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Day Two at Personal Democracy Forum: What Happens After 'Reboot'?

NEW YORK, June 24 – “What happens next?” is the question Andrew Rasiej used to start off the Tuesday morning panel discussion at the Personal Democracy Forum here.

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NEW YORK, June 24, First Thing in the Morning – “What happens next?” is the question Andrew starts us off with and the quesiton he wants to guide today’s session. The question concerns what comes after the reboot of American Democracy that was discussed yesterday and what we can do with the Democratizing tools to positively impact how government operates. Andrew wants to know what the audience is gonna do if they get to the White House and get a chance to help the next president change the way America does business, does democracy, and does citizenship. The morning speakers seek to address future efforts towards a more direct democracy where the influence of traditional moneyed power brokers can be restrained by and in the favor of a new, progressive citizenry with its finger on the button of the technology for a better Democracy.

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Gary Bolton: Satellite’s Polite Conceit of Unserved/Underserved

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Gary Bolton, President and CEO of the Fiber Broadband Association and author of this Expert Opinion piece

“You keep using that word. I do not think it means what you think it means.” – Inigo Montoya, The Princess Bride

SpaceX Starlink is the latest satellite broadband project to invoke the needs of unserved and underserved consumers to justify Federal Communications Commissions (FCC) licensing. The polite fiction spun by it and other satellite companies, nurtured by today’s short-form news cycle, is that such networks will deliver broadband services to anyone who needs them.

However, a less liberal appraisal recognizes these multi-billion dollar capital-intensive efforts are dependent upon business and government customers for economic survival and will deliver services only to those who can best afford them.

The marketing conceit of “broadband for all” is not new and dates back more than a decade to the launch of the O3b mPower satellite constellation, with “O3b” standing for the “Other three billion” in the world that didn’t have broadband internet. Over the years, the company delivered services to the Cook Islands, Pakistan, and Nigeria along with four of the five major cruise lines fleet, NOAA, and the Department of Defense, listing verticals such as telcos and MNOs, governments, energy and mining companies, cruise and commercial maritime, enterprise, and aviation.

More recently, SES has partnered with Microsoft to deliver Azure Cloud access anywhere in the world, but there are no clear statistics on how many of the other three billion O3b has added to the internet.

“Our vision can change the lives of billions: almost half the entire human population is not yet connected,” OneWeb claims, but its targeted customers are maritime, aviation, enterprise, and government, with 5G worked in for good measure. There’s no clearly articulated path on how selling to big businesses translates into affordable access for billions of unserved and underserved people.

“Because that’s where the money is,” Willie Sutton, bank robber, once stated.

SpaceX executives believe the Starlink network could bring in as much as $30 billion a year, cash the company will use to fund Elon Musk’s ambition to colonize Mars. The company’s March 5, 2021, FCC filing requesting a blanket license for “earth stations in motion” (ESIM) focused on the company’s ability to deliver broadband services to large vehicles, ships and aircraft – going after the same government, maritime, and aviation sectors as O3b and OneWeb.

A week earlier, PC Mag expressed “concern” that urban Starlink deployments would take up satellite capacity “for the rural users who really need it. Starlink will have to manage its signups smartly.” Other publications have repeated the premise that Starlink’s reason for existence is to provide service to the unserved/underserved, so there’s no reason to worry about satellite affecting planned greenfield fiber deployments or network upgrades.

The cold truth is SpaceX is out to make money, so it’s going to sign up as many customers as can best afford the service and prioritize customers bringing in higher revenues such as enterprise, governments, and verticals. Revenue management is the name of the game, not rural users who need it. It is the same business template O3b and OneWeb are following today and Telesat and Amazon will in the future.

Satellite services provide both good and bad aspects for underserved/unserved geographics. In some clear cases, satellite will be the most cost-effective way to deliver broadband to rural locations because the local phone or cable company cannot economically provide a viable alternative. Higher-speed services such as Starlink should also serve as a competitive stimulus for rural incumbents to upgrade networks on a more proactive basis than simply “milking the asset” until things break or customers start leaving to other options.

It remains to be seen if Starlink services will have a large-scale detrimental impact on rural service providers and will depend the concentration of Starlink customers within a specific geographic area.  One or two customers picking up satellite services is unlikely to influence fiber buildout or network upgrade plans, but 10 or more most certainly could, especially if some of those customers are local business and government purchasers.

