Some of you may remember Pennsylvania as the state where the battle to save muni broadband began when, around Thanksgiving 2004, the PA Legislature passed a law preventing local government from“competing with the private sector” by prohibiting state or local government from offering broadband services unless the local government solicited service from the private sector and got turned down. While that sucked from the perspective of the citizens of PA, it did help kick off the massive fight that blocked anti-muni broadband legislation in other states, such as Indiana and Texas.
Now, those whacky worshipers of the Gods of the Marketplace in the PA Legislature are at it again! As reported by Craig Settles, the Hon. Patrick Browne (R-Senate District 16), Chairman of the PA Senate Finance Committee, and several lesser acolytes of the Absolutist Free Market Faith have introduced SB 530. This bill would prevent the State of PA or any local government therein from taking any stimulus money for purposes that would “compete with the private sector.” Indeed, if I read it correctly, it would prevent PA or local government from ever engaging in any activity that “competes with the private sector” unless it was (a) related to higher education, (b) maintaining public parks, (c) “necessary services” defined as “those services that are critical for human safety and health, including fire departments, emergency services and medical services;” and (d) any current activity, but that activity may not be expanded.
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Many folks talk about broadband build out as if it were rural electrification. I do agree with this in one sense — it is a critical part of our infrastructure and links to our tradition of ensuring that we remain one country with access to vital services for all. In this respect, broadband is similar to telephone/voice, electric power, sewage, roads, and other other public utility/natural monopoly type investments. But it is fundamentally different from all of these in a fundamental way. Other public utilities have high initial construction cost, but then have very predictable maintenance and upgrade costs. This makes it possible to solve some problems with a huge one-time grant or, for the private sector to make a serious cap ex investment, but then budget for regular upgrades based on projected need and maintenance based on standard depreciation.
Not so broadband. As our technological capacity increases, we increase both the potential capacity for the network and our capacity to use the network in unpredictable ways. But we have neither public policy nor private sector models that acknowledge this — with the possible exception of Verizon, which solved the problem from their perspective by aggressively pulling fiber/overbuilding capacity as to current demand where profitable and aggressively selling off high cost rural regions. And, while that works for Verizon and its shareholders, it rather sucks from a public policy perspective.
I call this the Zeno’s Broadband Buildout Problem. No matter how much Achilles invests in build out, he will never catch up to the limit of possible upgrades. As I explain below, my tentative conclusion is that the right public policy result is a recognition that we don’t get to do a one time investment and go away, but need to continue to experiment to find sustainable models that factor in growth rather than simply look at build out followed by steady state. I’m not sure beyond that, other than my conviction that anyone who shrugs and says “that’s why the government shouldn’t do this at all” is definitely wrong.
OTOH, it also means I find the speed upgrade in the stimulus package — 45/15 for wireline and 3/1 for wireless — pretty good despite the fact that many of us want to reach the 100 mbps or even 1 gigabit/second capacity for future network needs. Broadband Achillies may not be able to catch up to Bandwidth Demand Tortois, but that doesn’t mean he gets to slack off either. A good swift stimulus in the patootie is actually a pretty good idea, given the open ended nature of the problem.
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Sometimes the conventional wisdom gets it right. After much speculation, it now seems increasingly likely that Obama’s Harvard Law classmate Julius Genachowski will be nominated to take over as FCC Chair.
From my perspective, this looks like very good news. Genachowski is no stranger either to the FCC or to the private sector, a distinct advantage given the twin difficulties of managing the agency and dealing with all manner of incumbent dog-and-pony shows. Heck, Genachowski is no stranger to the DTV transition, having been involved in the initial standard setting work back in the day. Genachowski’s close relationship with Obama, heavy involvement in the Obama campaign from the beginning, and general tech background provide fairly strong early assurance that — contrary to the hopes of some and fears of others — Obama does not appear to be backing away from his campaign commitment to open networks and media diversity.
All that said, let nobody think the fun is over and we all get to go home. Now more than ever, progressives need to build on our movement momentum and press our case open networks, real spectrum reform, a more diverse media, adequate consumer protection, and regulation that creates real competition by opening bottleneck facilities and limit market power. We have an opportunity, not a victory, and we must act to seize it.
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Today marks the 40th Anniversary of Star Trek, now referred to as Star Trek: The Original Series (or just ST:TOS). I make no secret of my love for ST:TOS, and credit it with (among other things) imbuing me with a sense of idealism and optimism against the odds. But few realize how FCC regulation of broadcasting made the creation and syndication of Star Trek possible — and why deregulation has made it so much harder for something like Star Trek to hapen today.
And what a long strange trip its been to get here! In 2004, Congress passed the Commercial Spectrum Enhancement Act (CSEA), which required government users to vacate some choice spectrum so the FCC can auction it. You can see the FCC’s official page for this auction here. You can see my recent general musings on this auction on the Public Knowledge policy blog here.
But none of this tells the whole story. After two controversial rulemakings, a pending legal challenge, and the appearance of a host of new bidders, FCC Auction 66: AWS-1 is ready to start this week on August 9. A look at the list of who has come to play signals an auction of unparalleled visciousness, determination, and probable manipulation by sophisticated bidders because the FCC wussed out and did not adopt anonymous bidding.
For those interested in my handicaping what a report from the Center for American Progress describes as a corrupt means by which incumbents keep out competitors and what I have called “a really wonky version of Worlds of Warcraft,” read on!
Posted in General, Spectrum, Tales of the Sausage Factory
Also tagged aws, bidders, crack cocaine, fcc, fcc auction, incumbents, manipulation, public knowledge, public policy, spectrum auctions