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China and the Internet

China is creating a State Internet Commission. The actual title is “State Internet Information Office.” The department, known as the State Internet Information Office, will direct, coordinate and supervise online content management and handle administrative approval of businesses related to online news reporting, it said. The office will work to implement the policies of Internet communication and promote legal system construction in this field, it said. It will direct the development of online gaming, online video and audio businesses and online publication industries, it said. The office will be engaged in promoting construction of major news websites and managing government online publicity work. It is assigned the duties to investigate and punish websites violating laws and regulations. It will oversee Read More ›

Wisconsin considering telecom reform

WI capitol iStock_000006601106Medium.jpgLegislators in Wisconsin got set this week to deliberate telecom reform. Next week two committees will conduct hearings on Assembly Bill 14 and Senate Bill 13, which would

  • Exempt Voice over Internet Protocol (VoIP) and data services from state utility regulation,
  • Repeal price regulation, and
  • Require large incumbent local exchange carriers (ILECs) to reduce intrastate switched access rates to mirror their interstate rates within five years. Small ILECs — who charge the highest rates — would be exempted for four years, after which PSC authority to order rate reductions would be restored. Meanwhile, for some reason, new entrants would be required to charge identical rates for both intrastate and interstate access beginning immediately.
  • Telecom providers would be allowed — although not required — to file tariffs, which would take effect immediately.
  • Programs supported by the state’s universal service fund would be limited to essential telecom services.
  • ILECs would be allowed to provide basic voice service through an affiliate or through the use of any available technology or mode until April 30, 2013, after which none of the bill’s basic voice service requirements would apply.

The Milwaukee Journal Sentinel cites one critic, who complains

The legislation would strip away 50 years of consumer protection for landline telephone subscribers, said Barry Orton, a University of Wisconsin-Madison telecommunications professor.

Much has changed in telecom in the past 50 years. Fifty years ago, phone service was provided by monopolies in possession of exclusive franchises issued by government. Congress authorized competition beginning in 1996. Today, nearly all consumers have a choice of providers, and a cable company, Comcast, is the nation’s third largest phone services provider.

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Florida telecom reform

FL capitol iStock_000005245210Medium.jpgThe Florida State Senate approved House Bill 1231 by a vote of 39-0 this week, following a vote of 110-4 in the House of Representatives. Among other things, the bill would

  • Remove the Florida Public Service Commission’s oversight of both local telecommunications services — including service quality and price regulation — and also intrastate interexchange services.
  • Remove the PSC’s authority to provide certain consumer education materials and to adopt rules concerning certain billing practices.
  • Promote the adoption of broadband services without the need for government subsidies.

A full analysis by legislative staff is available here.
The bill is now awaiting approval by Gov. Rick Scott.
If legacy telephone regulation is not reformed, the mostly private investment that will be needed to provide every household with an Internet connection of at least 100 megabits per second – a goal of the National Broadband Plan – could be at risk. Continued regulation jeopardizes competition by creating artificial competitive advantages and disadvantages for providers.
Nearly all consumers can choose between competing providers of voice services. Many Americans, regardless of age and income, are opting to discontinue landline phone service and rely instead on their mobile phone or voice service provided by their cable company.

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End Time Follies

Does the rise of Facebook portend the end of the real world, the collapse of dictatorships, the fall of Google, and the rise of love and peace and network neutrality?
Do smart pods and pads and Edenic walled social networks mean the end of the Web?
From Money, Fortune, the Economist, and Technology Review to a galore of blogs and newsletters, pundits predict the collapse of the web. Last September, Wired put it all together behind a lustrous eye-blasting pink cover, with Chris Anderson-Michael Wolff grafitti declaring “The Web is Dead.” Many see Facebook, Twitter, and Apple’s mediacopia as bringing about the decline and fall of Google, the outbreak of world revolution, or the revival of the U.S. economy of innovation.
As an extension of policy based networking tools from the enterprise to the dating scene, Facebook has no security to speak of, and no significant new technology. Yet it is treated as both an answer to the decline of the U.S. economy of innovation and a threat to the existing networking industry. Twitter is seen as a threat to mullahs in Iran and on American TV news. Apple’s mobile pods and pads are said to portend an end to the old worldwide web and the ascent of fire-walled gardens of delightful earthly aps.
The nub of such mindbending but brain-bent observations is the eclipse of the web by walled content, which is media “controlled” by one menacing company, like Apple or Comcast or Newscorp. As conceived by Tim Berners-Lee, the World Wide Web, by contrast, was open to all. At CERN in Geneva, the Web inventor specified the HTML mark-up language for the creation of standard web pages that could be read on a browser on any computer attached to the net. Transmission across the net was accomplished by HTTP (hypertext transport protocol). Berners-Lee was concerned less with the network that delivered the bits and bytes on what is called “layer 3” than with the desktop experience and linkage to other pages.

