broadband

Broadband Stimulus Plan: Spend First, Ask Questions Later

by Nick Brown on April 13, 2009 · 1 comment

in Regulation, Tech & Telecom

There has been some noise in technology circles the last week over the FCC comment period or Notice of Inquiry (NOI) in regards to the broadband Internet portion of the American Recovery and Reinvestment Act otherwise known as “the stimulus.”

The NOI allows individuals, association groups, public policy organizations like CEI, and businesses to issue their comments, suggestions, advise—anything really—to the FCC.   This allows “the public” to describe how they feel like the funds should be spent and the best strategy to improve the state of broadband deployment in under-served an unserved areas.

The comment period is intended to help formulate the National Broadband Strategy which is required to be completed one year from the recovery act being signed in to law.  This means that the strategy will come due around the 17th of February 2010.

There is a major problem with the process that is being used in this case.  The majority of the funds will be distributed prior to the completion of this strategy that will decide how best to distribute and use them.  Cart before the horse much?

The US Department of Agriculture who has used the Rural Utilities Services (RUS) division to improve broadband distribution in the past has been awarded funds for distribution from the stimulus.  RUS plans to distribute its roughly $2.5 billion by September 30th, 2009.  The National Telecommunications and Information Administration—who received the bulk of the broadband stimulus funds—will hand out their dollars in three phases occurring Spring of 2009, Fall of 2009, and Spring of 2010.

The bill writers recognized the need to give the issue a good deal of study to attempt to create a solid plan, but the process also seems to indicate that they felt to create new jobs fast, so the funds needed to be spent fairly quickly to provide stimulus to the economy.  This creates a Catch-22 and certainly suggests that maybe these funds shouldn’t have been spent at all, or in the very least that they should not have been tied up in the stimulus.

A year-long strategy session is pointless if you hand out the money before the plan is even drafted, and there is a good chance that the strategy that comes out of the session won’t be implemented because the money will have been spent.

Most likely, the strategy will be proposed and written based on who has the funds, not who could best use them.   So this broadband stimulus is almost certain to fall short of its goal of  increasing broadband access for unserved and underserved areas.

But this is what we should expect from our new, “smarter” government.  The same old, dumb results.

LibertyWeek 32: FCC Don’t Tread on Me

by Richard Morrison on March 5, 2009

in CEI Projects, Podcast

Your hosts Richard Morrison and Cord Blomquist bring you Episode 32 of the LibertyWeek podcast with special guest Sam Kazman and surprise guest co-host Jeremy Lott. We start by looking into the possible future of the Federal Communications Commission with nominee Julius Genachowski about to ascend to the chairmanship, and then take another stroll through the New Great Depression with high-level financial talks between unpopular British Prime Minister Gordon Brown and über-popular President Barack Obama. Oregonian brewers fight a proposed fifteen cents a pint tax in Beer News, and the Lady Madoff tries to stash away tens of millions from the feds in this edition of Scandal Watch. We hit our stride with an interview with CEI General Counsel Sam Kazman and his tales of the icy global warming rally staged earlier this week here in Washington, D.C. Finally, a little belt-tightening Olympic News from the USOC.

Listen here!

Senate Broad Stimulus & Avoiding Federal “Strings”

by Nick Brown on February 6, 2009 · 1 comment

in Deregulate to Stimulate, Regulation, Tech & Telecom

Aside from the fact that the Senate lacks the necessary votes to pass its version of the stimulus, the bill does actually have a much more in-depth plan for broadband expansion into unserved and underserved areas of the country.  In stark contrast, the House version has no concrete plan.

The Senate version of the stimulus raises the amount of money spent on broadband up to $9 billion, much more than $2.825 billion in the House version.  But either amount is a dangerous giveaway to broadband providers.  Already we’ve seen banks that have been similarly “stimulated” subject to strings attached to federal dollars.  CEO pay is being limited, and more micromanagement by the administration and regulators is sure to follow.  The same will be true for broadband providers should they choose to accept federal funds.

The Senate bill also providers tax credits for companies that receive grants to build these networks in rural areas.  This is determined by the grantee adding 10% of the expenditures for current generation broadband (this is adjusted to 20% of the expenditures if the network is being introduced to an unserved area) to 20% of the expenditures for next generation broadband.  The resulting total is the tax credit that the grantee can apply for.  In the bill, current generation broadband has been defined as a 5 Mbps up and 1 Mbps down, and next generation broadband as 95 Mbps up and 20 Mbps down.

