Blog - Page 66

Kudos to the House Energy & Commerce Committee for circulating a bipartisan draft broadband legislative proposal. Broadband Internet transmission services (BITS), Voice over Internet Protocol (VoIP) and Broadband Video Services (BVS) would be subject to exclusive Federal jurisdiction and would be free from any regulation of rates, charges, terms or conditions. A streamlined franchise process would let a BVS provider commence service within 15 days, and preferential treatment of broadband networks that are owned or controlled by cities would be prohibited. These provisions, if enacted, would provide clarity and certainty that are badly needed to attract investment. Some things about the proposal that are less than perfect. For example, the term “repeal” is never used. The FCC will likely grow Read More ›

President Bush’s meeting with Chinese President Hu Jintao today in New York and their newly agreed-to meeting in November in China suggest China is on the White House radar, as it should be. Asian economic policy should be right at the top of the Washington’s policy list (there’s also this small matter of potential North Korean nukes). But why is the White House still obsessing over the “trade gap” with China, browbeating assurances out of Hu to reduce the trade gap by buying more American goods? Where to start? First, the trade gap is an accounting identity and implies a capital surplus. We buy lots of stuff from China, send it dollars, and China invests in American assets. The American Read More ›

Telecom merger opponent ACTel trumpeted the results of a survey it commissioned of telecom managers at Fortune 1000 companies who are customers of AT&T or MCI. ACTel claims its survey shows that roughly two thirds of the managers express concern about the mergers. The timing of the survey suggests that that the merger approval process is entering a critical phase. For ACTel and a few others, the mergers are an opportunity to: (1) Force SBC-AT&T and Verizon-MCI to divest valuable network assets and enterprise accounts at bargain basement prices and (2) Roll back some of the recent efforts by the FCC to reduce harmful regulation. AT&T and MCI largely abandoned their efforts to compete in the mass market, so the Read More ›

The National Association of Realtors policy enabling traditional brokers to block their web-based competitors’ customers from having full online access to all Multiple Listing Services (MLS) listings, and the antitrust lawsuit that was filed yesterday in the U.S. District Court in Chicago by the Department of Justice, highlight a couple things about proposals to codify a set of network neutrality principles and give the FCC new enforcement authority. One is that the universe of players having an incentive and an ability to control what customers can see and do on the Internet is much larger than communications network providers. No network provider is involved here, and none of the net neutrality proposals would have been of any use. Another is Read More ›

There’s a suspicion that no one really cares about high-definition TV. That’s why broadcasters are planning more local news, more local weather, more local sports, educational and children’s programming – more of everything – in standard-definition. But not without assurances that cable systems will carry the additional channels. Cable systems were built with private capital. And the cable industry is facing a competitive onslaught from the likes of DIRECTV, DISH Network and now SBC, Verizon and others. Yet they would have to allocate up to 6 channels to each local broadcaster if Congress mandates multicast must-carry. The justification for even the current level of must-carry is eroding. Expanding the requirement would simply restrain investment and innovation that much further. If Read More ›

Among the many failures of infrastructure and management in the wake of Hurricane Katrina, the loss of communications contributed mightily to the confusion inside New Orelans and the poor decision making outside. No terrestrial telecom infrastructure can be entirely immune to 140 mile per hour winds and week-long floods. While most mobile phones and land-lines failed, we have reports of sporadic cell phone coverage in the days following the storm/flood. Eight days after the storm, numerous cell sites came back online in New Orleans. Within a week, Bell South reported that its main regional telecom hub in New Orleans was up. Nevertheless, the company estimates $400-600 million in damage to the telecom infrastructure. The big telecom winner coming out of Read More ›

Spectrum auctions were justified as a way for the “public” to receive a “fair portion” of the value of the public spectrum resource. But spectrum auctions are really just another tax which has transferred billions of dollars from the pockets of consumers to the coffers of government. The cost of spectrum licenses is fully reflected in the cost structure, and thus the pricing, of mobile phone service – as it should be. The affordability and availability of mobile phone service suffers as a result. The tendency of some politicians to view spectrum primarily as a tool for balancing the budget is a huge obstacle to affordable and universal broadband. What’s the point? When Congress reconvenes next week, it faces the Read More ›

Economist Jude Wanniski passed away suddenly yesterday at the age of 69. More than any other thinker, Wanniski educated the public about supply-side economics, after learning its key principles from Robert Mundell and Arthur Laffer in the early and mid-1970s. On my bookshelf behind me I have several binders worth of his Supply-Side University essays (written every Friday for the last decade or so) and several copies of his 1978 book The Way the World Works. Wanniski was a key force in the economic debates that led to the election of Ronald Reagan and to the implementation of his successful agenda of tax rate cuts, deregulation, and sound money. In his book he predicted that China was at the dawn Read More ›

Richard Chang, founder and CEO of SMIC, the top new silicon “fab” on the Chinese mainland, plans to give up his Taiwanese citizenship after Taiwan fined him for an “illegal investment” in SMIC in 2000. At a time when most Taiwanese and Chinese recognize and welcome closer ties and more economic integration, there are still many politicians on both sides who stubbornly insist on looking backward. It seems unwise for Taiwan to drive away key people like Richard Chang, who, even though he now operates on the mainland, still can be a friend and benefactor of Taiwan through all sorts of cooperative economic and technological arrangements. I think this is just a blip on a large radar screen showing mostly Read More ›

Congressman Rick Boucher (D-VA) wants Congress to codify a set of Network Neutrality principles and “bestow clear authority” on the FCC to enforce them. Net Neutrality is code for re-regulation. It is a recipe for overturning the Supreme Court’s decision in NCTA v. Brand X Internet Services and for allowing the FCC to apply heavy-handed regulation to every broadband Internet access competitor. Though it may be hard to envision such an outcome under current FCC Chairman Kevin Martin, commissioners and chairmen come and go.
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