January 2015

NETWORK NEUTRALITY

THIS WEEK IN NET NEUTRALITY
[SOURCE: Benton Foundation, AUTHOR: Kevin Taglang]
[Commentary] “I intend to protect a free and open Internet,” President Barack Obama announced in his State of the Union address on Tuesday, January 20. For many that was a clear, albeit truncated, reiteration of his statement in November 2014 calling on the Federal Communications Commission to “create a new set of rules protecting net neutrality and ensuring that neither the cable company nor the phone company will be able to act as a gatekeeper, restricting what you can do or see online.” In November, the President asked the FCC to “reclassify consumer broadband service under Title II of the Telecommunications Act — while at the same time forbearing from rate regulation and other provisions less relevant to broadband services.” The broadband access industry believes Title II would saddle them with a litany of regulations on matters such as pricing and how they manage their networks. Seemingly to slow the momentum of the President’s proposal and the call of millions of commenters at the FCC, Republicans in Congress late last week started circulating a discussion draft of legislation that would carve out new authority for the FCC to enforce net neutrality. The Republican legislation is aimed at avoiding common-carrier regulation but would prevent broadband providers from blocking, slowing down or accepting money to speed up delivery of certain websites.
http://benton.org/blog/what-we-learned-about-network-neutrality-week
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THE WORLD IS WATCHING OUR NET NEUTRALITY DEBATE, SO LET'S GET IT RIGHT
[SOURCE: Wired, AUTHOR: Ambassador Daniel Sepulveda]
[Commentary] When it comes to the debate on network neutrality, the world watches what we do at home. That’s one reason that President Barack Obama's commitment to network neutrality is so important: In the struggle to protect a global, open, and free Internet, we must also protect it at home. The President’s recent call to enshrine network neutrality principles in domestic regulation echoes our diplomatic efforts to prevent any centralized power -- corporate or governmental -- from picking winners and losers on the Internet, as well as our efforts to promote freedom of expression and the free flow of information online. The fight for network neutrality, like the fight for an open and free Internet, is a clarion call for the world’s Internet users and content creators to defend what has made the Internet one of the world’s greatest enablers of global social and economic progress. In both of these efforts, the United States will lead -- at home, by ensuring that service providers cannot pick winners and losers, and abroad, by ensuring that as more and more people get access to the Internet, they are able to take advantage of all of its benefits to innovate, collaborate, and communicate with the rest of the world.
[Ambassador Daniel Sepulveda is the Deputy Assistant Secretary of State]
benton.org/headlines/world-watching-our-net-neutrality-debate-so-lets-get-it-right | Wired
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VERIZON SAYS ALLEGATIONS CALLING COMPANY TWO-FACED ARE "FRIVOLOUS...HISTRIONICS"
[SOURCE: ars technica, AUTHOR: Jon Brodkin]
Verizon is urging the Federal Communications Commission to reject a call for an investigation into statements it has made on utility rules, network neutrality, and its fiber network. Verizon was accused of "deceiv[ing] the FCC" by telecom analyst Bruce Kushnick of New Networks Institute and audit director Tom Allibone of telecom customer advocacy group Teletruth. Verizon has used its status as a telephone utility to gain favorable government treatment of its fiber network even while telling the FCC that applying similar rules to Internet service would deter private investment. Verizon concluded its response to the FCC by saying, "Verizon’s position is and has been consistent throughout the inception of its fiber deployment and NNI’s frivolous Petition should be denied outright."
benton.org/headlines/verizon-says-allegations-calling-company-two-faced-are-frivolous-histrionics | Ars Technica
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COMCAST LOBBY MACHINE
[SOURCE: Wall Street Journal, AUTHOR: Shalini Ramachandran, Gautham Nagesh, Brody Mullins]
When Comcast heard rumors that President Barack Obama was preparing to call for tough new Internet regulations, the cable giant’s influence machine swung into action. Chief Executive Brian Roberts telephoned Valerie Jarrett, Obama’s senior adviser. He pressed her for information and stressed that Comcast opposed such a move, according to people familiar with the call. But Jarrett told him nothing and the last-ditch lobbying fell flat. A few days later, on Nov. 10, President Obama called for the “strongest possible rules” to make sure broadband providers treat all Web traffic equally -- a change that would regulate Internet service like a public utility. The news took Comcast by surprise. Comcast boasts one of the biggest corporate lobbying operations in Washington, spending $17 million in 2014, second only to Google Inc. That presence is being tested now like never before. In addition to the threat of new Internet restrictions, Comcast is facing intense scrutiny from regulators on its merger with Time Warner Cable.
benton.org/headlines/comcasts-lobbying-machine-faces-test-washington | Wall Street Journal
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INTERNET/BROADBAND

