The FCC’s role in regulating the communications industry needs to be reduced to reflect a more competitive marketplace, said Robert Litan, director of research at Bloomberg Government, in an interview for C-SPAN’s The Communicators which was set for telecast Saturday. Litan and Hal Singer, managing director at Navigant Economics, were on the program to discuss their book, The Need for Speed: A New Framework for Telecommunications Policy for the 21st Century. There was a case for more regulation within the industry 30 years ago because of monopolies within the industry, but “times change,” Litan said. “But in a world in which now we have convergence and we have a lot more competition, there’s less need for regulation” on issues like net neutrality. The FCC’s net neutrality order is “too radical, too harsh” in dealing with possible issues of discrimination in priority delivery contracts between network providers and websites, Singer said. He argued the order should be reversed, with discrimination issues dealt with “after the fact” by administrative law judges. There is more competition in the telecom industry than when AT&T had a monopoly on telephone service, but that “doesn’t necessarily mean that there is adequate competition,” Michael Weinberg, senior staff attorney at pro-regulatory Public Knowledge, told us. “If that’s your bar, then all sorts of things are going to look competitive. It is more competitive than an absolute monopoly, but I don’t think that means it’s adequately competitive.” While Litan and Singer are critical of the FCC in The Need for Speed, they note that the commission is only carrying out Congress’s instructions, Singer said. “The direction is going to have to come from Congress in recognition of the new landscape,” he said. Congress needs to reduce the FCC’s merger review authority within the wireless industry, Singer said. Since the FTC and Department of Justice’s Antitrust Division already examine those mergers for antitrust issues, “what is the FCC doing in this second, duplicative review?” he said. The FCC is then in a position to “give away things to the competitors who complain the loudest about a particular merger,” Singer said. “So long as you vest the agency with that kind of power, to move around millions or billions of dollars to special interests, you are going to get hordes of lobbyists walking around the halls of the agency looking for handouts.” The FCC should have a role in reviewing mergers within the wireless industry because of its expertise within the space, but “shouldn’t have a supplemental vote,” he said. Congress gave the FCC merger review authority under a public interest standard, which is important but different from the antitrust issue, Weinberg said. Public Knowledge has “been concerned in the past about the FCC’s interest in following through with enforcement of its merger conditions,” he said. “But that doesn’t necessarily mean that the FCC shouldn’t have a role in mergers or that there’s absolutely no situation in which conditions make sense.”
Wireless ISPs must have “a seat at the table” as the FCC considers the IP transition, Lariat, a small Wyoming wireless ISP, told several FCC officials Wednesday, an ex parte filing said (http://bit.ly/10ASWtm). “The ‘IP transition’ is not a transition; our network has been all-IP from the beginning,” Lariat said. Wireless ISPs are “an archetype of what all broadband networks will one day be: general purpose networks on which voice is not a special service but simply another ‘app,'” Lariat said. WISPs have several concerns, including possible exclusion of over-the-top VoIP providers from numbering systems; continued anticompetitive special access pricing by ILECs; disparate treatment of non-carrier broadband companies; and incumbent requests for “wasteful and unnecessary” USF funding to overbuild areas “already served by WISPs.”
The FTC and Department of Justice Antitrust Division should “seriously examine” patent privateering -- “the outsourcing of patent enforcement by operating companies ... to [patent assertion entities (PAEs)], and the competitive implications of such activities,” Google said Friday in a filing it submitted jointly with BlackBerry, EarthLink and Red Hat. The FTC and Justice continued collecting public comments following a workshop they held in December to get industry input on the effects of PAEs and how the agencies could minimize the harms PAEs could cause (CD Dec 11 p11). The filing deadline was Friday. Patent privateering “poses numerous perils to competition, consumers and innovation,” Google said. It “detrimentally alters enforcement incentives,” the company said, noting that PAEs are immune to possible countersuits because they do not offer products or services, shifting what is normally a patent peace into “asymmetric patent aggression.” Patent privateering can also “threaten royalty stacking and result in exploitation,” Google said. Privateering also encourages operating companies to enter into “contractual commitments secured from their PAE surrogates to raise rivals’ costs and thereby harm competition and stifle innovation,” Google said. Patent privateering may also “transgress the antitrust laws,” since patent acquisitions are subject to the Sherman Act and Section 7 of the Clayton Act, Google said. “Schemes by which operating companies outsource patents to PAE proxies to raise rivals’ costs may be subject to invalidation under Sherman Act Section 1 and Section 2,” the company said. “And, depending on the circumstances, employing PAE enforcement agents to evade FRAND commitments (including no royalty stacking pledges) may violate precedent under Section 5 of the FTC Act as well as the Sherman Act,” the coalition said, referring to fair, reasonable and non-discriminatory licensing. The Google-led coalition recommended the FTC and Justice conduct an inquiry into the relationship between operating companies and PAEs. An inquiry “would enable the Commission and the public to deepen their understanding of how operating companies’ arrangements with PAEs affect innovation, competition and consumers,” Google said. “The fruits of [the inquiry] also would provide a foundation for the antitrust agencies to assess whether solutions to the competitive concerns patent outsourcing arrangements pose lie in antitrust enforcement, in changes in the patent laws (where the antitrust enforcement agencies might play an important advocacy role), or elsewhere” (http://bit.ly/10kVRqi).
