Last week, the FCC held its monthly Open Meeting, and telecom issues were front and center. We sat down with USTelecom Senior Vice President Jon Banks to talk about what happened at the meeting.
Last week Congress began soliciting the views of folks interested in how much money is going to be provided to the Rural Utilities Service (RUS), a relatively small agency in the U.S. Dept. of Agriculture. USTelecom President and CEO Walter McCormick submitted testimony to both the House and Senate supporting the RUS telecom programs and offering suggestions as to how to make RUS more effective.
RUS can be a key contributor to America’s broadband future, and USTelecom would like Congress to ensure that the funding provided for the build out of telecom facilities, especially including broadband, is sufficient and well spent. Years ago there were those who contended that the job of RUS was done, that everyone had single party phone service (for those of you who can remember party lines), and that the agency should fade quietly into oblivion. Well, thank goodness that it did not, since policy makers have now rightfully decided that it would be a good idea for everyone, including rural Americans, to have modern communications facilities and service, including broadband Internet access.
Broadband communications vastly reduces the handicap of distance in rural areas, enabling services such as distance learning and telemedicine, and even just helping rural school kids access the same resources as city kids to do their homework. But for many high cost rural areas with low population density, it is just too darn expensive to build out the facilities needed to provide broadband service. That is where RUS comes in. It provides low interest loans and (a small amount of) grants to providers to construct those needed facilities. So USTelecom supports providing sufficient funding for those facilities to be built as an investment in the infrastructure, economic growth and people of rural America.
But there has been a big problem with the broadband portion of the RUS telecom program… (more…)
On Wednesday, the FCC announced the end of the 700 MHz spectrum auction, and yesterday, the Commission released the names of the winners. As many industry analysts had predicted, Verizon Wireless submitted the winning bid of $9.6 billion on the nationwide C-block spectrum; AT&T also invested heavily in the 700 MHz spectrum, bidding a total of $6.6 billion for various licenses in the B-block.
But the larger companies weren’t the only winners in the auction. FCC Chairman Kevin Martin noted that “a bidder other than a nationwide incumbent won a license in every market” in the auction and that nearly 70 percent of the licenses went to companies other than the nationwide wireless incumbents. Designated small businesses won 35% of the 1,090 licenses available.
Yesterday’s Open Meeting at the FCC touched on a number of issues related to broadband and telecom. The big news from the meeting was the release of the Commission’s newest report on broadband deployment and adoption in the U.S. As USTelecom President Walter McCormick said in a statement after the meeting:
The data released today illustrates the vibrant competition in today’s broadband market and underscores the tremendous efforts and investment that communications companies are making to deploy broadband in the U.S. The numbers also clearly show that millions of Americans are increasingly taking advantage of all that broadband has to offer. Whether for distance learning, health monitoring, protecting the environment or simply for entertainment, consumers are signing up for high-speed services at a record pace so they can reap the countless benefits that broadband delivers.
Also covered at the meeting was the adoption of an order that would bar telecom companies from entering into exclusive service contracts with the owners of multiple dwelling structures; the Commission approved a similar measure for cable video providers last year. Look for an upcoming USTelecom Vidcast with more information on yesterday’s meeting.
And save the date! The FCC has also announced a second en banc meeting to discuss network management. The meeting will take place at Stanford University in Palo Alto, CA on April 17.
At the recent winter meetings of the National Association of Regulatory Utility Commissioners, USTelecom President and CEO Walter B. McCormick Jr. and Executive Vice President Regina Hopper each addressed NARUC’s Telecom Committee on the topic of broadband.
McCormick offered his insights on what policy makers can do to help spur the deployment and adoption of broadband, while Hopper demonstrated the usefulness of USTelecom’s broadband site NextGenWeb.org as a resource for studies, news, and analysis on a range of broadband issues.
Be sure to check it out.
After weeks of bidding, over 200 rounds, and more than $19.5 billion in submitted bids, the FCC’s closely watched 700 MHz auction is slowing to a crawl and is expected to end soon.
Two big questions, however, remain on the minds of people watching the auction. The first is obvious: Who are the winners? More specifically, who has won the C-block package that adds up to a nationwide license? Verizon and Google were thought to be the companies that were bidding up the package several weeks ago, but due to auction rules, the package will be split, meaning the opportunity for one company to secure a nationwide network may have been lost. Once the auction ends, it will be a few days before the FCC releases its results, but with so many interesting players-including satellite interests, Google, nationwide telecom companies, an oil company, and numerous small companies-auction speculation has been a bit of a pastime for many industry watchers.
