Articles by Hance Haney 
Hance Haney is Director and Senior Fellow of the Technology & Democracy Project at the Discovery Institute. Haney spent ten years as an aide to former Senator Bob Packwood (R-OR), and advised him in his capacity as chairman of the Senate Communications Subcommittee. He subsequently held various positions with the United States Telecom Association and Qwest Communications. He earned a BA in history from Willamette University and a JD from Lewis and Clark Law School in Portland, Oregon.
Chairman and CEO Masayoshi Son of SoftBank again criticized U.S. broadband (see this and this) at last week’s Code Conference.
The U.S. created the Internet, but its speeds rank 15th out of 16 major countries, ahead of only the Philippines. Mexico is No. 17, by the way.
It turns out that Son couldn’t have been referring to the broadband service he receives from Comcast, since the survey data he was citing—as he has in the past—appears to be from OpenSignal and was gleaned from a subset of the six million users of the OpenSignal app who had 4G LTE wireless access in the second half of 2013.
Oh, and Son neglected to mention that immediately ahead of the U.S. in the OpenSignal survey is Japan. Continue reading →
Allowing broadband providers to impose tolls on Internet companies represents a “grave” threat to the Internet, or so wrote several Internet giants and their allies in a letter to the Federal Communications Commission this past week.
The reality is that broadband networks are very expensive to build and maintain. Broadband companies have invested approximately $250 billion in U.S. wired and wireless broadband networks—and have doubled average delivered broadband speeds—just since President Obama took office in early 2009. Nevertheless, some critics claim that American broadband is still too slow and expensive.
The current broadband pricing model is designed to recover the entire cost of maintaining and improving the network from consumers. Internet companies get free access to broadband subscribers.
Although the broadband companies are not poised to experiment with different pricing models at this time, the Internet giants and their allies are mobilizing against the hypothetical possibility that they might in the future. But this is not the gravest threat to the Internet. Continue reading →
Recent reports highlight that the telephone meta-data collection efforts of the National Security Agency are being undermined by the proliferation of flat-rate, unlimited voice calling plans. The agency is collecting data for less than a third of domestic voice traffic, according to one estimate.
It’s been clear for the past couple months that officials want to fix this, and President Obama’s plan for leaving meta-data in the hands of telecom companies—for NSA to access with a court order—might provide a back door opportunity to expand collection to include all calling data. There was a potential new twist last week, when Reuters seemed to imply that carriers could be forced to collect data for all voice traffic pursuant to a reinterpretation of the current rule.
While the Federal Communications Commission requires phone companies to retain for 18 months records on “toll” or long-distance calls, the rule’s application is vague (emphasis added) for subscribers of unlimited phone plans because they do not get billed for individual calls.
The current FCC rule (47 C.F.R. § 42.6) requires carriers to retain billing information for “toll telephone service,” but the FCC doesn’t define this familiar term. There is a statutory definition, but you have to go to the Internal Revenue Code to find it. According to 26 U.S.C. § 4252(b),
the term “toll telephone service” means—
(1) a telephonic quality communication for which
(A) there is a toll charge which varies in amount with the distance and elapsed transmission time of each individual communication… Continue reading →
The House Subcommittee on Communications and Technology will soon consider whether to reauthorize the Satellite Television Extension and Localism Act (STELA) set to expire at the end of the year. A hearing scheduled for this week has been postponed on account of weather.
Congress ought to scrap the current compulsory license in STELA that governs the importation of distant broadcast signals by Direct Broadcast Satellite providers. STELA is redundant and outdated. The 25 year-old statute invites rent-seeking every time it comes up for reauthorization.
At the same time, Congress should also resist calls to use the STELA reauthorization process to consider retransmission consent reforms. The retransmission consent framework is designed to function like the free market and is not the problem.
Continue reading →
The 600 MHz spectrum auction “represents the last best chance to promote competition” among mobile wireless service providers, according to the written testimony of T-Mobile executive who appeared before a congressional subcommittee Jul. 23 and testified in rhetoric that is reminiscent of a bygone era.
The idea that an activist Federal Communications Commission is necessary to preserve and promote competition is a throwback to the government-sanctioned Ma Bell monopoly era. Sprint still uses the term “Twin Bells” in its FCC pleadings to refer to AT&T and Verizon Wireless in the hope that, for those who can remember the Bell System, the incantation will elicit a visceral response. The fact is most of the FCC’s efforts to preserve and promote competition have failed, entailed serious collateral damage, or both.
Unless Congress and the FCC get the details right, the implementation of an innovative auction that will free up spectrum that is currently underutilized for broadcasting and make it available for mobile communications could fail to raise in excess of $7 billion for building a nationwide public safety network and making a down payment on the national debt. Aside from ensuring that broadcasting is not disrupted in the process, one important detail concerns whether the auctioning will be open to every qualified bidder, or whether government officials will, in effect, pick winners and losers before the auctioning begins. Continue reading →
DISH Network gets another opportunity on Tuesday to plead with Congress for another Satellite Home Viewer Act reauthorization—ostensibly to protect consumers from unwarranted rate increases and program blackouts, but actually to preserve and expand DISH Network’s and DirecTV’s access to broadcast programming at regulated, below-market rates.
