Great op/ed in The Washington Post today:

BY THE Federal Communications Commission’s own account, broadband use in the United States has exploded over the past decade: “Fueled primarily by private sector investment and innovation, the American broadband ecosystem has evolved rapidly. The number of Americans who have broadband at home has grown from eight million in 2000 to nearly 200 million last year.” So it is curious that the FCC’s newly released National Broadband Plan faults the market for failing to “bring the power and promise of broadband to us all” — in reality, some 7 million households unable to get broadband because it is not offered in their areas. Such an assessment — and the call for government intervention to subsidize service for rural or poor communities — is premature, at best

Read the rest here or check out Adam’s appearance on C-SPAN’s Washington Journal or on the Diane Rehm Show.

My central lament in everything I have said so far about the Federal Communications Commission’s ambitious new National Broadband Plan is that, well, it’s just too ambitious!  The agency has taken an everything-plus-the-kitchen-sink approach to the issue and the sheer scope of their imperial ambitions is breathtaking. I’ve likened it to an industrial policy for the Internet because the agency is essentially trying to centrally plan and engineer from above virtually every aspect of America’s broadband future despite its proclamation that, “Technologies, costs and consumer preferences are changing too quickly in this dynamic part of the economy to make accurate predictions.” But very little humility seems to be on display throughout the 376-page blueprint, which includes dissertations on everything from privacy to child safety issues to set-top box regulation.

And then there’s Chapter 15 on “civic engagement,” which calls for a wide variety of things to “strengthen the citizenry and its government,” and to “build a robust digital media ecosystem.” Although some of the ideas floated in the chapter are harmless enough–and some, like the call for more open and transparent government, would actually be beneficial–for the life of me I don’t understand why any of this needs to be in a plan about broadband deployment and diffusion. Particularly bizarre is the call here for Congress to create “a trust fund for digital public media,” which would fund the “production, distribution, and archiving of digital public media.” It would apparently be funded by “the revenues from a voluntary auction of spectrum licensed to public television.” (see pgs. 303-4)

Look, if the FCC wants Congress to create the equivalent of the PBS on Steroids, fine. Let’s have that debate. (In fact, I thought it was a debate that the FCC was already considering as part of its “Future of Media” effort). But why, again, is this in broadband plan? It’s a serious stretch to claim that this is somehow crucial to the task of getting more broadband out to the masses.  Moreover, should our government really be in charge of “building a robust digital media ecosystem”?  Here are a few reasons we might want to avoid having the government in the driver’s seat when it comes to charting the future course of America’s media sector.

Couple of media clips here regarding my thoughts about the FCC’s National Broadband Plan:

• C-Span Debate with Art Brodsky of Public Knowledge (49 min.)
• NPR / “Diane Rehm Show” Debate with Ben Scott of Free Press (51 min.)
• quick audio clip about the plan (4 min.)
• interview with “5 Qs on Tech” about the plan (3 min.)

Also see my essays:”5 Regulatory Hot Potatoes That Could Derail the FCC National Broadband Plan,” “Will the FCC’s National Broadband Plan Really Be Costless?” and “The Best Quote in the FCC National Broadband Report.”

Here’s a brief audio clip that PFF’s new press director Mike Wendy helped me put together in which I outline some of my reservations with the Federal Communications Commission’s (FCC) just-released National Broadband Plan. It’s just 4 minutes. Just click the play button below.

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Just FYI.. Tomorrow morning’s “Washington Journal” program on C-SPAN will be devoted to a discussion of the Federal Communications Commission’s new National Broadband Plan. I’ve been invited to appear on the show and I’ll be up against Art Brodsky of Public Knowledge.  The program starts around 8:30 am EST.

Also, here’s the link to the audio (click “Listen” in upper left hand corner of that page) from today’s Diane Rehm Show on NPR featuring a debate between me and Ben Scott of Free Press on the FCC’s plan. It featured call-ins and among the callers were Rep. Cliff Sterns and frequent TLF commenter Brett Glass. They both expressed some reservations about the FCC plan.

I’ve just read through the National Broadband Plan‘s (NBP) section on online privacy (pp. 52-57). I share the FCC’s goal of increasing consumer control over their digital profiles, and applaud the FCC’s call for promoting the development of trusted identity providers and for increased education about identity theft.  But I’m disappointed to see that the FCC is focused on regulatory solutions instead of less restrictive alternatives like consumer education, technological empowerment, increased enforcement of existing laws, or limiting government access to data collected by the private sector.

Given the nature of bureaucracies and the FCC’s sweeping assertions of its own authority in recent years, I suppose we shouldn’t be surprised that the FCC’s primary suggestion is that it should be given a key role in crafting privacy regulations for online services.  But the FCC clearly lacks any statutory authority over the “computing cloud” and Congress has not asked the agency for suggestions on expanding its jurisdiction.

The FCC deserves credit for recognizing something I’ve stressed: the manifold benefits of online data collection and use, especially that targeted advertising can significantly increase funding for “free” ad-supported content and services:

These data are giving rise to something akin to a “digital identity,” which is a major source of potential innovation and opens up many possibilities for better customization of services and increased opportunities for monetization. The value of a targeted advertisement based on personal data can be several times higher than the value of an advertisement aimed at a broad audience. For example, the going rate for some targeted advertising products can be several times the rate for a generic one because consumers can be six times more likely to “click through” a targeted banner advertisement than a non-targeted one. This differential will likely increase as targeting becomes more refined and more capable of predicting preferences, intentions and behaviors. Firms’ ability to collect, aggregate, analyze and monetize personal data has already spurred new business models, products and services, and many of these have benefited consumers. For example, many online content providers monetize their audience through targeted advertising. Whole new categories of Internet applications and services, including search, social networks, blogs and user-generated content sites, have emerged and continue to operate in part because of the potential value of targeted online advertising.

Unfortunately, the FCC doesn’t acknowledge that these benefits are a critical part of the trade-off inherent in increased regulation of how online service providers collect and use data. The Plan cites the economic value of “digital profiles” not as a reason for policymakers to tread cautiously in tinkering with the economic engine of the Internet, but as a justification for leveling the playing field among competitors through increased regulation. I’m all in favor of increased data portability and applaud efforts like Google’s cheeky Data Liberation Front, but it’s funny how even the benefits of data use become reasons for further regulation!

