The way Ben Kunz puts it in a new Business Week article, “Each device contains its own widening universe of services and applications, many delivered via the Internet. They are designed to keep you wedded to a particular company’s ecosystem and set of products.”
I like Ben’s article a lot because it recognizes that “
walling off” and a “widening universe” are not mutually exclusive. If only policymakers and regulators acknowledged that. They must know it, but admitting it means acknowledging their limited relevance to consumer well-being and a need to step aside. So they feign ignorance.
Many claim to worry about the rise of proprietary services (I, as you can probably tell, often doubt their sincerity) but I’ve always regarded a “Splinternet” as a good thing that means more, not less, communications wealth. I first wrote about this in Forbes in 2000 when everyone was fighting over spam, privacy, content regulation, porn and marketing to kids.
Increasing wealth means a copy-and-paste world for content across networks, and it means businesses will benefit from presence across many of tomorrow’s networks, generating more value for future generations of consumers and investors. We won’t likely talk of an “Internet” with a capital-“I” and a reverent tremble the way we do now, because what matters is not the Internet as it happens to look right now, but underlying Internet
technology that can just as easily erupt everywhere else, too.
Meanwhile, new application, device and content competition within
and across networks disciplines the market process and “regulates” things far better than the FCC can. Yet the FCC’s very function is to administer or artificially direct proprietary business models, which it must continue to attempt to do (and as it pleads for assistance in doing in the net neutrality rulemaking) if it is going to remain relevant. I described the urgency of stopping the agency’s campaign recently in “Splinternets and cyberspaces vs. net neutrality,” and also in the January 2010 comments to the FCC on net neutrality.
Continue reading →
“We’re from government and we’re here to help save journalism.”
That seems to be the hot new meme in media policy circles these days. Last week, it was the Federal Communications Commission (FCC) kicking off their “Future of Media” effort with a workshop on “Serving the Public Interest in the Digital Era.” This week, it’s the Federal Trade Commission’s (FTC) turn as they host the second in their series of workshops on How Will Journalism Survive the Internet Age? Meanwhile, the Senate has already held hearings about “the future of journalism,” and Senator Benjamin L. Cardin (D-MD) recently introduced the “Newspaper Revitalization Act,” which would allow newspapers to become nonprofit organizations in an effort to help them stay afloat.
I have no doubt that many of the public policymakers behind these efforts have the best of intentions and really are concerned about what many believe to be a crisis in the field of journalism. But here are my three primary concerns with Washington’s sudden interest in “saving journalism”: Continue reading →
by Adam Thierer & Berin Szoka
We’re hoping that the Government Accountability Office (GAO) has made some sort of mistake, because it’s hard to believe its latest findings about the paperwork burden generated by Federal Communications Commission (FCC) regulatory activity. In late January, the GAO released a report on “Information Collection and Management at the Federal Communications Commission” (GAO-10-249), which examined information collection, management, and reporting practices at the FCC. The GAO noted that the FCC gathers information through 413 collection instruments, which include things like: (1) required company filings, such as the ownership of television stations; (2) applications for FCC licenses; (3) consumer complaints; (4) company financial and accounting performance; and (5) a variety of other issues, such as an annual survey of cable operators. (Note: This does not include filings and responses done pursuant to other FCC NOIs or NPRMs.)
Regardless, the FCC told the GAO that it receives nearly
385 million responses with an estimated 57 million burden hours associated with the 413 collection instruments. A “burden hour” is defined under the Paperwork Reduction Act as “the time, effort, or financial resources expended by persons to generate, maintain, or provide information to a federal agency.” And the FCC is generating 57 million of ‘em! Even though we are frequently critical of the agency, these numbers are still hard to fathom. Perhaps the GAO has made some sort of mistake here. But here’s what really concerns us if they haven’t made a mistake. Continue reading →
I was slow to adopt broadband. So maybe it’s also appropriate that I was slow to read John Horrigan’s highly informative survey on broadband adoption released by the Federal Communications Commission on February 23. Or maybe it’s fortuitous, because the delay let me take a look to see what messages the news media took away from this survey.
Two clear messages appear in the news coverage. The first is a variant of the screaming headline the FCC put on its own press release: “93 Million Americans Disconnected from Broadband Opportunities.” You’ll find this as the headline or lead paragraph in coverage by the New York Times and AFP.
