Wednesday, June 5, 2019
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Broadband Speed and Unemployment Rates
STREAMLINE Small Cell Deployment Act
Editorial: Congress knows the Internet is broken. It’s time to start fixing it.
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We examine the effects of broadband speed on county unemployment rates in Tennessee. We merge the older National Broadband Map dataset and the newer Federal Communications Commission dataset in lengthening our broadband access data over the period 2011-2015. Extending the dataset improves the precision of the estimates. Our panel regressions control for potential selection bias and reverse causality and show that broadband speed matters: unemployment rates are about 0.26 percentage points lower in counties with high speeds compared to counties with low speeds. Ultra-high speed broadband also appears to reduce unemployment rates; however, we are unable to distinguish between the effects of high and ultra-high speed broadband. We document the beneficial effects of the early adoption of high-speed broadband on unemployment rates. Better quality broadband appears to have a disproportionately greater effect in rural areas.

The Federal Communications Commission has preliminarily voted to cap spending on the FCC's Universal Service programs, which deploy broadband to poor people and to rural and other underserved areas. The recent approval of a Notice of Proposed Rulemaking is a preliminary step—the FCC will take public comment on Chairman Ajit Pai's plan for three months before moving to a final vote. The FCC technically won't begin the public-comment period until after the NPRM is published in the Federal Register, but the FCC proceeding's docket is online.
The proposed cap of $11.4 billion is the same as the sum of the four programs' budgets for 2018 and would be indexed to keep pace with inflation under Chairman Pai's proposal. The new cap wouldn't have an immediate impact on actual spending, because it's higher than current spending. The FCC projects that the USF's total disbursements will be $10.2 billion in 2019 and remain below $10.5 billion annually through 2023. But the USF's Lifeline program is underutilized. It provided subsidies to 10.7 million low-income subscribers in 2017, even though 38.9 million American households met the program's low-income requirements. There's still room for Lifeline to grow, as actual spending was $1.14 billion in 2018 despite a budget of $2.28 billion. But the proposed budget cap could rule out expansions that either dramatically raise enrollment among low-income Americans or significantly raise the subsidies, which are typically just $9.25 per household per month.

Verizon has avoided paying local taxes on telecommunication equipment in many New Jersey municipalities over the past decade, but a proposed state law would force the company to pay back taxes for all the payments it didn't make. The bill, filed on May 23 by NJ State Assemblyman John Burzichelli (D–Paulsboro), "would force Verizon to pay local taxes on telephone poles, lines, land, and other equipment that the telecom giant has refused to fork over in an increasing number of NJ municipalities, starving them of tens of millions of dollars a year in tax revenue." As of 2015, Verizon had reportedly stopped paying the tax in more than 150 of the 565 municipalities in NJ. The tax Verizon has avoided ranges from $15,000 to more than $1 million a year for each municipality, taking revenue away from local budgets or forcing residents and other businesses to cover the shortfalls. Despite not paying tax in many cities and towns, local officials point out that Verizon "continues to benefit from the use of municipalities' poles, utility lines, and switching facilities even when it no longer pays taxes," a 2015 Inquirer article said.

Senate Communications Subcommittee Chairman John Thune (R-SD) and Ranking Member Brian Schatz (D-HI) reintroduced the Streamlining the Rapid Evolution And Modernization of Leading-edge Infrastructure Necessary to Enhance Small Cell Deployment Act or STREAMLINE Small Cell Deployment Act. The legislation updates the Communications Act to better reflect developing technology and facilitate the rapid deployment of 5G networks to meet consumer demand by setting reasonable standards for public review of infrastructure siting while recognizing the unique challenges for small municipalities.

AT&T, Verizon, and T-Mobile were the biggest spenders on a pair of Federal Communications Commission auctions designed to spark investment in next-wave 5G networks. The auctions covered two swaths of wireless spectrum -- the 24 gigahertz (GHz) and 28 GHz millimeter wave bands -- frequencies once considered too extreme for cellphone service. FCC Chairman Ajit Pai has made those frequencies a cornerstone of his strategy to spur 5G investments. Bidding across both auctions totaled less than $3 billion, compared with nearly $20 billion raised in a previous FCC auction that freed up frequencies used by local television broadcasters for cellphone use.
Verizon led spending on the first auction around 28 GHz after it bid $505 million. The leading cellphone carrier by subscribers was expected to focus on that auction to fill in gaps in the more than $3 billion worth of licenses it had already bought through private purchases. AT&T spent the most on 24 GHz licenses, bidding $983 million. It was followed by T-Mobile, which bid $803 million in the auction. Midwestern carrier US Cellular Inc. also earmarked cash for licenses in its service area and won $129 million and $127 million worth of spectrum in the 28 GHz and 24 GHz auctions, respectively.

Given its past success and future potential, what challenges do Wi-Fi and its advocates face? The “Bad” news is you need access to more spectrum and that’s not easy to accomplish. Wi-Fi engineers and innovators have sought much larger swaths of spectrum—channels of 160 megahertz or more—to achieve the vast improvements needed to truly realize and expand Wi-Fi capabilities. In examining some of the spectrum bands being bandied about and targeted for unlicensed use, I hope to leave you with some optimism: changes in FCC spectrum allocations may be coming to advance your companies’ great work and improve the global Wi-Fi experience.

The House Communications Subcommittee began its review of the STELAR compulsory copyright legislation -- STELAR is the latest name for the bill, which dates from 1988, that established the compulsory license that allows satellite operators to import distant network TV station affiliates into local markets where viewers lack access to them for a variety of reasons. The act must be renewed (and historically renamed) every five years or the compulsory distant signal copyright license and a provision requiring broadcasters and satellite operators and cable operators to negotiate carriage in good faith will expire. At the hearing, there appeared to be general agreement by legislators on both sides that broadcasters provided a vital service, including local news and weather and emergency alerts and diverse programming. But there was less agreement on how renewing and/or sunsetting key STELAR provisions would affect all those. Those opposed to sunsetting STELAR could take some comfort from Subcommittee Chairman Mike Doyle (D-PA), who said that while he agreed that while the license and good faith components were hardly a perfect solution, allowing it so sunset would result in a "crisis," of lost viewership and invite bad behavior and consumer harm.

The "Internet is broken." That, according to Rep. David Cicilline (D-RI), is the sentiment animating a bipartisan antitrust review of technology titans in the House of Representatives. He is right to initiate the effort. But exploring the particulars of so sweeping a contention may take years. Meanwhile, there’s one broken thing Congress already knows it has to fix. A small group of companies has substantial control over a massive part of American life. This control has come with costs, from the flourishing of online disinformation to a flood of security breaches. The government’s proper role in solving those problems, however, is far from certain — which is why it is worth having lawmakers spend time marshaling thought and evidence to make the arguments on both sides of the big-tech breakup debate. Legislators will need to decide whether U.S. antitrust needs a systems update. But even an updated antitrust policy could not address all of the issues posed by this new world.
Senators on the Commerce Committee have been insisting for months that a bill is coming soon that would end the unfair and non-transparent exploitation of personal information. They should stop stalling now and prove that Congress not only thinks the Internet is broken but also has the wherewithal to start fixing it.
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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