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Today’s data markets require data that brings value

Today’s data markets require that there be valuable data to trade but the Federal Communications Commission doesn’t quite see it that way.  Last week the Commission voted to accept a report that concludes that 17% of the American population or approximately 55 million people, do not have access to advanced broadband.  The Commission’s determination is based on new speed standards based on the speeds that approximately 70% of broadband customers are purchasing today.

From my view of the world here in Atlanta I can’t say that the Commission has much of a case when it argues that there is no choice among competing broadband providers even when you take income into account.  Here in the West End where median income in the 30310 area code is approximately $24,606, we have seven wireline and wireless providers of internet access.  They are Comcast (100 Mbps to 1 Gbps); AT&T (10 Mbps to 25 Mbps); Verizon (10 Mbps to 25 Mbps); T-Mobile (10 Mbps to 25 Mbps); Platinum Equity (6 Mbps to 10 Mbps); Sprint Nextel (6 Mbps to 10 Mbps); and MetroPCS (768 kbps to 1.5 Mbps).

The 30331 area code has a median income of $36,349 and the same choices in internet access carriers, with the only difference being the decrease in speed provided by Platinum Equity (3Mbps to 6 Mbps).

Our more affluent neoghbors to the north in Buckhead enjoy median incomes of $65,642.  Sprint is not available as a service choice for the residents of Buckhead, but no worries.  Platinum Equity provides service speeds of 25 Mbps to 50 Mbps while Level 3 provides 1 Gbps speeds.

You can see these speeds yourself using a nifty broadband-by-zip code calculator provided by the National Broadband Plan Map.

Not to completely dis my neighborhood but the West End is not the epicenter of finance and industry.  While we have a couple grocery stores, a community and arts center, too many churches, a middle school, and a few banks, we are not generating the income that puts us on the list of high value data providers, not at an income of $24,606.  You find that action up in Buckhead.  There are enough banks, law firms, and high tech firms for you yto throw a cat at.  These are the sources of high value data.

Three of the Commission’s members would no doubt nake the argument that with higher speed broadband, the high value data economic activity I allude to would exist in the West End or even Camp Creek.  I would argue with them.  The SnapChats of the world are being bought and sold for billions while only having a staff no larger than the numerous fast food joints that pepper the West End.  These firms are not generating high value data that is made available for trade via data markets that consumers and producers access via broadband links.  The data comes from high income consumers who may not be necessarily employed in tech.

No. Raising speed standards out of sense of duty to equate everyone with everyone is not the approach our progressive friends on the Commission should be taken in order to promote broadband deployment.  Also, trying to preempt state law in order to encourage the deployment of municipal broadband is not the answer especially in neighborhoods like mine.  Half of us simply can’t afford broadband.

Links to the internet should grow organically with broadband providers meeting demand for their services when consumers signal they are ready to purchase them.  We will need to see a turnaround in economic development and incomes to see the broadband speed equality that progressives on the Commission desire.

 

http://techcrunch.com/2012/09/30/data-markets-the-emerging-data-economy/

 

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The uncertainty behind applying sec. 706 of the Telecom Act

Federal Communications Commission Chairman Tom Wheeler in the wake of the decision in Verizon v. FCC published a blog post discussing how the FCC will apply section 706 of the Telecommunications Act of 1996 to ensure an open internet.  The U.S. Court of Appeals-District of Columbia vacated the portion of the FCC’s net neutrality order that implemented anti-discrimination and anti-blocking rules.  The court left in place the FCC’s jurisdiction over broadband, much to Verizon’s disappointment, allowing the FCC to reach broadband regulation through section 706.

Mr. Wheeler, reiterating his support for an open internet, sought to assure the broadband market that his focus will be on keeping the internet vital to free speech and electronic commerce.

“I am not advocating intervention unless there is an unmistakable warrant for it”, Mr. Wheeler said. “I am not interested in protecting competitors from competition, nor am I interested in presiding over a festival of rent seeking. But I am committed to maintaining our networks as conduits for commerce large and small, as factors of production for innovative services and products, and for channels of all of the forms of speech protected by the First Amendment.”

