PFF has just published the transcript for an event we hosted last month asking “What Should the Next Communications Act Look Like?” The event featured (in order of appearance) Link Hoewing of Verizon, Walter McCormick of US Telecom, Peter Pitsch of Intel, Barbara Esbin, Ray Gifford of Wilkinson, Barker, Knauer, and Michael Calabrese of the New America Foundation. It was a terrific discussion and it couldn’t have been more timely in light of recent regulatory developments at the FCC. The folks at NextGenWeb were kind enough to make a video of the event and post it online along with a writeup, so I’ve included that video along with the event transcript down below the fold. Continue reading →
Noting that the Telecom Act has become ” irrelevant to the ecosystem that has developed,” Verizon’s Executive Vice President Tom Tauke today called for Congress to overhaul the nation’s archaic communications laws and the regulatory regime that the Federal Communications Commission (FCC) is currently attempting to pigeonhole the Internet and entire Digital Economy into. It’s an excellent speech, and I encourage you to read the entire thing (which I have embedded down below the fold in a Scribd reader).
“[T]he test for government intervention in the marketplace is to prevent either harm to users or anti-competitive activity,” he said. He rightly noted that, in an age of technological convergence and vigorous cross-platform competition, the old silo-based approach of the Telecom Act — with its various Titles for outmoded market definitions — no longer makes any sense. He noted:
by the very nature of the Internet Ecosystem, many are working together or competing in other company’s turf. Computer companies sell phones, and quite successfully. Search engines sell open operating systems. Network providers create their own apps stores. That means that the value proposition to the consumer is really a package created by many companies acting together with little, if any, regard to their previous corporate histories. So no set of companies should be immune from scrutiny.
Of course, a regulatory regime already exists that accomplishes this goal: antitrust law. But Tauke’s proposal isn’t quite that sweeping. He doesn’t call for the FCC to be dynamited the ground and to just shift everything into the antitrust bucket, which some of us would prefer. Instead, he speaks generically about the need for a more sensible process — most likely still enforced by the FCC — that would work as follows:
Continue reading →
Progress Snapshot 6.6, The Progress & Freedom Foundation (PDF)
Mobile broadband speeds (at the “core” of wireless networks) are about to skyrocket—and revolutionize what we can do on-the-go online (at the “edge”). Consider four recent stories:
- Networks: MobileCrunch notes that Verizon will begin offering 4G mobile broadband service (using Long Term Evolution or LTE) “in up to 60 markets by mid-2012″—at an estimated 5-12 Mbps down and 2-5 Mbps up, LTE would be faster than most wired broadband service.
- Devices: Sprint plans to launch its first 4G phone (using WiMax, a competing standard to LTE) this summer.
- Applications: Google has finally released Google Earth for the Nexus One smartphone on T-Mobile, the first to run Google’s Android 2.1 operating system.
- Content: In November, Google announced that YouTube would begin offering high-definition 1080p video, including on mobile devices.
While the Nexus One may be the first Android phone with a processor powerful enough to crunch the visual awesomeness that is Google Earth, such applications will still chug along on even the best of today’s 3G wireless networks. But combine the ongoing increases in mobile device processing power made possible by Moore’s Law with similar innovation in broadband infrastructure, and everything changes: You can run hugely data-intensive apps that require real-time streaming, from driving directions with all the rich imagery of Google Earth to mobile videoconferencing to virtual world experiences that rival today’s desktop versions to streaming 1080p high-definition video (3.7+ Mbps) to… well, if I knew, I’d be in Silicon Valley launching a next-gen mobile start-up!
This interconnection of infrastructure, devices and applications should remind us that broadband isn’t just about “big dumb pipes”—especially in the mobile environment, where bandwidth is far more scarce (even in 4G) due to spectrum constraints. Network congestion can spoil even the best devices on the best networks. Just ask users in New York City, where AT&T has apparently just stopped selling the iPhone online in order to try to relieve AT&T’s over-taxed network under the staggering bandwidth demands of Williamsburg hipsters, Latter-Day Beatniks from the Village, Chelsea boys, and Upper West Side Charlotte Yorks all streaming an infinite plethora of YouTube videos and so on. Continue reading →
Worth It?
OK, time for a quick rant. What is all this confusion and consternation over early termination fees (ETFs) for high-end smartphones? I mean, seriously, how hard is this process to understand? The FCC has worked itself into a lather over this and is bombarding wireless operators and Google with hate mail letters of inquiry harassing asking them about their ETF policies. I just don’t get it. Let’s review some simple realities:
- Smartphones — especially high-end devices like the iPhone, the Droid, and the Nexus One — are basically mobile mini computers.
- Mini mobile computers do not grow on trees; someone has to make them and sell them at a profit or else no one would offer them to begin with.
- But the people who make and sell these devices (and wireless service for these devices) want to ensure rapid, widespread distribution to win over customers and recoup their costs.
- So, they offer a classic business inducement — an upfront subsidy for the product in exchange for monthly payments to amortize the upfront “loan” they have given the customer;
- AND THEN THEY FORM A CONTRACT WITH THE BUYER TO MAKE THE DEAL WORK. And that contract obligates both sides to live up to their end of the deal.
