Category Archives: Law and Economics

Welcoming Private Sector Efforts to Increase Broadband Adoption…

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According to U.S. Census data, in 2017 about 78% of Americans accessed the Internet at home over a fixed, terrestrial connection.  Like most goods and services, adoption rises sharply with income.  Only about 60% of households with annual incomes less than $30,000 have fixed broadband at home compared to 82% of homes with higher incomes.  Overseas, many developing nations have extremely low Internet adoption rates.  While much of our domestic policy discussion focuses on a lack of availability in more rural areas, the lack of adoption is as big a contributor, if not a bigger one, to the Digital Divide.  Continue Reading »

A Preliminary Review of “The User Rights Database: Measuring the Impact of Copyright Balance”…

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Several years ago, Professor Tom Nichols wrote an interesting essay entitled “The Death of Expertise.”  In this essay, he makes a simple yet profound insight: in our increasingly politicized world, there is a growing disregard for serious work done by qualified experts in our public debate.  Accordingly, warns Professor Nichols, “unless we return [expertise] to a healthy role in public policy, we are going to have a stupider less productive arguments every day.” As I have unfortunately had to document on many occasions, nowhere is this “death of expertise” more acute than in copyright policy. The latest example, it appears, Continue Reading »

Economics Makes a Welcome Return in the Forthcoming BDS Order…

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As part of his efforts to increase transparency at the Federal Communications Commission, Chairman Ajit Pai recently posted a draft order in advance of this week’s April Open Meeting which purports largely to deregulate Business Data Services (“BDS”)—also known as Special Access services—in areas where incumbent providers face competition.  While Chairman Pai’s predecessor, Tom Wheeler, sought to substantially expand the regulation of BDS, his efforts were frustrated by a record (including his own outside peer review) that did not support his penchant for aggressive regulatory action.  Rather than fight economic theory and the available evidence, the Draft Order reveals that Continue Reading »

Second Circuit Debunks FCC’s Set-Top Box Arguments

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Last February, the FCC launched yet another attempt to excise itself from (in the immortal words of former FCC Commissioner Robert McDowell) the “Valley of Unattained Goals” of Section 629.  To justify its aggressive regulatory intervention, the Commission argued that (1) there is a separate market for set-top boxes over which MVPDs allegedly exercise market power; and, as such, (2) the rates consumers pay to rent set-top boxes, to put it colloquially, are “too damn high.” While such arguments make for great populist fodder, the problem is that the Commission’s foundational arguments underlying their set-top box proposal simply are not Continue Reading »

Municipal Broadband and Predatory Pricing…

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In the wake of the Federal Communication Commission’s pre-emption of state laws overseeing municipal broadband networks in North Carolina and Tennessee, I was asked by the State Government Leadership Foundation (SGLF)—a non-profit organization that helps state governments develop sound policy through education, research, and training—to conduct an economic analysis of municipal broadband to help state legislators better understand the issue.  Last month, the SGLF released the final product of my effort.  The paper is both long (nearly 70 pages) and dense, using economic theory to describe what municipal broadband is and what it is not.  I don’t wish to cover Continue Reading »

The FCC’s Intellectual and Empirical Vacuum Over Market Power for Special Access Services

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It’s been over eighty years since the Communications Act of 1934 created the Federal Communications Commission (“FCC”) for the purpose of overseeing the nation’s communications industries.  Still, as revealed most recently in the Commission’s Tariff Investigation Order and Further Notice of Proposed Rulemaking on Special Access Services (hereinafter “BDS Further Notice”) the Agency has no idea how to define or measure market power in telecommunications markets.  In fact, its BDS Further Notice offers no apparent definition of market power, which is a significant deficiency for a regulatory regime allegedly based on the presence of market power. There are some hints Continue Reading »

The Investment Effects of the FCC’s New Asymmetrical Privacy Regime…

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Last September, I participated in a conference sponsored by the U.S. Chamber of Commerce Foundation entitled “The Internet of Everything: Data, Networks and Opportunities.”  As part of my presentation, I discussed an essay I co-authored with Phoenix Center Chief Economist Dr. George Ford entitled Information, Investment and the Internet of Everything.  In this essay, George and I pointed out that as a consequence of the Federal Communications Commission’s (“FCC”) decision in March 2015 to reclassify broadband Internet access as a Title II common carrier “telecommunications” service in its controversial Open Internet Order, all Broadband Service Providers (“BSPs”)—whether wireline, cable or Continue Reading »

Special Access and the FCC’s Regulatory Revival…

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There is a Chinese proverb, though some call it a curse, which says “May you live in interesting times.” For those involved in telecommunications policy over the last few decades, I think it’s safe to say we are now living in interesting times. Since before and certainly after the 1996 Telecommunications Act, the communications industry has undergone a competitive and deregulatory revolution. Twenty years ago the cross-entry of phone companies into video markets and video companies into phone markets was a running joke, but no longer. It’s a reality. Video regulation, which was a disaster even under monopoly conditions, has Continue Reading »

2014 Year in Review…

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2014 provided fertile soil for those interested in policy research. So with New Years rapidly approaching, I want to uphold tradition and use our last blog post of the year to highlight what we at the Phoenix Center thought to be the most interesting policy issues of 2014 and to provide some select examples of where we believed we added constructively to the debate. Spectrum Availability and Allocation While spectrum policy is always complex, the debate again boiled down to the fundamental questions: how do we free up more spectrum; and once we do, how do we allocate it? For Continue Reading »

Title II Reclassification and the Price Regulation of Retail Broadband Services…

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Last month, Larry Spiwak and I published a paper entitled Tariffing the Internet: Pricing Implications of Classifying Broadband as a Title II Telecommunications Service in which we outlined how the reclassification of broadband as a Title II telecommunications service would work in practice. (See Larry’s Op-Ed for a condensed version.) Since net neutrality seems aimed at prohibiting “paid prioritization,” we concluded that reclassification must lead to a positively-priced and tariffed termination service. That is, edge providers will be required to pay broadband providers to terminate their traffic. Today, they do not. No one has yet to make any reasonable argument Continue Reading »