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Netflix seeks piece of the action

Remember how network neutrality regulation was supposed to be for the limited purpose of preventing broadband providers (aka Internet Service Providers) from blocking or degrading access to unaffiliated web sites? Those of us who feared a “slippery slope” have been attacked as cynical, idiotic and hysterical. So now along comes Netflix. NN regulation won’t help Netflix, according to CEO Reed Hastings. The firm is not worried about being blocked or degraded. It’s worried about being charged for the huge volume of video traffic it hopes to deliver over the Internet in place of the DVDs it now sends through the mail. Netflix wants free access to the customers of the broadband providers. We don’t think ISPs should be able to Read More ›

Block a wireless merger because regulators might be able to produce a superior outcome?

The Wall Street Journal quotes two high-ranking former officials from the Federal Communications Commission who are skeptical of the AT&T/T-Mobile merger. AT&T is citing the need for more spectrum in urban areas to keep up with the increasing amount of wireless data traffic. As the article points out, data traffic is up 8,000% on AT&T’s wireless network over the past 4 years. Meanwhile, T-Mobile’s network uses the same technology as AT&T’s, and T-Mobile’s spectrum is underutilized. A former chief technology officer at the FCC shares his thoughts on the best way to fix the shortage. The correct way to do it is to change policy and release a huge amount of spectrum. Spectrum is in short supply where you want Read More ›

Going, going, gone: the telephone

Wired telecommunications carriers are one of 10 doomed industries, according to Toon Van Beeck at IBISWorld. Of the 10 chosen industries that are dying, Wired Telecommunication Carriers is by far the largest, at $154.0 billion in turnover. While this number may sound sizeable, it’s considerably smaller than the $341.8 billion at the end of 2000. Since then, this industry has declined in every year, and it is now close to 55% smaller than it was at its peak; with an additional decline of 37.1% expected in the next six years. While major players like AT&T and Verizon continue to dominate the industry, they are generating lower returns each year as consumers switch to VoIP and wireless products. That’s a far Read More ›

A cyber-security dictator?

It’s no secret that hackers can penetrate networks which deliver essential products and services. At the Los Angeles Times, Ken Dilanian writes: The U.S. is vulnerable to a cyber attack, with its electrical grids, pipelines, chemical plants and other infrastructure designed without security in mind. Some say not enough is being done to protect the country. * * * * The basic roadblocks are that the government lacks the authority to force industry to secure its networks and industry doesn’t have the incentive to do so on its own. Not so fast. Government itself played an important role in the design of the networks. Traditionally, most of them were and/or still are subject to pervasive government regulation designed to provide Read More ›

Kill the messenger?

According to this report, The liberal group Media Matters has quietly transformed itself in preparation for what its founder, David Brock, described in an interview as an all-out campaign of “guerrilla warfare and sabotage” aimed at the Fox News Channel….Media Matters, Brock said, is assembling opposition research files not only on Fox’s top executives but on a series of midlevel officials. It has hired an activist who has led a successful campaign to press advertisers to avoid Glenn Beck’s show. If their opponents are spreading false or misleading arguments, couldn’t “progressives” disprove those arguments? If progressives have a sound case to make, why would these thuggish tactics be necessary?

Why would Sprint oppose AT&T/T-Mobile merger? What could Sprint hope to gain?

Sprint’s CEO, Dan Hesse, worries that “too much power” would be in the hands of AT&T and Verizon Wireless if AT&T acquires T-Mobile USA.
sprint_nextel.03.gifSprint has been losing customers and revenues ever since its own problematic merger with Nextel in 2005. The carrier lost about $3.5 billion last year alone. Although Sprint’s troubles would not be solved if regulators block a merger between AT&T and T-Mobile, Hesse’s words suggest the possibility that Sprint may nevertheless urge policy makers to block the deal.
This is not sour grapes; it is a shrewd abuse of the regulatory process, which provides a golden opportunity for struggling competitors and others who are well-connected politically to practice legal extortion. For example, AT&T could be forced by the Federal Communications Commission and the Department of Justice or the Federal Trade Commission to sell assets at firesale prices, or to provide services to Sprint at overly-generous prices. AT&T could literally be forced to subsidize its competitor.
This raises the question whether government can and should intervene to preserve the wireless industry as a whole? As a general matter, when government intervenes to protect weak competitors it risks diverting private investment away from enterprises that are well-managed and efficiently-configured to firms that couldn’t otherwise proposer in a free market.

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