None of this is what Congress had in mind when it asked the FCC to propose ways of increasing the affordability and utilization of broadband as part of last year’s economic recovery legislation. I stressed that point in my comments back in January on the FCC’s NBP privacy inquiry (which was actually written by outside regulatory advocates and simply adopted by the FCC wholesale).  In essence, the FCC seems to have done what TV talk show guests do: Ignore the question asked and provide the answers you want.  When it comes to online privacy, the FCC’s answers mostly involve increased FCC regulation of the Internet.

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:

In plainer English, this means considering requiring that some Internet service providers unbundle and share their networks with other would-be competitors. The FCC tried that approach of “managed competition” in the late ’90s in implementing the Telecom Act of 1996. The result was not pretty. Investment was stifled. The court ultimately overturned the FCC’s mandatory sharing rules – but not before a lot of damage was done. The FCC shouldn’t even start down this road again.

Indeed, as the southern gentleman that he is, Randy is once again being far too kind in his assessment of things. Forced access regulation was a public policy fiasco of the first order. As I documented in my essay,”Will the FCC’s Nat’l Broadband Plan Be ‘Full Employment for Lawyers’?”, 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 how to interpret what just one word (“cost”) meant. And the economic devastation of infrastructure socialism was substantial since it greatly retarded investment and innovation by incumbents and new “entrants” alike. But those new entrants weren’t really entering the market at all. They were just “networks built on paper,” to use Peter Huber’s wonderful phrase. Our regulators labored under the illusion that they could create the fiction of competition based upon infrastructure sharing. The problem, however, is that sharing is not competing. The only thing that you can accomplish with a forced access regime is that you can milk the regulated monopoly you create until it runs dry; you can force that network provider to share its entire network with “competitors” at regulatory wholesale rates until you basically eat all the seed stock in terms of future investment and innovation on that network. If, on the other hand, you want competitive and highly innovative facilities-based networks, then you must allow carriers to earn a fair return on their investment and be free of arbitrary network-sharing mandates like the FCC is now apparently considering once again.

Even if you disagree with everything I’ve just said about forced access regulation, you cannot deny this: If the FCC walks down this path once again, it will lead to another round of epic legal battles and will tie up The Plan in Congress, the FCC, and the courts for years to come.  That doesn’t seem like a very sensible thing to include the National Broadband Plan if you hope to incentivze new network creation and investment in the short-term.

(2) Set-top Box Regulation: The Plan says the FCC will:

Change rules to ensure a competitive and innovative video set-top box market, to be consistent with Section 629 of the Telecommunications Act. The Act says that the FCC should ensure that its rules achieve a competitive market in video “navigation devices,” or set-top boxes-the devices consumers use to access much of the video they watch today.

What this means is that the agency wants to muck around with the TV market even more in an attempt to engineer next generation set-top boxes and transmission standards. This battle has been going on for many years, actually. In particular, cable operators and some consumer electronics companies have long been engaged in heated technical disputes over set-top boxes, “digital cable ready” equipment, and “plug-and-play” interactive applications. Basically, it’s a fight about how various features or services available on video distribution networks should work. In the old days the battle was over features like electronic programming guides (EPGs), video-on-demand (VOD), pay-per-view (PPV) services, and other interactive television (ITV) capabilities. And now it’s over the Internet and access to online video services.

But here’s the question that I asked in an old paper on the topic (“Unplugging Plug-and-Play Regulation“) that I found myself asking again after I saw this mentioned in the FCC’s Broadband Plan: Why is this issue — and technical disputes about next generation hardware standards — even before the FCC? Why are regulators being asked to make technical determinations that could skew marketplace developments and innovation for years to come? Again, you won’t be surprised to hear I am skeptical of the agency’s ability to somehow micromanage next generation video standards better than marketplace experimentation would. Moreover, what the heck is the problem here? Who the hell cares about set-top boxes in a world of abundant video choices across a broad range of media devices? And, again, how is all of this going to stimulate more investment and innovation in broadband? You got me.

Again, even if you disagree with everything I’ve just said about this issue as well, ask yourself if it’s really worth putting everything else in The Plan at risk for a regulatory initiative like this.

(3) Privacy Regulation: The Plan says the FCC will:

Clarify the relationship between users and their online profiles to enable continued innovation and competition in applications and ensure consumer privacy, including the obligations of firms collecting personal information to allow consumers to know what information is being collected, consent to such collection, correct it if necessary, and control disclosure of such personal information to third parties.

Wow, who knew the FCC was suddenly a privacy regulator!  Talk about mission creep. This agency has zero experience dealing with something as complicated as online privacy policy and yet here they are embarking on a bold new regulatory project to investigate privacy regulation as part of a plan to promote broadband diffusion.

Although the description of what the FCC plans to do is pretty vague, the phrase “obligations of firms collecting personal information to… consent to such collection” sounds an awful lot like a regulatory mandate by which opt-in would be required as a restrictive default. If you want to better understand why that will be so controversial, read this testimony by Berin Szoka and this testimony by Braden Cox (both to the FCC on this issue), as well as Berin’s excellent testimony to the FTC late last year on the broader issues at stake here.

Again, why muck up The Plan with something this controversial? Makes no sense.

(4) Broadcast spectrum confiscation? The Plan says the FCC will:

Enable incentives and mechanisms to repurpose spectrum to more flexible uses. Mechanisms include incentive auctions, which allow auction proceeds to be shared in an equitable manner with current licensees as market demands change. These would benefit both spectrum holders and the American public. The public could benefit from additional spectrum for high-demand uses and from new auction revenues. Incumbents, meanwhile, could recognize a portion of the value of enabling new uses of spectrum. For example, this would allow the FCC to share auction proceeds with broadcasters who voluntarily agree to use technology to continue traditional broadcast services with less spectrum.

In my essay from earlier today, (“Will the FCC’s National Broadband Plan Really Be Costless?”), I already noted why this idea is so controversial. As I noted:

Most of the spectrum they want to grab is currently occupied by someone else. In fact, a huge chunk of that 500 megahertz would come from licensed television broadcasters, who aren’t exactly excited about getting and an eviction notice from the government. Even if one agrees with the FCC that the broadcast band is currently under-utilized, that doesn’t mean that the broadcasters should be forced to vacate it. Moreover, any attempt to force them off would result in an epic legal battle that would take years to resolve and ultimately would not likely be resolved in the government’s favor.

It’s going to take huge sums of money to get the broadcasters to vacate voluntarily. That’s just a reality. People can whine all they want about “the people owning the airwaves,” but it’s bunk that isn’t going to stand up in court. Even if you like your odds of winning a massive spectrum confiscation case, do you have any idea how long it will take to fight the legal battles to resolve that thorny question?

