Daily Digest 3/14/2018 (Happy Pi Day 2018)

Benton Foundation


Senate Kicks Off Series of Infrastructure Hearings With Focus on Broadband

The Senate Commerce Committee kicked off a series of infrastructure hearings March 13 with one focused on broadband, including a big focus on collecting accurate date about where broadband is, and more importantly, isn't. Sen Roger Wicker (R-MS) presided over the hearing, "Rebuilding Infrastructure in America: Investing in Next Generation Broadband", saying he was greatly encouraged by the President Donald Trump's support for programs to increase broadband infrastructure in rural areas. While the President said getting broadband to farmers was a priority, he didn't actually earmark any funds for broadband in his infrastructure plan, though he did say that $50 million would be going to rural infrastructure, with states free to use all or part of that for broadband. Committee Ranking Member Bill Nelson (D-FL) pointed out that he and his colleagues had wanted direct investments in broadband to be part of any infrastructure plan and called the Trump proposal -- $200 billion in federal funds for all infrastructure, with $50 billion for rural, but no direct earmarks for broadband and the hope that the private sector leverages that $200 billion into a $1.5 trillion rebuild/buildout -- "simply inadequate on broadband expansion." He signaled it was up to the Senate Commerce Committee to step up and fill that void with "critical" direct investment in broadband, something Democrats have done in their own infrastructure proposal to the tune of $40 billion.

What does economics say about updating the Communications Act?

[Commentary] As Congress is considering whether to overrule the Federal Communications Commission’s net neutrality vote, to write a new Communications Act, or both, it would be good to review what leading economic research has said about the issues.

  • Research conclusion one: Regulations prohibiting fast lanes generally harm consumers.
  • Research conclusion two: Regulations prohibiting fast lanes generally harm the economy.
  • Research conclusion three: Regulations prohibiting fast lanes may lower network investment and content provider investment in some situations, but may not in others.
  • Research conclusion four: Blocking harms customers if it keeps them from doing legal things that they want to do.

[Mark Jamison is the director and Gunter Professor of the Public Utility Research Center at the University of Florida’s Warrington College of Business. He served on the FCC transition team for President-elect Trump.]


Chairman Pai Remarks at Satellite Industry Association Dinner

I want to thank the satellite industry for your contributions to our economy and quality of life, which sometimes go underappreciated. I want to express my appreciation for all that you do when disaster strikes. We now stand at a moment of tremendous promise for your industry—and ultimately for American consumers, who stand to benefit from your efforts. I want the FCC to help you, and with you the public, seize the opportunities that are in front of you. My top priority as Chairman of the FCC is closing the digital divide. I’ve often said that in order to bring digital opportunity to all Americans, we need to use all of the tools in the toolbox. Satellite broadband service is one of those tools

This New Wave Of Satellite Broadband Could Challenge Cable And Fiber

satellite internet has been the service of last resort for people who live in places where cable and telco broadband can’t reach. But that may begin to change as a next wave of satellite technology begins entering orbit over the earth over the next few years. The “last alternative” role of satellite service may not last forever, though. Changes are afoot in the industry. These new satellites, called Low Earth Orbit or LEOs, will be smaller and lighter and could soon cost less than $1 million each. Some investors believe the cost of these satellites will drop to around $100,000. New LEO-based services from companies will begin coming to market within the next two or three years.


Impact of Federal Regulatory Reviews on Small Cell Deployment

The objective of this paper is to independently assess the impacts of regulatory reviews required for the National Historic Preservation Act and the National Environmental Policy Act (NHPA/NEPA) on 5G small cell roll-outs by US wireless carriers. In assessing the costs wireless carriers incur in relation to these reviews, Accenture found the following:

  • 29% of deployment costs are related to NHPA/NEPA regulations when reviews are required
  • The industry incurred $36mm in costs for NHPA/NEPA reviews for small cells in 2017
  • As small cell deployment grows significantly in coming years, it is projected that wireless carriers will incur $2.43bn in NHPA/NEPA costs from 2018 to 2026
  • Savings of $1.56bn are estimated if the proportion of small cells requiring review under NHPA/NEPA could be reduced by two-thirds

A new bill could finally ban predatory inmate phone costs

March 8, a bipartisan group of US Senators introduced the Inmate Calling Technical Corrections Act that aims to restore federal authority to crack down on what prison reform advocates call the “usurious,” “abusive,” and “exploitative” business practices of a small handful of companies that dominate the $1.2 billion US prison phone industry. For Sen Tammy Duckworth (D-IL), who introduced the bill, addressing the problem of predatory prison phones rates is a practical, as well as moral, imperative. Numerous studies dating back decades have shown that family contact and communication reduces recidivism, making society safer and saving taxpayer money. At a time when lawmakers are focused on big-ticket issues like infrastructure, Sen Duckworth and her Senate colleagues face an uphill battle to push their bill through Congress. (Sen Duckworth introduced a similar bill in 2017 that didn’t even make it to the floor for a vote.) But the fact that the new bill has gained the backing of Sen Rob Portman (R-OH), a conservative Republican, shows that the measure has the potential to attract even more GOP support. A companion bill in the House could be introduced as early as the week of March 12.