CHANGES TO RUS BROADBAND LOAN PROGRAM INCLUDE RURAL GIGABIT PILOT
[SOURCE: telecompetitor, AUTHOR: Joan Engebretson]
When President Barack Obama spoke about reforms to the Department of Agriculture Rural Utilities Service broadband loan program, he was referencing changes adopted in the 2014 Farm Bill. Although the changes have received little publicity, they include a new definition of eligible service areas, a new minimum acceptable level of broadband service for projects receiving loan funding and plans for a rural gigabit pilot program. While eligible service areas previously included those with at least 25 percent of homes underserved, the new requirement is for 15 percent of homes to be unserved. Also, an important budget development is the authorization of $10 million annually through 2018 for a Rural Gigabit Network Pilot Program. Funding will be awarded to network operators for areas that do not currently have ultra-high-speed broadband, and recipients will have up to three years for their deployments.
benton.org/headlines/changes-rus-broadband-loan-program-include-rural-gigabit-pilot | telecompetitor
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RAISE THE SPEED LIMIT: ASSURING THE RIGHT TO AFFORDABLE BROADBAND
[SOURCE: Forbes, AUTHOR: Fabián Bustamante]
[Commentary] The problem with high-speed Internet in the US is not availability or speed, but affordability. A recent report from the Pew Research Internet Project shows that while 91 percent of the US adults in households with incomes greater than $75,000 per year use high-speed Internet at home, the number drops to 52 percent for those with yearly income below $30,000. This is not surprising. According to a report from the Open Technology Institute, the cost of a 25-50Mbps broadband service in Los Angeles (CA) is $70 or about 2.8 times more expensive than in London (UK). Community-owned broadband, if allowed, could offer an alternative when the market does not generate a healthy level of competition and the new BroadbandUSA initiative can help these services succeed. This is not the only model, of course. Different countries around the world have taken a number of paths toward available, fast and affordable broadband, with different forms of private/public partnerships and levels of government incentive. Whatever the plan and whoever initiates it, ensuring broadband affordability is long overdue; it is rather urgent.
[Fabián Bustamante is a Professor of Computer Science at Northwestern University]
benton.org/headlines/raise-speed-limit-assuring-right-affordable-broadband | Forbes
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SPECTRUM/WIRELESS

SPECTRUM AUCTION
[SOURCE: Wall Street Journal, AUTHOR: Jason Furman, Megan Smith]
[Commentary] America has enormous infrastructure needs that will require the federal government, together with local governments, to make significant, high-value investments. In one critical area -- the revolution in mobile broadband communications -- the government doesn’t need to invest its own money, but instead can encourage private investment and make a profit for taxpayers along the way. That is exactly what is happening now at the Federal Communications Commission’s 2015 spectrum auction, as the agency is facilitating the sale of spectrum that will be repurposed for mobile broadband use. Bidding has topped $44 billion, and the proceeds will fund the first-ever nationwide network for first responders, pay down the deficit, and cover adjustment costs for federal agencies that previously used the spectrum. The auction is an important step toward President Obama ’s goal of freeing up 500 megahertz of spectrum by 2020, nearly doubling the amount available for mobile broadband use. The Obama administration will continue to take an all-of-the-above approach to making more spectrum available, one of the most critical infrastructure projects of the 21st century.
[Furman is the chairman of the White House Council of Economic Advisers and Smith is the US Chief Technology Officer]
benton.org/headlines/how-avoid-spectrum-crunch | Wall Street Journal
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GOOGLE AND WIRELESS
[SOURCE: Wall Street Journal, AUTHOR: Miriam Gottfried]
[Commentary] Google, which makes the bulk of its money from online advertising, benefits from anything that lowers barriers to Internet access. And, unlike traditional carriers or even the Google Fiber offering, the company won’t need to worry about making a return on billions of dollars of network assets. Indeed, it might not even need to turn a profit in wireless to accomplish its broader goals. The implication is that Google could significantly undercut existing wireless carriers on pricing, particularly if it were able to shift a good portion of data usage on to Wi-Fi networks, says Craig Moffett, an analyst with MoffettNathanson. There seems little doubt that the entire industry would be better off without Google’s presence. So why are Sprint and T-Mobile apparently agreeing to partner with it? This looks like a classic prisoner’s dilemma: Sprint and T-Mobile are each pushed toward inking a deal, despite the risk to the overall industry, out of fear that its rival would beat it to the punch if it balks. If T-Mobile’s recent subscriber gains are any indication, though, price is a powerful card to play. For wireless carriers, Google’s entrance to the game is the last thing they need.
benton.org/headlines/googles-call-cant-be-ignored-wireless-investors | Wall Street Journal
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AGENDA

