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The Case Against Deregulation, Repealing Section 230, Looking Back At AT&T’s Breakup

Why deregulation isn’t pro-competition, the case for repealing Section 230, and the breakup of AT&T.

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Photo of Christopher Mitchell of the Institute for Local Self-Reliance

April 26, 2021—An article published by The American Prospect argues why deregulation is not inherently pro-competition as the Biden Administration prioritizes universal broadband coverage for Americans.

Sean Gonsalves and Christopher Mitchell penned a piece that detailed why properly funded, public, municipal broadband services are necessary to promote competition and affordability, particularly in rural and underserved communities across the U.S..

The authors explored a case in Colorado involving a municipal broadband provider known as Clearnetworx and the telecommunications company Lumen Technologies, then known as CenturyLink. Clearnetworx was awarded a $1-million grant to deliver high-speed internet via fiberoptic cable to Ridgeway, CO.

Before it could begin deployment, however, their grant was vetoed by CenturyLink under what Gonsalves and Mitchell called a bureaucratic “buzzsaw,” known as “right of refusal,” whereby incumbent providers can simply veto potential competition.

Gonsalves and Mitchell point out in their article that to their knowledge, every state with a comparable broadband grant has similar laws on the books.

Not only did CenturyLink veto the grant, but they then turned around and took it for themselves. The difference was that while Clearnetworx had committed to laying fiber, CenturyLink felt no such obligation, instead opting to marginally upgrade its existing DSL network in the region.

Gonsalves and Mitchell state that efforts to utilize municipal broadband will be a crucial component of Joe Biden’s American Jobs Plan; broadly, the administration hopes to divert federal dollars to “providers with less pressure to turn profits and with a commitment to serving entire communities.”

The authors made the case that deregulation is not pro-competition, despite what many legislators—both Republican and Democrat—would have their constituents think.

“In short, the barriers to competition and investment tend to be the big ISPs, and the games they play as powerful incumbent providers,” they wrote, “Focusing on deregulation when Charter Spectrum or AT&T can use their market power to squash rivals six ways from Sunday is like arriving at the emergency room with a gunshot wound, only to have the doctor focus solely on the toe you stubbed last night.”

One expert’s take on why he is “repeal not reform” for Section 230

Last week, president and founder of the research consultancy Precursor, Scott Cleland, published a piece with the Daily Caller arguing that it would be better to repeal Section 230 rather than simply reform the internet liability law. Not repealing it, he argued, would “perpetuate lawless U.S. Internet policy and guarantee Big Tech remains unaccountable and Americans remain unprotected online.”

Cleland took the position that repeal is inevitable and that it is out of date. He also pointed out that at the time, only one U.S. senator claimed to have broadband service, and that the average American with broadband access only used it for an average of 30 minutes per month.

He also argued that members of Big Tech have “asserted themselves as virtual global governors and unaccountable private regulators,” and hide behind “opaque algorithmic rule of code and take-it-or-leave-it” terms of service.

Cleland also made the case that Section 230 is not only a threat to those who consumer Big Tech’s services, but it has also presented a greater national security and public safety concerns. He pointed to the 1000-plus open investigations into Chinese espionage and the SolarWinds hack as evidence that Section 230 has weakened the U.S.’s defensive cybersecurity capabilities.

Looking back on the break-up of AT&T

When Wire was King: The Transformation of Telecommunications” is an upcoming documentary that examines the telecommunications market since its inception. In a recent blogpost on their website, the production team analyzed the legacy and ramifications of AT&T’s breakup when they were compelled to cede their control of Bell Operating Companies.

The blogpost lauded the move, stating that criticism that it may have stunted innovation was blown out of proportion; as a monopoly, Bell Labs was not incentivized to innovate, and breaking up the monopoly was more beneficial for innovation, according to the post.

The post went on to argue that the breakup not only improved innovation, but it also lowered cellular backhaul costs and improved competition.

“When Wire was King” will feature interviews with dozens of experts who shaped the telecom industry. The production team maintains an active presence online and has released a trailer for the project.

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Space Bills Get Markup, Cybersecurity Reserve Bills Introduced, Gigabit Center Opens in Crown Heights, NY

The Secure Space Act and the Satellite and Telecommunications Streamlining Act are scheduled for mark-up on Thursday.

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Photo of Cathy McMorris Rodgers in 2015 by Gage Skidmore

March 23, 2023 – The House Energy and Commerce Committee will host a mark-up meeting on Thursday to consider pieces of legislation that will “keep America at the forefront of next-generation communications technology,” according to a press release.

The Secure Space Act and the Satellite and Telecommunications Streamlining Act introduced by Chairman Frank Pallone, Jr., D-N.J., and Ranking Member Cathy McMorris Rodgers, R-Wash. in December last year will be among those going through the line-by-line process on Thursday.