Gary Bolton serves as president and CEO of the Fiber Broadband Association — the largest trade association in the Americas dedicated to all-fiber-optic broadband. With more than three decades in the telecom industry, Bolton has been highly involved in Washington, particularly on FCC and Congressional proceedings and international trade issues. He holds an MBA from Duke University and a BS in Electrical Engineering from North Carolina State University. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to [email protected]. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Matthew Johnson: Digital Divide Solution is Right Here with Lifeline. Why is No One Paying Attention?

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The author of this Expert Opinion Matthew Johnson, co-founder and co-CEO of TruConnect

Over the past year, COVID-19 has upended lives and livelihoods and revealed the troubling breadth and scope of the digital divide. Despite the positive turn the pandemic is taking, millions remain unemployed and struggle to pay rent and put food on the table. They cannot afford basic broadband to apply for jobs, participate in telemedicine, and complete schoolwork and are consequently trapped in a Catch-22 situation where the lack of internet keeps them locked in their current economic state.

The good news is that a solution already exists. Back in the mid-1980s, the Reagan administration conceived the federal Lifeline program to bring subsidized phones into every household. Since then, the program has evolved to include mobile and broadband services.

Today, 33.5 million low-income Americans are eligible for subsidized – even free – cell phones and internet access courtesy of Lifeline. The problem is that almost 80 percent are not getting them. Why?

Fundamental Lack of Awareness

Over the past four decades, the Federal Communications Commission and Congress have slowly chipped away at Lifeline’s budget, regurgitating the now-common “waste, fraud, and abuse” refrain. Most of those concerns from over five years ago have been remedied; however, the program continues to be overly politicized.

The result is that government agencies at state and federal levels have dedicated scant resources to educate the public about this lifesaving benefit – and COVID-19 has exposed the ramifications of that neglect in the form of abysmal enrollment numbers at a time when they should be record-breaking.

According to our data, Lifeline enrollment is particularly egregious in predominantly non-urban states such as Wyoming, Montana, Nebraska, North Dakota, and New Hampshire. This is not surprising considering that the U.S. has invested very little in rural internet infrastructure over the past two decades.

What is alarming is that states with the best enrollment numbers do not fare much better. Oklahoma – the state that boasts the highest Lifeline sign-ups – barely breaks 40 percent, and the next best three states – Louisiana, Alaska, and Maryland – hover at only 30 percent registration.

Compounding the situation, overzealous and opaque advertising rules by Big Tech entities like Google block eligible Lifeline service providers from reaching low-income users. Meant to protect vulnerable Americans, these ad policies, while well-intentioned, actually further exclude and alienate them from participating in programs designed to rescue them from their economic situations.

Costs to Low-Income Americans

According to a 2019 Pew Research Center study, 80 percent of low-income Americans cannot afford smartphones, computers, and home broadband services together. Nearly half do not have home internet or a computer, and roughly 30 percent do not own a smartphone. When faced with a choice, many opt for mobile devices because it allows them to seek employment, connect virtually with healthcare providers, research government services – like Lifeline, ironically enough – and engage in remote learning.

On the subject of Zoom schooling, the pandemic has laid bare another facet of the digital divide: the homework gap. Nearly 50 million students were forced to go online when the country went under lockdown a year ago. Approximately 20 percent lack home internet and are, thus, unable to consistently complete homework assignments. Many find themselves piggybacking off free WIFI from fast food joints and school footsteps, and approximately 45 percent entirely rely on cellphones to attend classes and complete assignments.

We should not be putting our children in danger amid a public health crisis, especially when the remedy is an already existing program that allows them to use free mobile devices as hotspots that connects devices to the internet from the comfort and safety of home.

Opportunity to Correct the Course

First and foremost, the government at every level needs to go where those who need help most are: churches and grocery stores as well as trusted community centers like libraries, housing authorities, and schools. They must also take advantage of in-person sign-up events to cross-promote Lifeline alongside other benefits such as SNAP and Medicaid.

Importantly, agencies should work hand-in-hand with a spectrum of Lifeline stakeholders – from philanthropies and nonprofits to healthcare providers, social workers, and internet service providers – to deliver clear and straightforward information about the federal program.

Finally, agencies should send eligible participants periodic email notifications with information about Lifeline accompanied by links to local service providers. As government entities, they can bypass the Big Tech ad policies that hinder Lifeline providers from spreading the word about the program.

