Benton Foundation

[Commentary] In reviewing the successes of the last year, but, more broadly, the last three years, the person I keep returning to is Federal Communications Commission Chairman Tom Wheeler. Chairman Wheeler has upheld the public interest, recognized the power of communications to strengthen communities, and acted to modernize and reform programs that bring open, affordable, high-capacity broadband to all Americans. His legacy is the opportunities for all Americans to connect to jobs, education, healthcare, and family. As we enter this holiday season, I am thankful for Chairman Tom Wheeler’s gifts to the American people. To me, what is amazing about his many accomplishments can’t always be measured by the dockets he opened, the votes he won, or the initiatives he proposed. The day-to-day impacts of his actions can often be more readily seen in the child who can now reach a hand across a keyboard to access a whole new universe of knowledge thanks to gigabit connections to the school and Wi-Fi in the classroom. Or in the young mother who can now coordinate work and her child’s medical care thanks to her Lifeline connection. Or the small business owner who can now compete on a level playing field with its bigger business competitors thanks to a free and open Internet. Or the community that was once left behind, that is able to get ahead with new broadband options. In other words, it’s not the orders he voted or the computers he connected, but the lives he touched in ways both big and small. I expect they will be felt not just for a year, or a chairman’s term, but in the case of that little girl … it just may change her life.

The Ashbury Senior Community Computer Center (ASC3) is a community-based organization which provides technology training and low-cost home internet service. ASC3 serves four Cleveland neighborhoods (Glenville, Forest Hills, South Collinwood and East Cleveland) -- and anyone else who requests their services. These neighborhoods are economically-diverse and family-oriented with a strong representation of older, African-American adults and Case Western Reserve University students. The draw of important churches in these neighborhoods brings in traffic from elsewhere in Cleveland. All four neighborhoods have low home broadband adoption rates. Wanda Davis and her family wanted to strengthen their community. They had two family businesses they needed to close, but they owned the property and realized there was an opportunity to create a community center. Ms. Davis said, “As we closed the hardware store and deli, wanted to make sure what we left was long standing and supportive of the community. The purpose has always been about impact.”
[Siefer is the Director of the National Digital Inclusion Alliance]

In thinly-populated rural and tribal areas, community anchor institutions (CAIs) can be vitally important to connecting residents to the rest of the world. Schools, libraries, health clinics, and many other anchor institutions rely upon high-capacity broadband to provide education, health, and information services to rural consumers. Unfortunately, because of the economic factors described below, anchor institutions in rural and tribal areas have an especially difficult time obtaining high-capacity broadband connections at affordable rates. Ensuring every rural community has access to high-capacity Internet access through their anchor institutions will often require financial support and other government initiatives to stimulate deployment and promote competition. Connecting rural CAIs to high-capacity broadband can be a catalyst for further investment; when CAIs serve as the “anchor tenant” on a rural network, they improve the business case for community-wide network upgrades or further network expansion. When implementing programs designed to increase access to broadband service in rural areas, federal, state, and local efforts should give high priority to the broadband needs of rural community anchor institutions.

[Tom Koutsky served as Chief Policy Counsel for Connected Nation, where he provided vision and leadership for Connected Nation’s broadband research and policy initiatives.]

The Senate Judiciary’s Subcommittee on Antitrust, Competition Policy & Consumer Rights held a hearing on AT&T’s proposed acquisition of Time Warner, a deal that would combine nation’s largest pay-TV provider, second-largest wireless company, and third-largest broadband provider with a media entertainment titan that among other things, owns HBO, CNN, TBS, TNT and Warner Brothers studios. A fun time was had by all.

The Senate Committee on the Judiciary’s Subcommittee on Antitrust, Competition Policy & Consumer Rights held a hearing on AT&T’s proposed acquisition of Time Warner, a deal that would combine one of the nation’s largest phone and internet providers with a media entertainment titan that among other things, owns HBO, CNN, TBS, TNT and Warner Brothers studios. A fun time was had by all.

Committee Chairman Chuck Grassley (R-IA) pointed to concerns about the a negative impact on competition and innovation. “There’s concern that a combined AT&T-Time Warner will block competitor access to popular Time Warner content. There’s concern that a combined company will give preferential treatment – for example, favorable channel placement and zero-rating pricing – to Time Warner’s premium entertainment programming to the disadvantage of other content producers, in particular small independent producers. There’s concern about AT&T-Time Warner’s ability to leverage their assets to negotiate better licensing arrangements or raise the price of their content to the detriment of other distributors. There’s concern about the merged company’s ability to employ “bullying” tactics to dictate rates and terms to other networks. There’s concern that this acquisition will concentrate too much power into one conglomerate, resulting in higher prices and fewer programming options for consumers. There’s also concern about the merger’s implications for a free and diverse press.”

