Bruce Mehlman, co-chairman of the Internet Innovation Alliance, shared some insightful thoughts yesterday prior to a discussion on Capitol Hill about the future of broadband and the Internet:

“Pro-Internet policy successes came when government removed barriers, rather than adding new ones,” said IIA Co-Chairman Bruce Mehlman. “Unfortunately those days may be ending. While there is rare bipartisan agreement that the biggest challenge to broadband-enabled growth is lack of private investment and available spectrum, there is growing disagreement on how to fix it.”

I remember 1992 vividly (which means I’m getting old if I can remember anything from 20 years ago vividly). Local telephone companies were facing competition, serious competition, for the first time. There were up to 400 long distance companies in Florida, though most were resellers. Cable companies, who were providing ILEC by-pass services, were testing technology that would allow them to challenge the local phone companies. Regulators were asking BellSouth what the hold-up was in introducing …hold your breath … here it comes …ISDN! The calls for deregulation were growing. Everyone wanted to see truly robust, innovative, and fierce competition in the telecom and advanced services markets.

Yes, there was a time that regulators backed off, and that tactic worked. You didn’t have grass roots organizations hankering to know every minute detail of how a cable company, ALEC, or ILEC ran its business. They were truly consumer oriented, concerned not only about rates, but about the delivery of services to the underserved. Even they wanted to bet on innovation delivering services.

Not today, as Mr. Mehlman correctly surmises. Today with have innovation-hindering net neutrality rules. We have grass roots organizations like Public Knowledge and Free Press actually criticizing minority groups for supporting efficiency of service delivery. These groups have prodded and cajoled the current FCC into an apparent preference for a command and control regulatory scheme. While the FCC talks “robustness” and “innovation”, its actions, supported by grass roots groups that put its consumer ancestors to shame, speak another narrative; a narrative that says that markets are inherently no good.

Bubba and 1992. Along with my slimmer figure, we miss you.

At first blush I thought Federal Communications Commission Chairman Genachowski was starting the FCC’s first reality show. What he announced late last week was a competition to see which eligible telecommunications carriers could identify effective approaches to increasing broadband adoption and retention by low income consumers. At stake is a pot of subsidies worth $25 million with the winners receiving subsidies of up to $100,000 a year for three years to implement their broadband project.

The FCC made it a point that at least one of the submitted projects should address broadband adoption and retention on Tribal Lands. The FCC did not make that point for any of the U.S. insular territories.

It’s too bad. The FCC consistently talks about how broadband can spur economic development and job growth. It goes on and on about robust technology and job creating innovation, but when it comes to delivering subsidies to the U.S. Virgin Islands, the territory gets ignored.

If the FCC is interested in low income citizens adopting broadband, then the USVI provides an ideal laboratory. According to the U.S.V.I. Bureau of Economic Research, 11% of households in the U.S. Virgin Islands live on less than $10,000 a year. One-half of households in the U.S.V.I. live on less than $35,000 a year. Twenty-five percent of Virgin Islanders lived in poverty in 2008.

What is even more unbearable are children living in poverty. Twenty-three percent of families in the U.S.V.I. or 6,206 families were living in poverty, most of them with children in the household. Twenty-four percent of families with related children under the age of 18 live in poverty. Thirty-four percent of families headed by a female live in poverty in the U.S.V.I.

I guess America’s Paradise is just a vacation spot for the FCC. When it comes to making us a part of the policy landscape, it’s not a part of the FCC’s reality.

The Federal Communications Commission issued final rules for channel sharing. The rules are the result of the recently passed Jobs Act that provides for voluntary incentive auctions of broadcast spectrum.

The FCC stressed that channel sharing is voluntary and that broadcasters and other licensees of spectrum will determine whether they want to enter into sharing arrangements. The FCC expects channel sharing to free up spectrum for wireless broadband providers.

Channel sharing doesn’t mean that an over-the-air broadcaster’s only option is to give up its entire spectrum and go out of business. Broadcasters should be able to retain just enough spectrum for one standard definition program stream, while sharing the rest of its 6MHz channel.

Overall, sounds like a non-intrusive policy for freeing up some spectrum for the mobile types while keeping the over-the-air broadcasters operational.

Yesterday Broadband for America released a study supporting continued regulatory hands off approach to the Internet. Here are some of the reports take-aways:

• Being unregulated has helped the Internet grow and expand in the face of “demand that is not just explosive in volume but unpredictable in type. Supply has unfailingly met demand, at ever-lower prices.”
• Regulated telecommunications services have been hurt by delay and rigidity. “The Internet’s responsiveness and adaptability stands in stark contrast to the rigidity created by the regulatory compensation regimes that have stifled conventional telephony. […] What makes the Internet so effective is not just its own simplicity and adaptability, but the absence of externally imposed rigidity.”
• Regulation will get in the way of innovation. “Any attempt to impose economic regulation on the Internet is likely to slow not only its own evolution but the innovation at the edge that depends on the Internet’s core.”
• “Were the Internet subjected to economic regulation, investors would expect slower growth and less responsiveness not only in the market for infrastructure, but in the edge markets for services, applications and devices that rely on it. Funding the Internet’s infrastructure would become more difficult.”

I love this quote from Bruce Mehlman captured in a piece by Broadcast and Cable yesterday:

“Now more than ever we need more spectrum in the hands of those actually serving our entrepreneurs, to ensure robust and reliable Internet service,” said Internet Innovation Alliance co-chair Bruce Mehlman in a statement. “Policies that allow the markets to deploy these resources to their highest and best use, rather than politicians’ preferences, will lead to a stronger entrepreneurial ecosystem – that means more innovation, more jobs, more cost-savings for consumers and more start-up businesses in the United States.”

If we want to get our economy going again and incentivize the deployment of broadband into unserved areas, government needs to focus on one of its core responsibilities; moving natural resources into their most productive use, with the market setting the price for those resources.