NCTA expressed “grave concern” about ILEC proposals to get access to Connect America Fund Phase I money without any corresponding obligation to extend broadband service to the 19 million Americans that lack it, in a meeting with an aide to FCC Chairman Julius Genachowski Thursday (http://bit.ly/10ARgzS). That approach, which would give the price cap LECs about $1.5 billion in support for 2013, is “fundamentally at odds” with the FCC’s USF reform goals, NCTA said. The ILEC proposals would classify as unserved about a million locations currently counted as served, and then make support available to upgrade the existing DSL service at those locations, NCTA said. Spending “limited resources” in such a manner “should not be a priority,” it said. NCTA also raised concerns about USTelecom proposals to eliminate the obligation to spend a third of its 2013 legacy high-cost support on broadband in areas currently unserved by any unsubsidized provider. “Enforcement of that requirement is critical to achieving the Commission’s goal of promoting broadband deployment,” NCTA said.
Partnerships among telecom agents and IT companies are becoming more formalized and complex, a study by Channel Partners and CompTIA said. It’s the third year the two groups have looked at the ways telecom agents and IT companies are working together. “Firms have figured out that for these pairings to succeed long-term, the rules of engagement and responsibilities must elevate beyond a handshake agreement,” said Carolyn April, CompTIA director-industry analysis. The agreements are getting more strategic and companies are working more closely on establishing revenue targets and account ownership than they had in the past, she said. The fast adoption of cloud computing and increased competition from telecom carriers is driving need for increasingly nuanced and well-defined partnerships, the study found.
The 1,200-mile MassBroadband 123 fiber network will connect 1,200 community anchor institutions in Massachusetts, Gov. Deval Patrick (D) said Thursday (http://1.usa.gov/Y3ckMM). The enhanced service will come to more than 120 communities in western and central parts of the state, his office said. The network’s first section became active Thursday and “runs from Springfield to Sandisfield and includes 51 community institutions,” it said, with more to follow in coming months.
Local media company LIN TV acquired digital agency HYFN, which “develops and implements award-winning mobile, social and web experiences for some of the world’s largest brands,” LIN TV announced last week (http://bit.ly/13YygAA). HYFN offers clients -- including “mid-size, Fortune 500 and global companies” -- a system that allows them to manage multiple social media channels in a consolidated dashboard, according to the release.
Expect further consolidation among TV middleware vendors, ABI Research said. Already about 80 percent of sales within the sector, which ABI says includes middleware, conditional access and digital rights management tools, come from companies with end-to-end solutions such as Cisco, Microsoft and Rovi. The rest of the sales belong to startups, it said. “We expect the TV middleware market to continue its consolidation phase,” said Sam Rosen, a practice director at ABI Research. “First, hardware and software companies will come together to offer more of a service oriented approach,” he said. “Second, acquisitions bringing together technologies required for the next generation TV offering will occur,” he said.
The office of Wyoming Gov. Matt Mead (R) touted his state’s broadband work Thursday. “This expansion of fiber networks by private partners means the infrastructure will also be available to more private businesses,” the Republican said in a statement (http://1.usa.gov/12rpWEx). His office described the state’s work to attract data centers and to have faster broadband connections throughout the state, especially focused on schools and telecommuting. “The most recent map from the National Telecommunications and Information Administration and Federal Communications Commission shows high-speed access for Wyomingites moved from 54% to 85% between 2010 and 2011,” according to Mead’s office. “Over two-thirds of Wyoming students now have access to high-speed internet connections at school -- this is up from a quarter of students at the beginning of 2011.” Mead’s staff helped orchestrate the law restricting state regulation of VoIP and IP, which staff said was done to increase such tech investment (CD Feb 1 p7). The governor signed that law recently, which takes effect in July. The data center progress may be “just the beginning,” Mead noted, pointing to the expansions of the Green House Data center in Cheyenne and Ptolemy Data Systems’ centers in Sheridan. Microsoft plans to expand a center in Cheyenne and Silver Star Communications hopes to open one in Afton, he added.
Kansas House Bill 2201, a broad telco-backed deregulation bill, received another passing vote Thursday. The Senate conference committee report version was adopted 37-3. Kansas’s two legislative bodies voted in favor of the bill in February and March but multiple versions still required hashing together for a final vote.