Tag Archives: regulation

California cable lobby wants neutral regulation and it should have it

by Steve Blum • , , ,

Equally attached to unequal laws.

When the California Public Utilities Commission allowed mobile phone carriers the same freedom to install wireless equipment on utility poles that wireline companies enjoy, it encouraged cable and telcos to ask for the same deal. It inferred that the path to approval would be open if they didn’t get stroppy about fine print that was written when copper was all there was. Like pole attachment rates that assume a thin cable and not a fat box full of radio gear.

The lobbying front for the California cable industry – the California Cable and Telecommunications Association – jumped at the offer. In a petition filed with the CPUC, CCTA said of course there’ll be no quibbling over the meaning of ancient texts: the same rules that apply to mobile carriers should apply to cable companies, because doing it any other way would…

Contravene state statutes and Commission precedent…which require regulation in a competitively and technologically neutral manner.

Just so. That is, or should be, the guiding principle for all telecoms regulation in the 21st century. Having one set of rules for companies that push bits through wires wrapped in foam and mesh, and another for those using twisted pairs of copper is anticompetitive and technologically biased.

Cable and telephone companies rely on a hundred-year legacy of regulations that originally granted them monopoly rights to provide specific services using particular technologies in the analog age, when telecommunications was defined by the physical medium used and not the information it contained.

I’m sure CCTA didn’t intend to make that point. It is a fierce defender of a system that allows cable companies to divide up territories amongst themselves and then operate within as unregulated monopolies. Telephone companies are no different. They also rely on a bespoke regulatory regime that produces a similarly satisfying result.

CCTA’s conclusion is correct. It should be applied across the full spectrum of Californian telecoms law and regulation, in a competitively and technologically neutral manner.

Accelerating technological change triggers regulatory reflex in Santa Cruz

by Steve Blum • , , ,

San Francisco voters decisively rejected an attempt to clamp stiff limits on Airbnb and other online platforms that make it possible for people to rent out spare rooms and empty houses by the day. The measure was on the ballot in the first place “because the hotel industry is threatened”, said California lieutenant governor Gavin Newsom. He was the keynote speaker at the Monterey Bay Economic Partnership’s state of the region conference in Santa Cruz.

It’s not only the hotel industry that’s feeling the heat. Property owners can often make more money on a daily basis via Airbnb and similar outfits than they can renting out houses and apartments by the month. Reducing the supply of traditional rental properties raises the price. It’s no surprise, just simple microeconomics.

One solution is to embrace the market and build more places to live. But whether it’s meant for the open market or government managed programs – so called affordable housing – new construction faces vocal opposition from neighborhoods and seemingly endless regulatory hurdles. “If there’s one thing I would do, it is change CEQA [the California environmental quality act] to make it possible to build more housing in ways that are predictable”, Lynn Reaser, chief economist at the Fermian Business and Economic Institute told the audience.

That’s not likely to happen. Newsom made it clear that it’s a third rail he won’t step on – he jokingly said he was willing to get out front on “marriage and marijuana” but not CEQA.

Which leaves regulation as the tool of choice for confronting the law of supply and demand, something Santa Cruz mayor Don Lane favors. “The greatest need we have in our communities is affordable housing, more than visitor accomodations”, he said.

Managing a shortage is not the same thing as fixing it, though. Newsom said that economic change is accelerating. “The tech genie is out of the bottle, you can’t stop the future”, he said.

Cellular sites have no impact on property values

Noise level does not equate to economic impact. Cellular tower opponents talk a lot (including on their mobile phones – go figure) and can be extremely disruptive at public meetings. Not to mention the damage they do to broadband improvement efforts. But their bark has no bite in the Silicon Valley real estate market.

Joint Venture Silicon Valley has completed a study of the impact of cellular sites on property values in Palo Alto, Redwood City, Saratoga and San Jose. Bottom line: proximity to a wireless tower has zero, zilch, zip, nada effect on the selling price of single family homes.

The study looked at 70 wireless sites and examined more than 1,600 transactions, with the assistance of the Santa Clara and San Mateo County Realtors Associations. They compared the difference between the initial asking price of a home with the eventual selling price. The spread was the same regardless of how close or not the home was to a tower.

Comparisons were made over nine months, from January to September 2012. Homes as far away as half a mile from a cellular site had the same ask/sell spread as homes right next to one.

The study was presented by Leon Beauchman, the director of JVSV’s wireless communications initiative, at their second annual wireless symposium, held on 2 November 2012 at Marvell Semiconductor Inc. headquarters in Santa Clara.

