Atlanta should avoid the net neutrality debate. It’s not good for business

Internet Innovation Alliance co-founder Bruce Mehlman posted an article yesterday discussing the positive impact relaxed regulatory requirements can have on investment in and deployment of broadband networks. According to Mr. Mehlman, investment in broadband rose by $1.5 billion to $76.3 billion.  He contrasts this to the $3.2 billion decline in investment between 2015 and 2016.

What made the difference? According to Mr. Mehlman it was the decision last year by the Federal Communications Commission to repeal their 2015 open internet order, a decision that put into regulatory code a number of net neutrality principles.  The 2015 order treated broadband access providers as telephone companies by applying consumer and telephone network management rules that were based on communications law from the 1930s.  That approach, according to Mr. Mehlman, just can’t fly in the 21st century.

Unfortunately, Washington has been embroiled in a debate over how net neutrality principles should be applied.  There is a consensus among opponents to and proponents of net neutrality principles that consumers should be able to access web content of their choice; that content providers should not have their traffic speeds throttled by broadband access providers; and that broadband access providers should be transparent about the terms and conditions of their services.  Whether a rule by a regulatory agency is the best approach to ensuring these policy goals is an issue.

Getting to yes on net neutrality may be best brought about by an action of Congress.  Defining net neutrality in the law and laying out the components of its meaning will give content providers and broadband access providers definitive guideposts that help settle any conflicts in the future.  Without a congressional action, the industry and consumers run the risk of a back and forth regulatory battle driven by changes in political power, particularly when a new presidential administration takes over and a new chairman is appointed.  That type of uncertainty every four years is not good for consumers or business.

As more people and businesses move to Atlanta, regulatory certainty becomes an asset for the person who telecommutes; for the financial technology company that needs to maintain connection to its app subscribers; to the student who relies on distance learning to complete assignments.

Treating a broadband provider facing competition from three or four more broadband providers as if they were a monopoly local telephone company in 1934 won’t contribute to Atlanta’s continued growth.

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Verizon moves ahead with 5G

Verizon yesterday announced the rollout of Verizon 5G Home internet service. Verizon claims in its press release that it is the first company to introduce 5G commercially in the United States with service to be provided in parts of Houston, Indianapolis, Los Angeles, and Sacramento.

Given the lack of uniform industry standards, being first to provide 5G service means moving ahead with the service based on its own proprietary 5G standards.  According to Hans Vestberg, Verizon’s chief executive officer,  “To be first, we encouraged others in the ecosystem to move more quickly at every step. We appreciate the partnership of network equipment makers, device manufacturers, software developers and chip makers in reaching this critical milestone. The entire wireless industry gets to celebrate.”

Verizon will start taking consumer orders for the service on 13 September 2018 with the service taking effect on 1 October 2018.

SDx Central, a technology content provider and research firm, estimates that the first phase of 5G standards will probably not materialize until late 2018 when industry can base concrete standards on high profile cases. However, Verizon sees no concerns with moving forward with its own proprietary standards.  Rather, it sees itself as a leader on moving the industry further along the journey to rolling out 5G. According to company spokesman John O’Malley:

“The 3GTF standard we developed actually accelerated the adoption of the international standard last December — two years earlier than most people thought it would happen. And now, device, infrastructure and other technology leaders are developing products that will run on that standard. And when those products and technologies are available, we’ll evolve our offerings as well. The entire industry is working together on this.”

Although Verizon did not mention the impact of its 5G rollout on global trade, broadband communications has been described as an important platform for international commerce, particularly for small and medium enterprises.

In 2013, the World Economic Forum determined that 95% of businesses located in countries that are part of the Organisation for Economic Co-operation and Development has an online presence. The internet in general and social media in particular allowed these businesses to market products globally and reach customers outside of their regions.

Joshua Meltzer of the Brookings Institution in a paper addressing the internet as a platform for international trade said the following:

“Significantly, the Internet is creating new opportunities for small and medium-sized enterprises (SMEs) and for businesses in developing countries to engage in international trade and become part of the global economy. By providing opportunities to access business inputs such as cheaper telecommunications, strategic information on overseas markets, legal and consulting services, and cloud computing, SMEs and developing country firms are now more than ever able to become globally competitive. With a website, these firms can now engage internationally, reaching customers and communicating with suppliers all across the world.”

Could we see further integration of the aforementioned cities into global trade as a result of this rollout?

 

FCC to vote on a 5G order designed to deploy more broadband

On 26 September 2018, the Federal Communications Commission will vote on an order that members of the Commission believe will help pave the way for deployment of the small cell technology that supports 5G technology.

5G refers to a next generation wireless technology that promises to deliver wireless communications at faster speeds with increased data capacity.  Writing for TechTarget.com, Margaret Rouse describes 5G as a technology that could provide data traffic speeds of 20 gigabits per second while enabling increases in the amount of data transmitted due to more available bandwidth and advanced antenna technology.

“In addition to improvements in speed, capacity and latency, 5G offers network management features, among them network slicing, which allows mobile operators to create multiple virtual networks within a single physical 5G network. This capability will enable wireless network connections to support specific uses or business cases and could be sold on an as-a-service basis.” — Margaret Rouse

Unlike current 4G Long Term Evolution wireless technology that relies on the deployment of large cell towers, 5G depends on the deployment of small cell antenna sites that are placed on utility poles or rooftops.  5G is designed to operate in frequencies between 30 GHz and 300 GHz allowing for greater data capacity but over shorter distances.

Commissioner Brendan Carr has been given credit for driving the development and release of this order.  Mr. Carr has been traveling the United States advocating for streamlined regulations that in turn would facilitate deployment of 5G technology.  Mr. Carr sees local and state regulations for cell tower and other facility siting as an issue and is making the argument that Sections 253 and 332(c)(7) of the Communications Act of 1934 can be leveraged to make local and state regulations less adverse to 5G deployment.

Under Section 253 of the Communications Act, the Commission may preempt any local or state statute or regulation that prohibits an entity from providing intrastate or interstate telecommunications services. States and localities can regulate telecom companies in order to preserve universal service, protect the public safety and welfare, and manage public rights-of-way.  Section 332(c)(7) maintains a state or local government’s authority over decisions regarding placement, construction, and modification of personal wireless facilities.

Mr. Carr argues that the order will generate $2 billion in cost savings for the wireless industry while generating an additional $2.4 billion in wireless investment.  Actual deployment is still nascent with expectations as to what 5G can do versus what it is actually doing.  Phones using 5G standards, according to Ms. Rouse’s article, are expected in 2019.  Cities are still constructing their blueprints for reconciling their smart city concepts and the “internet of things” with 5G expectations.  It may not be until 2030 that 5G becomes commonplace.