Beyond the fact that the Federal Communications Commission (FCC) decided to release the executive summary of its long awaited National Broadband Plan via a PDF of a scanned printed copy, there are other reasons to be concerned about the agency’s ability to centrally plan one of the most important, fast-moving sectors of our economy. In this video clip, I discussed some of my general reservations with the idea of a gargantuan government industrial policy for the broadband sector, and in this essay I noted how, from what we’ve see of the plan thus far [Executive Summary], the FCC appears to be engaged in some creative accounting techniques to fund the scheme.
Not everything in The Plan troubles me, however, and I hope to touch on some of the more sensible elements in a future post. But, as I was reading through it, I flagged 5 regulatory hot potatoes in the plan that threaten to derail the entire thing. In this regard, the parallels between the National Broadband Plan and the debate over health care “reform” are really quite striking. Indeed, it appears the Administration has once again settled upon a “go for broke” (potentially quite literally!) strategy. In both cases, they appear hell-bent and trying to do it all in the form of One Big Plan. Now, I won’t lie to you; such everything-plus-the-kitchen-sink public policy gambits make me nervous based simply on the sheer scale of the undertaking. When Washington tries to regulate massive chunks of the economy using bloated bills and bureaucracies inside the Beltway, it troubles me greatly. But even if the sound of Big Government on Steroids doesn’t raise your blood pressure, one would hope that the prospect of political gridlock and litigation hell would force advocates to scale back their ambitions a tad bit. After all, what good is a plan that can never pass or be implemented?
That’s why I was rather surprised to see these 5 regulatory initiatives teed up in the National Broadband Plan:
(1) Return of the Forced Access Regulatory Nightmare? The Plan says the FCC will, “Undertake a comprehensive review of wholesale competition rules to help ensure competition in fixed and mobile broadband services.” As my friend Randy May of the Free State Foundation notes: Continue reading →
Just FYI.. Tomorrow’s “Diane Rehm Show” on NPRs local affiliate station (WAMU 88.5FM) will feature a debate about the Federal Communications Commission’s (FCC) National Broadband Plan, which is due out tomorrow. [Here’s the executive summary.] The show airs at 10:00 locally, but you can listen to the show here online, and I’ll repost a link or embedded audio file once it becomes available.
I’ve been invited to be on the show alongside Ben Scott, policy director at Free Press, Dennis Wharton, spokesperson for the National Association of Broadcasters (NAB), and a few other guests who haven’t been announced just yet. (Here are some of my early musings on the plan: 1, 2.)
After working my way through the Executive Summary of the Federal Communications Commission’s (FCC) National Broadband Plan, there are a number of things I find troubling that I will get to in a subsequent post. But here’s the thing about “The Plan” that I found most surprising — even audacious — in its arrogance: The FCC wants us to believe the whole scheme is costless. The agency bases this astonishing claim on the following assumptions:
Given the plan’s goal of freeing 500 megahertz of spectrum, future wireless auctions mean the overall plan will be revenue neutral, if not revenue positive. The vast majority of recommendations do not require new government funding; rather, they seek to drive improvements in the government efficiency, streamline processes and encourage private activity to promote consumer welfare and national priorities. The funding requests relate to public safety, deployment to unserved areas and adoption efforts. If the spectrum auction recommendations are implemented, the plan is likely to offset the potential costs.
Let me translate: “Pay no attention to all the bills we are racking up, because spectrum revenues shall set us free!”
Perhaps that logic works in the reality-free zone we call the Beltway, but back in the real world this simply doesn’t add up. Regardless of how well-intentioned any of these goals and proposals may be, it should be equally clear that there is no free lunch, even with spectrum auction proceeds fueling the high-tech gravy train. The proposals and programs the FCC sets forth will impose serious economic costs that shouldn’t be so casually dismissed, especially using the weak reasoning that “improvements in the government efficiency” will magically manifest themselves thanks to massive new government intervention in the field. (If you think you’ve heard this one before, you have. See: The current health care debate.)
Moreover, if everything really does hang on the promise of spectrum auction revenues covering the broadband spending binge, well, bad news: The agency is never going to bring in enough to cover what they’ve proposed here. The reason is simple: Most of the spectrum they want to grab is currently occupied by someone else! Continue reading →
I somehow missed this excellent ITIF paper by Robert D. Atkinson and George Ou when it came out at this point last year, but George has just dusted it off, made a couple of updates, and re-posted it over at the Digital Society blog. Worth reading. It touches on a lot of the same case studies I have been documenting in my ongoing series, “Problems in Public Utility Paradise.” In particular, it focuses on the UTOPIA and iProvo fiascos out in Utah. Here’s a key takeaway from those case studies:
The lessons learned in Utah is that projected uptake models and deployment plans don’t always come to fruition, and when that happens the consequence is failure. For UTOPIA, the project was projected to reach 35% uptake rates by February 2008 but the reality was less than 17% uptake. UTOPIA had also hoped for 17% uptake from lucrative business customers but the reality was only 2 to 3 percent. Provo County’s iProvo was hoping for 10,000 subscribers by July 2006 with the assumption that 75% of those customers would subscribe to lucrative triple play services, but the reality was 10,000 customers in late 2007 with only 17% of those customers subscribing to triple play. Many consumers were quite happy to subscribe to existing broadband cable or telecom providers. The consistent theme in Utah was an overestimation of the uptake rates and the underestimation of competition from incumbent cable operator Comcast and telecom operator Qwest which led to consistent underperformance.
