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Ajit Pai’s timely assessment of local, state government bottlenecks to broadband is spot on

Federal Communications Commission member Ajit Pai today issued a statement assessing state and local governments’ potential role in the delayed deployment of an all Internet Protocol (IP) digital infrastructure. Here is some of what he said today:

“It is critically important that states and local communities adopt broadband-friendly policies when it comes to rights-of-way management. When broadband service providers seek to construct next-generation networks, they need to access government-controlled land, poles, and conduits in order to lay fiber and install other infrastructure. Currently, too many providers who try to obtain such access are confronted with daunting sets of federal, state, and/or municipal regulations that often delay and sometimes deter infrastructure investment and broadband deployment .”

“More generally, to enable the nationwide deployment of next-generation networks like
Google Fiber, we need to eliminate regulatory barriers to innovation and investment at all levels
of government. Whether we are dealing with economic regulation or rights-of-way management,
we cannot apply 20th century approaches to our 21st century challenges.”

Commissioner Pai has hit it on the nail head. As I tweeted earlier today, local governments have been on an extortion rampage when it comes to extracting franchise fees for I-Net projects and funding their in-house television studios so that they can broadcast useful information like how to get your cat out of a tree without calling the fire department. These fees are eventually passed through to consumers on their cable and telephone bills.

It’s no wonder Verizon said enough is enough and opted for an agreement to just cross sell video distribution services rather than go through the onerous process of satisfying a local government’s need to play local broadcaster.

In addition, these onerous rights-of-way management requirements not only increase fees on consumer bills, but keep out potential broadband competitors. Just ask Starpower and RCN about their experiences with Fairfax County, Virginia, then you’ll see why Cox and Comcast have been sole providers of cable in that county for decades.

Mr. Pai’s assessment is spot on. If his fellow commissioners are serious about broadband deployment spreading universally throughout the U.S., then it si time they put their ears to the ground in local jurisdictions.

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Why Does Al Franken Want to Force a Market?

The Hillicon Valley reported last Thursday about Senator Al Franken’s displeasure with the settlement agreement between Verizon and the U.S. Department of Justice. The Minnesota Democrat reportedly believes that the Obama Administration via the DOJ has not gone far enough to ensure competition in the video distribution industry.

No wonder Democrats get accused of choosing winners and losers. Mr. Franken is advocating for government forcing companies to compete with each other.

It’s one thing to accuse a company of practices that keep another company out of a market, but just because Verizon knows how to provide video distribution services doesn’t mean it should be compelled to do so versus cross selling the services of another competitor.

If a third party wants to take advantage of the opening Verizon is providing by not providing video distribution services, let them step in and do so.

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How Does Denying Confidentiality to a Joint Operating Entity Agreement Encourage Access to Spectrum?

Public Knowledge, one of the Dark Lords of the Progressive Sith, filed a petition with the Federal Communications Commission asking the agency to deny confidential treatment of a joint operating agreement between Verizon and SpectrumCo and Verizon and Cox. Verizon wants to purchase spectrum from these two entities in exchange for the cross selling of each other’s services.

Public Knowledge believes that the FCC should not apply confidential treatment to information about the companies’ governance structure under their joint agreement. Public Knowledge argues that the information does not consist of trade secrets or any other information that if released would harm either of the companies’ competitive positions.

My take is, how does removing confidential treatment help the FCC make a better decision about the optimal use of a natural resource. Public Knowledge argues that keeping the information confidential may stifle innovation, and stifling innovation threatens of the public interest. Public Knowledge is probably taking some comfort in hiding behind a concept, the public interest, that has successfully avoid a concrete definition for decades if not the past couple centuries.

This comfort is more apparent when you consider that Public Knowledge, the group bringing the assertion, brings no quantitative analysis to justify its position. How do we know that keeping a joint operations agreement confidential will drive up costs for consumers? Will making its details public increase the likelihood of broadband adoption?

So quick is Public Knowledge to cite the Freedom of Information Act, it feels like they are simply happy to forego the consumer welfare analysis good public policy requires. First address quantitatively or qualitatively the consume harm. Then move to analyzing any barriers to market entry failure to act may cause or help maintain. Jumping to a FOIA analysis, though acceptable by jurisprudential warriors, only tells me that Public Knowledge is more interested in being overly nosey.

With cable providing shows online, who needs DVR and TiVO?

Cox Communications yesterday announced that its subscribers can now view on-demand programming on Cox’s website. Miss a show or news? No problem. Go to Cox’s website after the show premieres and check it out there.

The idea makes sense. As a distributor of content, a cable company should take advantage of as many platforms as possible. It’s good for the content provider because greater access by consumers means that there is greater engagement with the content provider’s product.

This is also good for promoting wired broadband adoption. Since only subscribers to Cox can take advantage of this feature, it encourages consumers to get wired, which leads to benefits that only wired broadband access can provide.

One downside may be the digital recording industry. If I can access my programming online, why bother going through the machinations to set up a recording of a favorite TV show?