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Another Example of Regulatory Capture

As you observe (or hopefully, participate in), the debates around network neutrality or universal service fund reform, remember that many of the loudest voices in support of industry positions are likely to be astroturf front groups.  Between extremely well-financed astroturf organizations and industry-captured regulatory agencies, creating good policy that benefits the public is hard work.  It helps to study how industry has gamed the FCC in the past -- as documented by David Rosen and Bruce Kushnick in a recent Alternet article.

At the risk of being sarcastic, we can thank the FCC for working with the industry to make our phone bills to easy to read - an example is available here.

Feb 7 Debate on the National Broadband Plan

Readers of this site may be interested in an upcoming debate between Craig Settles and Blair Levin, the architect and chief defender of the National Broadband Plan.  On Monday, Feburary 7, New America will host and webcast the event.  Tune in at 10:00 EST to hear these two discuss the plan, with moderators Amy Schatz (Wall Street Journal), Stacey Higginbotham (GigaOm), and Cecilia Kang (Washington Post).

Craig is a champion for local, community owned networks, whereas Blair Levin justified the National Broadband Plan's turning a blind eye to the lack of competition in broadband by saying it would have been unpopular with the massive carriers to challenge their dominance.  

Responding to Broadband "Goals" in Obama's SOTU Address

Wally Bowen, the Founder and Executive Director for the Mountain Area Information Network in Asheville, North Carolina, wrote the following piece after President Obama's State of the Union Address.  He gave us permission to reprint it below.

Last night in the State of the Union address, President Obama called on Congress to help “win the future” by, among other things, rebuilding America's infrastructure.

On broadband Internet access, the president was unequivocal: wireless broadband is the way forward (item #1 below).

However, he did not mention the FCC's recent approval of “open Internet” protections that are widely believed to be unenforceable. Indeed, just a few days ago Verizon filed suit to invalidate these rules via a preemptive, knockout blow.

Congress is not likely to pass any meaningful net neutrality/open Internet rules. This means that the Internet is completely exposed to “corporate enclosure” by a handful of cable and telephone companies and their business partners (Apple, Google, FaceBook, et al).

Our only alternative for preserving an open Internet -- and the freedom to innovate and use applications of our own choosing -- is the creation of non-commercial, community-based broadband networks (item #2 below).

MAIN logo

Fortunately, Asheville and WNC are ahead of the game with our nonprofit fiber networks (ERC Broadband, Balsam West, French Broad EMC, et al.) and nonprofit wireless networks like the Mountain Area Information Network (MAIN).

The way forward will be difficult. While the commercial carriers have been somewhat tolerant of nonprofit “middle-mile” fiber networks, they view nonprofit “last-mile” providers of broadband service to homes and businesses as “unfair competition.”

Indeed, 15 states have already passed laws – pushed by cable and telco lobbyists – to prohibit “last-mile” municipal broadband networks. A similar law was attempted, but tabled, in the last two sessions of the N.C. General Assembly. This law will no doubt re-appear in the upcoming session.

Dave Burstein Reflects on FCC Policy

Dave Burstein of DSL Prime is interviewed on a recent episode of America's Report on TelecomTV.

This video is no longer available.

The Economist Again Blasts US Anti-Competitive Telecom Policy

The Economist has again editorialized about US telecom policy, in this case specifically about network neutrality.
This debate is loudest in America, uncoincidentally the developed market with the least competitive market in internet access. Democrats, who are in favour of net-neutrality rules, insist regulation is needed to prevent network operators discriminating in favour of their own services. A cable-TV firm that sells both broadband internet access and television services over its cables might, for example, try to block internet-based video that competes with its own television packages. Republicans, meanwhile, worry that net neutrality will be used to justify a takeover of the internet by government bureaucrats, stifling innovation. (That the internet’s origins lie in a government-funded project is quietly passed over.)
They take a fairly middling approach, regarding the network neutrality rules as decent, arguing that some measure of discrimination should be allowed and could be beneficial (one wonders if they truly thought deeply about this: before YouTube, connections would have been optimized against streaming traffic and YouTube may never have succeeded). In any event, they answer their own question: the real problem in the U.S. is lack of competition among Internet service providers.
These details are important, but the noise about them only makes the omission more startling: the failure in America to tackle the underlying lack of competition in the provision of internet access. In other rich countries it would not matter if some operators blocked some sites: consumers could switch to a rival provider. That is because the big telecoms firms with wires into people’s homes have to offer access to their networks on a wholesale basis, ensuring vigorous competition between dozens of providers, with lower prices and faster connections than are available in America. Getting America’s phone and cable companies to open up their networks to others would be a lot harder for politicians than prattling on about neutrality; but it would do far more to open up the net.
Unfortunately, they do not consider another remedy: local ownership that is accountable to the public.