A couple minor provisions in the Act that have nearly outlived their original purpose are due to expire, but DISH Network is taking advantage of this opportunity to argue that “there is much more that Congress can do to expand consumers’ access to local programming…” DISH’s plea is an example of the narcotic effect of supposedly benign regulation intended to promote competition by giving nascent competitors a leg up. DISH Network, in particular, has become addicted to artificially low prices for broadcast programming, and will seize any opportunity to reduce its programming costs some more through regulation.One of the problems with betting your shareowners’ company on regulation is that in politics, nothing lasts forever. Another is that there are certain laws of economics, and they still apply. Shareowners really ought to be on high alert for the appearance of a Beltway, State Capitol or City Hall strategy—firms that can compete and win in the marketplace have no need for regulatory advantages.
Continue reading →
In her new book, Captive Audience, Susan Crawford makes the same argument that the lawyers for AT&T made in Judge Harold H. Greene’s courtroom in response to the government’s antitrust complaint beginning in 1981, i.e., that telephone service was a “natural monopoly.” In those days, AT&T wanted regulation and hated competition, which is the same as Crawford’s perspective with respect to broadband now. Here is what she said today on the Diane Rehm Show:
Diane Rehm: “Is regulation the next step?”
Susan Crawford: “It always has been for these industries, because it really doesn’t make sense to have more than one wire into our homes. It is a very expensive thing to install; once it’s there, it has to be kept up to the highest level of maintenance, it has to allow for lots of competition at the retail level—across this wholesale facility—and it has to be available to consumers at reasonable cost. That kind of result isn’t produced by the marketplace; it doesn’t happen by magic, because … when you can divide markets, and cooperate, you’re not going to come up with the best solution for consumers.
In her book, Crawford candidly says that “America needs to move to a utility model” for broadband … and “stop treating this commodity as if it were a first-run art film…”
It’s time for a stroll down memory lane.
Continue reading →
On Wednesday, the Subcommittee on Communications and Technology will conduct an oversight hearing of the implementation of spectrum auctions by the Federal Communications Commission.
The subcommittee members ought to consider the fact that although the mobile wireless industry faces an acute shortage of spectrum (“broadband spectrum deficit is likely to approach 300 MHz by 2014”), the FCC risks getting distracted and mired in a pointless effort to leverage its spectrum auctioning authority to manipulate the structure of the mobile wireless industry.
In mid-2011, former Commissioner Michael J. Copps warned of “darkening clouds over the state of mobile competition … we find ongoing trends of industry consolidation.” As Copps saw it, increasing concentration will lead to higher prices for consumers. His solution was for the market to have more competitors that look and perform like AT&T and Verizon Wireless.
Since Congress failed to prevent the FCC from engaging in what the late Alfred Kahn once called “oxymoronic efforts to promote competition by regulation” when it adopted the Middle Class Tax Relief and Job Creation (JOBS) Act in February, the path was clear for the FCC to act on Mr. Copps’ pessimism. The commission issued a Notice of Proposed Rulemaking in late September for establishing caps on mobile spectrum holdings. The NPRM is designed to eliminate AT&T’s and Verizon Wireless’ access to additional spectrum they need in the short-term to meet growing demand for mobile broadband services. Continue reading →
No doubt you are aware that the Communications Act of 1934 eastablished the Federal Communications Commission, which has profoundly affected the broadcast, cable, telecommunications and satellite industries. You will recall that the legislation was signed into law by President Franklin D. Roosevelt. What you may not realize is that President Roosevelt made two subsequent attempts to abolish the Federal Communications Commission.
On Jan. 23, 1939, Roosevelt wrote similar letters to Senator Burton K. Wheeler and Congressman Clarence F. Lea urging dramatic FCC reform.
I am thoroughly dissatisfied with the present legal framework and administrative machinery of the [Federal Communications] Commission. I have come to the definite conclusion that new legislation is necessary to effectuate a satisfactory reorganization of the Commission.
New legislation is also needed to lay down clear Congressional policies on the substantive side – so clear that the new administrative body will have no difficulty in interpreting or administering them.
I very much hope that your committee will consider the advisability of such new legislation.
Although proposals for FCC reorginization were introduced at the time, Congress did not act. Then World War II intervened. It wasn’t until 1996 that Congress “comprehensively” updated the 1934 Act. But the 104th Congress left the “present legal framework and administrative machinery of the Commission” intact, and it failed to to “lay down clear Congressional policies on the substantive side.”
Roosevelt wanted to transfer the functions of all independent agencies like the FCC to cabinet departments. A 1937 initiative for this purpose failed. Two years later, Roosevelt took aim at the FCC directly.
Roosevelt’s specific issues with the FCC of the 1930s are a subject for a subsequent essay (they were primarily on the radio side, although also relevant to the telephone side). In any event, his 1939 letter reinforces a libertarian critique of the 1934 act. The law was overly broad and created too much room for the FCC to establish its own policy preferences instead of serving to enforce the policies of elected congressional representatives and the president.
Althouth well-intentioned, the FCC (even to its most famous creator) was a disapointment and a mistake. The 113th Congress should carefully consider the 32nd president’s advice.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.