All of this amounts to a convoluted way of subsidizing the broadband industry, risking the “strings-attached”  trap that has already been set for other industries.

However, the Senate version of broadband stimulus does not make grantees abide by the FCC’s net neutrality policy statement.  Should a stimulus bill pass, it should be the bill that best benefits consumers and maintains a free market in the long run.  Even though the Senate version funnels more federal money at broadband subsidies, it at least makes an attempt to avoid the “strings-attached” problem by prohibiting this ill-conceived FCC policy from being enforced as if it were actual law or a proper rule, which it isn’t.

Again, the contrast between this bill and the House version is significant.  The House bill gives grantees little money, asks them to bear most of the burden of build-out, and then regulates and taxes these new networks as a reward for the companies’ efforts.  This strategy is doomed to fail .

The Senate version would encourage rural expansion of broadband and reward companies for taking risks.  If such a stimulus must pass, at the very least it should contain this sort of policy approach.

Costa’s Confusion on Net Neutrality

by Cord Blomquist on January 7, 2009 · 3 comments

in Tech & Telecom

I’m sad to see PC Magazine leave the newsstand, but I’m glad it’s not gone for good. Though I often enjoyed picking up a copy when stranded at a faraway airport, I usually read it online. Even after subscribing to the hard copy this year (which had to be the year it was discontinued) I absorbed most PC Mag content via my laptop.

I hope that the columnists continue to be a big part of the magazine. Not only is PC Mag home to my favorite cranky geek John C. Dvorak, but also some columnists I’ve enjoyed disagreeing with over the years.

Among them is Dan Costa, who I’ve often disagreed with on the issue of Network Neutrality. His most recent column, however, is a home-run—probably in ways he never intended.

Costa focuses on the idea that paying for the amount of bandwidth you use is entirely reasonable.  His closing line “Can’t we all agree that my mom and I shouldn’t be payin the same price for bandwidth?” is spot on.   Dan’s a professional tech writer and a huge geek.  He’s transferring a lot of a data in comparison to his mom’s rather meager consumption.

Though he certainly didn’t mean to illustrate this, Costa also illuminates the misconceptions people have about what Network Neutrality really means, or what it should mean.  Costa says he may be “bypassing” the issue of net neutrality when saying that such tiered service is OK.

This shows how confused the neutrality debate has become.  Tiers of service—like paying more for a faster connection or a larger bandwidth cap—shouldn’t enter into the debate.  Both are reasonable pricing structures for network owners to implement and neither would unfairly favor one group over another.  Tiered pricing is perfectly consistent with the “end-to-end” principle; that is to say, that it doesn’t involved network owners looking at data, slowing it down, speeding it up, dropping it, or otherwise manipulating it.

No, tiered pricing is still very neutral, other than at the last mile—that’s where network operators of all types make their money anyway.  If this weren’t neutral, one could argue that even those ISPs that only offer one connection speed with one bandwidth cap were non-neutral.  They would, after all, be offering a 0GB per month plan for those who don’t pay at all.  Charging itself would seem decidedly unneutral unless we acknoledge it’s perfectly normal to charge people for what they use.

Finally, I think Costa is right to bring up that consumers should be aware of the terms that many companies include in their contracts.  Sprint’s XOHM Wi-Max service includes language such as:

XOHM may use various tools and techniques designed to limit the bandwidth available for bandwidth-intensive applications or protocols, such as file sharing.

That’s a service caveat big enough to drive a truck through, or at least big enough to stop you from downloading an HD movie via Bittorrent on your Wi-Max connection.

My point is that the neutrality debate shouldn’t be about different levels of service being available for different prices.  That’s a no-brainer.  The real interesting debate to be had is talking about whether or not the end-to-end principle will always be the de-facto law of the Net, and just how forthcoming companies need to be if they plan on subverting that principle.

My stance?  End-to-end seems so valuable a model that it’s hard to conceive of a different one being at all desirable; but, many regulations have blocked or slowed technologies that could never have been imagined when the regulations were written.  So, let’s avoid neutrality regulations as no neutrality violations have occurred yet that haven’t be corrected by the market.

As for terms of service like XOHM’s, I think it’s up to the tech community to keep folks aware of TOS statements that leave the door open to Sandvine-like interference.  I still think it should be up to customers to decide if those non-neutral activities are OK, but companies shouldn’t be keeping methods secret or burying them in their TOS.

With that said, thanks agian to Dan Costa for a great column and farewell PC Magazine.  I will miss italicizing you.

Next Entries →