August 2010

Reporters' Roundtable: Network neutrality

Author Larry Downes and CNET writer Maggie Reardon join Needleman for a discussion about network neutrality -- the concept of a network infrastructure that is nondiscriminatory when it comes to types and sources and the content of Internet traffic. To support Net neutrality is to support freedom, openness, fair competition, and economic growth, according to supporters. On the other hand, somebody's got to pay for the Internet, both its wires and its wireless towers and radios. Who should that be? And if someone's paying for it, shouldn't they have some say in what goes over their equipment? Isn't telling businesses what they have to do with their privately built infrastructure antibusiness, antigrowth, and short-sighted?

Broadband Performance

This paper analyzes residential consumer usage of broadband and the performance of fixed broadband connections in the U.S. The data and analyses in this paper were used to create the National Broadband Availability Target described in the National Broadband Plan (NBP), and therefore represent key inputs into the calculation of the broadband availability gap. The paper also explains how networks have evolved and could evolve over time and what drives network usage and performance demands.

Data indicate a diverse broadband consumer population with several different usage patterns:

  • The average Internet user has been online for 10 years and spends roughly 29 hours per month online at home, double the amount in 2000.
  • Faster connections are correlated with more time online.
  • In the first half of 2009, the median broadband user consumed almost 2 gigabytes of data per month, whereas the average (mean) user consumed over 9 gigabytes per month.
  • Mean usage is driven by a small set of users who consume large amounts of data.
  • Overall, per-person usage is growing substantially (30-35% per year).
  • Based on FCC analysis, there are four distinct use profiles among U.S. consumers, each with different usage characteristics.
  • For these four use profiles, actual download speed demands range from 0.5 to 7 megabits per second (Mbps), with varying quality-of-service requirements.
  • Data indicate that 80% of broadband use falls into three of these profiles, which require actual download speeds of no more than 4 Mbps.
  • Usage is increasing with greater use of video and two-way, interactive applications.

Broadband Adoption, a National... meh, whatever

[Commentary] Complex questions about relevance or, for that matter, the ranking of government priorities, lend themselves poorly to phone survey methods. The question of the 'relevance' of the Internet is, frankly, a weird one that lies outside most people's daily experience with the Internet.

In the Pew survey, relevance is a composite of several other reasons for non-adoption, including 'not interested,' 'too busy' and 'don't need it.' Such reductionism is fine except that informants may also be engaged in reductionism or substitution in their answers. Our work, which was based entirely on interviews and focus groups, often ran up against an initial rejection among non-adopters of the Internet's 'relevance' to their lives, only to find those views revised or elaborated as informants reflected on the question and on their wider set of information habits and needs. We routinely found that people who expressed disinterest in a first instance would later signal difficulty or discomfort with Internet or computer use as a major reason for non-adoption. Pew separates these categories, leading to a finding that only 1 in 10 non-users are interested in adopting but 6 of 10 need support or training. Other slippage between terms was relatively common. These effects are magnified, we would argue, in poor or otherwise marginalized communities. The poor tend to be underrepresented in phone surveys for a variety of reasons, including concrete barriers such as lower rates of landline service or English fluency; and softer barriers such as socio-economic or cultural distance from the imagined average respondent for whom the surveys are designed. Issues of trust are also important in these contexts and shape respondents' answers (for this reason we relied on community-based intermediaries to arrange meetings and interviews). The government, in particular, is often regarded with suspicion when it begins to ask questions about people's home lives. And finally, many of the 'essential service,' questions involving education or health, touch on areas that some informants consider private. These issues take time and care to unpack.

So while the Pew study isn't wrong, strictly speaking, we would argue that it is the wrong instrument to get at many of the more complex issues it chooses to explore in this space. Unfortunately, the results are easily used to take a swipe at an important new initiative. For our part, we stand by Finding #1 in our report: Broadband Access is a Prerequisite of Social and Economic Inclusion (and Low-Income Communities Know It). We're glad that the FCC knows it.

Frontier slips back on its broadband usage cap

Bandwidth metering is not popular with any broadband consumer as proven by the outcry against the trials conducted by AT&T and Time Warner Cable, but Frontier is okay with imposing bandwidth limits by softening the language of what's deemed excessive use in its terms of service (TOS).

With much of the controversy over Time Warner Cable's metering and cap trials over, Frontier is now maintaining its 5 GB cap on its DSL tiers but it has removed references to 5 GB as being "excessive." How generous of them. Interestingly, when Time Warner launched its metering trials, Frontier ran an ad decrying cable's unfair bandwidth caps to get consumers to sign up for their DSL service. Of course, when the furor over TWC's cap trial ended, Frontier went right back to imposing their bandwidth caps. In one case, the ILEC conducted a metering trial in Minnesota that would impose an up to $250 a month fee on any user that violated the 5 GB cap on its 3-6 Mbps DSL service.

Telecom Industry Opposes State Fees on Internet Telephony

AT&T, Verizon, Vonage and other leading telecommunication companies sent a letter to the Federal Communications Commission recently urging the FCC not to subject Internet telephony to state fees for the Universal Service Fund, a program that subsidizes telecommunications costs in rural areas.