In the New York Times, Cecilia Kang started her coverage saying, “When AT&T and Time Warner announced their $85.4 billion deal in October, lawmakers greeted the acquisition frostily. Now their tone is changing.” Although lawmakers said the deal merited tough scrutiny, they also questioned whether traditional ways of evaluating mergers are growing outdated as Silicon Valley companies like Facebook and Google become massive media platforms that threaten the television industry. Sen David Perdue (R-GA) said the deal would combine companies that did not directly compete against one another. “The consumer is benefited from the aggregation,” he said. “That is called capitalism.”

At the hearing, AT&T and Time Warner executives pitched a message that catered to the new administration: a populist promise of lower prices and the potential to build more wireless infrastructure through the merger. While AT&T and Time Warner are powerhouses, they presented themselves as weaker rivals to the cable industry and Silicon Valley tech companies. AT&T Chief Executive Randall Stephenson said that cable companies dominated the broadband and television market, serving high-speed internet to eight of every 10 American homes that have broadband service. To experiment with new mobile video technologies, he said, AT&T needed to have in-house content to quickly try new streaming services at a lower cost. He added that AT&T had just introduced a streaming service with 100 channels for less than most cable television packages. “It is only the beginning of what we want to bring to the marketplace to threaten cable’s entrenched and still-dominant market position,” Stephenson said. He said AT&T would give CNN editorial independence if the merger were approved. Jeff Bewkes, the chief executive of Time Warner, said, “It is not enough to deliver great content.” The companies’ competitors have multiplied, he said. Stephenson said the merger “eliminates no competitor” and that the company aims to “get the most content to the most people at the lowest prices.”

Consumer groups rejected the characterization of AT&T and Time Warner as disadvantaged rivals, saying a combined company would create a powerhouse that all cable providers and networks would have to negotiate with. Streaming providers like Sling TV and Hulu would face a major new competitor, with AT&T’s access to 110 million wireless and satellite subscribers and premium television networks under the same roof, the groups said. “If a single company is able to control so many key inputs to online video, this new market could be snuffed out,” said Gene Kimmelman, president and chief executive of Public Knowledge, a nonprofit consumer group, at the hearing. He stressed that internet companies rely on the wireless and broadband networks controlled by huge telecommunications companies like AT&T.

Mark Cuban, an internet entrepreneur and owner of the NBA’s Dallas Mavericks, who also spoke at the hearing, said the truly dominant companies in media distribution these days were Facebook, Google, Apple and Amazon. “Facebook is without question in a dominant position, if not the dominant position, for content delivery,” he said.

Antitrust enforcers in the Trump administration will ultimately decide whether to approve the deal or block it as anticompetitive. However, members of Congress can both reflect and contribute to the public mood regarding the merger of such large, high-impact businesses. The members of the Subcommittee extracted a pledge from the AT&T and Time Warner executives to treat their competitors fairly on content and distribution if their pending $85 billion merger is approved. AT&T’s Stephenson promised that the combined company would not unfairly favor Time Warner content on its distribution platforms, like DirecTV, by blocking or overcharging companies that compete with Time Warner from offering content. In turn, Time Warner Chief Executive Jeffrey Bewkes promised that his company would not inflate the price of Time Warner content for distributors that compete with AT&T.

“The reason we have these hearings is to get stuff on the record, right?” said Sen. Amy Klobuchar (D-MN), the subcommittee’s ranking member. “So they said on the record they wouldn’t discriminate. They said on the record that Time Warner wouldn’t discriminate, either, where the content went. So if that proves to be false, then you have it under oath that they said this, and then you can use that for further action.”