The second type of message highlights the main reasons one-third of the population does not subscribe to broadband. “FCC Survey Shows Need to Teach Broadband Basics,” notes the headline on an Associated Press story. According to the survey, the three main obstacles to broadband adoption are cost, lack of digital literacy, and non-adopters’ perception that broadband is not sufficiently relevant to their lives. (I got a chuckle when I saw that non-adopters said they would be willing to pay $25, on average, for broadband; that’s the magic price that finally induced me to give in and sign up!)
But whoa, what’s missing here? Our old friend Availability. Broadband was supposed to be some kind of noveau public works project that would take hundreds of billions of dollars to bring to fruition, because many Americans lack access to broadband. “Build it and they will come!” “Pour that concrete information superhighway!” “Stimulate the economy!”
The FCC survey tells an interesting story about availability:
Of the … non-adopters, 12 percent say they cannot get broadband where they live. This translates into a 4 percent share of Americans—on the basis of their reports on infrastructure availability in their neighborhood—who say they are unable to obtain broadband because it is not available. This means that 31 percent of all Americans can get service but do not. (p. 5)
The survey also notes that 10 percent of rural respondents say broadband is not available where they live. I don’t mean to sound insensitive, but
that’s all? Heck, I’d have guessed a higher percentage than that.
To put the numbers in perspective: 4 percent of Americans say they don’t have broadband because it isn’t available, while almost three times as many — 10 percent — lack broadband because they think the Internet is irrelevant to their lives.
Is availability a problem in some places? Sure. But the FCC survey shows it isn’t nearly the size of problem we’d been led to believe. So let’s hope the National Broadband Plan’s discussion of availability is similary circumscribed and appropriately targeted.
Today I am testifying at an FCC hearing on “Serving the Public Interest in the Digital Era.” [Speaker lineup here.] The purpose of the workshop is to explore:
- A brief history and overview of policies involving “public interest” requirements for commercial media and telecommunications companies;
- The state of local commercial broadcast TV and radio news and information; and
- The impact of media convergence and the emergence of the Internet, mobile technologies, and digital media on FCC media policy.
In my remarks, I focused on “Why Expansion of the FCC’s Public Interest Regulatory Regime is Unwise, Unneeded, Unconstitutional, and Unenforceable.” Down below I have attached my written remarks. Continue reading →
NetChoice filed comments today with the FCC in its inquiry on Empowering Parents and Protecting Children in an Evolving Media Landscape. PFF’s comments (jointly filed w/ EFF as described in their TLF post) are comprehensive, excellent, and very highly recommended (well done Adam and Berin). I took a narrower approach. My goal was to dismiss age and parental verification as a tool to keep kids safe online:
Teens are very active users of Internet websites. To verify parental consent, parents would have to provide identifying data (most often credit card information) to a myriad of sites and services. This would require private companies to store vast amounts of parents’ personal information and, by doing so, increase customers’ vulnerability to security breaches and identity theft. According to the Berkman study, “there are significant potential privacy concerns and security issues given the type and amount of data aggregated and collected by the technology solutions….” Many online companies have moved away from collecting and storing this type of data for good reason.
Like the comments filed jointly by PFF and EFF, I also asserted that the FCC lacks jurisdiction to regulate online media platforms. Neither the Telecommunications Act of 1996 nor the Children’s Television Act of 1990 provides the Commission with the authority to regulate online media content. Furthermore, if the FCC were to pursue regulation of the Internet in the same manner it regulates broadcast and cable television, we believe there would be serious first amendment implications.
Not sure where the FCC can go with this NOI (at least as it regards the Internet) but that’s the scariness of it all.
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”):
Debate over the regulatory status of broadband heated up this week as trade associations and major broadband companies sent a letter to the Federal Communications Commission arguing strenuously against reclassification of broadband as “telecommunications service” subject to regulation under Title II of the Communications Act. One implication of Title II regulation is that broadband could be regulated like a public utility. Comparisons of broadband to services like electricity or railroads, which I discussed last week, also raise the prospect of public utility regulation.
Classic public utility regulation restricts entry and regulates prices to prevent firms from charging excessive prices. It’s typically used in situations where competition is believed to be impossible (or, where pre-existing policy decisions have created monopolies that aren’t going to go away very soon).
