So why are minorities left out of Landrieu’s SBA bill

Posted June 30th, 2010 in Broadband and tagged , , , , , by Alton Drew

Senator Mary Landrieu, Democrat of Louisiana, along with Senator John Kerry, Democrat of Massachusetts, have introduced S. 3506, the Small Business Broadband and Emerging Information Technology Enhancement Act of 2010, a bill that creates a broadband and emerging information technology coordinator in the Small Business Administration. The bill also supports technology training for women via certain business centers.

The new administrator will be responsible for coordinating broadband training programs for the SBA’s staff as well as programs that allow small business entrepreneurs to access the raw technology materials necessary for running a business in the broadband, Internet age.

Sounds tame enough, until you read a little closer and see that blacks, Hispanics, and Asians are left out of the bill’s language.

Kind of surprising coming from Democrats. Then again, this is the party that gave us a Julius Genachowski-led Federal Communications Commission, the same FCC that overlooked us during the early stages of the development of its national broadband plan.

The other issue standing out is the bill’s failure to clearly state problems with the relevant markets at issue in broadband. For example, the bill doesn’t clarify whether content and applications providers are having problems accessing technology from technology providers such as computer makers, router providers, etc.

The bill does not say that given the excess demand for technology on the part of content providers, we feel it necessary to cure this market failure by providing low interest loans or even loan guarantees.

Instead we get mostly language about the need for technology training amongst SBA staff and the need for exposure by small business entrepreneurs to existing technology. The bill is all over the place.

S. 3506 is a good start but needs work. First, expand the intent to include minorities. Second, make it clear what problems in the market and which markets in particular are we trying to fix.

Net neutrality is not the way to go for journalism and new media

I was pretty busy this past weekend, having attended a couple panel discussions held by the National Association of Latino Elected and Appointed Officials (NALEO) and the National Association of Hispanic Journalists (NAHJ).  It was during a NAHJ panel discussion on the Internet’s impact on print media that Free Press and Color of Change had an opportunity to share with journalists in the Hispanic community how net neutrality would positively impact the media. Unfortunately for Free Press and Color of Change they never made their case, probably because there was no case to make.

Right now traditional media, in particular print media, is struggling to find its way and place in the new media world. It is well documented that print media has been losing revenues and subscribership over the past few years as more information consumers decide to obtain their news from the Internet.

Does the fall off in print media subscribership mean that there is a reduced demand for news? Of course not. Did we stop listening to music because we replaced 8-tracks with MP-3s and iTunes? All we have done is change the method of content delivery. The content and its importance is still the same.

What journalists, especially journalists in the African American and Hispanic American communities should be concerned about is the impact that a net neutrality policy will have on the price that information consumers will have to pay for accessing content provided via the Internet. As minority publications struggle to find a space in the new media market, the last thing we want to see are increases in fees that consumers will have to pay. Under net neutrality and broadband reclassification, it will become more expensive for information consumers to access new media content.

For example, if the Federal Communications Commission is successful in reclassifying broadband as telecommunications, I expect, at a minimum, a ten percent increase in monthly costs for getting online. Why? Because all of a sudden that broadband pipe from Comcast or Time Warner that we use to access the Internet will get hit with what is called a subscriber line charge or SLC.

Currently a monthly charge of $6.50, the SLC is assessed to recover the costs for providing telephone subscribers with the opportunity to make a long distance phone call. With reclassification, your broadband pipe becomes a phone line and you are hit with an extra $6.50 a month in fees.

I don’t know about you, but $6.50 is two gallons of gas that a single parent has to put in the tank to get their kids to school. Given the income and employment pressures that the minority community is especially susceptible to, do you think we are going to buy broadband?

Unfortunately, this is one of the many downsides of a net neutrality and reclassification concept; a downside that Free Press and Color of Change are too afraid to share with us. Net neutrality, by making access to information more expensive for consumers, will have a negative effect on journalists and minority-owned and focused publications in the new media era. It’s a concept that we cannot afford.