(5) Another M2Z Fiasco? The Plan says the FCC will:

Consider licensing a block of spectrum with a condition to offer free or low-cost service that would create affordable alternatives for consumers, reducing the burden on USF.

Oh my, didn’t the FCC learn anything from the M2Z fiasco? You will recall that former FCC Chairman Kevin Martin had his heart set on engineering a similar plan into existence, but he wanted the free wireless service to be squeaky-clean and filtered to weed out all the naughty bits. M2Z Networks had a plan to offer such a service that was slow as molasses but met the core condition of being free to the public (at least the basic, plain vanilla offering) and highly-filtered. Of course, the rather big catch was that before M2Z would give us The Net for Puritans, they wanted a big slice of juicy spectrum from the government at a greatly reduced lease rate. And Rep. Anna Eshoo (D-CA) floated a similar proposal as part of her ” Wireless Internet Nationwide for Families Act of 2008,” (H.R. 5846).

Bottom line: Rigging auctions will inevitably be hugely controversial, even if it doesn’t include a censorship component.  But, in all likelihood, any plan by the FCC to subsidize a free or low-cost service along the lines of what M2Z already proposed will generate that sort of debate about what standards should govern content on that network. After all, many taxpayers will understandably protest that they shouldn’t have to subsidize content they find objectionable. Of course, the same might be said for other broadband subsidies proposed under The Plan, but when we’re talking about a free service required to be provided as a condition of a sweetheart spectrum deal (rather than simply lowering the cost of paid services), the political pressure for censorship will be difficult to surmount. (For more details, see this old paper by Berin Szoka and me, “What’s Worse Than Rigged Auctions & Internet Censorship? How About Both in One Package!” and this new article by Matt Lasar of Ars Technica, “Free Wireless Broadband Plan is déjà vu All Over Again.”)

Conclusion

No doubt, the FCC and its janissary will claim that each of these regulatory proposals has merit and deserves consideration. But if these provisions remain in the National Broadband Plan, I think the agency is setting itself and its supporters up for a long fight and, ultimately, a very disappointing outcome.  Some might claim that fortune favors the bold and that now is not the time for incrementalism. But this broadband plan would already be quite bold even without these controversial provisions included. For me, it’s just a bit too bold since I don’t believe the government has a very good track record when it comes to building high-tech networks or gauging demand for next generation services.  But regulatory shenanigans like the 5 discussed here could sink the plan and make the whole debate moot.

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.)

What struck me most about the executive summary of the FCC’s “National Broadband Plan” is that they published it in one of the most opaque formats going: It’s a PDF scan of a printed document.

This means you can’t cut and paste the bullet point that says:

Increase civic engagement by making government more open and transparent, creating a robust public media ecosystem and modernizing the democratic process.

This and other observations/snark in my recent Cato@Liberty post join Adam’s early comment on the FCC’s incredible cost claims. Undoubtedly, there will be more here at TLF.

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! In fact, a huge chunk of that 500 megahertz would come from licensed television broadcasters, who aren’t exactly excited about getting and an eviction notice from the government. Even if one agrees with the FCC that the broadcast band is currently under-utilized, that doesn’t mean that the broadcasters should be forced to vacate it. Moreover, any attempt to force them off would result in an epic legal battle that would take years to resolve and ultimately would not likely be resolved in the government’s favor.

Of course, the folks at the FCC aren’t completely oblivious to these political realities. They know that they need to get the broadcasters to come to the bargaining table voluntarily to hammer out a deal.  But, as Barbara Esbin and I noted in our paper on this issue, there is one thing that will incentivze broadcasters to come to that table and talk turkey: Cold hard cash—and lots of it.  The FCC even admits as much when they note in the plan, “Mechanisms [for encouraging spectrum reallocation] include incentive auctions, which allow auction proceeds to be shared in an equitable manner with current licensees.”

But therein lies the folly of the FCC’s “broadband free lunch” scheme. They’re never going to be able to make both their masters happy. Both Congress and the broadcasters will want the spectrum auction revenue split to be something like 70-30 or 80-20, but both will demand the bigger slice of the pie. Thus, to get the broadcasters to the bargaining table, the FCC must make them a deal they can’t refuse. And that means that the spectrum auction revenues the agency predicts will cover all the costs of the National Broadband Plan will get eaten up by buyout checks for broadcasters. Finally, whatever proceeds are left after buying out the broadcasters will likely get thrown at a million other unfunded spending initiatives that Congress prefers over broadband.

So, something’s gotta give. There really is no free lunch.  Just like health care “reform,”  this FCC broadband plan will be anything but costless.

Details are starting to trickle out about the Federal Communications Commission’s (FCC) National Broadband Plan, which is due out tomorrow. Someone just posted the Executive Summary here. I haven’t had a chance to go through it all yet, but I’m looking forward to learning more about what the agency’s plans are on this front.

On Friday (again, before seeing any details), I offered some fairly mushy comments about the idea of national “plan” to the gang over at the excellent new site, FiveQsOnTech.com.  The site has a great format: Five questions on technology and policy asked and answered (usually on tape) by technology policy wonks. I’m honored to be among the first couple of experts featured on the site, along with Markham Erickson of the Open Internet Coalition and Rob Atkinson of ITIF.

In the first 3 minutes of this second of the two videos I appear in, I offered some thoughts about “The Plan”:

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.

Eventually the pro-business and pro-consumer cases for splintering and against artificial openness will prevail, because compulsion and deliberately ignoring free markets in infrastructure undermine communications wealth and content options despite the general view. The question is whether we recognize it now, or decades hence, long after other nations have embraced liberalized communications and bypassed us. Rather than a make-work “National Broadband Plan” like the one being presented to Congress this month, the FCC needs instead to act like Alfred Kahn at the old CAB, and present a case for turning out the lights and ratcheting down most functions over there, since airwave scarcity is increasingly disappearing (or created artificially by the agency itself) and since “public airwaves” don’t mean much in tomorrow’s world of limitless content access, customization and Everybody Tube broadcasting. The case for a ruthless, drastic purging of FCC’s involvement in and oversight of most things communications needs to be made rather than conspiracy in a make-believe, Emperor’s New Clothes broadband plan. The FCC is too much an impediment in too many important respects for the concrete plan in play to be one of adding rather than paring responsibilities. The FCC and a naive Congress are on a path toward turning America’s involvement in the Internet into the C&O Canal of Communications.