Antitrust Practice, Economic Evidence and Market Reality Compel the Department of Justice to Oppose the AT&T-Time Warner Merger

[Research] Why the government’s case against the AT&T-Time Warner merger is both warranted and consistent with past enforcement practices. The case is necessary to prevent possible coordination among dominant firms that would likely thwart the development and expansion of innovative online video platforms as well as cheaper alternatives to traditional cable and satellite services. AT&T sits in the center of a tight oligopoly of a few dominant transmission and content companies that require substantial public oversight to prevent extending past abuses of both consumers and competition in the digital marketplace. An extensive analysis of decades of market and regulatory developments, both involving antitrust enforcement and regulatory policy, across all the markets involved in both AT&T and Time Warner’s various businesses delivers these key findings:

  • The application of the merger framework under the conditions in the communications sector shows that the AT&T-Time Warner merger poses a severe threat to competition.
  • Policies to prevent discrimination against independent service providers in access to critical bottleneck facilities deliver significant benefits in terms of the quality of content and consumer choice.
  • Historical antitrust interventions such as the Microsoft case delivered substantial pro-innovation and pro-consumer benefits, and the Microsoft case in particular is analogous to the AT&T-Time Warner suit due to the presence in both of real or likely vertical leveraging.
  • Given the growing importance of a small number of platforms in the digital communications space, which is described in the paper as a “tight oligopoly on steroids,” the Department of Justice’s decision to oppose is not only correct on the facts, it is squarely within the mainstream of antitrust law and practice because the merger would harm competition, slow innovation, stifle the growth of online video distribution and raise consumer prices.
  • In abandoning the 2015 Open Internet Order, the Federal Communications Commission has turned a blind eye to anti-consumer, anticompetitive practices that afflict all digital communications markets -- increasing the need for the Department of Justice to act.
  • Assistant Attorney General Delrahim should welcome the opportunity to lay out the broad basis for the decision to oppose the merger in a rich qualitative narrative during the AT&T-Time Warner trial.

This major challenge to local news has gone almost unnoticed

[Commentary] The proposed acquisition of Tribune Media by the Sinclair Broadcast Group is under consideration by the Federal Communications Commission and the Justice Department. Approval would likely trigger a hemorrhage in local reporting and voices and a sharp decline across much of the nation in balanced coverage of politics and government. The core principles undergirding the Communications Act are localism, diversity and competition. Approval of this merger, along with erasure of the previous limits on ownership, would open a floodgate, likely leading to more mergers by media conglomerates, whether liberal or conservative. This would mean more monopolies or oligopolies in broadcast news, which is a primary source of information for a significant share of Americans — those older, poorer and more rural citizens who do not have access to cable or satellite television. This merger would be a major setback for America’s media and electoral process. And it is not an exaggeration to predict that it would signal the end of local TV as we know it.

[Norman J. Ornstein is a resident scholar at the American Enterprise Institute]


Meet the FCC's 5G crusader

A Q&A with Republican Commissioner Brendan Carr of the Federal Communications Commission. Commissioner Carr is looking forward to addressing state and local regulations he believes might be holding up 5G deployment. He also addressed the recent backlash against large internet companies and said he hadn’t been contacted by a watchdog probing the agency’s chairman. “As I have looked at the infrastructure docket I’ve divided it into two main buckets, one is the federal historic and environmental review side, which we’re doing this month. The next bucket is going to be taking a look at state and local laws and looking at our authorities under [the primary communications law] to make sure that we’re all headed in the same direction to enable that deployment... The other big piece of it obviously is spectrum and the chairman in Barcelona a couple weeks ago announced that we’re going to hold a 5G auction at the end of this [year],” he said. 

via Axios

Chairman Pai Names Replacement Member to the Board of Directors of the Universal Service Administrative Company

NCTA Names Mark Kulish and Robert N. Rubinovitz as New Senior Executive Hires

Stories From Abroad

EU and US leaders differ on tech competition policy

Comments from experts and tech leaders at 2018's South by Southwest festival were a reminder that Europe's aggressive competition enforcement policies are viewed very differently on either side of the Atlantic. "The Europeans go after big successful companies... using very ambiguous anti-competitive laws," said Consumer Technology Association chief Gary Shapiro during a panel. "There’s nothing wrong with being large," said Julie Brill, Microsoft deputy general counsel and former Commissioner on the Federal Trade Commission, during a different panel. She added that the problem is when a large marketshare is "used in inappropriate ways and used to further benefit the monopolist." "We’re not in a beauty contest of being more aggressive than another," echoed Damien Levie, who heads trade and agriculture at the E.U.'s American embassy. "We look at conduct cases of what we call abuse of dominant position.”

via Axios

China to Put Media Under Cabinet-Level Control, Abolish SAPPRFT

China is to abolish the State Administration of Press, Publication, Radio, Film and Television (SAPPRFT) and is expected to set up a new media body answerable to the Cabinet, further tightening the Communist government’s control of media and entertainment. SAPPRFT, the regulatory body which currently oversees the media and entertainment sector, would be replaced by a new state radio and television administration attached to the State Council, or Cabinet. The proposal is being put to China’s ongoing national legislative session for deliberation. “The proposed administration, directly under the State Council, will be responsible for drafting policies and measures for radio and television management and their implementation, coordinating development of broadcasting undertakings and industries, promoting institutional reform in the sectors, importing radio and television programs, and facilitating the sectors to go global,” said official news agency Xinhua. The move is one of several administrative mergers within the Chinese government, announced in the past days and being voted on at China’s annual parliamentary sessions. It is also expected that China Central Television, China Radio International and China National Radio may be merged to form a new state broadcasting giant.

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Benton (www.benton.org) provides the only free, reliable, and non-partisan daily digest that curates and distributes news related to universal broadband, while connecting communications, democracy, and public interest issues. Posted Monday through Friday, this service provides updates on important industry developments, policy issues, and other related news events. While the summaries are factually accurate, their sometimes informal tone may not always represent the tone of the original articles. Headlines are compiled by Kevin Taglang (headlines AT benton DOT org) and Robbie McBeath (rmcbeath AT benton DOT org) -- we welcome your comments.

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