A recent study by Cecil Bohanon and Michael Hicks at Ball State University’s Digital Policy Institute found that statewide cable franchising has increased broadband deployment.
Half of the US states have now enacted legislation that creates statewide cable franchising. These laws allow new entrants into the video business (principally the phone companies) to get permission to offer video from the state, instead of having to deal with local governments to get cable franchises. Previous research, much of it cited here, found that cable competition reduces cable rates and expands the number of channels available to subscribers. Local franchising often delayed or prevented new competitors from entering the market.
Since the same wires get used to transmit video, telephone, and broadband, Bohanon and Hicks reasoned that opening up entry into cable would also increase competition in broadband and hence increase broadband subscribership. And that’s precisely what their econometric study finds. After controlling for other factors, broadband subscribership is 2-5 percent higher in states that have statewide video franchising. Based on this finding, Bohanon and Hicks estimate that statewide video franchising increased broadband subscribership by about 5 million.
Their study covers the years 1999-2008. Maybe some of these 5 million would eventually have gotten broadband anyway. At worst, this study shows that 5 million subscribers got broadband sooner than they otherwise would have.
The study does not test whether the increase in broadband subscribership occurred because statewide video franchising sped up investment and deployment of infrastructure, or if it simply spurred competition in places where phone and cable companies already had the relevant infrastructure deployed. I don’t know how one would get the confidential data on broadband investment in order to test this. But given the large amount of new investment related to broadband, I’d be willing to bet that statewide franchising encouraged both new broadband deployment and more intense competition where infrastructure was already in place.
I’m recuperating today after wrist surgery #2 but I just had to say something about a hugely important proposal introduced today that would bring us one step closer to information socialism. No, I’m not talking about the discussion draft privacy bill released today by Reps. Boucher & Stearns (which Adam and I already commented on here) but about the amendment introduced today by Sen. Udall that would “require credit-rating agencies to divulge credit scores, free of charge, to consumers when they access their free annual credit report.”
Actually, there is an important analogy between the two bills: both will have populist appeal because they can claim to giving consumers a “right” to “their” information—but both would impose real costs that will ultimately be borne by consumers. On the privacy side, Adam Thierer and I have warned repeatedly that data collection is critical to the online advertising that supports the publishers of the Internet’s cornucopia of content and services. Everyone takes this for granted but few of us really think about the quid pro quo at work: users receive “free” content and services in exchange for seeing advertising and sharing data about their browsing habits, which makes advertising more relevant to them, more effective for advertisers, and therefore more profitable for publishers.
Unfortunately, a similar free lunch mentality is at work with credit scores. If we think about them at all, most of us probably resent and/or fear them. Yet credit scores, and the entire credit reporting system, are truly one of the wonders of information capitalism and a boon for consumers. Before they developed, lending decisions were far riskier because lenders didn’t really know whom to trust with their money. Thus they had to build in a risk premium into their interest rates to account for the fact that some users might default or fall behind on payments. This punished good borrowers and rewarded bad ones. Getting a loan was difficult, often required special connections, and was often arbitrary and thus sometimes downright discriminatory.
This situation was bad for everyone. While nobody likes being in debt, we often forget how radically empowering credit can be in allowing us to expand our opportunities in life. Continue reading →
Today, the House Committee on Energy and Commerce, Subcommittee on Communications, Technology and the Internet, released its long-awaited online privacy bill discussion draft, requiring that users opt-in to certain types of online data collection. Berin Szoka and I issued the following statement in response:
By mandating a hodge-podge of restrictive regulatory defaults, policymakers could unintentionally devastate the “free” Internet as we know it. Because the Digital Economy is fueled by advertising and data collection, a “privacy industrial policy” for the Internet would diminish consumer choice in ad-supported content and services, raise prices, quash digital innovation, and hurt online speech platforms enjoyed by Internet users worldwide.
Before imposing prophylactic regulation, policymakers should first identify specific consumer harm that requires government intervention. They should next ask whether there are less restrictive alternatives to regulation, such as enhancing enforcement of existing laws, bolstering limitations on government access to online data, education efforts about online privacy, and promoting the development and uptake of technological empowerment solutions that allow users to manage their own privacy preferences.
Continue reading →
Thought you all might be interested in this upcoming PFF event on “Can Government Help Save the Press?” It will take place on Thursday, May 20, 2010 from 8:30 a.m. – 12:00 p.m. in the International Gateway Room, Mezzanine Level of the Ronald Reagan Building on 1300 Pennsylvania Ave, N.W. here in DC. This event will consider the FCC’s “Future of Media” proceeding (comments are due this Friday) and debate what role the government should play (if any) in sustaining struggling media enterprises, “saving journalism,” or promoting more “public media” or “public interest” content. [You can find all our essays about this here.]
The event will feature a keynote address by Ellen P. Goodman of the FCC’s Future of Media team. Ellen is one of the sharpest minds in the media policy universe today, and a real asset to the FCC team. She is a Distinguished Visiting Scholar at the FCC, a Research Fellow at American University’s Center for Social Media, and a Visiting Scholar at the University of Pennsylvania’s Annenberg School of Communications. She is also a Professor at Rutgers University School of Law at Camden, specializing in information law and policy. She has spoken before a wide range of audiences around the world on media policy issues, has consulted with the U.S. government on communications policy, and served as an advisor to President Obama’s presidential campaign and transition team.
After Ellen Goodman brings us up to speed with where the FCC’s Future of Media process stands, we’ll hear from a diverse panel of experts that I am still busy assembling. But so far it includes Charlie Firestone of the Aspen Institute, who will be on hand to discuss the work he’s been doing with the Knight Commission on this front. I’ve also invited a rep from the Newspaper Association of America to come and talk about the diversity of new media monetization models that they have been aggregating. (Check out the appendix of their outstanding FTC filing last Nov.) And Kurt Wimmer of Covington & Burling, who represents broadcasters among others, will talk about the need for regulatory flexibility / forbearance, especially on ownership issues. Again, more panelists to come. But please sign up now!
I have a blog post up at Cato@Liberty today about Senate Democrats’ national ID plans. The thing is nine printed pages long. It doesn’t get my recommendation that you read the whole thing—unless you really jones for identity-systems talk. Here’s a summary:
The plan is confusing, disorganized, repetitive, and sometimes contradictory. Summarizing it is a little like trying to piece together the egg when all you have is the omelet, but three themes emerge: First, this summary backs away from an earlier claim that there would not be a biometric national identity database. There will be a national biometric database. Second, repeating the word “fraud-proof” does not make this national ID system fraud proof. Third, this national ID system definitely paves the way for uses beyond work authorization. This is the comprehensive national identity system that people across the ideological and political spectrum oppose.
I pity the Hill staffer who had to write the national ID parts of the plan. He or she almost certainly doesn’t know enough to write sensibly about the design of identity systems, and the demands of politics require the plan to talk about impossible things as if they’re possible, and even easy.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.