Tech Pork

NYT’s Hansell on Broadband Stimulus “Hooey”

by on January 24, 2009 · 8 comments

Some sensible thinking here about broadband pork stimulus plans from Saul Hansell of the New York Times. In his piece on the NYT Bits blog this week, “Does Broadband Need a Stimulus?” he argues that people should stop grumbling about the “relatively small sum” of $6 billion that the new administration has proposed for wiring rural areas and urban centers. Hansell argues:

This also seems to be a rather sound policy choice because, as I look at it, the noise about a broadband gap is hooey. With new cable modem technology becoming available, 19 out of 20 American homes eventually will be able to have Internet service that is faster than any available now anywhere in the world. And that’s without one new cable being laid.

That fact hasn’t prevented a lot of folks involved in telecommunications policy from calling for a lot of money to be spent on backhoes and cable riggers. For example, the Communications Workers of America and the Telecommunications Industry Association called for $25 billion in subsidies to network providers as well as tax breaks. The Free Press, a group that advocates for media diversity, recommended spending $44 billion, with an emphasis on subsidizing companies to compete with existing cable and phone companies.

Running a new fiber-optic cable to every American home may well increase competition in broadband providers, but it isn’t needed to deliver high-speed Internet service. Current cable modems use just one of the more than 100 channels on a typical cable system and can often offer speeds of 16 megabits per second or more. The next generation of modems, using a technology called Docsis 3, allows several of those video channels to be combined to offer what ultimately can be Internet service as fast as 1 gigabit per second — 10 times faster than is offered in Japan, which generally is regarded as having the fastest broadband infrastructure.

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The Technology Association of America – What’s the URL?

by on December 9, 2008 · 7 comments

The AeA and the Information Technology Association of America (ITAA) are merging to become the Technology Association of America.

ITAA gobbled up – er, merged with – the Government Electronics and Information Technology Association and the Cyber Security Industry Alliance earlier in the year.

Now, as to the new name: Are they really going to cover all technology? Farm technology? Construction technology? Mining? Watercraft? Plastics? Dental surgery? They seem to have moved from a name (ITAA) too narrow to include the electronics work of AeA to a name that is too broad.

And here’s the important question: . . . What URL? The Texas Apartment Association has the obvious one.

Go, domain speculators! Go!

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Just How Inefficient is Communications Regulation? The USF Case Study

by on December 4, 2008 · 10 comments

One of the reasons that so many of us here take issue with proposals to expand regulation of communications, broadband, and media markets is because we have studied the horrendous inefficiencies of economic regulation in practice. We oppose regulatory proposals not because of a “blind faith” in free markets, but because we understand that even when markets stumble they correct themselves quicker and more efficiently than regulatory systems do. One can profess the supposed theoretical benefits of enlightened “public interest” regulation all they want, but the facts are the facts. And the facts do not support the proposition that government regulation generally enhances consumer welfare.

In that regard, Tim Lee’s new Net neutrality report for Cato does a nice job of surveying some of the past unintended consequences of regulation. Also, even though it is now 10 years old, I highly recommend “Economic Deregulation and Customer Choice” by Jerry Ellig and Robert Crandall. It’s an outstanding overview of why economic regulation of various industries failed consumers so miserably in the past.

But if you want even more shocking proof of how horrendously inefficient communications regulation can be in practice, then you must read my PFF colleague Barbara Esbin’s two essays this week on the Universal Service Fund (USF): “The High Cost of USF Support,” and “More FCC Support Fund Follies.” In these two essays, Esbin walks the reader through various grim reports and statistics that have been released recently documenting the failures of the USF.

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No “Technology Czar,” Please

by on November 5, 2008 · 15 comments

Over at OpenMarket.org, Wayne Crews has a good post arguing against Obama’s plan to appoint a “Technology Czar“:

Industries–and mere concepts like “technology”–do not need czars in Washington. Such enterprise needs to operate apart from this city. Indeed, even supposedly “deregulatory” Republicans were not reluctant to regulate the Internet. Bush favored federal privacy regulation, but never pushed it. His adminstration was also happy to target porn and “spam.” Legislation favored by the Republicans ran the gamut from gambling to cable regulation to media ownership. Right now, many firms in Washington are poised to push for federal privacy legislation to, as they say, pre-empt the states and get rid of the “patchwork” of privacy legislation with which they must deal. But the risk is merely trading 50 regulators for 51.

(Read the rest of the post here)

We already have plenty of regulators in Washington. Instead of appointing yet another messiah-like figure to solve our nation’s technological woes, the best thing for the technology industry would be a massive downsizing of the federal government’s role in regulating telecom companies, dictating privacy policies, and deciding what broadcasters can air.

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Do Irish-Americans Deserve a Satellite Radio Set-Aside?

by on October 27, 2008 · 6 comments

Read Matt Lasar’s article on Ars today (“Satellite Radio Minority Channel Decision Looms for FCC“) about how somebody has suggested that Irish-Americans “deserve a channel on satellite radio which informs, educates and entertains them with all things Irish.”