Capitalism is still too young historically for us to have had our John Locke for the digital age and its long and thin network (and intangible) properties. The short and fat stuff like houses and cars was far easier. Policymakers already destroyed the prospects of liberalization in the electricity industry by trying to mandate hyper-regulatory “retail wheeling” (same for all intents and purposes as net neutrality) in the name of “competition.” Forced neutrality has wrecked one industry. I hope we don’t do it again, but too many special interests gain from regulation. They don’t, for example, even seem to recognize the ways in which properly liberalized electricity grids would also have turbocharged communications liberalization.

Competition in access to content is only one part of the story; competition in the provision of infrastructure and devices drives communications wealth and free speech, too.

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.

Assuming the GAO got these numbers right, just think of the deadweight economic loss associated with all this paperwork, and think of how it will grow in months and years to come! Can you imagine how much the numbers have likely grown so far this year, with the agency generating so many new public notices, notices of inquiry, requests for information, and more?  And just think what the paperwork burden will look like once the National Broadband Plan and Net neutrality regulations kick in!  Oh my… The agency has already promised lots more notices will flow out of the National Broadband Plan to implement various portions of it.

In terms of the deadweight loss, go back to the numbers Adam cited in his essay last week asking, “Will the FCC’s Nat’l Broadband Plan Be “Full Employment for Lawyers”? As noted there, lawyers were about the only group that did fairly well thanks the FCC’s over-zealous regulatory ways in the post-Telecom Act period. Greg Sidak of Georgetown University Law School found that the number of telecom lawyers–as measured by membership in the Federal Communications Bar Association–grew by a stunning 73% in the late 1990s. That was largely driven by a 37% hike in FCC spending and a tripling of the number of pages of regulations in the FCC Record in the post-Telecom Act period. Sidak argued, “If one assumes (very conservatively) that the average income of an American telecommunications lawyer is $100,000, then the current membership of the FCBA represents an annual expenditure on legal services of at least $340 million.” And we all know that those lawyers were making a heck of lot more than just $100K (and billed even more), so Sidak’s estimates were ultra-conservative: The deadweight loss of all this legal activity was much greater.

Indeed, a very conservative estimate of hourly rates for Washington communications lawyers would be $200/hour, but even at that rate, 57 million burden hours would equate to a total cost of $11.4 billion. In fact, when major Washington law firms use “blended rates” to bill out the time of senior partners, junior associates, and paralegals working in teams on things like regulatory filings, the figure is more like $350-400 (if not more)—which would equate to a deadweight cost of $20-23 billion every year.  To put that staggering number in perspective, leaks about the National Broadband Plan indicate that the FCC might be planning on spending about that much to subsidize broadband deployment over a decade.

Or, to use another comparison, NASA’s 2010 budget is a mere $18.69 billion.  That’s in the same ballpark as what, according to the GAO’s man-hour estimates, the FCC’s reporting requirements cost U.S. industry every year.  As Wernher von Braun famously said about the Apollo program, which he led: “We can lick gravity, but sometimes the paperwork is overwhelming.”

So, “if we can put a man on the moon,” as they say, why can’t we do something about this paperwork burden so America’s communications, media, and high-tech providers can focus on actually providing better, faster, and cheaper service to consumers?

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

That’s 1,575 pages and 6,770 footnotes worth of regulation in just three orders! This obviously does not count the dozens of other rules and clarifications the FCC issued to implement other parts of the Telecom Act. Nor does it include the hundreds of additional rules issued by state public utility commissions (PUCs), who actually received expanded authority under some of these FCC regulatory orders.

Again, this was all implemented following the passage of a bill (The Telecom Act) that was supposed to be deregulatory in character!  But wait, it gets worse. This doesn’t even begin to cover the tens of thousands of pages of legal filings, economic studies, consultant reports and other filings submitted to the FCC and state agencies by groups and individuals looking to have a say in the matter.

Lawyers, in particular, did quite well thanks to the FCC’s endless stream of litigation-prone rulemakings during the 1996-2003 period. Greg Sidak of Georgetown University Law School found that the number of telecom lawyers–as measured by membership in the Federal Communications Bar Association–grew by a stunning 73 percent in the late 1990s. That was largely driven by a 37 percent hike in FCC spending and a tripling of the number of pages of regulations in the FCC Record in the post-Telecom Act period. Sidak argues, “If one assumes (very conservatively) that the average income of an American telecommunications lawyer is $100,000, then the current membership of the FCBA represents an annual expenditure on legal services of at least $340 million.” And we all know that those lawyers were making a hell of lot more than just $100K, so Sidak’s estimates are ultra-conservative and the deadweight loss of all this legal activity was much greater.

Even the lawyers admitted what a boon all this regulation was to their business. In the wake of one controversial FCC rulemaking in 2003, telecom lawyer Dana Frix of the firm Chadbourne & Parke told The New York Times that “Every word will be challenged… My children will go to college on this stuff. This is a lawyer’s dream.” That pretty much says it all, now doesn’t it?

Look, I know that many supporters of a National Broadband Plan and Net neutrality regulation have good intentions. They really do think that The Plan and these rules will make the world a better place. But they need to acknowledge that regulation sometimes has unintended consequenses, especially when bureaucrats are asked to embark on grand “National Plans,” or to interpret amorphous terms like “neutrality.”  Once the programs and laws get on the books, volumes of regulations are promulgated interpreting and implementing them. That is followed by still more regulations interpreting, enforcing, and expanding the earlier regs. And then the lawsuits begin. Followed by still more regs and then more laws trying to straighten it all out after the courts say its all hopelessly arbitrary. Pretty soon we forget what we were fighting over. It’s all just about the paperwork and the lawsuits. And it becomes a grand sport for the armies of well-heeled laywers, lobbyists, consultants and economists who operate inside the parasitic economy we call “the Beltway.”

So, as much I wish Mr. Lazarus really was just joking about the FCC “doing everything it can to provide full employment for telecom lawyers,” the reality is that that is exactly what will happen following implementation of the National Broadband Plan and Net neutrality regulations. And that’s why the room full of telecom lawyers sitting here with me today were really laughing when Mr. Lazarus delivered that punch line… Laughing all the way to the bank, that is.

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!

If Google can offer 1Gbps broadband for a “competitive” price — say, $50 a month, — then why can’t Verizon and Comcast? Well, unlike Google, neither of these firms — or most telecom companies, for that matter — has a substantial stake in the content business (not yet, at least). Selling data, voice, and video services above cost is how traditional telecom companies make money. But Google’s bread and butter is advertising, not infrastructure. Also, big ISPs serve tens of millions of homes, while Google only aspires to connect a mere half million. Even if Google’s broadband service were to run a $100 million yearly deficit, Google wouldn’t suffer much — the firm earned over $4 billion in net income last year alone.

