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African American communities shouldn’t wait on the State to close the digital divide

I have to wonder if the broadband digital divide is more a question of the broadband financing management. I believe more could be done with revenues collected by the black church when addressing the digital divide, particularly in the area of ownership of technology and content delivery platforms.

By some estimates, black churches have collected $420 billion in revenues since 1980. That’s close to $12 billion in annual revenues. I know some black churches invest in businesses within their communities; and while a very small fraction of the venture capital community, African Americans are joining the ranks of venture capital firms.

Venture capital likes areas of that offer large returns and for venture capital those areas are primarily technology. Historically when we talk about the digital divide we talk about access to broadband, but I don’t buy into that definition. African Americans are over-indexed on smart phone ownership and use of social media. Where African Americans are not over-indexed on is platform ownership. While on the energy end the argument has been that the capital intensity for building a grid makes it near impossible for minority ownership of electric utilities, the open architecture of the internet chips away at that notion.

And waiting on government is not a wise plan, if you want to call waiting a plan. The Federal Communications Commission is more concerned with underwriting broadband providers via its Connect America Fund versus promoting the deployment of content delivery networks. Private sector initiatives like those taken by Facebook, Google, and Microsoft to build their own global private networks are best for deploying content delivery networks, not only for the delivery of content but to capture and analyze data as well. This is where the money is, in my opinion, for communities of color and where venture capital generated in communities of color should be going.

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Is the FCC making venture capital investment in unlicensed spectrum risky?

Posted May 19th, 2016 in spectrum, unlicensed spectrum and tagged , by Alton Drew

Venture capital investing in device makers that use unlicensed spectrum have a number of challenges. One challenge is interference from other networks operating in unlicensed spectrum bands. For example, the Federal Communications Commission has in circulation an item containing a request by Globalstar to deploy a low power broadband network in the 2473-2483.5 MHz band where certain devices using unlicensed spectrum operate. The Commission needs to determine whether this service will interfere with devices using unlicensed spectrum.  A number of providers, like Bluetooth, that use unlicensed spectrum to provide services have raised their concerns with the Commission. If consumers find they cannot use devices due to interference, smaller revenue streams may result, putting the device maker’s business model in jeopardy.

Another challenge comes from using unlicensed spectrum itself. Not only is its use less protected from interference as opposed to licensed spectrum, but since the provider also has no license to use as collateral for financing. Will a venture capitalist want to pick up the financing slack (and risk) when additional financing can’t be obtained from banks?

Also, since devices simply need certification that they meet Commission operational rules for unlicensed spectrum, barriers to entry in the unlicensed device space are lower than that in the licensed space. The potential for increased competition means potential reduced revenue streams which lowers returns on a venture capitalist’s investment.

The Commission can’t do much in terms of upfront capital costs or encouraging investment in proprietary technology, the kind of moats that providers of devices using unlicensed spectrum could create to protect their turf. The Commission has to come up with workable definitions of acceptable interference in the unlicensed spectrum space. The Commission should also ensure that deployment of a broadband network in unlicensed space doesn’t result in privatization or a gatekeeper scenario that keeps other unlicensed device providers out of the unlicensed spectrum space.

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AT&T makes another media play

Posted May 16th, 2016 in AT&T, media and tagged , , by Alton Drew

AT&T today announced that it will acquire Quickplay Media Inc., as part of its plan to support streaming of DirecTV content over any device. AT&T already has an existing relationship with Quickplay. The company provides the platform for AT&T U-verse TV. Subject to a pre-merger review, the acquisition is expected to close in mid 2016.

The acquisition provides another example of convergence 2.0 as legacy companies such as AT&T and Verizon take their infrastructure to a media level.

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Driver-less cars and the nanny state on steroids

Posted May 12th, 2016 in spectrum, unlicensed spectrum, Wi-Fi, wireless communications and tagged by Alton Drew

I’m not a fan of the driver-less car concept. What’s the fun of a driver-less car unless the car itself is not fun to drive to begin with. What’s not so fun is a brewing fight over the best uses for unlicensed spectrum as driver-less car producers bump heads with communications providers. In this article from The Washington Post, there is a discussion about a proposal from Transportation secretary Anthony Foxx that would require all new cars be equipped with car-to-car communications devices. These devices would operate within 75 Mhz of the 5,9 Ghz band. Groups, like the National Cable and Telecommunications Association, argue that spectrum is running out and unlicensed spectrum needs to be made available to fill the gap.

Unlicensed spectrum has been touted as a space for technology and communications innovation. It’s the area in the electromagnetic spectrum where certain wireless devices play including WiFi hot spots, medical equipment, wireless headsets, remote car door openers, wireless keyboards, and cordless phones. With cognitive radio technology, unlicensed spectrum’s vulnerability to interference can be addressed making unlicensed spectrum an emerging alternative for carrying communications.

The only long-term benefit I see from driver-less cars is that flowing to companies like Zip Car. Uber drivers should be scared shitless because why get in a car with a driver with a criminal record when all you have to do is call up a driver-less car from Google. And while the State makes an argument that driver-less cars can reduce the number of non-alcohol related accidents by 80%, shouldn’t drivers (and the insurance companies that issue policies) be prepared to take on the costs of accidents?

I would rather see every available piece of spectrum provided to households that pursue a self-sustainable path. For example, using unlicensed spectrum for their internal needs like monitoring electricity usage or connecting their homes to their rooftop solar panels or wind turbines. Or using unlicensed spectrum to connect with neighbors and public safety.

The Obama administration’s nanny-state approach to the use of unlicensed spectrum by going to bat for initiatives like driver-less cars is a waste of a valuable resource.