much more transparent and democratically accountable if Federal agencies simply adopted some of the tools users take for granted on private websites-such as RSS feeds and standardized data. 

Let’s just hope that Obama makes it very clear in creating the CTO post that its responsibilities are indeed strictly limited directing adoption of information technology inside the Federal government, so that the position doesn’t mushroom into the more powerful “Technology Czar” some rightly fear.

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Crowdsourced accountability project: Progress, but we still need help from developers

by on December 14, 2008 · 34 comments

Mayor's Project Napkin SKetch UPDATE: I’ve created a Google Group for this project. I hope you’ll join it and help us build this tool.

Last Thursday I asked for help creating a site that would facilitate crowdsourcing the task of prioritizing the 11,000+ projects proposed in the U.S. Conference of Mayors’ $73 billion “Main Street Economic Recovery” stimulus plan. The point of doing this is to help President-Elect Obama keep his promise that any stimulus spending will be directed at critical infrastructure, and not pork. Roads and bridges and schoolhouses are infrastructure, but dog parks and tennis centers in wealthy neighborhoods probably don’t count.

Software developer Kevin Dwyer stepped up to the plate, took the mayors’ report, and parsed out the projects into an SQLite database. You can find the database here and Kevin’s take on what he did here. Now that we have the data in an easy-to-remix format, I’d like to ask for your help developing the backend for the site.

Going forward I can offer graphic design and copywriting to the project, as well as cat-hearding, which are my comparative advantages. What I don’t have are the technical chops to code the backend. If you are a developer, or know someone who is, and might be willing to help, please read on. Continue reading →

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