Blog - Page 66

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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See a former colleague of mine Scott Gottlieb getting slimed by the Seattle Times for — gasp — knowing something about financial markets. Scott used to write the Gilder Biotech Report and the Forbes Medical Technology Report, and he recently went back to the FDA as one of three deputy commissioners. The reporter seems to think that only people who don’t like the pharmaceutical/medical technology industry should work at the FDA. Most people in government have little experience with business and financial markets, and so a Scott Gottlieb here or there is not only not going to hurt anyone but in fact provides a much needed new perspective in an institution that has trailed its foreign counterparts in approving new Read More ›

So now that Google has entered the instant message and voice-over-IP games, adding to the existing 76 million U.S. users of AIM, Yahoo, and MSN Messenger, not to mention Skype‘s 47 million VoIP users and a few million Vonage customers, with robust broadband video conferencing from these web-based applications providers on the way, can we finally agree that the rigid price ceilings and floors and geographic pricing layers and cross-subsidies for traditional voice telephony administered by the 51 state utility commissions are no longer operative? -Bret Swanson

News that Intel has agreements to deploy Wi-Fi with governments in 13 countries, coupled with (a)burgeoning interest among US municipalities for such deals and (b)rejection of attempts by telephone companies to erect legal barriers to same, all augur a fundamental shift in the structure of teleccom in America, should municipal deployments suceed. (If they fail, everything returns to SQA.) Telephone companies committed the political error of trying to stop deployment outright, arguing that the umpire (regulator) must not also play in the game (of providing local phone service). The argument has merit, but companies whose reputation for customer service is now at rough parity with that for the airlines are in no position to stop politically popular ideas. Better to Read More ›

The companies delivering voice, video and data services rank low in customer satisfaction, reports the Washington Post. Customer service appears to be the primary culprit. The newspaper quotes the following expert opinion: when there is competition and consumer choice, it does get better. Would the cable industry alone have spent almost $100 billion in network upgrades since it was deregulated in 1996 if not to compete against the satellite and phone companies? Competition is here. Customer service may not be as important as it once was, but that’s because customers today can also shop for innovative products and competitive pricing. Gold-plated customer service existed under regulation, when government controlled price and market entry. AT&T emphasized customer service because it was Read More ›

Back in 2001 I wrote about a technology company with a funny name that in a round-about way helped make the case for telecom deregulation. Narad Networks had developed sophisticated analog signal processing techniques that dramatically expanded the usable spectrum of the coaxial cables used in cable TV networks. With current analog and digital programming running from 5 to 860 MHz, Narad’s network updates would open the spectrum up to 1.2 GHz, boosting by 50 percent the already considerable capacity of the cable companies’ hybrid fiber coax (HFC) networks. Over this newly available spectrum, Narad could run Gigabit or even 10 Gigabit switched Ethernet trunks, enabling dedicated switched Internet services of 10, 50, 100 Mbps — whatever — to homes….Or Read More ›

The Internet has already deeply affected business models across the spectrum, from supply-chain management to consumer level e-commerce. But it will take real broadband to truly disrupt the visually oriented movie, television, and education industries. James Surowiecki of the New Yorker, in “Disk Averse,” adds to the growing literature focusing on the “Long Tail” economy. Last fall Wired editor Chris Anderson wrote a groundbreaking article by that name showing that digitally oriented content sellers, who were not constrained by the physical scarcities of shelf space or spectrum, earned between 25 and 50 percent of their profits from unpopular products. The volume of niche content (books, movies, songs) is so large, Anderson showed, that it matches or excels the sales and Read More ›

Holman Jenkins writes in today’s WSJ that IPTV faces death in the need for Bells to win 33,000 separate cable franchise approvals in order to provide the service. The bad news is that there is another hurdle that could prove equally if not more constraining: Section 104 of the 1996 Telecom Act, which bars electronic redlining, a term Jenkins wrongly attributes to cable lobbyists. Actually, the NAACP coined it in the early 1990s. In the event, sec. 104 inserts “without discrimination on the basis of race, color, religion, national origin, or sex” after the phrase “to all the people of the United States” in section 1 of the original 1934 Communications Act. Read literally this means Baptists must get service Read More ›

When I was in Shanghai in the fall of 2003, I met with Jack Ma, the fast speaking Chinese entrepreneur who founded Alibaba.com. At the time, as we met atop the world’s tallest hotel, the Grand Hyatt Shanghai in the Jin Mao Tower, Alibaba’s chief business was an online supply-chain platform that connects China’s many thousands of manufacturers, component and commodity handlers, and import-exporters. Now Alibaba also competes with eBay with a consumer online auction site and online payments (a la PayPal). Today, Yahoo! is paying $1 billion for a 35 percent stake in Alibaba and will turn its Chinese operations over to Alibaba. eBay and Barry Diller’s Interactive Corp. had already made deals to enter the Chinese ecommerce market. Read More ›

The Federal Communications Commission’s August 5 decision deregulating Digital Subscriber Line, thus giving DSL regulatory parity with cable Internet service, and ending the Computer Inquiry Rules (some of which date back nearly 30 years) is a welcome sign indeed, surprising in both its quick action and its breadth. That the FCC acted so swiftly despite a Supreme Court ruling (the “Brand X” case) giving the FCC carte blanche to continue treating DSL more harshly than rivals, attests that Chairman Kevin Martin, he of the 2003 swing vote for state broadband prerogatives, is a genuine convert to real deregulation. The reluctant acquiescence of the agency’s two Democratic commissioners attests to growing Beltway realization that Asia is bypassing US in the race Read More ›