As Google’s broadband plans illustrate, smart vertical integration in the content and infrastructure businesses has the potential to benefit consumers enormously. Creative arrangements between these two industries will likely be increasingly important in the years ahead as demand for faster broadband grows. But attempts by government to steer these arrangements in unnatural, politically-favored directions — by adopting open access mandates, for instance — threaten to thwart efficient, vertically integrated business models.

By the way, when are we going to hear comment from all the critics of the Comcast-NBC deal who cried foul on the grounds that content-infrastructure integration undermines consumer welfare? A recent Free Press report, for instance, argues that:

Because the merged entity would control both content and distribution, it would have both the incentive and the market power to limit the access of competing content to the distribution platforms it controls.

There’s an equally compelling — or, more precisely put, equally unconvincing — argument to be made that Google would have a similar incentive to favor its own content on its broadband network. If we should be worried about Comcast-NBC favoring NBC-produced content on Comcast’s network, shouldn’t we also be worried about Google favoring its search engine over Bing on its broadband network?

No, in reality, the likelihood that either Comcast-NBC or Google has the market power to sustain a genuinely anti-consumer regime of preferential treatment is quite slim. Adam and others have already documented extensively here on TLF how choice in the media marketplace is abundant and continually expanding. And the broadband market, while certainly not as vibrant, is still fairly competitive and growing more so at a steady clip, as Google’s announcement today illustrates.

Fearing the evolution of the content and infrastructure industries — whether in the form of Googlephobia or Media Merger Hysteria — is fundamentally wrong-headed. To be sure, as integration occurs, mistakes will be made, mergers will fail, and consumers won’t always get exactly what they want. But these phenomena are normal, even necessary, elements of a dynamic, rapidly evolving market. We should celebrate, with due caution, Google’s entry into the broadband game. But we should not assume that the Google model is the end-all, be-all arrangement between content and infrastructure.

Good ideas, supported by evidence, eventually matter.

That’s the conclusion I reached after reviewing the outline the FCC’s broadband task force presented to the commission yesterday. Here are some ideas perceptive scholars have been discussing for a long time that are apparently going to be part of the National Broadband Plan:

• “Private sector investment is essential; new funding is limited.” So I guess the Interstate Highway System won’t be the funding model for universal broadband. Whew!
• “Policy changes require the consideration of unintended consequences.”
• “Competition drives innovation and better choices for consumers.”
• Wireless broadband needs a big new chunk of spectrum, and policymakers need to consider reallocating broadcast TV spectrum and spectrum reserved for use by the federal government.
• “Market forces should be applied to all [spectrum] bands, though other policy objectives should play a role in allocation decisions.”
• Fundamental reform of the Universal Service Fund, which subsidizes phone service very inefficiently, should actually be done, not just talked about.
• Universal service reform should include reform of “intercarrier compensation,” the charges phone companies pay each other when they hand off traffic.
• “USF policies should be designed to achieve measurable outcomes with transparency, oversight, and accountability.”

Most of these ideas were considered wacky, ideological, politically unrealistic, or just not relevant a few decades (or even a few years) ago.  Now they are the mainstream.

That doesn’t mean everything is wonderful with the National Broadband Plan. The FCC is supposed to plan how broadband will be used to promote consumer welfare, civic participation, public safety, education, health care, energy independence, community development, worker training, and a host of other legislative goals. In many cases there may be a fundamental tension between consumer welfare — a term of art in economics that means resources are allocated so that consumers get the selection of goods and services they are most willing to pay for, with the quality attributes they most prefer, at the best possible prices — and the other goals, which often involve planners deciding what consumers should want. Similarly, FCC Chairman Genachowski’s comments illustrate some decisionmakers’ disturbing tendency to conflate access (the service is available to those who want it) with adoption (everybody actually chooses to use it). Technophiles sometimes have an annoying habit of assuming that those of us who fail to adopt the latest info tech gadget or service must be ignorant rubes who don’t understand the glories of being hooked up to a fat information pipe 24/7 — rather than careful shoppers who have better things to do with our time than read Yahoo OMG! while driving. For this reason I fully expect to be annoyed by the National Broadband Plan, as well as gratified to see that some good ideas have finally made it from the Ivory Tower to real-world policy application.

But there’s enough good stuff in there to stick with “gratified” for at least one day.

In a speech yesterday, FCC Chairman Julius Genachowski pledged to revisit the Federal Communications Commission’s universal service programs for telecommunications as part of the National Broadband Plan: 

 The key points for today are these: USF is a multi-billion dollar annual fund that continues to support yesterday’s communications infrastructure. The goal of universality is as important as ever — and to meet our country’s innovation goals, we need to reorient the fund to support broadband communications. This is a thorny issue, with no shortage of practical and statutory challenges. We need to wring savings out of the system, protect consumers, avoid flashcuts, while ultimately moving USF in the direction it needs to go to support our 21st century platform for innovation. 

The USF program spends approximately $7 billion annually. Most of the money goes to subsidize phone service in “high cost” areas. Eeuww – phone service.  So twentieth century! All of us who have not yet shifted 100% of our personal communications to Facebook and Twitter pay for the universal service fund via surcharges of about 12 percent on our wireless and  wireline phone bills, including VOIP. (Dirty little secret: you also pay for universal telephone service if you use a wireless broadband card, because each card is assigned a phone number.) 

Genachowski’s comment follows some rather interestingly-timed announcements from the FCC’s broadband task force. On November 13, the task force asked for public comment on the role the universal service fund and “intercarrier compensation” (another, more opaque set of transfers from consumers in general to rural phone companies) should play in the national broadband plan. Comments are due December 7. Five days after soliciting comments, on November 18, the FCC announced that the structure of the universal service fund is one of the “critical gaps” in the path to universal broadband.

I doubt the FCC has telepathically determined what the parties will say in the comments they file on December 7, but there’s no need to. The FCC has ground through so many rounds of comments on universal service reform that the problems and potential solutions are well-known. At a conference on universal service about five years ago, I recall one speaker commented, “Everything that can be said about universal service has already been said, but not everyone’s had a chance to say it, so that’s why we still have conferences on it.” About a year ago, the FCC almost used a court-imposed deadline as an opportunity to actually reform universal service and intercarrier compensation, but the commissioners failed to reach consensus.

