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Fred Campbell points out flaw in FCC “pick winners” strategy

If the Federal Communications Commission is really interested in ensuring the deployment of broadband, its broadcast spectrum policy of allowing Sprint and T-Mobile to get more low band spectrum in hopes of getting broadband rolled out to rural customers may be dead on arrival.  That’s my takeaway from a blog post by Fred Campbell of the Center for Boundless Innovation in Technology.

Mr. Campbell highlights Sprint and T-Mobile’s earlier conclusions that deploying mobile rural broadband is an expensive proposition.  having spectrum is one thing.  Building the actual infrastructure is another.  Deployment is still about the bottom line and building towers and laying cabling over less densely populated areas relative to urban areas is still not cost effective.  Quoting Mr. Campbell:

“As a result, Sprint and T-Mobile have chosen to rely primarily on roaming agreements to provide service in rural areas, because it is cheaper than building their own networks. The most notorious example is Sprint, who actually reduced its rural coverage to cut costs after the FCC eliminated the spectrum exemption to the automatic roaming right. This decision was not driven by Sprint’s lack of access to low frequency spectrum — Sprint has held low frequency spectrum on a nationwide basis for years.”

I would go one step further.  By taking away from AT&T and Verizon the opportunity to get more lower frequency spectrum and shifting it to Sprint and T-Mobile, broadband deployment suffers a double whammy.  Not only will rural customers not see additional mobile broadband deployment from Sprint and T-Mobile, rural and urban consumers won’t see additional broadband deployment by AT&T and Verizon either.  All this picking and choosing does is erode AT&T and Verizon’s ability to grab a little more market share while serving their current customers and adding new urban and rural consumers.

This is not how you enhance a competitive environment in wireless.

 

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To get the best out of broadband, be extraverted

Posted March 14th, 2014 in Broadband, economy, employment, entrepreneurship, social network, urban and tagged , , , , by Alton Drew

Yesterday I met with my old friend Phyllis for lunch.  We met at Florida State and would meet at 5:30 in the mornings a couple times a week to play racquetball.  I think in 21 years I’ve only won two games against her.  In addition to friendship, as business people and lawyers, it’s also good to trade information and knowledge that may benefit both of us or someone we may know who is in need of help.

Yesterday’s lunch also helped me to put this article in to some better context.  Mashable.com’s Samantha Murphy Kelly wrote an article recently about who she describes as the world’s most connected man.  The subject of the article, Chris Dancy, reportedly has from 300 to 700 systems running at any given time, systems that constantly provide him with real time data.  The data gives him feedback on how well he’s sleeping, his fitness levels, etc. According to Mr. Dancy, ”I’m much more aware of how I respond to life and take steps to adjust to my environment. I’ve also formed better habits thanks to the feedback I’m getting.”

Wireless devices, mobile-ready websites, and consumer demand for data combine to create a bundle of personal information that either we use, as Mr. Dancy does, to determine where we are at and how well we are doing in order to get there.  We are creating and connecting to our digital mirrors, mirrors, ironically, that reflect a lot about ourselves to other people which raises privacy concerns.  I wonder, however, if we are using wireless broadband to meaningfully connect with others who may be able to share knowledge and information leading to economic opportunities?

Networking maybe an overused word.  I prefer connections, but focus on the concept is more important.  For minorities entering the labor market, skills may not be enough as Nancy DiTomaso pointed out in May 2013 in a piece for The New York Times.  Inclusion versus exclusion may be the problem for blacks and other minorities seeking higher-wage opportunities.  People tend to share information about jobs with their family and friends so if you are shut out of a network based on skin color the search for work becomes harder.

Is broadband a panacea, a quick fix?  No, it is not, but it provides access to other platforms that provide alternatives to the human social networks that minorities are shut out off.  Broadband access is also fundamental to creating independent social networks through which minorities can share information on job and entrepreneurial opportunities.

It’s time to divert that feedback loop of information we have on ourselves and use broadband to share it with the right people and develop strong connections.

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There is more to Idaho than potatoes and Debbie Austin

My son and I are apparently keeping up with some of the Joneses.  Yesterday his mother came into town to visit him and presented him with a smartphone.  Yes, a smartphone.  The old man is still in 3G la la land having upgraded from a 2G flip phone back in November 2011. (I’m still smartin’ from having my chops busted by Dr. Nicol Turner Lee for having the audacity to carry a 2G flip phone in public a couple years back).  Anyway, with two cell phones in the house and no wireline, the Chuckster and I are firmly a part of the unit of analysis evaluated by Pew Research and the National Centers for Disease Control (CDC) for determining the number of households that have snipped the cord at home and rely completely on wireless access to communications services.