The Benton Foundation published a handbook for city officials seeking the affordable, abundant bandwidth their communities will need to thrive in the decades ahead. Designed for local decision makers, The Next Generation Network Connectivity Handbook: A Guide for Community Leaders Seeking Affordable, Abundant Bandwidth reviews the current landscape of broadband networks, including next generation, gigabit capable networks, outlines best practices, summarizes existing models, and presents a framework through which community leaders might begin preliminary project steps given their city’s specific strengths and circumstances. “Our purpose,” said co-author Blair Levin, “is to lower the initial, daunting information barrier that exists between cities already immersed in these Internet infrastructure issues and those just beginning to navigate them.” From 2009-2010, Levin oversaw the development of the National Broadband Plan while at the Federal Communications Commission. A key insight offered by city officials is the important linkages between deploying next generation information networks and other municipal policies, including those affecting construction, transportation, housing, and economic development. As a result, the Handbook identifies two critical and related tasks for cities: understanding how its practices affect the economics of deploying and operating next generation networks, and organizing its assets, practices and people to improve its ability to negotiate with third party providers or deploy these networks themselves. “Many communities are tackling 21st Century information infrastructure challenges themselves, regionally, or with private partners. We have a lot to learn from their approaches.” said co-author Denise Linn, Program Analyst for the Smart Chicago Collaborative. “In the second edition of the Handbook, we’ve incorporated new cases and resources from 2016. This field is a moving target with emerging best practices and shifting players — tracking new broadband initiatives has never been more important.”

Although Donald Trump will be our next President, we are not sure who will occupy key positions in broadband policy. We can, however, know what some of the agendas and issues will be and their potential direction. Several can impact the economics and options related to network deployments. 1) The Federal Communications Commission’s ability to legally undercut laws restricting municipal broadband efforts is likely to remain limited, but we note that a number of efforts have proceeded in states with such laws, and as more communities obtain next generation broadband through their own efforts, and as such broadband becomes more important from an economic development perspective, the ability for incumbents to convince legislatures to pass such laws will likely weaken. 2) As competitors try to deploy next generation networks, they have pointed to two places where they see significant barriers: utility poles and entry to multiple-dwelling units (MDUs). 3) One of the few areas of agreement between the Democratic candidate, Hillary Clinton, and the President-elect, Donald Trump, is that both agreed there was a need for the country to spend more on infrastructure. While Trump has not yet laid out his technology-related agenda, cities making plans for upgrading their networks should pay close attention to policy debates in the first part of 2017 to determine if there are new resources to be utilized in upgrading networks for these future needs. 4) In the last few years, there have been increasing calls for the government to adopt policies that enable all to participate in what we might think of as digital life, particularly for such services as health care, education, job training, and public safety. Again, we cannot know what the precise policies will be for improving inclusion in digital life. We can know that greater efforts at inclusion increase the value of, and the percentage of, adoption in traditionally low-adoption communities. Both have the impact of improving the economics of new deployments, as they bring new customers, and a greater willingness to pay, to the platform.

[Commentary] On November 21, 2016, President-elect Doonald Trump named Mark Jamison and Jeffrey Eisenach to his “agency landing team” for the Federal Communications Commission. Jamison is a Visiting Fellow with the American Enterprise Institute (AEI). He is also the Gunter Professor of the Public Utility Research Center (PURC) at the University of Florida and serves as its director of telecommunications studies. [Eisenach is a Visiting Scholar at AEI and Director of its Center for Internet, Communications, and Technology Policy.] Since, as a candidate, Donald Trump did not offer a telecommunications agenda, many are trying to read the tea leaves to understand how these appointments will impact how the FCC will operate over the next four years. As a professor and visiting fellow, Jamison is a prolific writer. We've been reading through his works looking for hints of what Trump Administration priorities may be.

[Commentary] Studies show community anchor institutions (CAIs) often cannot afford to purchase the broadband capacity they need to serve their communities. While the E-rate and Rural Healthcare programs have been enormously helpful, many schools, libraries, and healthcare providers still report they cannot purchase sufficient broadband because of the cost or because robust broadband networks are not available. Many other anchor institutions—such as public housing, community colleges, community centers, and other community-based organizations—do not receive federal subsidies for broadband connectivity and have even more trouble finding the resources to pay for reliable broadband. Federal, state, and local governments need to address the connectivity challenges of tomorrow by providing additional financial resources and incentives to CAIs so that they can afford to purchase broadband services that meet their needs.
[Gina Spade is the founder of Broadband Legal Strategies, a law firm specializing in universal service issues]

With just a little over 2,000 people in western Kansas’ Stanton County, you might be surprised there’s a library in the area. But the Stanton County Public Library is heavily used. If you went there after hours and looked on its outdoor patio, you might see people at the Anna Mae Lewis Outdoor Library using the Internet connectivity from the library’s network. As my team visited rural libraries in Kansas and Maine, we routinely saw parking lots and streets filled with patrons using Wi-Fi connections after hours. By some estimates, there are 4,078 rural libraries in the US and they’re important in more ways than you might expect. Going well beyond book lending, rural libraries support all sorts of educational programs, maker spaces, and social service meetings. They also have public access computers and most provide Wi-Fi access both inside and outside their buildings.