FCC’S JANUARY AGENDA
[SOURCE: Federal Communications Commission, AUTHOR: Public Notice]
The Federal Communications Commission will hold an Open Meeting on Thursday, January 29, 2015. The FCC will consider:
A Report and Order to ensure that accurate caller location information is automatically provided to public safety officials for all wireless calls to 911, including for indoor calls, to meet consumer and public safety needs and expectations, and to take advantage of new technological developments. A 2015 Broadband Progress Report examining whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion; and a Notice of Inquiry asking what immediate action the FCC should take to accelerate the deployment of such capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications market.
An Order announcing the conclusion of the Ninth Notice of Inquiry Concerning the Development of Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion.
Whether to take an enforcement action.
The FCC will also hear presentation on the new Consumer Help Center that provides an easier-to-use, more consumer-friendly portal for filing and monitoring informal consumer complaints, as well as accessing educational materials.
benton.org/headlines/fcc-releases-agenda-open-meeting-thursday-january-29-2015 | Federal Communications Commission
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STORIES FROM ABROAD

EU UNLIKELY TO SUPPORT BAN ON FREE UNLIMITED FACEBOOK, SPOTIFY
[SOURCE: Reuters, AUTHOR: Julia Fioretti]
European Union member states are unlikely to support an EU-wide ban on telecommunications companies offering online services such as Facebook and Spotify for free, according to a proposal by EU presidency Latvia. So-called "zero-rating", where operators offer unlimited access to certain online services -- typically Facebook, music streaming or online television -- is seen as good for competition and innovation as well as more choice for consumers. But some consumer groups, Internet activists and member states consider this to be in breach of network neutrality since it makes some services more attractive than others and operators can choose to make their own services zero-rated, thereby distorting competition. A proposal on net neutrality by Latvia says that an explicit ban on positive price discrimination -- such as zero-rating -- was unlikely to gain the support of all members. Countries such as the Netherlands and Norway already have bans on price discrimination -- meaning operators cannot offer some services outside of a customer's data allowance -- but an EU-wide ban would extend that to all 28 member states. Leaving the choice to individual governments runs the risk of a patchwork of approaches across the EU, however, contrary to its aim to develop a single market in the telecoms sector.
benton.org/headlines/eu-unlikely-support-ban-free-unlimited-facebook-spotify | Reuters
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O2-THREE
[SOURCE: Financial Times, AUTHOR: Daniel Thomas, Arash Massoudi, Josh Noble]
Li Ka-shing’s Hutchison Whampoa has entered into exclusive talks to buy the British mobile business of Telefónica for £10.25bn, a move that would create the UK’s largest mobile group. Hutchison confirmed that the two companies have entered “several weeks” of negotiations over the potential acquisition, although Frank Sixt, Hutchison’s finance director, said there was “still work to do” to reach a definitive agreement. The proposed deal would involve Hutchison paying £9.25 billion in cash and a further £1bn in deferred payments. Assuming regulatory approval, the tie-up would be completed around mid-2016. The merger would transform the British mobile market. Ofcom, the industry regulator, has long sought to maintain at least four competitors to keep prices low for consumers. Hutchison’s Three network, in particular, has been crucial in setting the lower end of pricing with cheap tariffs giving large bundles of data and calls.
benton.org/headlines/telefonica-poised-sell-o2-hutchison-whampoa-ps10-billion | Financial Times
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January 2015

Better broadband for us all

Better Communities through Better Broadband: A Coalition of Public and Private Interests Affirms the Need for Local Internet Choice

January 23, 2015 (Peggy Charren)

What We Learned About Network Neutrality This Week