October 2014

Silicon Valley’s power players have learned that Washington can be a political asset -- and a cultural hazard.

Google, Facebook and other tech giants have been spending furiously inside the Beltway as they seek sweeping changes to the country’s patent, privacy and immigration laws. But as these companies angle to improve their political fortunes, they’ve also backed candidates and causes that are at odds with the beliefs of the larger tech community back home -- and the industry has faced plenty of criticism as a result. For well-established Washington insiders, these strange bedfellows are merely the price of doing business. But for tech companies, still learning to navigate politics, the new relationships are the subject of serious friction and scorn.

[Commentary] This otherwise lackluster election might change the role of money in politics in three important ways: 1) Regulated, disclosed "hard money" contributions might soon become irrelevant. 2) Broadcast television advertising might no longer drive campaign costs. 3) This might be the year that campaign finance itself becomes a viable political issue.

There are approximately 20 countries where, despite having broadband prices below five percent of their average income, broadband is still unaffordable for the bottom 40 percent (see, for example, China). In fact, only 29 countries out of the 75 studied can claim under this analysis that broadband is affordable for the 100 percent of their population. It is also interesting to note that there are 14 countries where the monthly price of broadband is more than 100 percent of the average monthly income.

Moreover, there are 39 countries with an estimated aggregated population of more than 840 million people that have broadband prices higher than five percent of monthly income for all deciles – that is, unaffordable for close to 100 percent of the population (see, for example, Iraq above). Taking into account this analysis by deciles and applying it to all the countries, an estimated 3.5 billion people do not have access to affordable fixed broadband. The analysis shows that almost 3.5 billion people are being left without affordable broadband, spread all over the world. Further analysis at the country level should be carried out to determine the different options to make broadband more affordable.

When Federal Communications Commission Chairman Tom Wheeler arrived at the FCC, he described the incentive auction as taking a cutting edge concept to market on deadline. Now is a good time to take stock of where we are and where we are going. It is also time to carefully consider and recalibrate our proposed timing for the commencement of the incentive auction.

There are undeniable impediments to FCC efforts to implement a successful auction. As Chairman Wheeler indicated several weeks ago, the court challenges to the auction rules by some broadcasters have introduced uncertainty. The court issued a briefing schedule in which the final briefs are not due until late January 2015. Oral arguments will follow at a later date yet to be determined, with a decision not likely until mid-2015. We are confident we will prevail in court, but given the reality of that schedule, the complexity of designing and implementing the auction, and the need for all auction participants to have certainty well in advance of the auction, we now anticipate accepting applications for the auction in the fall of 2015 and starting the auction in early 2016. Despite this brief delay, we remain focused on the path to successfully implementing the incentive auction.