- Hey… did I mention they need to form a contract to make the deal worth it? OK, good, wanted to make sure I got that point across.
- Then they give you a nice shiny new mobile mini-computer that for some reason we Americans still insist on calling a cell phone.
- Then you start paying off the “loan” they’ve given you for that device over the span of the service contract. This is called “prorating.”
- But, if you default on that loan by breaking your contract, you’ll be hit with a penalty — an early termination fee — since it would leave the carrier without a way to recoup the cost of that shiny new mobile mini-computer that they handed you on the cheap when you just absolutely had to have the hot new toy in town.
Is this process really all that complicated? And why is it so controversial? It certainly shouldn’t be. Prorating happens every day in countless ways in a capitalist economy. And yet in the apparent techno-entitlement society we live in these days, some people seem to think there’s something scandalous about this process when it happens with our beloved mobile devices. In reality, the smartphone subsidy and prorated contract system is really one of the great pro-consumer accomplishments of our time. Continue reading →
Last week I commented on a severely one-sided FCC net neutrality hearing that featured a endless parade of horribles being prophesied by virtually every speaker. The litany of spooky stories became tedious and absurd. Everyone foretold of the impending doom that awaits unless government intervenes to save us from various corporate conspiracies to “silence” our voices. Unsurprisingly, evidence was in short supply. It was pure Chicken Little poppycock.
This got me thinking again about what I have referred to as the “problem of proportionality.” I have discussed the problem of proportionality in the context of public policy debates about online safety and privacy, but it seems equally applicable to debates about net neutrality. Here’s how I explained the “problem of proportionality” in an earlier essay:
let’s think about how some of our lawmakers and media personalities talk about the Internet. If we were to judge the Internet based upon the daily headlines in various media outlets or from the titles of various Congressional or regulatory agency hearings, then we’d be led to believe that the Internet is a scary, dangerous place. That ’s especially the case when it comes to concerns about online privacy and child safety. Everywhere you turn there’s a bogeyman story about the supposed dangers of cyberspace. But let’s go back to the numbers. While I certainly understand the concerns many folks have about their personal privacy or their child’s safety online, the fact is the vast majority of online transactions that take place online each and every second of the day are of an entirely harmless, even socially beneficial nature. I refer to this disconnect as the “problem of proportionality” in debates about online safety and privacy. People are not just making mountains out of molehills, in many cases they are just making the molehills up or blowing them massively out of proportion.
Again, much the same is true of net neutrality. Indeed, it is even more true since actual net neutrality “incidents” are so hard to come by. Continue reading →
I’ve just released a new PFF white paper looking at the hysteria that has often accompanied major media mergers and then taking a look at the marketplace reality years after the fact. Here‘s the PDF, but I have also pasted the entire thing down below.
_____________________________
A Brief History of Media Merger Hysteria:
From AOL-Time Warner to Comcast-NBC
by Adam Thierer
Although the pending union of Comcast and NBC Universal has not yet made it to the altar, Chicken Little-esque wails about the marriage have already begun in earnest. For example, the pro-regulatory media organization Free Press has already set up a website to complain about the deal.[1] And Jeff Chester, executive director of the Center for Digital Democracy, has called it “an unholy marriage.”[2] The fever only promises to spread once the deal is formally announced, and a lengthy fight over the deal is expected at the Federal Communications Commission (FCC) and whichever antitrust agency reviews the deal.[3]
But reality tends to play out somewhat less dramatically than the script penned by the media worrywarts. It’s worth looking back at some of the more prominent examples of media merger hysteria in recent years to understand why such panic is unwarranted, and why a deal between Comcast and NBC Universal is unlikely to lead to the sort of problems that the pessimists suggest.[4] Continue reading →
by Berin Szoka & Adam Thierer, Progress Snapshot 5.11 (PDF)
Ten years ago, Nobel Prize-winning economist Milton Friedman lamented the “Business Community’s Suicidal Impulse:” the persistent propensity to persecute one’s competitors through regulation or the threat thereof. Friedman asked: “Is it really in the self-interest of Silicon Valley to set the government on Microsoft?” After yesterday’s FCC vote’s to open a formal “Net Neutrality” rule-making, we must ask whether the high-tech industry—or consumers—will benefit from inviting government regulation of the Internet under the mantra of “neutrality.”
The hatred directed at Microsoft in the 1990s has more recently been focused on the industry that has brought broadband to Americans’ homes (Internet Service Providers) and the company that has done more than any other to make the web useful (Google). Both have been attacked for exercising supposed “gatekeeper” control over the Internet in one fashion or another. They are now turning their guns on each other—the first strikes in what threatens to become an all-out, thermonuclear war in the tech industry over increasingly broad neutrality mandates. Unless we find a way to achieve “Digital Détente,” the consequences of this increasing regulatory brinkmanship will be “mutually assured destruction” (MAD) for industry and consumers.
