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Americans for Prosperity getting older Americans interested in social media

For the past two days I’ve been enjoying the dry heat of Orlando, Florida. It’s always good to come back to my adopted home state and got the chance to visit with my law school chums as well as witness another type of heat here in Florida: The Seventh Annual Defending the American Dream Summit. Besides the occasional bashing of President Barack Obama’s health care and economic policies, their were panels on how to use social media as a platform for getting their political advocacy messages out. This is pretty standard fare until you appreciate who made up the majority of the audience: older Americans.

You couldn’t help but notice. This group definitely dominated the Summits demographics and presented another reason for broadband adoption: the demand for further democratization on the part of our graying population and another source of energy for individuals who have seen a lot and have plenty to say, not letting a little thing like age take them out of the discussion.

Listening to the questions these citizens were asking about social media while they incorporated their observations about the nation’s political climate in their comments tells me that they were interested in a little more than how to get their kittens down out of a tree.

Look out young Twitter and Facebook users. Grandma and grandpa are coming.

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A number of rural carriers say no to FCC’s rate of return analysis

A number of rural telecommunications carrier associations yesterday filed joint reply comments in a Federal Communications Commission proceeding where the FCC is considering reducing authorized rate of return on a rural carrier’s assets from the current 11.25% to a rates of return range of 7.39% to 8.79%.

Needless to say the rural carriers are a bit miffed. The rate of return is used to determine how much revenue a carrier can generate on assets put into use to provide telecommunications services. When the revenue is determined, the FCC determines the appropriate rates for interstate special access services and common carrier line rates, as well as the appropriate amount of universal service contribution a rural carrier may receive. The higher the rates of return, the greater the rates a carrier may charge to recover these revenues.

The carriers argue that lowering the ROR means there will be less funds available for reinvesting in the deployment of broadband facilities. The FCC argues that since 1990, the last year the ROR was determined, changes in technology warrant a change in these rates and initially found that the appropriate rate should be around 9%.

But could that be the FCC’s approach from the beginning? Regulators reason that the higher the rate of return, the less the incentive to invest in innovation. I don’t think that is necessarily true. For example, if a carrier has aging assets in its rate base, they will remove them, either on their own or as a result of a rate review. As technologies change and carriers find themselves facing competitive pressures brought on by cord cutting and cable companies able to bundle in on-demand services, these carriers will want to keep up, but they will need the revenues necessary for purchasing and deploying the facilities necessary for deploying new facilities and services. It’s during this period that ROR should be remain at the same level or even increased.

The FCC’s logic seems to be centered on keeping rural carriers captive to the updated, new and improved universal service fund. We’ll keep your interstate rates low and force you to come to the trough and drink even if you feel your customers are better served if you fund broadband deployment on your own dime. The FCC believes that there is market failure sufficient enough to keep rural providers from meeting voice and broadband needs of consumers. If that is the case, then the FCC is ensuring that market failure by decreasing the ROR rural carriers should earn.

It’s truly ironic given the FCC’s policy goal of basing inter-carrier compensation received by rural carriers on a free market framework, but I see nothing free market about forcing rural carriers to stay on a universal service funding scheme premised on fake innovation.

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As the FCC creeps to a spectrum solution, the private sector speeds towards one

Stefan Weitz, director of search for Bing, describes in a post for GigaOm.com how frequency intelligent wireless devices and apps could help the industry address the coming spectrum crunch, where wireless devices from laptops to tablets could stop working like a scene from a sci-fi “B” movie.

The Federal Communications Commission is pursuing the goal of making more spectrum available by implementing a reverse auction policy to incentivize broadcasters to give up their frequencies and hopefully leaving them enough pocket change to “relocate” to other sections of the spectrum beach. Some of the proceeds will also be used to finance a national public safety communications network.

The other policy being considered and one the FCC may have less control over is the relinquishing of spectrum held by federal government agencies including the U.S. Department of Defense. Estimates as high as ten years have been bantered about for how long it would take an agency to give up spectrum and relocate to another portion of the beach. That time frame is definitely to far out to meet the impending spectrum crunch doom of 2015.