The second question is what will become of the apparent failure of the D-block license, a nationwide license that was to be used for a public safety/private partnership? Since the auction started in late January, there has been only a single $472 million bid for the D-block, well below the agency’s $1.3 billion minimum price. In mid-February, FCC Chairman Kevin Martin conceded that he thought an additional bid on the D-block would be unlikely, saying that the Commission would have to go “back to the drawing board” to figure out what to do with the spectrum; as of yet, the Commission has kept mum about any plans or details for a subsequent D-block auction.
Hollywood film makers are taking a strong stand against Internet regulation proposals that would add new layers of government involvement to the management of the Internet.
Dan Glickman, chairman and chief executive officer of the Motion Picture Association of America was in Las Vegas this week addressing the movie industry and members of the National Association of Theater Owners. He warned industry leaders that Hollywood was facing a growing threat of “lawlessness.”
This effort is being called by its proponents “net neutrality.” It’s a clever name. But at the end of the day, there’s nothing neutral about this for our customers or for our ability to make great movies-blockbuster first-run films-in the future. If Washington had truth in labeling, we’d call this proposal by another name: Government regulation of the Internet. Government regulation of the Internet would impede our ability to respond to consumers in innovative ways, and it would impair the ability of broadband providers to address the serious and rampant piracy problems occurring over their networks today.
You can download a copy of Glickman’s remarks here.
Movie production is a high-stakes game. The average cost to make and market a major MPAA member company film was $106.6 million in 2007. But why would film makers put those huge sums at risk if government policies impede Internet Service Providers’ ability to combat piracy? Isn’t it interesting that Hollywood, a hotbed of creativity and innovation, a place where artistic freedom is cherished above all, has seen through “net neutrality” for what it is: A threat to consumer-centric innovation and economic growth.
At the Las Vegas event, Glickman told industry leaders that the “future of the theater, unimpeded theatrical production and a vibrant aftermarket all depend on an Internet that remains free from government regulation.” He warned the group that government regulation of the Internet would be “a terrible reversal of American innovation policy.” He reminded everyone that it’s the information economy that will create new jobs and new opportunities for the future.
“Today MPAA and all of our studios are standing up in opposition to broad-based government regulation of the Internet,” Glickman said. “We are opposing so-called ‘net neutrality’ government action. And, in the process, we are standing up for our customers, for our economy and for the ability of content producers to continue to create great movies for the future.”
Today, USTelecom filed comments in the FCC’s pole attachments proceeding. In terms of leveling the playing field among broadband providers and making the market for broadband more competitive, getting parity in pole attachment rates would be a giant step forward. As we discuss in the comments, a recent survey of USTelecom’s membership shows that incumbent local exchange carriers (LECs) pay more than eight times what cable providers pay per attachment and almost six times the rate paid by competitive LECs. That’s a pretty substantial disparity between companies that are selling nearly identical bundles of services. But more importantly, it results in a substantial disparity in what consumers ultimately pay; in essence, it’s a tax on ILEC broadband consumers.
My colleague Robert Mayer talked a bit about pole attachments in his recent USTelecom vidcast. If you haven’t caught it yet, you can see it here.
To explain the importance of the ongoing 700 MHz spectrum auction, let me start by paraphrasing FCC Commissioner Michael Copps, paraphrasing Mark Twain’s famous aphorism, “Buy land; they’re not making it anymore.” Spectrum is scarce, so when they sell it, you should buy. But there’s more to this auction than just spectrum scarcity. Interest in the 700 MHz auction is so intense because the outcome could have a substantial impact on both the broadband and wireless digital communications industries. As FCC Chairman Kevin Martin has noted, this auction represents the “single most important opportunity” for bringing all Americans the benefits of broadband competition—greater availability, increased speeds, and lower prices.
The reason is that the 700 MHz band has some extremely favorable propagation characteristics, making it incredibly useful for high-power, long-range operations (unlike, say, unlicensed WiFi operations). Unlike other parts of the spectrum, the 700 MHz range can easily penetrate homes and buildings, unlike cellular spectrum. That means winning bidders could use their licenses to build high-speed wireless networks over entire cities, states, regions, or even nationwide.
The current auction offers a number of geographic license areas ranging in size from small (individual cellular market area licenses) to larger (12 regional economic area grouping licenses) to the largest, a package of licenses that adds up to a nationwide network. Winning companies large and small will all have an opportunity to deploy their services, and in conjunction with some of the strictest build-out requirements the FCC has ever proposed, that means the entire country— including rural and underserved areas—will get the benefits of broadband in their communities.
Walter’s appearance on CSPAN’s The Communicators is now online. It was a great conversation with C-SPAN’s Pedro Echevarria about many of the top issues driving communications and broadband delivery and adoption. Be sure to have a look.