Ouch. For more details, see this old essay of mine about UTOPIA from 2008, and this piece from last Sept about iProvo. Not a pretty picture. As I say every time I pen a piece about the latest muni failure du jour, these case studies should serve as a cautionary tale about the dangers of grandiose, centrally planned broadband schemes. There is no such thing as a free lunch. Network-building is hard, and politicians usually aren’t that good at doing it.
Today I am attending, and speaking at, a terrific event in downtown DC sponsored by the Catholic University Law School on“Implementing the National Broadband Plan: Perspectives from Government, Industry, and Consumers.” It’s being held at the offices of the law firm of Wiley Rein LLP. Edward Lazarus, Chief of Staff to FCC Chairman Julius Genachowski kicked off the event with a nice keynote address talking about the broad goals of the FCC’s coming National Broadband Plan. Lazarus broke the ice by joking with the crowd — which is heavily made up of communications industry lawyers — that “The FCC is doing everything it can to provide full employment for telecom lawyers. Whatever else we are failing at, we are succeeding at that.” Again, it was a joke, so I don’t want to make too much out of it, but… No, strike that, I do want to talk about that for a minute! Because this is actually a very important question: Exactly how much bureaucracy and deadweight loss to the economy (in the form of more lawyering and lobbying) is going to accompany the National Broadband Plan?
Two years ago, I posted an essay on “Lawyers, Lawsuits and Net Neutrality Regulation,” in which I attempted to highlight the uncomfortable fact that Net neutrality regulation will likely lead to a bureaucratic nightmare at the FCC and a lawyer’s bonanza once the lawsuits start flying in court. Of course, now we have Net neutrality regulations and a National Broadband Plan pending at the FCC, so the potential for bloated bureaucracy will only grow larger. Do you think I am exaggerating? Well, here are some facts to consider from our recent experience in the field of “telecom reform.” In the years following passage of the Telecom Act, entire forests fell because of the thousands of pages of regulatory and judicial interpretations that were handed down trying to figure out what that word meant. In fact, let’s take a quick tally of the paperwork burden the FCC managed to churn out in just three major “competition” rules it issued in an attempt to implement the Telecom Act and define the “cost” of unbundled network elements (“UNEs”):
* Local Competition Order (1996): 737 pages, 3,283 footnotes
* UNE Remand Order (1999): 262 pages, 1,040 footnotes
* UNE Triennial Review (2003): 576 pages; 2,447 footnotes
Continue reading →
November was certainly a bad month, public relations-wise, for the Administration’s stimulus program, what with claims that the program had created huge new numbers of jobs debunked. (Who would have guessed that numbers given for Arizona’s 15th congressional district or Minnesota’s 57th district were wrong?) But, as pointed out last week by my collegue Meinan Goto, there may be further trouble ahead. In a report recently released by the GAO, the government watchdog agency warns of possible waste, fraud and abuse in $4.7 billion broadband stimulus grants to be made by NTIA and the Rural Utilities Service.
The risks stem from a variety of sources, including the speed with which the grants are to be made, and the two agencies near-total lack of any experience with grants of this magnitude. The GAO also points out that, in true cart before horse fashion, NTIA and RUS will have to complete its first, and perhaps both, funding rounds before a map showing where broadband is needed is completed, and before the FCC completes its congressionally-mandated plan on to make broadband available.
GAO, of course, isn’t the first to point out this cart-and-horse situation, but that doesn’t make it any less serious. While less headline-grabbing than invented congressional districts, the report is nevertheless worth reading by anyone who thinks $4.7 billion is still real money.
IDG News reports that the European Parliament has negotiated a telecom bill that “now contains a new Internet freedom provision that states that access to the Internet is a human right of every E.U. citizen, and that if authorities take away that right people must have the opportunity to defend themselves.” If indeed the bill merely creates what Americans would recognize as a “due process” right against government action, that may not be such a bad thing. IDG notes that, “The issue is very sensitive, and not just in Europe, where a number of countries including France and U.K. are passing laws threatening to sever users’ Internet connections if they are found to have breached the copyright on music or movies.” Whatever one thinks of such “three strikes” laws as a remedy for copyright infringement, it seems reasonable that users should indeed have the right to “defend themselves” if accused of copyright violations before their Internet access is turned off.
