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October 14th, 2013 3:08 pm
CFIF Technotes
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(1)  A new study from the Internet Innovation Alliance (IIA) shows how American consumers continue to abandon old-fashioned wireline telephone service, but Federal Communications Commission (FCC) bureaucratic inaction in the transition to all Internet Protocol networks (the “IP Transition”) threatens harm to consumers, our economy and market competition:

To ensure that ILECs can continue to provide innovative solutions for consumers and compete effectively against other platforms, they must be free to make the best use of their capital. That, in turn, means dedicating their capital to IP – and fiber – based broadband networks, rather than tying it up in obsolete copper-based circuit-switched networks.  At the end of 2012, the ILECs’ share of the consumer voice, broadband-access, and video markets was 34%, 14%, and 10% respectively.  It is time to stop treating the ILECs as monopolies that must be hobbled and start treating them as useful assets whose health is important to this nation’s economy and global competitiveness.”

(2)  Similarly, Raymond J. Keating of the Small Business & Entrepreneurship Council (SBE Council) summarizes how the FCC’s upcoming auction of low-frequency spectrum currently used by TV broadcasters over to wireless firms is fraught with bureaucratic overreach and market interference, citing a study by Duke University’s Leslie Marx:

This incentive auction would have the TV broadcasters getting a split of the proceeds from the auction.  But some, like the Justice Department’s Antitrust Division in a filing with the FCC, argue that the auction rules should be set to provide an advantage for smaller carriers – such as Sprint and T-Mobile – over the largest mobile service providers, i.e., AT&T and Verizon.  Unfortunately, some fail to understand the competitive market process and how businesses gain market share.  Others more cynically are attempting to use government to manipulate the rules of the game in their own favor.”

(3)  Bloomberg.com reports on more positive news for the FCC, however, courtesy of the U.S. Supreme Court:

The U.S. Supreme Court turned away a challenge by five power companies to new federal rules that lower the fees telecommunications companies must pay to attach lines to electric utility poles.”

(4)  Over at The Wall Street Journal, meanwhile, Holman Jenkins puts on his usual must-read clinic.  In his latest piece, Jenkins details successful Internet service providers’ efforts to “tunnel under the regulatory morass that inhibits physical broadband deployment”:

All this renders even more quaint the scrap over ‘net neutrality.’  Verizon is battling in a U.S. appeals court the FCC’s effort to impose this regulatory conceit on the broadband industry – with certain bloggers insisting that if Verizon wins, it will represent “the end of the Internet,” because, you know, there’s not enough competition to make sure broadband operators don’t “censor” the Internet in their own interest by blocking access to websites that compete with their own services.  Uh huh.  The truth is, competition has been more than adequate so far to police the Internet, and now competition is getting jacked up a serious notch as the video explosion stimulates a deluge of new investment. Now if the regulatory establishment would just take ‘yes’ for an answer.”

(5)  USA Today highlights how mobile communications advances have improved natural disaster relief:

Natural disasters are on the rise.  Reported incidents have more than doubled since 1980, and in 2010 alone, the combined impact of earthquakes, hurricanes, floods and other calamities forced 42 million people to flee their homes.  Thankfully, advances in mobile communications have spread to all corners of the globe, providing the victims of disasters much easier contact with relief workers, and each other.”

(6)  The Hill’s Technology Blog details House Energy and Commerce Committee Vice-Chairwoman Marsha Blackburn’s (R – Tennessee) comments on FCC interference with private telecom investment:

The Federal Communications Commission (FCC) has a ‘regulatory addiction and … penchant for picking winners and losers’ and the laws governing the agency need a ‘substantial overhaul,’ House Energy and Commerce Vice-Chairwoman Marsha Blackburn (R – Tenn.) said Wednesday.  The agency is hurting the telecommunications industry and crowding out private investment because it ‘is fixated on growing its jurisdictional footprint and expanding its influence in other areas,’ Blackburn said, speaking at a Telecommunications Industry Association event.”

(7)  Fiercetelecom.com reports on the TIA 2013 tradeshow, where keynote speakers from AT&T and Verizon lamented the federal regulatory murkiness that inhibits the TDM-to-IP transition:

AT&T and Verizon envision a blended wireless and wireline service world, but regulatory executives from both telecos said during a policy keynote session at the TIA 2013 tradeshow that a lack of regulatory clarity in transitioning their legacy TDM networks to IP is a key barrier.

‘In 2009, the FCC set some very ambitious objectives, one of which was a complete shutdown of the TDM architecture and merge to IP by 2017,’ said James W. Cicconi, Senior Executive Vice President of External and Legislative Affairs for AT&T.  ‘We’re here in 2013, and no single thing that I can discern has been done to advance that objective.’  Cicconi said that he has gotten little, if any guidance from the FCC on the next step.

And Craig Sillman, Senior Vice President of Public Policy for Verizon, said that while the telco has benefitted from a ‘light touch’ regulatory approach for advancing its wireless business, legacy voice service regulations have hindered its wireline moves.”

(8)  Finally, Mobile World Live reports on a wide range of CEOs repeating their call for lighter regulation:

The opening keynote session at Mobile World Congress brought together the chief executives of AT&T, China Mobile, Telecom Italia, Telefónica and Vodafone.  Under the theme of mobile operator strategies, talk of digital revolution and unprecedented industry transformation – spurred on by LTE and cloud-based technologies – was dominant…   But if the rapid development of networks and digital eco-systems is to continue, and help boost GDP in the process, much more investment will be required.”

The biggest takeaway from this week’s Technotes?  The FCC has its work cut out for it if it truly seeks to advance innovation and modernization.

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