Freedom Line Blog

Back in the days before nearly everyone possessed a cell phone, people who needed to place calls while away from home often used pay phones.  In many circumstances, it was considered common courtesy to make conversations as quick as possible, so that the next person in line could make their calls.  In crowded areas, however, some pay phones actually enforced time limits in a form of usage optimization.

Fast forward to today, with another form of optimization at issue.

In a recent letter to Verizon, Federal Communications Commission (FCC) Chairman Tom Wheeler proclaimed himself “deeply troubled” by Verizon’s announcement that it will extend its Network Optimization policy to 4G LTE devices.  “Network Optimization,” or “network management,” is not a new concept.  It enables wireless carriers to deliver the best possible service to the highest volume of customers, by optimizing the data speeds of the heaviest 5% of unlimited plan customers, but only when a specific cell site is significantly congested.  It serves as a necessary tool to ensure the best network experience for all customers, which should logically be the number one priority for wireless providers.

Under Verizon’s announced extension, customers affected will be those using a 3G or 4G LTE device on an unlimited data plan, who have fulfilled their minimum contract term, who are among the top 5% of data users and who are connected to a cell site experiencing high demand at that time.  In practice, that essentially means a person streaming a movie while playing a video game in the middle of Times Square for days on end – not the average consumer sending emails or scrolling through Facebook.

Chairman Wheeler’s letter, however, did not come as a surprise.  Unfortunately, it the type of action that we’ve witnessed all too often from President Obama’s other past FCC Chairmen.  To wit, they habitually flex their regulatory muscles and ostentatiously harass wireless providers in order to placate the 1% of digital elites, at the expense of everyday consumers.  The simple fact is that every national wireless carrier employs some similar type of network management practice, because it serves the best interest of consumers.  The US wireless market it is highly competitive, and carriers must strive to satisfy consumer demand or invite customer defection.

If Chairman Wheeler truly seeks to ensure that consumers receive the highest-quality wireless service, he would instead refocus the FCC’s best efforts toward releasing more spectrum, which constitutes a critical lifeline for the wireless industry, and which has the potential to resolve looming network congestion issues.  The FCC’s core mission is to manage spectrum – not to needlessly intervene in private market business decisions.

Accordingly, Chairman Wheeler should redirect his efforts away from government overreach designed to help the proverbial “1%” of digital elites, and more toward measures that actually matter to and benefit the 99%.

America’s century-old telephone networks using analog and physical switch technology served us well from the days of Alexander Graham Bell to the dawn of the Internet.  Twenty-first century technology, however, demands a smooth and rapid transition to Internet-Protocol (IP) services.

Fortunately, there’s actually good news coming out of the Federal Communications Commission (FCC) on that critical issue.  As noted by The New York Times, FCC Chairman Tom Wheeler announced this week that he’s directing staff to commence trials for the much-needed transmission:

The chairman of the Federal Communications Commission said on Tuesday that the agency would begin “a diverse set of experiments” next year that would begin to move the nation’s telephone system from its century-old network of circuits, switches and copper wires to one that transmits phone calls in a manner similar to that used for Internet data.  The Internet-based systems allow more information to be transmitted at one time, making possible the addition of video to phone calls, as employed by services like Skype and Vonage.  While consumers can already use those services, most of the legacy telephone networks still use analog technology, employing an out-of-date system of physical switches that is expensive to keep operating.  Those old networks make possible what is known in the communications industry as Plain Old Telephone Service, or POTS, and they use types of switches that in many cases are no longer manufactured, telephone company executives say.  The outdated switches limit the ability of companies to expand the networks to carry more traffic and impede a company’s ability to refurbish equipment.”

Some of the usual anti-market activist suspects, such as Public Knowledge, fear that the FCC’s comparatively limited authority to overregulate the Internet in the same way that it did existing telephone networks will mean a reduced ability of federal regulators to meddle as communications technology advances.  The reality, however, is that the transition to broadband and IP services has already begun as consumers freely migrate to more advanced connection methods.

The FCC should focus on what works in the real world, rather than hobble technology’s advance on the basis of unfounded fears, so this week’s announcement marks a welcome and positive milestone.