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Jeffrey Eisenach

Critics and Supporters of Net Neutrality Trade Claims at Senate Judiciary Committee Hearing

in FCC/Net Neutrality by

WASHINGTON, September 21, 2014 – At a Senate Judiciary Committee hearing on Wednesday, critics of net neutrality warned against the negative impacts of internet regulation while supporters of net neutrality said that practices by major communications demonstrated the need for such protections.

Both former Federal Communications Commissioner Robert McDowell and economist Jeffrey Eisenach said that antitrust and consumer protection laws have been enough to protect of both technology companies and consumers. They also said that public utility regulation under Title II of the Communications Act would negatively impact investment. Both cited prosperity under deregulation as a key reason for avoiding greater government oversight of the internet.

Answering senators’ questions about previous widespread anti-competitive behavior, Eisenach downplayed accusations, saying that the core complaints have not been born out. He said that Netflix allegations against Comcast and Verizon Communications throttling data had been proved false by information found in the video streaming company’s August filing with the FCC.

Among the proponents of stronger net neutrality rules on the panel was Brad Burnham, who previously worked for AT&T in sales and marketing, but is currently a managing partner at a ventures company investing in internet applications like Tumblr and Kickstarter. He said greater regulatory oversight requires Title II reclassification. He said that internet service providers have begun to deploy “deep packet inspection” of the applications and services consumers are using on their network.

Nuala O’Connor, CEO of the non-profit Center for Democracy and Technology, took a less extreme path, urging the agency to consider available regulatory options, including Section 706 of the Telecommunications Act of 1996, or Title II, or something entirely different.

An additional witness in support of net neutrality was Ruth Livier, a writer, independent producer and actress. Livier, who said that the traditional media landscape did not give the pilot for bicultural dramedy about a modern Latina, said that net neutrality was a civil right. Because of an open internet, Livier was instead able to turn that TV pilot into the web series www.Ylse.net in 2008. She said it was vital to keep the internet “open and free of gatekeepers.”

 

Economists Say Network Neutrality Regulation Would Harm Consumers

in Broadband Updates/Broadband's Impact/FCC/Net Neutrality by

WASHINGTON, April 12, 2010 – A group of well-known economists has determined that the Federal Communications Commission’s proposed network neutrality regulations would harm consumer welfare.

The group of 21 economists includes Jerry Brito of George Mason University’s Mercatus Center, Robert Crandall of the Brookings Institution, David Farber with Carnegie Mellon University, and Jeffrey Eisenach and Hal Singer of Navigant Economics.

They say the government should not attempt to regulate the networks of high-speed Internet service providers to ensure that those companies give all consumers equal service.

“The economic evidence provides no support for the existence of market failure sufficient to warrant” the type of regulation proposed by the FCC, according to a statement from the group promoting the report “Network Neutrality: The Economic Evidence.”

The economists believe that “to the extent the types of conduct addressed in the [notice of proposed rulemaking] may, in isolated circumstances, have the potential to harm competition or consumers, the commission has and other regulatory bodies have the ability to deter or prohibit such conduct on a case-by-case basis, through the application of existing doctrines and procedures.”

Tech Policy Expert Sees U.S. on Right Path to Broadband Growth

in Broadband Stimulus/NTIA by

WASHINGTON, July 31, 2009 – The federal government and broadband grant seekers should be careful as they seek policy to ensure it doesn’t hinder the spreading of high-speed communications system across the nation, a former Commerce Department official and broadband expert said.

Internet Innovation Alliance Co-chairman Bruce Mehlman, who was assistant secretary of Commerce for technology policy during the most recent Bush administration, told BroadbandCensus.com that although many parties with an interest in the debate are displeased with the National Telecommunication and Information Administration’s broadband initiative, the state of the nation’s broadband is not dire.

“Speeds have gone up, prices have gone down, percentages of populations served have expanded,” he said.

But he noted that “the tenor of many of the comments [to the broadband plan] is that the sky is falling and America is the broadband Banana Republic.”

Mehlman pointed to a new study, “The Substantial Consumer Benefits of Broadband Connectivity for U.S. Households” by Jonathan Orszag, Mark Dutz and Robert Willig as evidence that the broadband situation in the United States is healthy.