Here are some major problems with the universal service fund, in no particular order:

• It subsidizes voice phone service with built-in incentives for inefficiency on the part of providers.
• It subsidizes wireless voice service without limiting the subsidy to one essential connection per household, so it has effectively created an entitlement to both wired and mobile phone service in rural areas.
• The FCC does not measure or track the outcomes produced by the subsidies to see what they actually accomplish for the public. (Section 201 of the draft Boucher-Terry USF reform bill would require the FCC to adopt outcome-oriented performance measures.)
• The contribution mechanism acts like a percentage tax that discourages use of price-sensitive services like long-distance, wireless voice, and wireless broadband.
• The “death of distance” has slashed long-distance phone charges, which means wireless bears a growing percentage of the burden and the funding mechanism may well be unsustainable.

(For more detail on these issues, read the assortment comments on USF reform by various Mercatus Center colleagues and me here, here, here, here, here, here, here, here, here, and here. BTW, did I mention this issue has been beaten to death?)

So is the FCC jumping the gun, rushing to judgment on universal service before the comments are in?  Heck no. It’s about time.

Hmmm… What am I missing? I cannot lay my finger on a single line in the Communications Act of 1934, the Telecommunications Act of 1996, or any statute in between that gives the Federal Communications Commission (FCC) the authority to regulate cloud computing.  And yet, like any good stickler for jurisdictional authority, my PFF colleague Barbara Esbin keeps bringing to my attention little FCC chirps here and there which suggest that the agency is slowly positioning itself to become the Federal Cloud Commission. For example, back in September, Barbara brought to my attention this passage in the Commission’s recent Wireless Innovation and Investment Notice of Inquiry, (paragraph 60, pg. 21):

As other approaches, such as cloud computing, evolve, will established standards or de facto standards become more important to the applications development process? For example, can a dominant cloud computing position raise the same competitive issues that are now being discussed in the context of network neutrality? Will it be necessary to modify the existing balance between regulatory and market forces to promote further innovation in the development and deployment of new applications and services?

In my earlier essay about this, I noted that these questions should serve as a wake-up call for Google and other cloud-based providers who think that “neutrality” mandates will end at the infrastructure layer of the Net.  As Berin Szoka and I argued in our paper on “high-tech mutually assured destruction,” regulatory regimes grow but almost never contract.  And I’m even less optimistic about the FCC limiting its regulatory aspirations after the latest thing Barbara Esbin brought to my attention.

Today, as part of the Commission’s ongoing effort to develop a National Broadband Plan, the FCC released a request for information “on data portability and its relationship to broadband.”  (NBP Public Notice #21) “The Commission seeks tailored comment on broadband and portability of data and their relation to cloud computing, transparency, identity, and privacy,” the notice says.  Here was the second item on the list of things the Commission said it was investigating:

Cloud computing. When considering the portability of data, we also consider the processes through which data are moved. In this context, we seek comment on how to identify and understand cloud computing as a model for technology provisioning.

1. The National Institute of Standards and Technology defines cloud computing as “a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.” Does this definition accurately capture the concept of cloud computing?
2. What types of cloud computing exist (e.g., public, hybrid, and internal) and what are the legal and regulatory implications of their use?
3. Can present broadband network configurations handle a large-scale shift in bandwidth usage that a rapid adoption of cloud computing might cause?
4. How does cloud computing affect the reliability, scalability, security, and sustainability of information and data?
5. To what extent can the federal government leverage cloud solutions to improve intra-agency processes, intergovernmental coordination, and civic participation?
6. What impact do developments in cloud computing have with respect to broadband deployment, adoption, and use?
7. How can various parties leverage cloud computing to obtain economic or social efficiencies? Is it possible to quantify the efficiencies gained?
8. To what extent are consumers protected by industry self-regulation (e.g., the Cloud Computing Manifesto), and to what extent might additional protections be needed?
9. What specific privacy concerns are there with user data and cloud computing?
10. What precautions should government agencies take to prevent disclosure of personal information when providing data?
11. Is the use of cloud computing a net positive to the environment? Are there specific studies that quantify the environmental impact of cloud computing?

I suppose some might claim there’s nothing wrong with the FCC looking into these issues, and that the agency’s interest in cloud computing is entirely benign.  But when it read all these questions about cloud computing in recent FCC notices, I can’t help but thinking about the potential for regulatory creep.  Eventually, when a regulatory agency asks enough questions — especially the sort of questions bolded above — it leads to more agency oversight.  And more agency oversight typically leads to some sort of agency regulation.

Or perhaps I’m just being paranoid.

Regardless, at a minimum, would someone at least tell me where the FCC gets the authority to even ask these questions?  Or do we live in such a Bold New World of progressive government that little encumbrances like statutory authority can be thrown to the wind?   Years from now, some might look back and ask the question that Nobel Prize-winning economist Ronald Coase asked 50 years ago about the FCC and spectrum regulation:  “How did the commission come to acquire this power?”  But I’d like to know the answer to that question right now regarding the FCC’s growing interest in cloud computing.

Blogger’s Note: I posted this blog entry over at BroadbandCensus.com earlier in the day. It’s the first of series this week — One Web Week — in which I’m taking a step back to look at the issue of broadband data and broadband transparency from a bit of a longer time frame. And today couldn’t be a more timely day to do so, with Genachowski’s speech highlighting a new sixth principle of Network Neutrality: broadband transparency! -Drew Clark

WASHINGTON, September 21, 2009 – Broadband data is important for the future of our country – and public and transparent broadband data is even more important.

Today, at this moment, new Federal Communications Commission Chairman Julius Genachowski is making a speech in which he is highlighting the vital principle of public and transparent broadband data.

For three years now, this principle has been the core belief animating my efforts as a journalist, and as the entrepreneur founding BroadbandCensus.com. Now, as we enter the fourth year since this saga began, it’s time to take stock and reflect on what BroadbandCensus.com has accomplished.

And with One Web Week having arrived, I’d like to lay out this history from a personal perspective. In this series of blog posts, I’m going to speak about what we’ve been through, who we have worked with to advance the principles of public and transparent broadband data, and what we ultimately aim to achieve at BroadbandCensus.com.

• Today’s topic: The debate begins, with the Freedom of Information Act lawsuit in 2006.
• Tomorrow’s topic, on One Web Day: The founding of BroadbandCensus.com in the fall of 2007.
• Wednesday topic: The Broadband Census for America Conference in September 2008, and our work with the academic community to foster public and transparent broadband data-collection efforts.
• Thursday’s topic, in advance of the U.S. Broadband Coalition’s report to the Federal Communications Commission: BroadbandCensus.com’s involvement with the National Broadband Plan in 2009.
• The concluding topic, on Friday morning: The role BroadbandCensus.com and broadband users have to play in the creation of a robust and reliable National Broadband Data Warehouse.