States are preempted from regulating Internet telephony, also known as voice over Internet protocol (VoIP), the companies say, citing a 2004 FCC order. Nebraska and Kansas have petitioned the FCC for a ruling that would allow states to collect fees on VoIP services for the Universal Service Fund. According to sources familiar with the situation, the FCC is considering a declaratory ruling that would accomplish as much. The Telecom industry letter echoes sentiments expressed earlier this week by House Commerce Committee ranking member Joe Barton (R-TX) and the ranking member on the panel's Communications subcommittee, Cliff Stearns (R-FL). According to the National Association of Regulatory Utility Commissioners, the law has already made clear that Internet telephony services are obliged to contribute to state Universal Service Funds. "There is no dispute on the law," said Brad Ramsay, the association's general counsel.

Zell to bankruptcy court: If lower creditors get money back, I want mine

Tribune Company Chairman Sam Zell is demanding his share of repayment in the media company's bankruptcy if lower-priority creditors, emboldened by a recently released examiner's report, get anything.

EGI-TRB LLC, the company that the real estate mogul created to invest $315 million in debt and equity in the 2007 Tribune leveraged buyout, filed a conditional objection to the current plan of reorganization this week, saying it expects its debt claims to be repaid if creditors whose trustee is Wilmington Trust Co. get any payment. The Wilmington creditors have about $1 billion in claims known as the "phones" notes. EGI-TRB is slated to get nothing under the proposed reorganization plan currently on file in the Delaware Bankruptcy Court. But that plan is now in flux in the wake of a bankruptcy examiner's report buttressing Wilmington creditors' allegations against Tribune lenders that Mr. Zell's deal left the company insolvent. Tribune attorneys have said that changes to the plan are likely.

FCC Report Shows TV Accessibility Complaints Continue to Climb

On August 13, 2010, the Federal Communications Commission (FCC) issued its first quarter 2010 Consumer Complaints Report. Among the general complaints, the quarterly report shows some disability-related consumer complaints/inquiries regarding video description, closed captioning, and emergency access to video programming.

Complaints about hearing aid compatibility, accessible phones and services (Secs. 255 and 251), relay services and other disability requirements are not included in this report. COAT notes -- not for the first time-- that the FCC reporting about disability complaints/inquiries does not state any trends, outcomes or resolutions of these television complaints, or if further investigatory steps were taken. Hopefully, the new reporting requirements in S.3304, once enacted, will stimulate the FCC's Enforcement Bureau to more action.

Confidence in Newspapers, TV News Remains a Rarity

Americans continue to express near-record-low confidence in newspapers and television news -- with no more than 25% of Americans saying they have a "great deal" or "quite a lot" of confidence in either.

These views have hardly budged since falling more than 10 percentage points from 2003-2007. Americans' confidence in newspapers and television news is on par with Americans' lackluster confidence in banks and slightly better than their dismal rating of Health Management Organizations and big business. No matter the cause, it is clear the media as a whole are not gaining new fans as they struggle to serve and compete with growing demand for online news, social media, and mobile platforms.

Three Reasons Over-The-Top TV Apps Will Beat Big-Cable

With Apple bringing its second-generation living room box to market, it might be time for cable carriers to reconsider their decade-plus journey through the interactive TV desert. The Cupertino giant isn't the only competition, after all; Google's app-platforms are coming to an HDTV near you soon, the outlook for big cable's own app efforts has never looked more dim. So why are over-the-top apps likely to win out over the cable industry's efforts?

  • Carriers are too slow and cautious. Speed is perhaps the biggest reason carriers are being left in the OTT app dust. Cable MSOs have been cautiously developing their app-platform for over a decade. But they have been slowed down by a combination of factors: a large installed base of underpowered infrastructure, a fiscally conservative predisposition towards investing CAPEX, a lack of enthusiasm for the necessary market development needed for interactive services (at retail, developer and hardware partner levels) and glacial testing and rollout process for their interactive services.
  • The mobile-market proved the OTT app model works. In a sense, over-the-top won in mobile as well, when Apple, and later Android, clearly beat out on-deck carrier app stores in the U.S. If that fact is any indicator, Apple, Google and others building on their platforms could conceivably move ahead of the MSOs in reaching consumers with app-platforms in just a few years.
  • Where developers go, consumers will follow. Anyone who knows someone working on an iPhone app, raise your hand. Now how many know someone developing a Java app for EBIF/OCAP? Thought so. Developer momentum is key; with an installed base of hundreds of thousands of hungry iPhone and Android developers now seeing a new market for TV apps, chances are high that these markets will see an explosion of innovation over the next few years.

Private Sector Shows Support for Meaningful Use

Now that the Department of Health and Human Services has announced final rules for meaningful use of electronic health records, we have a framework that will enable action by players across the board -- in both the private and public sectors.

Some of those players announced their action plans yesterday -- putting their weight behind the meaningful use goals and pledging to work together. At a recent meeting on Advancing EHR Adoption and Meaningful Use sponsored by Health Affairs and Brandeis University's Health Industry Forum at the National Press Club, payers, providers, and certification and licensing boards came together to announce early plans for supporting rapid adoption and meaningful use of electronic health records. With the meaningful use goals as their framework, these representatives of the private sector are formulating a strategy for the transformation of health care in our country through the use of health IT. These are indeed significant and encouraging first steps, occurring a mere three weeks after announcement of the final phase 1 meaningful use rules. We applaud their efforts and we look forward to more payers, providers, and others in both the public and private sectors joining the team to move together towards our common goal.