For far too long, the chasm dividing the internet haves and have-nots has widened to the point of absurdity. Right now, we have a golden opportunity – and an already existing antidote – to bridge the digital divide. Let’s finally take it.

Matthew Johnson is a co-founder, board member, and co-CEO of TruConnect, the fourth largest wireless Lifeline company in the United States. He is also a member of Young Presidents Organization and a two time finalist for E&Y’s Entrepreneur of the Year.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to [email protected]. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Christopher Mitchell: Electric Grid Disaster in Texas Leads to Broadband Open Access Soul Searching

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The author of this Expert Opinion is Chris Mitchell, director of the Community Broadband Networks Initiative at Institute for Local Self-Reliance

The disaster in Texas resulting from an electric grid that was deliberately left exposed and likely to fail in rare cold weather events has received a lot of dramatic coverage, as well it should given the loss of life and damage to so many homes and businesses.

It also raised some questions in my mind regarding competition and designing markets that will be discussed below. Texas was a leader in allowing different electricity firms to compete in selling electricity over the same electric grid, an arrangement that has some similarities to open access broadband approaches.

In digging into that recent electricity history, I made another interesting and relevant finding that I discuss first as part of the background to understand the lessons from Texas. In 20 years of competing models between, on the one hand, municipal and cooperative structures to deliver electricity and, on the other hand, a largely deregulated and competitive market, the munis and co-ops delivered lower prices to ratepayers.

Electricity deregulation, Texas style

More than 20 years ago, Texas largely deregulated electricity markets. Residents still have a monopoly in charge of the physical wire delivering electricity to the home, but they could choose among various electricity providers that would effectively use the wire and charge different amounts, differentiating themselves via a variety of factors, including how the electricty was produced.

However, some areas continued to have monopoly electricity providers, including two of the largest public power providers in the nation, San Antonio’s CPS and Austin Energy, among others as well as several rural electric cooperatives.

For 20 years, Texas has conducted an informal test between unregulated market competition and local providers that are democratically accountable to their customers. The Wall Street Journal is the latest of many over the years to study the numbers and dispassionately annoint the munis and cooperatives the winners.

None of this was supposed to happen under deregulation. Backers of competition in the electricity-supply business promised it would lower prices for consumers who could shop around for the best deals, just as they do for cellphone service. The system would be an improvement over monopoly utilities, which have little incentive to innovate and provide better service to customers, supporters of deregulation said….

From 2004 through 2019, the annual rate for electricity from Texas’s traditional utilities was 8% lower, on average, than the nationwide average rate, while the rates of retail providers averaged 13% higher than the nationwide rate, according to the Journal’s analysis.

The findings are similar to a 2015 report from the Texas Coalition for Affordable Power, covered by the Texas Tribune:

But from 2002 to 2013, the average household in deregulated areas paid a total of about $4,800 more than residents of cities — like Austin and San Antonio — served by just one municipal utility, or those served by electric cooperatives, the analysis said.

Not just a question of price

This isn’t the first time we at ILSR’s Community Broadband Networks team have looked at electricity. Given that many of the arguments against municipal broadband are identical to arguments against public power more than 100 years ago, we like to look at the 100+ years of empirical evidence that local governments can handle these responsibilities.

Many studies looking at prices and reliability have found public power to be at least as good as the big investor-owned utilities, and often better. Back in 2011, I wrote about Connecticut Light and Power compared to Norwich, Connecticut after a storm demonstrated the benefits of community ownership.

Norwich had far fewer customers lose power, and they regained service more quickly than the investor-owned utility. It led to the New York Times digging into the two companies’ budgets to seek answers.

In contrast to Connecticut Light and Power, Norwich’s electric unit last year increased operations and maintenance spending by 11 percent, to $2.9 million. Put another way, in 2010 Norwich allocated about $132 a customer to this line item in its accounts. Connecticut Light and Power reported maintenance, unadjusted for deferred expenses, of $96.5 million, or around $78 per client.

We generally see networks that are directly accountable to their customers doing a much better job, not just in price but all-around value.

Lessons for designing markets competitively

The competitive market was supposed to deliver far lower prices to consumers. As several have stated, including ILSR’s very own energy expert, John Farrell, what it mostly did was allow electricity companies to introduce the tricky and opaque billing practices common among the national cable monopolies to what had been a fairly transparent market.