The Secure Space Act prohibits the Federal Communications Commission from issuing satellite licenses or other related authorizations to untrusted actors, based on the framework adopted in the Secure and Trusted Communications Networks Act.

The Satellite and Telecommunications Streamlining Act clarifies FCC authority with the goal of promoting responsible use of space, incentivizing investment and innovation, and advancing U.S. leadership.

“America is leading the way in next-generation satellite technologies, which are contributing to a revolution in the communications marketplace,” the representatives said in a statement. “To make sure the U.S. – not China – continues to lead this global industry, we must streamline our regulatory processes to unleash innovation while also ensuring our laws fully protect the American public.”

Bills to ensure cybersecurity reserves in government introduced

Two bills introduced Tuesday by Sens. Jacky Rosen, D-Nev., and Marsha Blackburn, R-Tenn., would establish pilot programs that would hire civilian cybersecurity personnel in reserve to “ensure the U.S. government has the talent needed to defeat, deter, or respond to malicious cyber activity, especially at times of greatest need.”

The bills, some versions of which were previously introduced but did not pass, would establish the Civilian Cybersecurity Reserve pilot programs within the Department of Defense and the Department of Homeland Security.

“Cybersecurity threats targeting the United States continue to grow in scale and scope, demonstrating the urgent need for robust civilian cyber reserves capable of addressing these threats and protecting our nation,”  Rosen said in a press release on Tuesday“Our bipartisan legislation will help ensure the U.S. government can leverage existing cybersecurity talent from the private sector to help our nation deter and swiftly respond to cyberattacks.”

The bills comes at a time when federal agencies are “experiencing a growing shortage of cybersecurity talent,” the release said.

“As the cyber domain continues to expand in size and complexity, so should our cyber workforce,” Blackburn said. “By creating a reserve corps similar to our National Guard or Army Reserve, we can ensure the U.S. has qualified, capable, and service-oriented American talent that is necessary to address cyber vulnerabilities and keep our nation secure.”

Gigabit Center to provide free internet to students in Crown Heights, NY

The Brooklyn Gigabit Center, which will provide free internet resources for students, opened in Crown Heights, New York on Wednesday.

The center will provide free high-speed Wi-Fi, technology, education and school supplies to Crown Height, New York, an area where 36 percent of households lack broadband, according to the press release.

The center opened with a press conference hosted by the administration of Mayor Eric Adams, LinkNYC, the New York City Office of Technology and Innovation, digital infrastructure company ZenFi Networks, and tech education non-profit Digital Girl, according to a ZenFi Networks press release.

ZenFi Networks has previously opened centers in the Bronx, Manhattan, and Queens to help the local communities to learn and adopt to modern technologies.

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DOJ Investigates TikTok, Google’s Generative AI Tool, Charter Counsel Retiring

An internal TikTok investigation found employees had allegedly spied on journalists, the Times reported.

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Photo of Sundar Pichai from 2021 by World Economic Forum used with permission

March 21 – Federal authorities are investigating Chinese-owned video sharing app TikTok over allegations its spying over journalists, reported The New York Times on Friday.

Three people familiar with the case told the Times that the Department of Justice has been investigating the company ByteDance after internal emails showed the company had conducted an internal investigation and “found employees gained access to data from two journalists and people associated with them,” the Times said.

According to the Times, a spokesperson said the company “strongly” condemns the actions of the four employees who obtained the data on the journalists and are no longer working for the company.

The investigation comes during a time Washington and state governments are on heightened alert of the app they say is a national security risk. A new memorandum by the White House’s Office of Management and Budget published in February outlines how agencies are to identify and ban problematic software, like TikTok, from government devices and networks.

Senators have also introduced the RESTRICT Act to further strength national cybersecurity by empowering the Department of Commerce to examine critical infrastructure products and ensure “comprehensive actions to address risks of untrusted foreign information communications and technology products.”

Google releases new Bard generative AI tool for trialing  

Google has released an artificial intelligence tool intended to assist users in daily tasks, the search engine giant’s attempt to enter the generative AI space shared by the popular ChatGPT application.

Called Bard, the tool allows users to use the generative AI software as a personal assistant to ask the machine to come up with ways to accomplish tasks. The tool presents a chat box that the user inputs questions into, with the “large language model” generating tips automatically.

Google said the machine is in “experiment” mode and is asking users to contribute to its refinement.

Bard comes a week after OpenAI, the company behind generative AI tool ChatGPT, announced the latest version of the tool that has been able to craft novels using basic prompts. In the latest version, the tool has been able to create websites and versions of 2D video games.