According to a study by the CDC, 52.3% of adults in Idaho live in households that do not have  a wire line but have at least one wireless phone.  On the lower end, 19.4% of adults in New Jersey live in households that do not have a wire line but have gone the wireless-only way.  In my home state of Georgia, that percentage is 37% while Maryland comes in at 29.4%.

A closer look at the urban areas of Georgia and Maryland show that the percentage of adults that have opted for wireless only households is higher.  DeKalb County and Fulton County Georgia show 41.8% of adults living in households where there is a wireless phone only while the rest of the Peach State is at 36%.  In Maryland, Baltimore City comes in at 39.6% while the rest of the state registers at 27.6% of adults living in wireless only households.

If you have a penchant for old school, legacy land line usage then New Jersey is the state you want to be in, according to a Pew Research study, with 78.9% of households in Tony Soprano land have at least one land line.

Age and wealth have a bearing on whether a household cuts the cord, according to Pew.  Citing additional CDC research, Pew concluded that:

“The wireless-only lifestyle is especially predominant among the poor and the young. According to the CDC, nearly two-thirds (65.6%) of adults ages 25-29 lived in households with only wireless phones, as did three-in-five (59.9%) 30- to 34-year-olds and a majority (54.3%) of adults ages 18-24. A majority of adults living in poverty (54.7%) lived in a wireless-only household, versus 47.5% of what the CDC calls the “near-poor” and 35.3% of non-poor adults; wireless-only households also predominate among Hispanics, renters and adults living with roommates.”

Policy wise this tells me that regulators should not force broadband providers like AT&T and Verizon to continue putting resources toward maintaining old copper networks.  The country, whether for aesthetics, convenience, or financial reasons, showing its preference for mobility and regulations that go against this grain only encourages inefficiencies in resource allocation.

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As city cores become populated by the educated, urban broadband takes on more importance

Posted November 22nd, 2013 in Broadband, digital divide, economy, Internet, urban and tagged , , by Alton Drew

The Federal Reserve Bank of Cleveland senior analyst Kyle Fee recently published a report finding that as America becomes increasingly urbanized, the core areas of American cities are being increasing populated by those with at least a bachelor’s degree. In his report, Mr. Fee concludes:

“Though most people in the US live in metropolitan areas, they’ve been choosing to live farther and farther from the center of those areas since the 1950s. While that trend continues to this day, there are some dramatic changes. The exodus from the center of town is slowing down quite a bit, for one. For another, those residents who now live in the central city are better educated than they used to be.”

Mr. Fee continues,

“Over the last 10 years, central business districts have increasingly attracted highly educated individuals as residents. Today, the average educational attainment rate of the urban core is almost identical to the average educational attainment rate in neighborhoods away from the core (on a population-weighted basis), and much of the gap has been closed in the last 10 years. The reasons behind the shifts are likely multifaceted, but they may include rising congestion in large, dense metropolitan areas and improvements in public safety.

In addition, there is a growing body of literature that notes the location decisions of high-skilled individuals increasingly involve consumer amenities that reflect tastes and preferences along with lifestyle. In The City as an Entertainment Machine, sociologists Richard Lloyd and Terry Nichols Clark observe changes in Chicago’s neighborhood demographics that support this analysis and shed light on the modern personal location decision. ‘The local amenities are no longer schools and churches. A residential population of young professionals with high levels of education and lower incidence of children creates a social profile geared toward recreation and consumption concerns.’ The emergence of skilled cores appears to be the manifestation of some cities becoming places that are more geared toward consumption rather than production.”

The impact on broadband? Although the paper does not address broadband specifically, young professionals are probably including in those amenities broadband connectivity. Young professionals may not only want broadband at home but also broadband on the go or mobile. According to The Washington Post, almost all degree holders in the U.S. is on line while 41% of those without a college degree are not cruising the information superhighway. The Pew Internet and American Life Project also found the highest rates of broadband usage at home was among those with college educations. Almost nine in ten college graduates have broadband access at home.

As more individuals with broadband tastes move to city core areas, those without may feel additional competitive pressures for work. Broadband access has become almost imperative for access to employment or other financial opportunities. In addition, along with the higher incomes entering city core markets, there may be increased costs for other items including food and housing and additional dollars drive up demand for services.

In face of increasing demand driven by the broadband haves, the broadband have nots may see more reasons for broadband adoption.

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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.