The Beginnings: Why I Sued Kevin Martin’s Federal Communications Commission

BroadbandCensus.com was founded in October 2007 after I spent nearly a year and a half with the Center for Public Integrity, a non-profit investigative journalism organization based here in Washington. But the quest for public and transparent broadband data goes back further.

For more than 15 years, I have covered the politics of telecom, media and technology. Most of that was spent at the National Journal Group in Washington, a key source of inside information about policy and lobbying. My aim there, as it is now, was to ensure that all the facts are brought to the table, that divergent viewpoints are fairly represented, and that questions asked go to the center of the debate.

When it came to broadband, the looming questions were and still are: where do we have broadband in the United States, and who is offering it? What kind of service is promised, and are carriers delivering on those promises?

In 2006, issues of broadband policy lurked in the background of many major political and media controversies: Net neutrality, online piracy, media ownership and control, the build out of high-speed networks, both wired and wireless, and the role of Web 2.0 in government and society. Whatever the ultimate resolutions for each of these controversies, the first step was better broadband data.

At this time, I headed the Center for Public Integrity’s media and telecommunications project, “Well Connected.” We were expanding its focus on media ownership to the new source of media control: the nation’s broadband infrastructure.

The Federal Communications Commission had a database about the carriers that offer broadband by ZIP code. This database is created from the carriers filing the Form 477 with the FCC. The FCC publishes other databases of the locations of radio and television broadcasters, and of cable companies. We asked for a copy of the Form 477 database in August 2006. At that time, we cited the Freedom of Information Act.

An FCC staff member called me to discuss arrangements for getting our electronic copy. When I called the FCC staffer back, less than 45 minutes later, he told me that he had been instructed not to talk to me further. From that point on, only Kevin Martin’s lawyers would do the talking.

The FCC missed their 20-day deadline to timely respond to our FOIA letter. On September 25, 2006, the Center for Public Integrity filed suit in federal district court , seeking to enforce our FOIA request. We asked the district court to grant us access to the Form 477 database, with information about subscriber numbers redacted (if necessary). The end result would be a database with the names of the carriers that offer broadband on a ZIP code basis.

Even though the FCC has been collecting the Form 477 since 2000, and already has a database of all of this information, they have only ever released the number of providers within a ZIP code, and not the names of the providers. Even then, the agency only released the number if the number was four or more – out of an excessive concern for identifying carrier information.

That’s like saying that the government will restrict the release of information it has about how many gas stations there are in your town if there are not four or more gas stations in town. In any case, the government won’t tell you the names of the gas stations, or where you can find them, so that you can buy gas. And most definitely, they won’t share the prices at which the gas stations sell gas.

“We filed suit against the FCC to obtain the data that the public and policy-makers need in order to get a complete and accurate picture of the current state of broadband,” I said at the time.

Broadband Providers Seek to Forestall Publication of Carrier-Level Broadband Data

I’ve recounted the story of the FOIA litigation at great length, in June 2007, in a story, “Center Spearheads Efforts to Disclose Broadband Data,” and in February 2009 in Ars Technica, “US broadband infrastructure investments need transparency.”

We were seeking something quite straightforward: the identities of broadband carriers that offer service within a particular geographic location. At the time, we were seeking ZIP code information, because that was the best information that the FCC had. I and many others have long recognized that ZIP codes are extremely problematic and coarse unit of measurement. And that is why it is extremely positive that, in July 2009, the NTIA declared that it needed broadband information by Census block.

But in 2006 and 2007, getting carrier-level broadband data by ZIP would have been a good first step. Then-Chairman Kevin Martin, of course, was never a fan of public disclosure. After his agency nixed any sort of collaboration or compromise in approaching our FOIA request, Martin sought to shore up support from industry. On December 15, 2006, the agency issued a “Public Notice to Service Providers Who Filed FCC Form 477s With The Commission And Sought Confidential Treatment Of The Information Submitted.”

AT&T and Verizon Communications, along with the Wireless Communications Association International, intervened in the lawsuit. Others filed as “friends of the court,” on the side of the FCC. The public notice and the interventions forced Judge Rosemary Collyer to recuse herself from the case, as she owned stock in AT&T. The case went to Judge Ellen Huvelle.

“As a non-profit publisher of investigative journalism committed to transparent and comprehensive reporting both in the U.S. and around the world, the Center for Public Integrity believes that making data about the names of the broadband provider on a ZIP code-by-ZIP code basis would allow consumers to ‘truth-check’ the FCC data,” I wrote at the time. “Adding citizen-provided information about the speed, quality and price of such connections would, in turn, create a robust collection of information further informing telecommunications-related public policy debates.”

In their defense, the carriers said that disclosure would cause them competitive harm – the legal standard for denying the disclosure of data under the Freedom of Information Act.

In our legal briefings, the Center noted “that all of the major communications companies – including cable, wireless and telecom players – already provide ZIP code lookup of service availability on their Web sites.” If the information was not available on web site, the information was readily available by calling up the carrier and asking if service was available at that address. Because such information was already readily-discoverable, aggregating the data on a single web site would not cause competitive harm, either.

Among those who intervened in the suit, some sincerely believed that disclosure would have caused them harm. Others litigated merely because of the possibility of a negative FOIA precedent. Whatever the case, Kevin Martin’s FCC certainly went all-out to defend restrictions on data.

In its legal briefings, the FCC argued that releasing the data would lead to competition in communications. “Disclosure could allow competitors to free ride on the efforts of the first new entrant to identify areas where competition is more likely to be successful,” the agency told the federal district court in Washington.

It was supremely ironic that that the FCC and the communications industry were fighting our efforts to obtain public and transparent broadband data at the same time that Congress and the FCC began to clamor for precisely that which we were seeking: better broadband data to address a range of policy concerns.

Together with my friend Scott Wallsten, then of the Progress and Freedom Foundation (later with Technology Policy Institute, and now at the FCC), the Center for Public Integrity organized a Conference on Broadband Statistics on June 28, 2007, at the National Academy of Science.

Scott and I gathered an assemblage of many people, including officials from Comcast, Verizon, AT&T, ConnectKentucky, plus leading academics and policy practitioners in the field, including experts from Information Technology and Innovation Foundation, Pew Internet and American Life Project, and the University of Texas at Austin, to consider precisely these questions. Audio from the June 2007 conference is available here; a transcript of the proceeding is available here.