Its power has concerned lawmakers and has sparked calls by experts for its regulation.

Aleksander Mądry, professor of Cadence Design Systems at the Massachusetts Institute of Technology, said in a recent subcommittee hearing that generative AI is a very fast moving technology, meaning the government needs to step in to confirm the objectives of the companies and whether the algorithms match the societal benefits and values.

In January, ChatGPT eclipsed 100 million monthly users.

Charter’s executive vice president is retiring

Richard Dykhouse, executive vice president, general counsel and corporate secretary of Charter Communications, is set to retire from his position, but will remain until the company picks a successor, the cable company announced Monday.

“Rick has played a significant role in Charter’s transformation and growth story – including its reorganization in 2009, the acquisitions of Time Warner Cable and Bright House Networks, and the largest-ever integration of cable companies,” Chris Winfrey, Charter’s president and chief executive officer, in a press release. “I am grateful for Rick’s leadership, advice and sound judgment over the years and pleased that he will continue to assist us throughout the transition to his successor.”

Once the company finds the right person, Dykhouse will remain as executive counsel to support the transition, the release said.

Dykhouse joined Charter in 2006.

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Sohn Speaks After Withdrawal, MasterCard Back Indigenous Connectivity, Liberty-CityFibre in Buy Talks

The former FCC nominee spoke for the first time regarding future plans after withdraw.

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Photo of Gigi Sohn from 2012 by Joel Sage used with permission

March 20, 2023 – Former Federal Communications Commission nominee Gigi Sohn told The Washington Post in an interview published last week that she feels she “got a book to write” about her 16-month-long battle to get the Senate to vote her onto the commission.

Earlier this month, the two-time nominee of President Joe Biden withdrew her candidacy after what she called “dark money political groups” tainting her career. Sohn has been accused by Republicans of being impartial and donating to members of the Commerce committee that had previously pushed her nomination forward but which did not get to Senate votes.

“There’s been a bunch of stuff that’s happened over the past 16 months … that is going to make people’s eyes bug out,” Sohn told the Post.

During Sohn’s confirming process, she said she has been repeatedly subject to “unrelenting, dishonest and cruel attacks” from extremist groups and media.

“That was the first time I felt like ‘Oh my god, this could really rile up some crazies to come to my house … and threaten me and my family,’” the Post said she said. “I owed a duty to me and my family to move on, and this was very, very difficult on me emotionally.”

Sohn said she was “very proud” of the support she received from allies throughout the process, the Post said.

Sohn told the Post she had “several opportunities” lined up, which might be the intent to advocate internet access at the state level. But she also said she could do “something bigger and more,” according to the Post.

Mastercard Foundation partners with indigenous institute for internet access

The Mastercard Foundation announced Monday it is investing $3.7 million CAD, or $2.7 million USD, to help the Indigenous Connectivity Institute expand its current digital equity program.

The funding will “enable the ICI to expand current programs and develop new initiatives to reach 10,000 Indigenous young people over the next three years,” according to the release.

“This support from the Mastercard Foundation has the potential to advance Indigenous digital equity beyond our imaginations and make real the projects and collaboration we’ve been dreaming up for years. I am so excited to see this new partnership in action,” Darrah Blackwater, ICI Advisory Council member, said in a press release.

The indigenous-led organization is focused exclusively on digital equity in Canada and the United States by providing training programs to advance technical and advocacy skills, the release said.

“A fast, reliable internet connection is essential to ensuring that Indigenous young people can access high-quality education and meaningful employment opportunities,” says Jennifer Brennan, Director of Canada Programs at the Mastercard Foundation. “The shared vision for this partnership is a commitment to ensuring Indigenous young people and communities have the capacity, support, knowledge, and financial resources to lead digital equity to advance their aspirations and strengthen their communities.”

State broadband leaders will join Broadband Breakfast’s online event and talk about how their states are approaching the digital equity planning process and what they hope to accomplish with federal funding on Wednesday April 15 at 12 noon ET.

Liberty Global acquisition of Cityfibre and Liberty Global unlikely to be approved

Virgin Media O2 is seeking to acquire fiber competitor CityFibre for £3 billion, according to media reports.

The Telegraph reported Saturday that Virgin is in talks with the competitor, but questions remained about the likelihood of the deal moving past regulators.

Capacity reported Monday that equity analyst Jerry Dellis from Jefferies Equity Research does not believe it will get past the Competition and Markets Authority.

“A VMO2-CityFibre combination would appear to threaten the regulatory objective of network competition providing choice for ISPs, leading to better outcomes for consumers,” a Dellis research note said, according to Capacity.

“With a back-book comprising millions of customers that have been subject to multiple years of retail price increases, we question what incentive VMO2 has to compete down wholesale pricing.”

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