The commissioners have less than eight months to “ensure that all people of the United States have access to broadband capability,” as well as provide additional guidelines for using existing high-speed Internet infrastructure to support more than a dozen socioeconomic and political objectives.

Officials can sift through more than 1,700 suggestions from a gamut of activist groups, lobbyists and interested consumers. Many of them see the answer in some form of social and economic engineering by government bureaucrats, price controls, wealth redistribution, or other regulatory mandates. Nothing could be further from the truth. Now, as in the past, the FCC should reject proposals that are hostile to market forces.

A new public fund to subsidize Internet access for poor and rural residents is not likely to be effective. Consider the case of E-Rate, a US$2.25 billion FCC fund created in 1997 to connect all children to the Information Age by underwriting up to 90 percent of the costs of hard-wiring classrooms and libraries. Since its conception, however, E-Rate has been a bust. Public and private reports detail the regulatory loopholes, rubber-stamped “gold plated” networks, and criminal abuse.

After disbursing more than $20 billion in funds — collected, ironically, from fees that raise the cost of monthly phone bills — the FCC has still failed to establish basic accountability measures for E-Rate, and according to the Government Accountability Office (GAO) this March, excessive rules and paperwork keep thousands of schools from seeking reimbursements for legitimate costs. If the FCC is too inept to structure and manage our broadband funds properly today, what will make tomorrow any different?

Read more here.

“Even with the credit crisis, the telecommunications industry is in better shape than it has ever been in. It is now competitive, relatively flush with subscribers and strategic options….“You’re not seeing the same liquidity issues and hue and cry coming out of the telecom industry that you’re seeing out of other industries,” Seidenberg said.”

[...]

The FCC is a nonprofit entity, and, therefore, criteria such as power and politics — not money — shape its motives. In a world in which telecommunications has morphed into a simple Internet application, the FCC becomes irrelevant if it doesn’t govern the Net. This gives bureaucrats from both parties incentives to make new rules in order to stay in the game, as they did with their Net neutrality “principles” in 2005.

However, incentives to stay in power are not necessarily aligned with incentives to do what’s right for consumers. That should give everyone reason to consider carefully what is likely to happen if FCC Chairman Kevin Martin is successful in intervening to control the Internet’s future.

That would be a future in which lobbyists, interest groups, and power-hungry politicians controlled what consumers could access on the Net. It would be a future that looked a lot like the regulation-heavy telecommunications past.

[...]

Read full article here.

RFID (radio frequency identification) tags that can monitor the status of older individuals, face-recognition video systems that allow two-way video calls when someone simply enters the room, and robot-assisted remote telesurgery are just a few of the amazing systems described at the conference.

Eric Dishman, Intel’s director of product research and innovation, discussed his company’s goal of getting “rid of the nursing home” and putting “technologies in people’s homes.” Dishman is working from a distributed computing point of view, where caregiver expertise can arrive across time, and medical technology can be distributed from outdated institutions to an individual’s most frequented location.

Technology like RFID tags connected with wireless networks can help create an “always on” health monitoring system, thereby transitioning society away from a “mainframe” medical model and redirecting it toward a smaller, more personalized, PC-type model. This is a great idea, yet the unspoken truth is that this type of communication requires healthy, innovative networks. That raises a key question about Net neutrality, an issue spun and respun by many.

Essentially, it involves a fight over whether network operators, such as Verizon or Comcast, are allowed to continue to set the price for their services and prioritize information that rides on their pipes.

History shows that government regulatory and price controls have a negative effect on innovation, and applying them to the Internet — as Net neutrality advocates want to do — would be disastrous for rolling out newer, faster and more efficient network services. This makes one wonder if Intel’s research and innovation department ever talks with its lobbying arm, because in 2006 the company foolishly jumped on the Net neutrality bandwagon.

[...]

Read more here.

Verizon’s “walled garden” required consumers to use a Verizon-chosen phone in order to get Verizon’s service. Consumers disliked that restriction, and the company took notice. Indeed, the company’s press release makes the point that Verizon has often parted with the “big telecom” mentality in order to serve consumer-driven demand.

For instance, “the company parted with the industry last year when it introduced prorated early termination fees and in 2004 when it refused to participate in a wireless directory when customers said they didn’t want one. Verizon Wireless also broke with ‘wireless tradition’ when it supported local number portability, because customers wanted the freedom to take their number if they switched service providers.” Now Verizon is breaking with tradition to offer consumers greater device choice.

Verizon also clearly sees large revenue opportunities in an open system. The success of the iPhone made it obvious that consumers are willing to buy their own phones at high prices instead of simply going with subsidized versions that the phone company offers. Right now, the iPhone can only be used on AT&T’s system, but if it could be used on any system, Verizon would certainly be better off. Of course, there is another business reason for Verizon to open up as fast as possible.

If it can get developers to start working on new devices for its system, it will be in a better position when Google’s Android open source mobile software project starts to take off. The market forces pushing open the wireless industry appear almost unstoppable, making one marvel that state utility commissions still hold hearings to question whether there is enough competition in the sector. That brings up the issue of politics, and wherever there is telecom, there are lobbyists.

[...]

Read more here.

The study, titled “Wi-Fi Waste: The Disaster of Municipal Communications Networks,” reviewed 52 city-run telecom networks that compete in the cable, broadband, and telephone markets. The amount of deception and anti-competitive activity that we found in our sample was appalling and a solid reason why proposed Muni Wi-Fi systems across the country should be opposed. It’s nice to see that politicians, the media, and companies are finally taking notice.

So does this mean an end to the idea of cities blanketed in Wi-Fi? Of course not – it means the opposite. Now that government is not distorting the market with subsidies, both corporate and open source networks can flourish. One company that seems to be doing a good job of expanding Wi-Fi access in San Francisco is Meraki, but there are others as well.

Here’s a paragraph from the study:

According to the Tax Foundation, the national average retail sales tax rate (combining local, county, and state sales taxes, weighted by personal income) is 6.61 percent. Taxes and fees on cable TV and telephone subscribers average 13.52 percent, twice as high. In other words, telephone calls and cable services are taxed at two times the rate as clothing, sporting goods, and other household products.

“It’s only fitting that the United States’ largest municipal Wi-Fi city would have complete and total coverage for all wireless devices, including cellular telephones,” said Mayor Pringle. “For 150 years in Anaheim, we have championed creativity, innovation and imagination – the same ideals that technology companies embody.”

Good for them. It’s time for leaders in other cities to do the same.