October 2016

The Surprising Backbone of the Internet of Things

[Commentary] Street lights and traffic signal poles are like the Colorado Esplanade in the sky. No, I am not celebrating their function as providers of light. Their real power comes from a transformation — into neutral platforms that provide the tools of connectivity to everyone. Very few American cities (notable exception: Atlanta) have carried out this transmogrification, but every single one will need to. Santa Monica is showing the way: it is a city that will be able to control its future digital destiny, because it is taking a comprehensive, competition-forcing approach to the transmission of data.

Cities that get control of their streetlights and connect them to municipally-overseen, reasonably-priced dark fiber can chart their own Internet of Things futures, rather than leave their destinies in the hands of vendors whose priorities are driven (rationally) by the desire to control whole markets and keep share prices and dividends high rather than provide public benefits.

[Susan Crawford is the John A. Reilly Clinical Professor of Law at Harvard Law School and a co-director of the Berkman Center.]

Reverse Auction Closes With Broadcasters' New Exit Price at $54.6 Billion

The second stage of the Federal Communications Commission's reverse portion of the spectrum incentive auction closed after 53 rounds, and wireless operators will now have to pay broadcasters at least $54,586,032,836 to get access to the 114 MHz of spectrum that will be on the block in the forward auction.

In the reverse auction, broadcasters are competing to give up spectrum or move to new channels in exchange for a government payment — low bidder wins. The $54.6 billion total is a sizeable drop in price from stage one, substantially closing the gap between broadcasters' asks and wireless companies' offers, who will get to start bidding on the 114 MHz of spectrum (actually less since some of that is guard band -- buffer spectrum -- in their own stage two forward auction starting next week.

FCC Confirms Soaring Costs for Video Programming, Retransmission Fees

The average price for basic cable TV service increased 2.3% to $23.79 for the 12-month period ending January 1, 2015, driven in large part by soaring costs for video programming, according to a new Federal Communications Commission pay TV price survey. Expanded basic cable service rates increased by 2.7% between 2013 and 2014 to $69.03. Those are substantial increases, considering that the overall inflation rate was essentially flat for that time period.

FCC data also suggests that soaring retransmission consent fees were a key driver of the price increases. The average pay TV provider paid nearly $12.7 million to local broadcast stations for retransmission of broadcast programming in 2014 – up from $7.8 million in 2013. That’s an increase of 63.2% in one year. The monthly fee per subscriber per broadcast station was $1.07 in 2014, up from 75 cents in 2013 – a 43% increase. The FCC survey was based on information provided by cable TV providers and telecom companies offering video services but did not include input from satellite TV providers or AT&T U-verse. Survey results were published in the FCC’s “Report on Cable Industry Prices” released October 12.