Mr. Weitz describes work in software defined radios, where future devices could hop across frequencies. Apps could also use software defined radio to “hop on” a frequency that where there is not much competition for its bandwidth or an app that moves packets but is in no rush to move the data so it opts for riding a 3G network instead of the faster 4G ride.

Mr. Weitz also discusses the use of pico cells, small cell technology that have been shown as effective for increasing capacity in dense, urban areas. As Mr. Weitz concludes in his post;

“Is the spectrum’s ability to keep pace with devices and data a problem tomorrow? No. But if the rapid upticks witnessed over the last few years are any indication, it’s clear: we need smarter spectrum allocation and, more importantly, smarter use thereof.”

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Pew should feel comfortable treating smartphones as broadband

Pew Research Center’s Internet and American Life Project released a report last week documenting a four percentage point rise for adults reporting that they had broadband access at home. According to Pew in May 2013, 70% of American adults reported having access to broadband at home. That’s up from 66% of American adults in April 2012.

There is still a racial divide between whites and blacks when it comes to broadband adoption at home. Approximately 74% of white American adults have broadband access at home while 64% of black American adults claim broadband access at home. The percentage of Hispanic adults with at home broadband access is approximately 53%.

Pew did raise an interesting issue by comparing smartphones to broadband. According to the report, there is no consensus whether 3G or 4G smartphones qualify as broadband speed and Pew questions whether the distinct differences in the quality of utility between smartphones and broadband should be ignored when determining whether to equate the speeds of the two. Pew offers the argument that it would be “challenging” to update an resume, view educational material, or even file taxes on a smartphone.

While I agree that updating a resume and transmitting it from a smartphone would be tedious and exacting, there are a couple arguments for equating 3G and 4G smartphones with broadband.

First, broadband has to be assessed within a national commercial framework. Section 1301(2) of the Communications Act makes it clear that deployment and adoption of broadband is in the nation’s business and job growth interest. Specifically:

“(2) Continued progress in the deployment and adoption of broadband technology is vital
to ensuring that our Nation remains competitive and continues to create business and job growth.”

Americans use their smartphones for business and commercial purposes. An investment banker discussing a court opinion via a smartphone with a legal analyst to whom she has paid a consulting fee is a commercial transaction. Ordering a pizza via a smartphone or placing an order via your smartphone for future shipment to your place of business are also commercial acts.

Content creation , albeit a high-quality activity that cannot be performed with ease over a smartphone, is not the only quality business activity that smartphones can be used for. Content creation should not be the sole or primary commercial or business activity that defines whether smartphones qualify as broadband.

Second, there is the issue of speed. According to a review by ZDNet, While average wired broadband speeds delivered by fiber average around 21 Mbps, average 4G speed averages 9.5 Mbps, way in excess of the Federal Communications Commission’s 4 Mbps threshold for defining broadband.

Maybe 3G, with average speeds just under 4 Mbps, might not make the broadband cutoff. Running video on 3G devices, where video requires at least 4 Mbps speed for quality viewing, is not satisfying in a world where an increasing amount of video content is being viewed (Miley Cyrus notwithstanding), but Pew should include possession of 4G smartphones in the home when determining the percentage of American adults that have access to broadband at home.

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Verizon, CBS strike deal

Posted August 22nd, 2013 in Broadband, cable company, cable television and tagged , , , by Alton Drew

It seems like Verizon and CBS have come to terms on CBS’ programming being distributed via Verizon’s FiOS network, according to a post by the good people over at The Hillicon Valley. Here are comments I left on The Hillicon Valley website.

CBS can do what it wants with its intellectual property. The FCC or any other agency should not tell them to who they can license their intellectual property. This is not a network or infrastructure issue that falls under the FCC’s net neutrality rules.

It does go to how other participants in the video distribution market will see the value of Time Warner Cable’s network, but maintaining or improving the value of its network is Time Warner’s problem, not the government and not the consumer.