The initiative is aimed at improving mobile broadband coverage in Silicon Valley, with a goal of making 4G service “available from major carriers in half of Silicon Valley cities by 2014.”

Congresswoman Eschoo pushes for more broadband spectrum

Silicon Valley congresswoman Ann Eschoo wants to shake up the way that Washington manages and assigns spectrum. The goal is to free up a total of 500 MHz for wireless communications purposes. Much of that would come from turning over frequencies held by government agencies to public use. But some of it would come, willingly or not, from the private sector.


“We have to make freeing up spectrum a top priority,” she said at Joint Venture Silicon Valley's second annual wireless symposium, held on 2 November 2012 at Marvell Semiconductor Inc. headquarters in Santa Clara. “So many companies and broadcasters think it belongs to them. We know that the airways belong to the American people.”

Eschoo pointed to an FCC decision to move ahead with buying back television channel assignments from broadcasters on a voluntary basis and auctioning it off to wireless carriers. She said it would account for 120 MHz towards the final goal, and raise $25 billion dollars, although some of that would go to broadcasters who gave up their channel assignments.

The FCC has given itself a June 2014 deadline to hold the auctions. There are a lot of different interests to balance in the process. Wireless Internet service providers are worried that unlicensed frequencies will be sold out from underneath them.

Spectrum policy “must be balanced with both licensed and unlicensed spectrum,” Eschoo said, adding that wireless technology generates $50 billion in revenue in the U.S. every year.

Some government agencies are fighting plans to clear them off of some frequencies and turn the bandwidth over to the private sector, preferring instead to work out some way of sharing. But that idea is not very popular with wireless broadband advocates.

Eschoo believes that federal agencies can be more efficient in their use of frequencies, and wants Congress to step in and “scrub” the way the executive branch holds and uses spectrum. The bottom line, she said, is that the airwaves are an engine for job creation.

Genchowski has an activist agenda for the FCC

by Steve Blum • , , , , , ,

FCC chairman Julius Genachowski delivered the opening keynote at the CTIA IT and Entertainment conference today. He offered good of idea of what he has in store for the industry, and gave us a feeling for who he is.

If you take him at face value, the FCC is going to be the wireless industry’s best friend. And the consumer’s best friend. In fact, everybody’s best friend.

Genchowski unveiled what he called the FCC’s mobile broadband agenda:

1. “Unleashing spectrum” for 4G service. He said mobile broadband usage is exploding, and the FCC has to promote more efficient use of spectrum.
2. Remove obstacles to 4G deployment, for example by streamlining the tower siting process.
3. Develop fair rules of the road for the Internet. He said it’s important to ensure the Internet remains open, and that the FCC has to empower entrepreneurs, not lawyers.
4. Empowering consumers by supporting a transparent marketplace. He also said vibrant and competitive marketplace, but he focused on transparency — nominally more information for consumers — as the means to fostering greater competition.

He clearly intends to be an activist FCC chairman. His plans would create a bigger role for the FCC in regulating the telecommunications industry, wired and wireless, telephone, cable and broadband alike.

The better the available information, the better a free marketplace will work in theory. That’s fine. But it’s a short step from requiring better information to trying to actively manage the workings of the market, and then to dictating outcomes.

The point wasn’t lost on Ralph de la Vega, CEO of AT&T Mobility and the second keynote speaker. He thanked Genchowski for his stated good intentions, but quickly hit back, saying we (presumably meaning America if not the entire world) need an Internet free of “burdensome regulation”. He said the Internet is open now, and needs to stay that way.

In a genuine debate, it would have been difficult for de la Vega to make the case that the particular corner of the Internet that he is responsible for is open. Like all U.S. mobile carriers, AT&T manages what subscribers can do with their bandwidth, and what devices they can use.

On the other hand, Genchowski would have been equally hard pressed to explain how a more activist regulator will lead to greater market freedom. Creating “fair” rules and “empowering” particular market players is in fact the reverse of letting the market operate.

Even free market economists usually allow that natural monopolies, such as telecoms networks, need some degree of regulation, so there’s clearly a role for the FCC to play. If that role is limited to increasing transparency and improving the ability of consumers to make economically rational choices, Genchowski and de la Vega should have no argument between them.

Will Genchowski so limit himself and his colleagues? I did not leave with the feeling that he sees himself as a simple referee. Rather, his enthusiasm is palpable for the work he laid out. I expect he will lead an FCC that increasingly sees itself as an industry player, at the least co-equal with the private sector, and sitting on the opposing side of the table.

Maybe Genchowski really believes he can foster entrepreneurial growth through federal regulation, rather than creating a bull market for Washington lawyers, lobbyists and special interests. If he does, he needs to explain how.