FCC Survey: 80% of Schools/Libraries Have Insufficient Broadband Connections

The Federal Communications Commission released the results of a survey of libraries and schools, the 2010 E-Rate Program and Broadband Usage Survey - announcement here [pdf] and full report here [pdf]. As critical as we are of the FCC, I would like to note that the FCC is doing a better job of collecting data than it did in the past. I want to highlight a few interesting pieces from the report. Of the respondents, only 21% of schools and 13% of libraries have connections riding on fiber-optics. Half of schools and libraries are stuck on T1 lines. Schools and libraries reported 63% and 65%, respectively, connections that were under 10Mbps. Considering these connections are likely serving many concurrent connections, they should have faster connections. The vast majority want to have faster connections: FCC Chart of those desiring faster connections The question is why they want faster connections. Only 20% say their current connection completely meets their need to conduct online testing and assessment applications - with another 44% saying it "mostly" meets those needs. Chart These gaps represent a tremendous opportunity for growth - communities should be building their own fiber-optic connections to connect these key institutions and ensure they will have affordable, fast, and reliable connections well into the future. By owning the network, these institutions will have greater control over future costs and their capacity to take advantage of even newer applications. The FCC should favor locally owned networks to encourage self-reliance instead of never-ending subsidies to private carriers who have little incentive to lower prices and increase investment.

Problem of Scale Hurts Frontier with FiOS

Frontier has been bitten by the same disadvantage many communities face when building their own networks -- little market power means having to overpay for everything. When Frontier bought millions of Verizon rural lines, it bought a few FiOS connections as well. But not enough to gain any bargaining power with channel owners. So Frontier had to raise the costs of its video services up for 46%. Lest anyone feel too sorry for Frontier, they are doing just fine. It is their customers who suffer. But it is a reminder that the issue of scale and market power are barriers to all competition, not just community networks. If we want to have real competition in this country, the Congress and the FCC need to stop ignoring the problems caused by massive players distorting the market. This unregulated market is an invitation for big players to join together and screw everyone else.

Broadband Pricing: Les Mis Style

We're about to start a new year and thanks to the FCC, we'll see some expanded creativity from the private broadband carriers who want to raise the prices we pay. In fact, you might not be aware of the lengths to which they have already gone. Illustrated nicely by this graphic from the folks at New Networks. dirtybill.jpg But now they have increased power to increase the prices they overcharge us in novel ways. I'm a sucker for Les Misérables, so when a friend reminded me of some of the lyrics, I couldn't help but post them up here as they seem appropriate. Some things never change. From Master of the House: les-mis.jpg

THENARDIER Enter M'sieur Lay down your load Unlace your boots And rest from the road (Taking his bag) This weighs a ton Travel's a curse But here we strive To lighten your purse Here the goose is cooked Here the fat is fried And nothing's overlooked Till I'm satisfied... Food beyond compare Food beyond belief Mix it in a mincer And pretend it's beef Kidney of a horse Liver of a cat Filling up the sausages With this and that ... Charge 'em for the lice Extra for the mice Two percent for looking in the mirror twice Here a little slice There a little cut Three percent for sleeping with the window shut When it comes to fixing prices There are a lot of tricks he knows How it all increases All those bits and pieces Jesus! It's amazing how it grows!

Les Mis Photo used under Creative Commons License, courtesy of daviddmuir.