How would the FCC intervene in broadband via section 706?  In promoting broadband deployment, the FCC could use price cap regulation; regulatory forbearance; measures that promote competition in the local telecommunications markets; and other regulating methods that remove barriers to infrastructure investment.

Price cap regulation was actually considered a regulatory alternative back in my pre-Grecian hair formula days when I would actually dive unto concrete to hit a splat shot in racquetball.  Those days are over, both for hitting the concrete on an outdoor court and for price cap regulation.  Price cap regulation was meant for incumbent local exchange carriers that could show that they were no longer dominating markets for local phone service.  In this 21st century era of true convergence, applying that method to AT&T or Verizon would reverse innovation back to the days of ISDN.  Shudder the thought.

Regulatory forbearance always sounds good on the surface, but all that would amount to is the FCC telling broadband providers that they have their fingers off the trigger but the saftety is still off.  I’d rather they straight up repeal a regulation than give a broadband provider a false sense of relief.

As for measures promoting competition in local markets … are you kidding me?  That ship has left the harbor and the pasengers all hold one way tickets.  Not only do we have local competition via a wired and wireline service, we have much choice for accessing the internet via broadband.  Here in Atlanta I can access the internet via a Verizon hotspot; my Comcast wired boradband service, and if I really let my inner geek loose, an AT&T wireline.  Talk about the need for a Communications Act re-write.

And although the FCC has rules about opening up pole attachments to communications providers, infrastructure deployment is a local matter so unless to a unitary system of national government versus our current three tiers, I expect infrastructure deployment to remain contingent on how well behaved local governments are and how long before tapering at the Federal Reserve actually comes to a halt.

Section 706 was put in place in 1996.  As an avenue for FCC jurisdiction over broadband, it creates a lot of uncertainty and will disincentivize investment in broadband platforms.

 

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As more people move to urban centers, shouldn’t broadband policy follow demand

I came across an interesting blog post on The American, a blog maintained by the American Enterprise Institute. The post’s author, Ryan Streeter, discusses the concept of agglomeration economies. According to the National Bureau of Economic Research, agglomeration economies are the benefits that come when firms and people locate near one another together in cities and industrial clusters. Even as transportation and communications costs fall, according NBER, agglomeration economies are still important.

It seems we like to cluster. In Mr. Streeter’s 2010 analysis, the world continues to urbanize with 70% of the world’s population expected to live in cities and metro centers by 2050. Due to this expected change in demographics, Mr. Streeter reasoned that state public policy will have to adjust to the increasing role cities play in driving national economies. States will have to place greater emphasis on issues of construction, green space, and traffic within cities if states themselves are to stay competitive. Rural influence in national politics will decrease as electoral districts become urban. Washington will have to take on a progressively urban mindset.

If Washington is concerned about increasing American productivity and job growth, it will have to educate itself on the relationship between urban densities and higher wages. Americans are probably moving to cities and metro areas for higher wages and probably not cognizant of the issue of higher productivity, but I would wager that not only does the availability of wired and wireless broadband help increase productivity but bottle-necking the availability of additional spectrum would adversely impact urban economies and commerce.

I would argue that the desire to work in close proximity of other entrepreneurs drives the move to cities, although I have no empirical data to back this up. The increase in co-working areas in Atlanta, Baltimore, and other urban centers may add some weight to this observation.

What does this mean for wireless broadband? It creates an exigency in the spectrum crunch. Further urbanization places increased demand on existing facilities and creates the need for innovative solutions to acquire more spectrum. It means that the Federal Communications Commission cannot afford to delay auctions and in particular must get on with crafting rules for its reverse auction for television broadcast spectrum.

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Putting a face on the Joint Center report

The Great Recession of 2007 was a bitch. Getting separated, then divorced while raising a son on my own between 2007 and 2009 only compounded matters. Having had my fill of western Maryland, I decided to head south to Atlanta for the warmer climate and to take advantage of being closer to family. As any parent will tell you, the more support you have, the less stress when it comes to child rearing. Little did I know that I was heading into a perfect economic storm in the ATL.