FCC and courage don’t mix

Posted June 25th, 2010 in Uncategorized and tagged , , , by Alton Drew
One of my son’s favorite television shows was Courage the Cowardly Dog. Courage was by nature a wimp, but when his owner, Muriel, was threatened by every thing from zombies to snake oil salesmen, Courage, against his nature, came to her rescue.

True courage comes not only from doing the right thing, but also comes from going against the grain in order to make sure that the right thing is done.

The Federal Communications Commission has not done that. The commissioners mentioned by Mr. Brodsky have decided to tow the same old regulatory, interventionist line, rather than seek an updated way for the FCC to engage a broadband market in the 21st century.

Notice I said engage. Given its expertise in the transmission component of broadband and its relationship with broadband’s primary providers, namely telecommunications and cable companies, I expect the FCC to weigh in on issues regarding the Internet. It’s a natural, ancillary, incidental expectation. Rather than seeking to drop the same old regulatory hammer that has been rusting since 1934, the FCC should seek to reinvent how it engages markets. It can do so by focusing on the true underlying issue that net neutrality proponents lack the courage to mention.

The issue is really about how content providers, represented by Free Press and Public Knowledge, view their inability to create a valid business model that facilitates their entry into the content provider market. I’ll say it for you, Public Knowledge and Free Press. You are concerned with antitrust and your ability to compete. Just come out and say so. Don’t hide behind the “skirts” of a consumer protection argument. Man up and say that you want a regulatory regime that ensures you get the appropriate treatment under antitrust rules.

Quite frankly, rather than dumping praises on an FCC that doesn’t have the courage to wait on Congress to give it the expressed authority to regulate the Internet much less reinvent itself for the 21st century, you open coalition, net neutrality types should be taking your fight to the FTC. You’d still lose, but at least you’d be in the right boxing ring.

Broadband providers have no incentive to limit flow of traffic

Posted June 25th, 2010 in Broadband, FCC, Government Regulation and tagged , , , , by Alton Drew

Free Press has never showed evidence that net neutrality will spur investment. Economides is correct. Why change the traditional rules of broadband, which has been hands off for three decades. The global communications network Free Press refers to has been growing by leaps and bounds as a result of a deregulated telecommunications scheme implemented by the Telecommunications Act of 1996. In addition, the Act set the stage and premise for the deregulated approach that Congress mandated for the Internet.

The best pro-business argument for openness has been made by opponents to any additional regulation of broadband access, namely, that broadband access providers have no incentive to discourage the flow of traffic on their networks because increased traffic flow enhances the value of the network and the returns on investment. This is the main reason, contrary to Free Press’ unsubstantiated arguments, that broadband access providers such as Comcast and Verizon invest $80 billion a year into the deployment, maintenance, and management of their networks.

The investment into broadband networks, especially over the past decade makes Free Press’ conclusion that without net neutrality there would be no network investment all the more erroneous. Simple logic dictates that if there were no investment in networks, there would be no Internet over which Free Press and Color of Change could distribute their inconsistent rants

FCC needs to stay out of stakeholder meeting

Posted June 25th, 2010 in Broadband, FCC, Government, Government Regulation, net neutrality and tagged , , by Alton Drew

There is an old saying: too many hands in the kitchen messes up the soup, or something like that. The danger of having too many cooks in the kitchen is that the public may deem the output as straight up rancid. The United States Court of Appeals for the District of Columbia was very clear that the Federal Communications Commission (FCC) needs congressional authority to reclassify broadband access as telecommunications.

The court also made it clear in its ruling in Comcast v. FCC that the FCC needs to show changes in how broadband is delivered and perceived by the consumer before any treatment of broadband as telecommunications can past muster.

I don’t think that FCC Chairman Genachowski should be in the room at all. This is a market issue that only Congress can address. Let content providers and broadband providers share their proposed language and maybe allow the Federal Trade Commission, the nation’s premier consumer protection agency, to weigh in. If this is truly a market failure issue, which I personally believe it is not, then allow the FTC to show up and speak to the consumer welfare issue.

All Mr. Genachowski needs to do at this point is to stay any current FCC proceedings on net neutrality and allow the Congress time to consider any legislation. Now that approach smells like mom’s home cooking.