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The FCC and net neutrality: Part three of four

Wednesday, October 14th, 2009

The third in a four-part series on the Federal Communication Commission’s six net neutrality principles:

During a recent webcast from the Brookings Institute, Federal Communications Commission (FCC) Chairman Julius Genachowski explained six principles of net neutrality and proposed making them official rules. Let’s take a closer look at proposed rules three and four, which focus on devices and competition.

No. 3: As long as they don’t damage the network, consumers can connect any legal devices of their choosing.

If you follow the wide-ranging discussion on devices, you’ll find there’s a lot of overlap. The third principle would seem to relate only to third-party devices like Sling Media’s Slingbox (a TV and video streaming device that is blocked on some 3G networks), but many industry executives involved in the net neutrality debate are also chiming in on what devices are used to connect directly to broadband networks.

We’ve seen the obvious example at work – a cell phone. But when considering the phrase “any legal device of their choosing,” the FCC’s third principle includes any non-phone device that contain Wi-Fi modules, such as Apple’s iPod Touch, Microsoft’s ZuneHD and Blu-Ray players that offer integrated Netflix streaming. Internet radio devices, web-connected home security systems and cameras with integrated wireless connectivity should be considered as well.

With all these devices in play, the net neutrality issue quickly becomes handset exclusivity – a practice where wireless carriers make exclusive deals with device manufacturers. Two examples at work currently include Google’s partnership with Verizon Wireless and Apple’s partnership with AT&T.

Both the FCC and Congress have spent some time looking into wireless handset exclusivity arrangements, especially as it plays into the FCC’s fourth net neutrality principle:

No. 4: Consumers have a right to competition.

The FCC’s fourth principle would ensure customers have the right to competition across the Internet spectrum, not simply in terms of choosing a service provider.

Net neutrality advocates claim there is a necessity to regulate the infrastructure and prohibit private enterprise from implementing methods to alter or promote one entity over another.

A worst-case scenario would be if a service provider would favor information from Microsoft over Google by purposely slowing Goggle’s content delivery to create a competitive disadvantage. Another would be a wireless carrier making enough exclusive deals with equipment manufacturers to effective eliminate smaller competitors and force consumers to choose between device or service.

An Internet stranglehold by a handful of organizations could also limit across-the-board innovation. Consider AT&T’s public statement that real-time gaming is an “aspirational service” and not a core broadband application. It’s an interesting statement, considering a Harvard Business School study on the video game industry demonstrated that innovative devices, ubiquitous broadband access, improved games and increased reach led to U.S. sales of software, hardware and accessories reaching $18.9 billion in 2007, an almost 40 percent growth over 2006. The Nintendo DS, a handheld broadband gaming device, was the top-selling gaming device in 2007 with 8.5 million units sold.

Could this statement be pushback from an infrastructure that can’t support gaming and is trying to undermine not only a competitor, but also an entire platform of innovation that millions of Americans take advantage of on a daily basis?

The rise of various, multi-tasking devices that can provide broadband access and other services has various industry leaders looking for ways to best position themselves as the market begins to take a more concrete shape. The FCC’s net neutrality principles as they relate to devices and competition (and how it eventually chooses to enforce them) will play a major role in that process.

Further reading:

• Part one
• Part two
• Part four

Tags: 3G, Apple, AT&T, Blu-Ray, broadband, Broadband Expansion, Brookings Institution, competition, Congress, digital, economy, FCC, Federal Communications Commission, Google, Harvard Business School, infrastructure, innovation, Internet, Internet radio, iPod, Julius Genachowski, Microsoft, Net Neutrality, Netflix, network, Nintendo DS, security system, Sling Media, Slingbox, Verizon, video games, Wi-Fi, ZuneHD
Posted in Digital news, broadband, national broadband plan | No Comments »

Seen and unseen possibilities: Broadband means economic growth

Thursday, October 8th, 2009

By Doug Adams, Knight Center of Digital Excellence

Our nation’s broadband economic stimulus plan – part of the American Recovery & Reinvestment Act – is placing a bet that our economy will improve with the expansion of high-speed Internet.