Folks, you just can’t make up stuff this good.

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Should Government Funding Be Part of a Broadband Plan? Have Your Say on November 18

by on October 22, 2008 · 7 comments

Readers of Tech Liberation Front may be interested in a new breakfast series that BroadbandCensus.com has recently begun.

The next event in this series, “Should Government Funding Be Part of a National Broadband Plan?” will be held on Tuesday, November 18, from 8 a.m. to 10 a.m., and will include Stan Fendley, the director of legislative and regulatory policy for Corning, Inc., Kyle McSlarrow, CEO of the National Cable and Telecommunications Association (NCTA), and John Windhausen, Jr., president of Telepoly Consulting. I will moderate the discussion.

Two weeks after Election Day, this Broadband Breakfast Club meeting will consider one of the hottest topics in telecom: can and should funding for broadband work its way into a pending fiscal stimulus package?

Future meetings of the breakfast club (December 2008 through March 2009) will consider the role of broadband applications in harnessing demand, how the universal service fund will be changed by high-speed internet, the role of wireless in universal broadband, and the extent of competition in the marketplace.

The Broadband Breakfast Club meets monthly at the Old Ebbitt Grill, at 675 15th Street, NW, in Washington. (It’s right across the street from the Department of the Treasury.)

Beginning at 8 a.m., an American plus Continental breakfast is available downstairs in the Cabinet Room. This is followed by a discussion about the question at hand, which ends at 10 a.m. Except for holidays (like Veteran’s Day), we’ll meet on the second Tuesday of each month, until March 2009. The registration page for the event is http://broadbandbreakfast.eventbrite.com.

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Will NASCAR Fans Get Out the Vote for Kevin Martin?

by on October 19, 2008 · 11 comments

I’ve been trying to catch up after a week-long cruise with my kids down in the Caribbean and as I was doing my best to sort through thousands of e-mails and articles in my RSS reader, I stopped and did a double-take when I saw some headlines from last week about how the Federal Communications Commission is spending $350,000 taxpayer dollars to sponsor a NASCAR team.  For that money, NASCAR driver David Gilliland “has agreed to use his No. 38 car as a high-speed billboard promoting the February 2009 national transition to digital television,” according to Multichannel News.

In the annuls of idiotic government spending initiatives this one has to be a potential hall of fame entry.  Over on the PFF Blog, my PFF colleague Barbara Esbin has a humorous piece explaining why:

what signal does FCC sponsorship of a stock car racer send to the beleaguered American public in this autumn of our discontent? The FCC Chairman claims that this sponsorship is an “extremely effective way for the FCC to raise DTV awareness among people of all ages and income levels across the United States who loyally follow one of the most popular sports in America.” Well, those loyal sports fans will have to be following No. 38 at the three sponsored races with some pretty high-speed binoculars to catch the DTV message. Although the $350,000 does get the government posting of its informational website URL, www.dtv.gov, along the track — doubtless not the only advertisement to lure spectator eyeballs — it is primarily receiving posting on the car’s sides and on the driver’s helmet and suit. Let’s just hope No. 38 has a large fan base, does exceeding well in the three races, and, more importantly, avoids accidents, injuries, and fleeting expletives.

Maybe this is just another federal government bailout. On the same day that the FCC announced its investment in NASCAR, the Raleigh News & Observer ran an article entitled, “Global crisis threatens NASCAR.” It seems that “motor sport” team sponsorship has been down this year, “with sinking auto showroom sales, declining attendance and rising operating costs.” And let’s not even talk about the carbon footprint of stock car racing.

Of course, what’s even more pathetic about this move is that FCC Chairman Kevin Martin’s likely motivation for doing this is probably political:  He probably thinks this is a good way to win blue collar votes with all the NASCAR fans down in North Carolina for a future run for office. [It’s widely rumored that he will seek some office down in his home state after his tenure at the FCC is up.]  After all, NASCAR is hugely popular in that state.  I don’t know about you, but I’m none too happy subsidizing a get-out-the-NASCAR-vote effort for one of the most regulatory-minded FCC Chairmen in history.