A 2019 Houston Chronicle article, “Analysis: The Murky and Confusing Texas Electricity Market” sheds some light:

But the shopping site became overwhelmed with offerings. Some companies offered more than 30 plans that were hard to distinguish from each other. Several retail electric providers began offering multi-tiered electricity plans with low teaser rates designed to catch the attention of shoppers, only to have those who signed up learn too late that using one kilowatt hour above a certain threshold would send the advertised price soaring by as much as 10 times.

Other companies offered “free nights and weekends” plans that could cost consumers more because of much higher weekday rates. One company offered a $600 bill credit for a two-year plan that would ultimately cost customers twice as much as another plan offered by the same company.

It is worth nothing that Texas was not solely seeking lower prices, but also incentives to encourage customers to shift their electricity use away from peak times, especially in the summer. Some companies have achieved those goals, but reading the investigations suggests that the bulk of energy in the market has been expended trying to fool potential customers with opaque pricing.

What this means is that rather than technical or other useful progress, the main innovation was in the form of legalized fraud or trickiness. Companies often competed in how they could fool people into signing up, though they would pay more. This is one of the biggest complaints people have today about telecommunications bundles that are hard to understand and often change price without adequate warning.

Open access broadband networks

As more municipal networks explore and iterate on open access models, proponents need to consider some of the recent lessons learned from Texas. To date, most ISPs on open access networks are earnest, small local companies with a variety of reasons to enter the business, though maximizing wealth extraction has not been one of them.

To my knowledge, I don’t see these shenanigans on UTOPIA despite it passing 120,000 premises. But what happens when open access networks pass 2 million potential users? Or 10 million?

I hope this issue won’t even arise, in part because I would expect the local ownership of the network to produce more accountability than a state or federal agency. But it wouldn’t hurt to have some rules regarding transparency of pricing or some mechanism to ensure the competition on these networks doesn’t devolve to harmful games.

These cable pricing dynamics aren’t just annoying. They are particularly pernicious for the lowest-income households that don’t have the time, and sometimes the literacy, to spend hours digging into complex pricing. Returning to the case of electricity and the Houston Chronicle’s “Murky” story:

“Too many Texans are still overpaying for power,” said Fred Anders, founder of Texas Power Guide in Houston, a website that helps consumers find the lowest cost plans. “And very likely a disproportionate share of them are people who can least afford to overpay and have less time and awareness to navigate the minefield of gimmicks in the electricity market.”

That story also has the interesting nugget that very few people are actively switching providers, which is supposedly the best way to keep prices low. A fatigue seems to set in rather than the kind of enthusiasm that might be expected from the heartiest fans of markets.

This reality is an important reminder when it comes to internet access: I believe people generally want “competition” when they are frustrated with their provider. I don’t think a survey of the subscribers to EPB in Chattanooga or NextLight in Longmont or US Internet in Minneapolis or Sonic in California would reveal much desire for more local competition because users there are happy to pay a fair rate for reliable and straightforward service.

I don’t think people want to spend their time trying to save another $2/month on internet access by checking in on the deals each week to change providers. If that would be all that open access could offer, I will be disappointed. Of course, it may be that for communities that do not want to offer retail service, offering the possibility of choice will result in better outcomes than if they chose a contract with a single ISP, so there are many factors to consider.

People want something that works transparently at a reasonable price. My enthusiasm for open access is very much tied up with the possibility of specialized niche services. Services that we have trouble imagining today because nearly all Americans are locked behind networks owned by corporate monopolies that are not open to innovation. Ammon’s genius is not merely the financial model but the courage to open so much power to users and ISPs. Time will tell if they do anything special with it.

I believe that valuable innovation will come from open platforms, but think the Texas lessons offered a chance to explore why as well as some potential hazards along the way.

Editor’s Note: This piece was authored by Christopher Mitchell, director of the Institute for Local Self Reliance’s Community Broadband Network Initiative. His work focuses on helping communities ensure that the telecommunications networks upon which they depend are accountable to the community. He was honored as one of the 2012 Top 25 in Public Sector Technology by Government Technology, which honors the top “Doers, Drivers, and Dreamers” in the nation each year. Originally published on MuniNetworks.org, this piece is part of a collaborative reporting effort between Broadband Breakfast and the Community Broadband Networks program at ILSR.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to [email protected]. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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