The study focused on five findings:

1. Consumers receive more than $30 billion of net benefits from the use of fixed-line broadband at home, with broadband increasingly being seen as a necessity;

2. With even higher speed, broadband would provide consumers even greater benefits – at a minimum of an additional $6 billion per year;

3. Significant broadband adoption gaps exist between various groups of households;

4. Among those who have a home broadband connection, there is no significant valuation gap based on race; and

5. The total economic benefits of broadband are significantly larger than our estimates of the consumer benefits from home broadband.

Mehlman said the report shows broadband is an “experience good.” Once people experience it, they value it much more highly than they ever thought they would, which could explain some of the adoption gaps. In effect, to expand broadband by focusing on unserved areas is a good investment, but one that should be done regularly by the private sector.

Broadband also has seen growth through private investment and not just from the government’s coffers, he noted.

“We should recognize that there is an annual investment of $60 to $80 billion that is not government money,” Mehlman said, citing data from researcher Yankee Group. “We should make sure that government decisions don’t deter that investment.”

“In a healthy market you will see adoption up and down the workplace,” he said, “and I’d like to continue to see the wireless versus wireline versus cable versus powerline arms race.”

Mehlman’s attitudes reflect those by economists at a broadband plenary last month held by the Progress and Freedom Foundation. Economists at the event differed on exact reasons why the United States has a successful broadband competition, but said the market works. They said too much regulation – rather than incentive – would be a bad thing.

Emperis Managing Partner Jeffrey Eisenach had said at the PFF forum that regulation of the broadband market would discourage innovation and that “regulations…don’t give enough credence to how capital markets work.”

Mehlman said the federal government should be careful in setting regulation “With mapping underway you shouldn’t presuppose strategy,” he said, referring to the Broadband Data Improvement Act currently open for broadband mapping grants.

Mehlman said policy can make infrastructure investment harder or easier, and if you add regulation it will deter private investment – especially in the unserved and underserved areas, those of prime focus in the current notices of available funds.

“Things are going right,” Mehlman said of the competition, and that any new policy should be done “with caution and humility.”

American Broadband Market Works, Economists Say

in Broadband's Impact by

WASHINGTON, June 15, 2009 – Reports of the death of American broadband have been greatly exaggerated, said a group of economists Friday at a panel on broadband market competition sponsored by the Progress and Freedom Foundation.

Groups like Free Press who routinely cite international statistics to support a thesis of market failure in broadband are overly pessimistic, said  Thomas Hazlett, Director of Information Economy Project and professor of law at George Mason University. “We’re all falling behind…the decline is on and we’re all sinking into the abyss,” he said sarcastically. Whether or not the American market is truly a duopoly can be tested empirically, Hazlett suggested.

Emperis managing partner Jeffrey Eisenach called the U.S. rankings and duopoly claims “two big misconceptions with the state of the world.” Recent OECD rankings are “100 percent wrong,” he said. And charges of a duopoly fail because of differences between services offered to residences and business.

Regardless, because American broadband was deregulated just five years ago, “competition is driving innovation,” he said. Europe has very little fiber deployed in comparison to Verizon’s deployment of fiber to many American markets, he noted. And when one counts DSL, Cable, and 3G networks of both AT&T and Verizon Communications, 80 percent of Americans have “four pipes” to the home, he suggested.

But Information Technology and Innovative Foundation President Rob Atkinson said there is a difference between government “facilitation” of deregulation and actual deregulation on the broadband system. “I think we are behind, and I think it is a duopoly,” he said. But Americans are “lucky to have two pipes” compared with many countries, he said. Introducing a municipal third pipe would be “overbuilding [and] a huge waste of money.”

The FCC can expand broadband penetration by educating people “at the margins” on the benefits of broadband and using programs like the Universal Service Fund to get service to consumers “at reasonably low prices,” Atkinson said. But regulation of the broadband market would discourage innovation, Eisenach said. “regulations…don’t give enough credence to how capital markets work,” he said.  While 100 percent coverage “may be the right number for health care,” it’s not worth the investment for broadband, he said.

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