Broadband is not a monopoly; it is an oligopoly. Contrary to popular perception, that is not synonymous with “evil.” Although both monopoly and oligopoly end in “-opoly,” that doesn’t mean broadband competitors will charge monopoly prices, or even somewhat excessive prices. The only firm conclusion that emerges from economic literature on oligopoly is, “anything’s possible, depending on the specific facts and circumstances.”
But there are also firm conclusions that emerge from economic literature on public utility regulation. Just about every time the federal government has tried to impose public utility regulation on an oligopoly, it has ended up enforcing a cartel. This is what happened in the past with railroads, trucking, airlines, and brokerage firms. There are a few times federal price regulation did not enforce cartels in oligopolistic or competitive industries. In those cases, it usually created shortages — most notably gasoline and natural gas in the 1970s.
Title II regulation is not necessarily synonymous with public utility regulation. Title II could be used to impose some “nondiscrimination” requirements, without necessarily directly regulating broadband providers’ prices or profits.
But anyone who actually wants the FCC to regulate broadband providers’ prices and profits needs to read the peer-reviewed economics literature on the actual effects of public utility regulation in practice on the federal level. (More literature is cited here.) Then they need to explain why the results in broadband would be different. And the explanation needs to be better than “We know better now, we’re smart, and we promise.”
Glen Robinson, my favorite professor back at Virginia Law, will be giving a lecture about “Regulating Communications: Stories from the First Hundred Years” at George Mason Law School this Thursday (2/18) at 4 pm. You simply couldn’t find a better person to give that talk. Robinson isn’t quite old enough to first-hand stories all the way back to the birth of the Federal Radio Commission in 1926 and the FCC in 1934, but he started practicing communications law back in 1961, was an FCC Commissioner 1974-76, and has taught at UVA since 1976 (until finally retiring in 2008).
Reading about his long career is a bit like watching the British comedy series Black Adder: Somehow, like Rowan Atkinson’s character Black Adder, Robinson keeps popping up again and again at pivotal moments in communications law history—most notably, he worked to draft early anti-cable rules in the 1960s and voted for the FCC’s indecency prosecution against George Carlin’s “Filthy Words” monologue. But unlike Black Adder, who always happens to be at the right place at the right time, make the wrong decisions and foolishly learns nothing, Robinson sometimes made the wrong decision, but demonstrated that rare ability to rethink his approach and admit he was wrong—an intellectual honesty most famously exemplified by FA Hayek. Robinson grew to become among the most trenchant, and certainly the most sage, critic of the FCC’s constant evolution towards censorship and curtailing competition in the communications industry. His general skepticism about administrative regulation is perhaps the most thoughtful and refined you’ll find in academe—and not just in communications law. Continue reading →
It’s been a busy week in the Googlesphere. Google made headlines earlier this week when it aired a televised ad for the first time in the company’s history, and again yesterday when it unveiled Buzz, its new social networking platform. Today, Google announced bold plans to build an experimental fiber-to-the-home broadband network that’s slated to eventually deliver a whopping gigabit per second of Internet connectivity to 500,000 U.S. homes.
Google’s ambitious broadband announcement comes as welcome news for anybody who pines for greater broadband competition and, more broadly, infrastructure wealth creation in America. To date, Google has dabbled in broadband in the form of metro Wi-Fi, but hasn’t embarked on anything of this scale. Laying fiber to residences is not cheap or easy, as Verizon has learned the hard way, and Google will undoubtedly have to devote some serious resources to this experiment if it is to realize its lofty goals.
It’s important to remember, however, that Google is first and foremost a content company, not an infrastructure company. Google’s generally awesome products, from search to video to email, attract masses of loyal users. In turn, advertisers flock to Google, spending billions in hopes of reaching its gigantic, precisely-targetable audience. This business model enables Google to invest in developing a steady stream of free services, like Google Voice, Google Apps, and Google Maps Navigation.
So it won’t be too surprising if Google’s broadband experiment doesn’t initially generate enough revenue to cover its costs. In fact, I’m skeptical that Google even anticipates its network will ever become a profit center. Rather, chances are Google won’t be at all concerned if its broadband service doesn’t break even as long as it bolsters the Google brand and spurs larger telecom companies to get more aggressive in upgrading their broadband speeds (which, indirectly, benefits Google).
Google’s broadband agenda is great news for consumers, of course. Who can complain if Google is willing to invest in building a fiber-to-the-home broadband network and is willing to charge below-cost prices? Not me!
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.