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History of DRM; IIPI Event Reviewed

by on October 2, 2008 · 2 comments

http://penny-arcade.com/comic/2008/9/26/

Speaking of snakes, I am just returned from a camping trip along the Appalachian trail in the Michaux Forest, quite out of wireless reception range. Several days’ heavy rain had washed the forest clean, left the moss glowing green and the mushrooms, salamanders, crayfish, and frogs quite content. There one combats the same problems confronted by earlier settlers–mice (and the snakes they attract), staying dry and tolerably warm, the production of decent meals, and keeping small children from wandering off into the woods. Why do some people enjoy briefly returning to this world? Despite being one of those people, I can’t say. Now I am back and my day is easy and comfortable (comparatively), with time to spare contemplating the meta-structures of finance, property, and capital. Let’s all hope these structures are not nearly as fragile as our confidence in them, which, judging from the tone of remarks at last week’s ITIF conference on innovation, has fallen quite low. Continue reading →

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Problems in Muni Wi-fi Paradise, Part 9 (amazing article about Philly failure)

by on September 29, 2008 · 10 comments

In my nearly 17 years of public policy work, I have never felt so vindicated about something as I did this weekend when I read Dan P. Lee’s Philadelphia magazine feature on “Whiffing on Wi-Fi.” It is a spectacularly well-written piece about the spectacular failure of Philadelphia’s short-lived experiment with municipally-subsidized wi-fi, which was called Wireless Philadelphia.  You see, back in April 2005, I wrote a white paper entitled “Risky Business: Philadelphia’s Plan for Providing Wi-Fi Service,” and it began with the following question: “Should taxpayers finance government entry into an increasingly competitive , but technologically volatile, business market?”  In the report, I highlighted the significant risks involved here in light of how rapidly broadband technology and the marketplace was evolving. Moreover, I pointed to the dismal track record of previous municipal experiments in this field, which almost without exception ended in failure. I went on to argue:

Keeping these facts in mind, it hardly makes sense for municipal governments to assume the significant risks involved in becoming a player in the broadband marketplace. Even an investment in wi-fi along the lines of what Philadelphia is proposing, is a risky roll of the dice. [… ]  the nagging “problem” of technological change is especially acute for municipal entities operating in a dynamic marketplace like broadband. Their unwillingness or inability to adapt to technological change could leave their communities with rapidly outmoded networks, and leave taxpayers footing the bill.

I got a stunning amount of hate mail and cranky calls from people after I released this paper.  Everyone accused me of being a sock puppet for incumbent broadband providers or just not understanding the importance of the endevour.  But as I told everyone at the time, I wasn’t out to block Philadelphia from conducting this experiment, I just didn’t think it had any chance of being successful.  And, again, I tried to point out what a shame it would be if taxpayers were somehow stuck picking up the tab, or if other providers decided not to invest in the market because they were “crowded-out” by government investment in the field.

But even I could have never imagined how quickly the whole house of cards would come crumbling down in Philadelphia.  It really was an astonishing meltdown.  Dan Lee’s article makes that abundantly clear:

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Problems in Muni Wi-fi Paradise, Part 8 (Boynton Beach, FL)

by on September 21, 2008 · 17 comments

Boynton Beach, Florida’s experiment with municipal wi-fi has ended.  [Add it to the list of recent failures]. According to the South Florida Sun-Sentinel:

There’s a roadblock in Boynton Beach‘s information superhighway. The city’s Community Redevelopment Agency decided this month it has no more money for free wireless Internet service in its district.  Boynton Beach was the first city in Palm Beach County to offer Wi-Fi three years ago. It operated 11 “hot spots,” or access points, paying $44,000 annually for vendors to keep the system running. But the CRA dropped vendors who failed to meet their contracts. Other companies wanted to sell the Community Redevelopment Agency new equipment, but in a tough budget year, offering free wireless was no longer viable, said the agency’s executive director, Lisa Bright.  […]  “There is clearly no way for it to be a revenue generator at this time,” Bright said. “It’s premature for us to go to the next level.”

Whenever I read one of these articles about the small town or mid-sized town wi-fi experiments failing so miserably I have to admit that I am a bit surprised.  After all, many muni wi-fi supporters have argued that it is precisely in those communities where government support is most necessary and will be most likely to fill in gaps left by sporadic / delayed private broadband deployment.  Frankly, I always thought this was the best argument for muni wi-fi and it’s why I made sure to never go on record as opposing all government efforts, even though I am obviously a skeptic and don’t like the idea of wagering taxpayer money on such risky ventures. (By contrast, I could just never see the reason for government subsidies of wi-fi ventures in major metro areas with existing private broadband operators. Like Philly and Chicago.)

But the fact that many small town or mid-sized town wi-fi experiments are failing is really interesting because it must tell us something about either (a) the viability of the technology or (b) demand for such service.  Now, many municipalization believers will just say that clearly (a) is the case and argue that we just need to wait for Wi-Max solutions to come online and then all will be fine.  It certainly may be the case that Wi-Max will help boost coverage in low density areas, but is that really the end of the story?  What about demand?  What really makes me mad when I read most of these stories about current failed experiments is that they rarely give us any solid numbers about how many people utilized the services.  To the extent any journalists or analysts are out there contemplating a story or study on this issue, I beg you to dig into the demand side of the equation and try to find out how much of the currently muni-wifi failure is due to technology and how much is due to demand, or lack thereof.  Of course, government mismanagement could also be a culprit. But I suspect there is a far less demand for these services than supporters have estimated.

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