More recently, Wallsten’s appointment as the economics director of the FCC’s broadband task force has prompted some controversy. But Wallsten has always been supportive of my efforts – and those of others in the field – to push for greater disclosure of broadband data. See “What Disconnect?,” and “Hiding the Broadband Map.”

The Aftermath: Kevin Martin and Me

Unfortunately, the Center lost the lawsuit when Judge Huvelle ruled against the Center in August 2007, and again in October 2007 after a motion for reconsideration. I’ll talk briefly in Tuesday’s blog post about the founding of BroadbandCensus.com in the aftermath of this defeat, and on Wednesday about BroadbandCensus.com’s efforts, in 2008, to advance public and transparent broadband.

But it’s worth fast-forwarding to get to the end of the Kevin Martin story.

Martin’s tenure at the FCC was marked by his repeated jokes about how he led the FCC like the KGB. That would seem to be of a piece with denying Freedom of Information Act requests like the one I initiated.

Yet I never anticipated just how pointed his criticism of public and transparent broadband data could be. I had been invited to speak at the National Association of Regulatory Utility Commissioners’ and the FCC’s joint conference on broadband deployment and data at the FCC, in San Jose, on November 6, 2008 – two days after the presidential election.

In my presentation, on the background to and requirements of the Broadband Data Improvement Act, I referred to the Center’s FOIA lawsuit, quoted in the section above, about how the FCC didn’t want disclosure of carrier data to lead to greater competition. Kevin Martin interrupted my presentation seven times! He disagreed with my characterization of the FCC’s position on broadband data.

“It was actually also because the carriers do not want it to be disclosed, and so it was not provided in a public way,” Martin first interjected. I disagreed with him, saying that “The FCC chose through its discretion over a period of time not to release information about carrier by carrier level.”

To which Martin replied, “I am not going to have an argument with you over it. I think we should move on…. This is not about FOIA litigation. No one is interested in that.”

I came back with, “I am just pointing out that the law does not need to be changed for the FCC to release this data.”

And that still isn’t the end of the story.

Two weeks later, on November 18, 2008, Kevin Martin was back in Washington for what appeared to be his final swan song: accepting an award at the Phoenix Center for Advanced Legal and Economic Public Policy Studies at the National Press Club. Martin gave his remarks, and was praised by the Phoenix Center. After chatting with journalists for a few minutes, we all went our separate ways.

Later, as I was walking over to the elevator to depart, I saw the elevator door closing on Kevin Martin and his long-time chief of staff, Dan Gonzalez.

Martin opened the doors by pushing the open button, and I walked in. Martin asked me what I had in my hands. It was a box with flyers, so I handed him a flyer from BroadbandCensus.com, and told him a bit about our next upcoming activity as the elevator went to the ground floor.

As we stepped into the lobby, I asked Martin if he had a nice trip back from the broadband data conference in San Jose.

He chuckled somewhat under his breath, and then said: “You may not believe this, but I think what you are doing is a good thing. I just can’t end up giving it to you.”

About BroadbandCensus.com

Read Part II here

In February, Congress passed the Obama Administration’s “(Five Year) National Broadband Plan,” part of the so-called “Stimulus.” (As economist Russ Roberts put it, government “stimulus” is “like taking a bucket of water from the deep end of a pool and dumping it into the shallow end.”) The Plan transfers $7.2 billion from taxpayers to broadband providers in subsides to promote broadband build-out. More than 10,000 comments have been filed on the plan. Once you get past the constitutional nicety of whether Congress has the power to subsidize “internal improvements” like broadband (it doesn’t), you might wonder just how well your money will be spent by all these techno-supplicants for the latest craze in corporate welfare.

The good news is that these comments are available online. Hurray for transparency! The bad news is that… they’re available online—specifically on the FCC’s Electronic Comments Filing System (ECFS). Anyone who’s used the web more recently than 1998 will cringe the first time they try to use ECFS to find anything, as Jerry has noted. Apart from the cumbersome, highly unintuitive interface, the problem is that there’s no way to search the text of comments ! You can only search pre-defined fields like like “law firm,” and if you don’t enter a value in precisely the right way, you get nada.

Bill Cline, the Chief of the Reference Information Center for the FCC’s Consumer & Governmental Affairs Bureau tries hard to put the best face on this farce of e-government, explaining:

A docket number is key to using ECFS, and this link takes you to the ECFS retrieval form with the docket number for the National Broadband Plan, 09-51, already filled in.  Just hit “Retrieve Document List” to get a list of all filings.  Yes, there are lots of them, and you need to click on each individual filing to read it.  But there are many ways you can focus your search, which include:

• Entering the name of a specific individual whose comments you want to see in Field 4 (Filed on Behalf of)
• Narrowing your search to people in your community by using the “City,” “State,” or “Zip Code” fields
• Entering “FCC” in Field 5 – (Law Firm) – to see FCC filings.
• Clicking on the box in field 15 (Eliminate Brief Text Comments) to narrow the search considerably by retrieving only longer comments
• Finding comments for a specific public notice by using a date range on either side of the comment due dates

Keep in mind that this the Federal Communications Commission we’re talking about here.  Yet this antiquated system hasn’t been updated in nearly six years! You might think the problem was just funding: after all, someone would have to pay for a new database system, right?  Yes, but we don’t need a new system: All the FCC has to do is set its robots.txt file to stop blocking search crawlers, so that FCC comments would be included in Google search results, as Jerry has noted.

The real absurdity here is that we naively expect these same regulatory agencies—that can’t even make their own data available through free search engines or stream their own meetings properly—to keep pace with the rapid pace of innovation on the Internet. If only the comedic geniuses at Saturday Night Live had chosen to pick on bureaucrats instead of lawyers, we’d have “Unfrozen Caveman Regulator” instead of  “Unfrozen Caveman Lawyer.” Maybe that would have made it clear to Americans how silly it is to give the least technologically competent among us control over technology, innovation and creativity—or, even better, that no one central authority is smart enough to manage it, even one led by a guy as seemingly Twitterific as Barack Obama.

Obama’s picked some good people to pull government into the Web 2.0 era, but they’ll always be fighting against the tide of institutional inertia inherent in bureaucracy. In short, we may well see a significant upgrade in e-government in the next few years, but it won’t change the basic fact that government just can’t keep pace with technological change. One need not be a libertarian to accept that this basic fact makes the Internet “different.” Thus can even a non-libertarian be a cyber-libertarian of the Internet Exceptionalist variety.