Of course, there are the jobs created just through basic construction, such as the building of broadband networks including fiber and towers. This is no different from jobs created through construction of a building. But if a region builds an office building with no use – with hardly any potential tenants – the economic impact will be short-lived and limited to the building project itself.

So what will we do with all of this broadband once we have it? The promise of broadband is much more significant than opportunities a new office park might provide. Faster and more pervasive Internet service provides a platform for innovation, research and development for all citizens – bringing with it new products, services and most importantly, revenue streams.

What kinds of products and services? Well without broadband, there would have been no impetus for the iPod, Kindle and digital cameras – and no explosive growth in the electronics market. Without broadband, there would be no way to communicate with your doctor over Internet-enabled video conferencing, potentially leaving health care costs to skyrocket even more than they already have. And without broadband, there would be no way to watch your favorite shows from anywhere on your laptop or smart phone – and along with that, there would be no growth in online advertising revenues.

To understand the economic benefit of massive broadband expansion, you need to appreciate the benefits known and unknown, seen and unseen. Early in the decade, as broadband became more common, there was no way to predict the economic impact each development would have. We wanted faster access to Web pages. The iPod and Kindle weren’t even ideas yet.

Beyond platitudes or the hypothetical, what proof do we have that broadband actually has a significant impact on our economy?

In a 2006 study funded by the U.S. Department of Commerce, researchers from the Massachusetts Institute of Technology and Carnegie Mellon University concluded that broadband access “does enhance economic growth and performance, and that the assumed economic impacts are real and measurable.” Looking at a cross-section of communities across the nation, the study found that between 1998 and 2002, communities that had mass-market broadband experienced more rapid growth in employment and in the number of businesses, especially in technology-intensive sectors, compared to communities without broadband.

Another study titled, “Broadband and Economic Development: A Municipal Case Study from Florida,” by the consulting firm Applied Economic Studies, found that as a result of municipal investment in broadband networks in the early half of this decade, Lake County, Fla., experienced roughly 100 percent greater growth in economic activity than other comparable counties in Florida by a combination of indicators.

And finally, earlier this summer a report from the World Bank Group found developing countries saw an increase in economic growth of 1.3 percentage points for every 10 percentage-point increase in broadband.

Beyond the economic benefits derived from building a platform for innovation, broadband impacts productivity – making us more effective, freeing up our creative energies and allowing us to focus on the next big idea. Broadband shrinks our world and enables telecommuting for collaborative projects across the country or across the globe, making tomorrow’s iPod or Kindle a reality faster – and with it, infusing capital into our markets.

So unlike the construction of an empty building, one we hope to fill with tenants, the investment in broadband construction is sure to fill our nation with hope and change, in the form of innovation and opportunities, as we were promised last November.

Also read “It’s ‘patent-ly’ obvious: U.S. needs better broadband.”

Doug Adams oversees public information efforts for the Knight Center of Digital Excellence based in Akron, Ohio. The center is operated by Cleveland-based technology nonprofit OneCommunity, in partnership with The John S. and James L. Knight Foundation, and is dedicated to creating connected communities through strategies that utilize information technologies to drive civic progress and economic development. To learn more about the Knight Center, go to www.knightcenter.org or e-mail info@knightcenter.org.

Tags: American Recovery & Reinvestment Act 2009, broadband, Broadband Expansion, Carnegie Mellon University, community, digital, digital camera, Doug Adams, economy, education, Florida, high-speed, infrastructure, innovation, Internet, iPod, Kindle, Knight Center of Digital Excellence, Lake County, Massachusetts Institute of Technology, MIT, network, smart phone, stimulus, stimulus watch, U.S. Department of Commerce, World Bank Group
Posted in ARRA, Knight Center of Digital Excellence, Opinion, Stimulus Package, Uncategorized | No Comments »

Broadband - so what? Here’s what

Friday, August 7th, 2009

By Doug Adams, Knight Center of Digital Excellence

While President Barack Obama and Congress have made clear how important broadband is to our nation by putting $7.2 billion in stimulus funding behind broadband initiatives, there still seems to be a perception gap among many non-adopter citizens.

