Regardless of whether the Federal Communications Commission ultimately reclassifies broadband termination as a Title II telecommunications service or not, the agency will likely justify its efforts to regulate broadband service based on its mandate in Section 706 to “encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans” using “measures that promote competition [and] remove barriers to infrastructure investment.”  Indeed, at the center of the agency’s net neutrality argument is the theory of a “virtuous circle,” whereby innovation and investment at the edge of the network increases the demand for advanced telecommunications capability” and thus, in turn, drives investment …
Read more

Last December, I authored a blog entitled Price, Profit, and Efficiency: Mark Cooper’s Bungled Analysis.  Using basic economics, my blog describes in detail why a report authored by Mark Cooper from the Consumer Federation of America (“CFA”) entitled Comparing Apples to Apples:  How Competitive Provider Services Outpace the Baby Bell Duopoly — Municipal Wireline and Non-Baby Bell Wireless Service Providers Deliver Products that are More Consumer-Friendly reached a conclusion that was not supported by economic theory.  Mark’s argument was that AT&T and Verizon charge higher prices and earn higher profits than do Sprint and T-Mobile and that such an outcome prescribes “a really good suspicion …
Read more

Last week, the D.C. Circuit in Verizon v. FCC issued its much-anticipated ruling on the Federal Communications Commission’s Open Internet Order.  In this decision, the court found that because the FCC had determined that broadband is not being deployed on a reasonable and timely basis to all Americans, Section 706 of the 1996 Telecommunications Act vests the agency “with affirmative authority to enact measures encouraging the deployment of broadband infrastructure” and, by extension, the power “to promulgate rules governing broadband providers’ treatment of Internet traffic.” (Slip Op. at 4.)  While the court remanded both the “no blocking” and “non-discrimination” portions of the Open Internet Order, …
Read more

Last month, I was generously invited to join a panel put together by the New America Foundation (“NAF”) at a Capitol Hill event entitled Spectrum Auctions: Promoting More Mobile Market Competition . . . or Less?  (For those interested, video of my panel is available here.)  It was an honor to participate, and kudos to Michael Calabrese from NAF for putting together a great event.  On the panel, I was joined by Mark Cooper (Consumer Federation of America), Fred Campbell (Competitive Enterprise Institute), and Peter Cramton (professor at the University of Maryland).  I found the discussion interesting, informative, and mostly civil.  The variance in the …
Read more

Aujourd’hui ce qui ne vaut pas la peine d’être dit, on le chante.   This line, from Le Barbier de Séville, is translated as, “Nowadays what isn’t worth saying is sung.”  International comparisons of broadband services certainly fall into this category, and this week the New America Foundation is singing again with a 2013 update to its 2012 Cost of Connectivity Report.  While New America’s 2013 Report has garnered some glowing accolades in the press (see, e.g., here and here), the hard reality is that New America’s 2013 Report continues to commit all of the numerous technical errors I highlighted in my earlier blog critiquing …
Read more

The Federal Communications Commission is at a crossroads.  Burdened with implementing laws designed for a market structure of a bygone era—and with little prospect of a comprehensive legislative update on the horizon—incoming FCC Chairman Tom Wheeler faces a daunting task to adapt and modernize the agency’s approach to regulation so that we can remove, in President Obama’s words, those rules which have “outlived their usefulness.”  Equally as important, Mr. Wheeler has the related and no less daunting task of re-establishing the FCC’s credibility with the industry, Capitol Hill, the courts and (most importantly) the public as the “expert” agency which not only uniquely understands the …
Read more

Two weeks ago, the Federal Communications Commission released its Fifteenth Report on the assessment of competition in the market for the delivery of video programming.  As both George and I were members of the core team of FCC staffers who wrote the very First Cable Report (and its insightful Appendix H) way back in 1995, I could not help but marvel at the growth and development of the industry over the last eighteen years. Of particular note to me were the FCC’s findings that not only do nearly 131 million (approximately 99%) of American homes have access to three multichannel video programming distributors or “MVPDs” …
Read more

Two weeks ago, the Phoenix Center held its Second Annual Rooftop Policy Roundtable where we focused our attention on the complex issue of the IP Transition.  We really appreciated everybody coming out to the event, particularly given the Washington DC heat and humidity (not to mention the thunderstorm).  After giving myself some time to think about the excellent conversations we had, I thought I would use this blog to highlight what I believe to be the major takeaways from the event. First, it became immediately apparent (at least to me) that the IP Transition is not a discrete issue; instead, the IP Transition concerns the …
Read more

Six years ago, the Phoenix Center released (and later published) a paper entitled Network Neutrality and Foreclosing Market Exchange: A Transaction Cost Analysis.  In that paper, we analyzed the effects of network neutrality proposals that foreclose or severely limit market transactions between content providers and broadband service providers.  Our model revealed that under plausible conditions, rules that prohibit efficient commercial transactions between content and broadband service providers could, in fact, be bad for all participants: consumers would pay higher prices, the profits of the broadband service provider would decline, and the sales of Internet content providers would also decline.  As a result, such proposals would …
Read more

Get Adobe Flash player