Finding work was next to impossible. It reminded me of a lyric from a popular song back in the Virgin Islands: “Time so hard, deh dawg an’ all a look wuk.” Translation: Times are so hard, even the dogs are looking for work. That was the Great Recession in a nutshell. I thought 2002 was bad for professionals, but that was mild compared to 2007.

Rather than mope around and ask, “Why me?”, I decided it would be a great opportunity to change careers. I was always interested in political writing and using my broadband connection made the foray into online media. Initially I picked up a gig writing for Examiner.com. They literally paid pennies, but it was exciting to write about national politics, putting together fun content pictures and all. I looked forward to e-mailing what I wrote to friends and acquaintances, taking the opportunity to express myself and how I viewed the world.

Months later, a friend invited me to blog as part of an advocacy campaign. She was on my distribution list for the articles I wrote for Examiner.com so had first knowledge of what I could do. It was and continues to be a great opportunity.

Unlike most job seekers, I had no fear of the online world. I hadn’t physically submitted a resume to any potential employer since 2002, but today people are still getting used to the idea of having to electronically submit a job application. Take for example a job fair here in Atlanta that I covered back in 2011 for Politic365.com. Job seekers, mostly Black American, stood in line for hours in front of the Atlanta Technical College hoping to see a recruiter. When people got inside to speak to companies, they were hit with a rude awakening: Employers don’t accept job applications in person anymore at job fairs. They quickly refer you to their websites in order to submit one.

For older job seekers especially, it was a surprise. Adding to the hardship must be the disproportionate amount of Black Americans whose only access to the Internet is via a smart phone. Smart phones are not designed for filling out job applications online or submitting resumes over the Internet.

The Joint Center for Political and Economic Studies’ research has shed light on how important it is for today’s job seeker to have access to broadband. It is ironic that employers have erected the use of technology as a barrier to entry into today’s labor market and that hurdling those barriers also requires use of the same technology.

I do not share the Center’s press for some government policy to address the barrier. It is tempting to argue that there is a failure in the market for laptops or personal computers, but it is difficult to draw that conclusion where the consumer opts for a $600 smart phone and a $60 a month data plan. Have American consumers with no broadband and computer at home been kept out of the laptop/wired broadband-at-home market or have they chosen to stay out?

As the labor market continues to erect these technical barriers to employment, we will need more than government policies that promote literacy skills or call for more computers in a library. Wireless companies discontinuing subsidies of smart phones would be a start. Removing the subsidies will temporarily drive smart phone prices up and force consumers to consider a choice between a smartphone and data plan or a laptop and wired broadband service.

Until a change in consumer behavior induced by changes in pricing occurs, Black Americans will continue facing technology obstacles to job searches.

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Atlanta’s entrepreneurs have choice in wireless broadband

The state of Georgia was recently named number one for business climate and at the heart of that success is the city of Atlanta. Atlanta has been particular inviting to black entrepreneurs over the past decade as seen by the increase in the city’s black-owned businesses.

Entrepreneurs may find it more appealing to be in the Atlanta area because of the choice of wireless broadband providers they encounter. At least seven licensees have access to the airwaves to provide wireless services in Fulton County, Georgia, within which Atlanta is located.

I could not verify that one of the licensees is still in business, and the mergers of Clearwire and Sprint and merger of MetroPCS and T-Mobile has arguably reduced the number to four, but even at that number, consumers still enjoy choice. According to Federal Communications Commission data, here is a list of the wireless licensees:

Access 700
AT&T
Verizon
Clearwire
MetroPCS
Sprint Nextel
T-Mobile

Although Verizon and AT&T are the big boys nationally, it’s not like they have a monopoly on spectrum licenses in the Fulton County, Georgia. For example, while AT&T has eleven licenses, a combined Sprint Nextel-Clearwire holds 14. Verizon has six licenses while a combined T-Mobile-MetroPCS has five.

Tried getting my sister to leave T-Mobile but she likes their calling plans and their policy for upgrading phones. Sorry Verizon.

This is why it’s perplexing to hear some advocacy groups rant about the lack of choice. If we didn’t have robust competition, these entrepreneurs wouldn’t be here.