In short, there is a lack of understanding of the value broadband connectivity can bring to their lives. The U.S. Telecom Association recently said many citizens aren’t adopting because of “perceived lack of Internet relevance.”

If the perception is that high-speed access is about iTunes and iPods, then public education should become part of public policy as it relates to stimulus funding on broadband networks.

We know it’s routine for students to submit their assignments online, or for job seekers to find and apply for employment. What’s less obvious is that high-speed Internet is the new platform for innovation, collaboration, education, learning and professional development opportunities. Broadband networks are critical to our individual, community, and nation’s progress.

In the Cleveland area, for example, public libraries offer summer programs to teach children 3-D imaging, animation and other skills that will prepare them for tomorrow’s opportunities.

Or go to Detroit, where an organization named Youthville is promoting a holistic and integrated approach to developing youth. Programs for children cover computer skills, leadership, academics, fitness, Web broadcasting and music studio recording. Among these programs is a new, one-of-a-kind, 24-hour broadcasting studio.

This spring in Miami, the city announced the start of a $200 million Smart Grid initiative led by state utility company Florida Power & Light. An initial build-out to 1,000 homes will validate different devices and services such as dashboards, smart thermostats, smart appliances and demand response software that are designed to help consumers more actively manage their energy consumption.

These are just a few examples of ongoing initiatives we at the Knight Center of Digital Excellence are helping along.

It is a disservice to America to trivialize the importance of broadband by relating applications primarily to pop culture. Sure, entertainment options increase as broadband expands, but that’s hardly the driving force of broadband networks. The public relations firm Ruder Finn found in a recent survey that research and self-education topped entertainment as reasons for going online. Those findings mirror a 2008 study by the federal Institute of Museum and Library Services, which found over 60 percent of online visits at public libraries were work or education related.

While our nation invests $7.2 billion in stimulus funding for broadband initiatives, let’s not lose sight of the compelling “so what” – that is, the opportunity for economic growth that will improve quality of life for Americans.

Beyond what’s at stake for individuals and communities, our nation is now in a position of playing catch-up with global competitors. We’re woefully behind in developing the broadband platform needed to continue moving forward and spurring innovation. In a recent Technology Policy Institute study analyzing download speeds, the U.S. falls between 11th and 14th in the world in that category, depending on the survey.

More disheartening is a Speedtest.net study that shows the U.S. had one of the worst increases in download speed over the past year of any nation.

It gets even worse regarding upload speeds. A number of studies shows the average U.S. upload speed to be somewhere between 371 kilobytes per second (Kbps) and 435 Kbps. Hardly adequate for the many potential business, education, telemedicine and e-government applications we need to drive down costs and spur innovation.
It’s critical to get everyone in the U.S. connected to high-speed Internet as soon as possible. When citizens aren’t online, our nation’s resources – our entrepreneurial spirit and innovative minds – are not being leveraged.

It’s time now to connect the dots on the demonstrated payoffs, so that Americans clearly know what opportunities are in store as a result of broadband adoption.

So what? It’s our future.