New Fronts in the Neutrality Wars
The FCC’s proposed rules would apply to all broadband providers, including wireless, but not to Google or many other players operating in other layers of the Net who favor such broadband-specific rules. With this rulemaking looming, AT&T came after Google with letters to the FCC in late September and then another last week accusing the company of violating neutrality principles in their business practices and arguing that any neutrality rules that apply to ISPs should apply equally to Google’s panoply of popular services. In particular, AT&T accused Google of “search engine bias,” suggesting that only government-enforced neutrality mandates could protect consumers from Google’s supposed “monopolist” control.
The promise made yesterday by the FCC—to only apply neutrality principles to the infrastructure layer of the Net—is hollow and will ultimately prove unenforceable. Continue reading →
The smell of high-tech regulation is increasingly in the air these days and many lawmakers and some activist groups now have the mobile marketplace in their regulatory cross-hairs. Critics make a variety of claims about the wireless market supposedly lacking competition, choice, innovation, or reasonable pricing. Consequently, they want to wrap America’s wireless sector in a sea of red tape. Two important new studies thoroughly debunk these assertions and set the record straight regarding the state of wireless competition and innovation in the U.S. today. These reports are must-reading for Washington policymakers and FCC officials who are currently contemplating regulatory action.
First, Gerald Faulhaber and Dave Farber have a new report out entitled “Innovation in the Wireless Ecosystem: A Customer-Centric Framework.” Here’s what Faulhaber and Farber find:
the three segments of the wireless marketplace (applications, devices, and core network) have exhibited very substantial innovation and investment since its inception. Perhaps more interesting, innovation in each segment is highly dependent upon innovation in the other segments. For example, new applications depend upon both advances in device hardware capabilities and advances in spectral efficiency of the core network to provide the network capacity to serve those applications. Further, we find that the three segments of the industry are also highly competitive. There are many players in each segment, each of which aggressively seeks out customers through new technology and new business methods. The results of this competition are manifest: (i) firms are driven to innovate and invest in order to win in the competitive marketplace; (ii) new business models have emerged that give customers more choice; and (iii) firms have opened new areas such as wireless broadband and laptop wireless in order to expand their strategic options.
They continue on to address the policy issues in play here and discuss the “consumer-centric” approach they recommend that the FCC adopt: Continue reading →
Seems like every week the tech rumor mills unveil some new smartphone that’s supposedly going to give the iPhone a run for its money. Over the past couple years, dozens of advanced handsets have been released with much fanfare — the LG Voyager, Palm Pre, Blackberry Storm, Samsung Omnia, to name a few — but time and time again, we end up with a device that can’t hold a candle to the iPhone’s amazing browser, massive app store, and sleek multi-touch interface.
But all this could change later this year. A number of handsets are due for release on several major networks over the next few months that run on Android, Google’s open source mobile operating system. Android is currently available on only a single device, the HTC G1. It’s a decent phone, but it lacks the polish of the iPhone and is only available with a contract from T-Mobile, which lags behind Sprint, AT&T, and Verizon in terms of 3G coverage.
I’m especially excited about the Android 2.0-based Motorola “Sholes,” a great-looking phone that’s supposedly due for release in November 2009 from Verizon. If rumors pan out, the Sholes should come with a slide-out keyboard, an extremely high-res display, a 5MP camera, and all-around solid specs. Via Android and Me:
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The latest edition (Version 4.0) of my PFF special report on “Parental Controls and Online Child Protection: A Survey of Tools & Methods” is now up. For those not familiar with the report, it explores the market for parental control tools, rating schemes, education and media literacy efforts, and various other tools, methods, and initiatives aimed at promoting online child safety. After evaluating that state of this market, I conclude: “There has never been a time in our nation’s history when parents have had more tools and methods at their disposal to help them decide what constitutes acceptable media content in their homes and in the lives of their children.” Moreover, I believe that the parental controls and content management tools cataloged in the report represent a better, less restrictive alternative to government regulation.
Version 4.0 of the report is now over 250 pages long (up from 200 pages in Version 3.0) and it contains almost 70 exhibits (up from 50), 725 references (up from roughly 500), and numerous updates in all five sections of the book. Major updates have been made to the Internet, social networking, and mobile media sections, reflecting the growing importance of those sectors and issues. Other new sections or appendices have also been added to the report, including:
- a new section examining how many households really need parental control tools;
- a new appendix on the downsides of mandatory parental controls and restrictive default settings;
- a new section on the dangers of “deputizing the online middleman” solution as an approach to solving child safety concerns;
- a new appendix reviewing the findings of 5 past online safety task forces;
- … and much more.
I issue major updates once a year and 1 or 2 minor tweaks during the course of the year to reflect the evolution of the parental control and online child safety marketplace and debate. The report is available free-of-charge on the PFF website, and the previous editions of the report are housed there too in case you want to see how it has evolved over the past couple of years. For those interested in taking a quick look at the report, I have embedded it down below the fold as a Scribd file. Finally, as is always the case, I encourage readers to send me updates and suggestions for how to improve the report and I will incorporate them into future versions.
Continue reading →
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The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.