But we should all be uncomfortable anytime government purports to invent a new “fundamental right” if that right is a “positive” one—i.e., a moral entitlement to a particular product or service that must be guaranteed by other taxpayers paying for something someone can’t afford or simply doesn’t value enough to pay for out of their own pocket. That’s precisely what Finland recently did, guaranteeing Finns the “right” to a 1 megabit broadband connection. That sort of entitlement is pure cyber-collectivism. Cyber-libertarianism recognize instead that:
true “Internet freedom” is freedom from state action; not freedom for the State to reorder our affairs to supposedly make certain people or groups better off or to improve some amorphous “public interest”—an all-to convenient facade behind which unaccountable elites can impose their will on the rest of us.
So if the Europeans want to guarantee a due process right, I hope they would find another term for that concept doesn’t have such cyber-collectivist implications.
Hey people. You owe me. All of you. You owe me free broadband. I am entitled to it, after all. That seems to be where our current FCC is heading, anyway. And hey, Finland’s just done it, and the supposed Silicon Valley capitalists at TechCrunch are giddy with delight about it. We’re apparently all just Scandinavian socialists at heart now.
Thus, I too have decided to throw in the towel on the idea of everyone carrying their own weight and picking up their own tab. So, get your wallets open and ready for me because I have lots and lots of things that I believe I have an inalienable right to receive free of charge from the government (i.e, “the people”; i.e., “YOU”). Please let me know which of the things on my high-tech wish list that you’ll be purchasing for me and I’ll check you off my registry so I don’t have to send the cops to your house to collect:
- free broadband (fiber, Wi-Max, and whatever else is around the corner);
- a couple of free new computers (and a really fast ones, thank you very much);
- 3 new HDTVs for my home (including one of those sweet new DLP projectors that usually cost about $10,000 bucks. And I’ll need you to pay for someone to help me install it. Or could you just come over and do that for me perhaps?);
- 3 free new DVRs for each new TV set that you are buying me (and could I get a nice universal remote to control everything, please);
- a free subscription in my area to either DirecTV, Cox Cable, or Verizon FIOS TV (with all the premium channels and sports packages… and don’t forget the Playboy Channel!);
- a free lifetime subscription to Netflix (or I guess I would settle for a free Blu-Ray player and some free movies);
- free new wi-fi router and signal extenders for my home (N-standard please, none of that B or G garbage… too slow for me);
- free mobile phone service for life + an iPhone + unlimited downloads in their app store (oh, could you have that iPhone autographed by Steve Jobs if you get a chance?);
- free Playstation or XBox + lots of games (and if I could get one of those driving wheels to play my new Gran Turismo game that would be dandy); and finally,
- free lifetime tech support when all this crap breaks down.
In closing, I thank you for your generosity. I mean, look, I know I don’t actually deserve any of this stuff, and that there’s no good reason that you should have to pay for my free-riding ways, and there’s obviously nothing in our Constitution to support all this, but hey… screw all that! This is my God-given birthright. I am entitled, baby! Now get busy thinking of how you are all going to start paying for me, you selfish bastards.
ACT will host an event on open government tomorrow morning that will feature TLF’s own Jerry Brito and Andrew Plemmons Pratt of the Center for American Progress. I’ll moderate and tee-up the discussion.
We’ll focus on how governments can move from merely posting information online (e-government) to a more participatory process (we-government). We’ll discuss core concepts of “we” government—including the social media technologies that enable access, accountability and participation—and how Congress can create processes for a more transparent government:
- Define what being “open” means for the executive, legislative and judicial branches
- Review and update procedures and rules within government to better deliver information to citizens
- Create mechanisms for accepting and integrating increased constituent correspondence and comments on rulemakings
The Details: Tuesday, Apr 14 from 9:30 to 10:45am. It’s at the newly opened Capitol Visitors Center, Congressional Meeting Room South (the new main entrance to the U.S. Capitol, is located on the East front at First Street and East Capitol Street, NE). Coffee and morning snacks will be served. Please let me know if you’d like to attend!
The Entertainment Consumers Association (ECA) is a group that does some good things to mobilize gamers to fight misguided regulation of video games. I greatly appreciate their tireless efforts to fight stereotypes and myths about games and gamers, and to specifically counter the hysteria about video games that we sometimes see in the press, and definitely see in political circles on a regular basis. They’re a great ally in the fight for freedom of speech and artistic expression in this field.
That’s why I was so sorry to see the ECA launch a new campaign that encourages gamers to petition their congressional leaders and encourage them to regulate the high-tech economy more and waste more taxpayer dollars on inefficient universal service programs and subsidies:
Net Neutrality and Universal Broadband are not only great for America; they allow us to play the games we want at high speeds! … ECA believes that Universal Broadband and Net Neutrality are vital for the development of the national infrastructure, and believes that this bill is an important opportunity to let Congress know that you agree.
Continue reading →
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.