Tags: 3-D, American Recovery & Reinvestment Act 2009, bandwidth, Barack Obama, broadband, Broadband Expansion, Cleveland, community, Congress, Detroit, digital, digital divide, Doug Adams, economy, education, Florida, Florida Power & Light, healthcare, high-speed, infrastructure, innovation, Institute of Museum and Library Services, Internet, iPod, iTunes, KCoDE, Knight Center of Digital Excellence, Miami, Michigan, network, non-adopter, Ohio, OneCommunity, Smart Grid, Speedtest.net, stimulus, stimulus watch, Technology Policy Institute, U.S. Telecom Association, upload speed, utilities
Posted in ARRA, Knight Center of Digital Excellence, OneCommunity, Opinion, Stimulus Package, broadband | No Comments »

From digital hub to digital America

Wednesday, April 1st, 2009

By Doug Adams

“I believe that America should lead the world in broadband penetration and Internet access. Full broadband penetration can enrich democratic discourse, enhance competition, provide economic growth, and bring significant consumer benefits.”
– President Barack Obama, January, 2008

Our nation’s economy is poised for transformation and broadband can be a key component to the nation’s innovation and growth. As we work on expanding and improving broadband, we can envision the potential impact on our economy by looking at how new technologies have changed our lives thus far.

The entertainment and consumer electronics industries underwent a transformation when broadband’s initial adoption changed the Internet – and the computer – forever.

In 2001, Apple visionary Steve Jobs predicted the computer would evolve to be the “digital hub” of the home – driving applications and electronics that were just emerging.

In coming years, the electronics world boomed as iPods and digital cameras flew off the shelves. This happened in conjunction with broadband’s initial expansion.

Much as computers and other devices have changed the way we live our lives, broadband and the digital applications it enables have already begun to change the way America does business. Digital platforms continue to gain popularity because they open up new choices for consumers. And with these choices come new opportunities for industries to develop new markets and revenue streams.

Consider the Hollywood writers’ strike of 2008. While studio executives initially bemoaned the Internet as an “advertising killer,” this labor dispute was based in large part over how to share online revenue.

Just this month, CBS’ “March Madness on Demand,” an online platform to view NCAA tournament basketball games, is expected to generate over $30 million during the 10-day tournament. That’s 15 to 20 percent more revenue than last year. Online advertising is supplementing, not replacing traditional TV advertising.

So much for the Internet being the death of advertising.

The economic impact of broadband and the Internet doesn’t stop there. Consider Facebook, YouTube, eBay, Amazon and countless other online applications that help drive a significant portion of our nation’s economy.

What’s the next iPod or Amazon? We may never know our full potential if the U.S. fails to make a serious commitment to further increase broadband penetration and speeds.

The fundamental first step is to create the platform for innovation. From there, we can accelerate a process that is already beginning, with initiatives, for example, that enable people to seek medical diagnoses from a doctor through online videoconferencing.

This is why Obama sees broadband as such a vital part of our nation’s recovery. His objective is to take Jobs’ vision to the next level, so that beyond having digital hubs within our homes, we create a digital America.

Jobs understood that America stood at the precipice of broadband’s initial growth. Obama understands it today. Enhanced broadband penetration and speed is key to our nation’s ability to innovate and compete in the global economy.

Jobs once said, “A lot of times, people don’t know what they want until you show it to them.”

And that’s part of our job at the Knight Center of Digital Excellence. We’re here to show people the possibilities – those on the drawing board and those we can’t yet imagine.

Doug Adams oversees public information efforts for the Knight Center of Digital Excellence, serving 26 U.S. communities served. The center is operated by Cleveland-based technology nonprofit OneCommunity, in partnership with The John S. and James L. Knight Foundation, and is dedicated to creating connected communities through strategies that utilize information technologies to drive civic progress and economic development.

Tags: advertising, Amazon, Apple, broadband, Broadband Expansion, CBS, community, digital, digital camera, digital divide, digital hub, Doug Adams, eBay, economy, education, Facebook, healthcare, Hollywood, infrastructure, innovation, Internet, iPod, KCoDE, Knight Center of Digital Excellence, March Madness, March Madness on Demand, NCAA, Obama, OneCommunity, online advertising, Steve Jobs, telemedicine, TV advertising, videoconferencing, writer's strike, YouTube
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