Platform Access

When Wireless Competitors Compete, Consumers Win

By: Mike Montgomery
As seen on Daily Kos

In the wireless industry it’s possible to be first and third at the same time.

Take, for example, wireless provider Sprint, which was recently acquired by the Japanese firm SoftBank for a little more than $20 billion. It’s a good-sized sum for America’s third-largest wireless provider—but then, that ranking applies only to number of customers, not its spectrum holdings.

While Sprint has only half as many subscribers as Verizon or AT&T, they happen to hold twice as much wireless spectrum – the invisible airwaves that enable mobile devices to send and receive data – thanks to their recent full buyout of Clearwire. Amazingly, Sprint has shown an uncanny ability to simultaneously win and lose, taking the gold medal in spectrum and a bronze in customers.

With their riches in spectrum holdings and underperformance as a business, it’s no wonder the company found itself in the middle of a bidding war between SoftBank and U.S. satelliteprovider DISH.

The point here isn’t to bash Sprint. They’re trying to run their business shrewdly, even if sitting on their airwaves hoard, while pining for more, risks hurting their customers and potentially their shareholders. But Sprint’s enviable spectrum position also shows that when it comes to the allocation of spectrum for wireless providers, industry rank isn’t as cut and dried as the number of customers in your flock.

This distinction is particularly important in light of calls by some carriers, including Sprint, and government officials to artificially limit the two largest wireless providers from the FCC’s upcoming spectrum incentive auctions based on the gap in subscribers between Sprint and Verizon/AT&T. Instead of banging the drum on Capitol Hill about how bad they’ve got it, Sprint should be trying to get more consumers to use their network.

Nevertheless, Sprint’s obvious spectrum advantage coupled with the fact that provider T-Mobile recently joined forces with fellow provider MetroPCS—a move that places the German-owned company in a much stronger, competitive position—the wireless industry is far more competitive than Sprint would like the world to know.

Competitive industries serve a great benefit to consumers by delivering better services at lower prices. Those on the side of restricting the involvement of certain providers from the FCC’s auctions are actually arguing against consumers.  Tens of millions of people just want their phones and tablets to function as designed and want to enjoy exciting new technologies that rely on advanced mobile broadband.  The FCC should consider that AT&T and Verizon have the most customers because consumers choose to use their networks. By restricting their auction participation, the FCC isn’t creating more choices for consumers — it’s hamstringing the choices consumers have already made. That’s not a win for anybody.

As the old saying goes, it’s not personal, it’s just business.  Sprint has the airwaves it needs to take care of its customers and then some, and the same goes with T-Mobile. But without open spectrum auctions, millions of Americans are at risk of receiving diminished service for their hard-earned dollars. To them, that makes it personal.

 

Surf and turf wars in Silicon Valley

By: Mike Montgomery 
As featured in The Hill

At first blush, the event held by Pepperdine University’s School of Public Policy entitled “The Broadband Technology Explosion: Rethinking Communications Policy for a Mobile Broadband World” could have easily seemed like a wonk fest for public policy nerds. But for those of us who made the trip to Silicon Valley’s Quadrus Conference Center on Sand Hill Road, the discussion was anything but boring. Quite the opposite, in fact, since the topics being hashed out are critical to the future of the Valley.

Chief among those topics was spectrum, specifically the best way to make more airwaves available for mobile broadband. By happenstance, the Pepperdine event coincided with the news that Instagram was launching new video capabilities, dubbed Instavine on social media as it was launched to compete with Twitter’s video platform, Vine. As this news lit up Twitter, I asked the panel how video from Instragram’s billion-plus users will affect wireless networks.

“[It] will create a larger load,” AT&T’s Richard Clarke replied. “We’re swimming fast, but the current is moving far faster.”

This demand for ever-increasing amounts of data (the “current” that Clarke spoke of) is driving carriers to pursue more wireless spectrum. The FCC plans to auction off 300 MHz of new spectrum to these wireless companies, but the panelists — including Harvard Business Review’s Larry Downes, Navigant Economics’ Hal Singer, and Pepperdine’s James Prieger — were doubtful that the full 300 MHz will ever reach the auction podium.

Put another way, the FCC’s efforts will only go so far, and unless the commission also eases restrictions on the secondary market transactions for spectrum, shortcomings will continue to exist. And these shortcomings, the panelists were sure to point out, could have a very real effect on the health of the wireless industry.

While no one believes the FCC should get out of the spectrum regulation business, there was broad agreement at the event that the commission needed to rethink its definition of public interest when it comes to the airwaves. Mobile broadband has been such a game changer, smartphones and tablets so explosively popular, that the current definition of public interest for spectrum is quickly falling out of stepwith consumer interests.

Singer in particular opined that the FCC should focus less on antitrust laws in its approach to regulation and instead focus more protecting consumers, a role they are uniquely qualified to fill.

Singer’s point has implications for spectrum policy. By focusing on consumer  to all wireless carriers regardless of their size, the commission will not place itself in the undesirable position of picking winners and losers in a thriving and highly competitive market. Will keeping auctions open, along with the FCC staying within its regulatory lanes, best serve consumer interests? At the Pepperdine event, the answer was a definite yes.

Obama Demands Expanded Airwaves

By Mike Montgomery
As seen on The Huffington Post  

Last week, the White House dropped a broadband bombshell in the form of a series of initiatives aimed at freeing up government-controlled spectrum for wireless providers. It also released a new report, “Four Years of Broadband Growth,” which is brimming with positive news about our nation’s broadband infrastructure.

It was a good week for both consumers and our country’s vibrant tech industry.

In Silicon Valley, President Obama’s focus on spectrum was especially welcome. In many ways, mobile broadband has become the lifeblood of our tech community. But as wireless providers are increasingly strapped for spectrum — and consumers continue to embrace mobile broadband at an unprecedented pace — there have been valid concerns that the blood would stop flowing. Or at the very least, that clogged airwaves would give the local tech industry chest pains.

As the single largest holder of spectrum, the U.S. government has the power to ensure America remains at the forefront of mobile broadband. The FCC’s upcoming spectrum incentive auctions have the potential to alleviate some of the congestion wireless providers face, but the fact of the matter is more action will be needed to free up spectrum, and needed quickly, in order to keep up with ever-growing consumer demand for advanced broadband-enabled services and applications.

While you could easily take the cynical view and declare allocating more spectrum for wireless is long overdue, it’s worth remembering that mobile broadband — and the mobile app industry it has sparked — is still in its infancy. The smartphone revolution only really began six years ago, after all, and outside of a select few visionaries, few had anticipated the monumental shift that has followed.

If wireless providers were caught somewhat flat footed by the sudden surge in demand for data on their networks, they’ve been investing billions to catch up. As the White House broadband report shows, annual investment in wireless networks jumped by more than 40 percent from 2009 to 2012 — from $21 billion a year to $30 billion. At the same time, the report finds, investment in Europe was static, and in Asia — including China — it only increased by 4 percent.

For Silicon Valley, all this investment in wireless infrastructure has helped inspire a wave of innovation and economic growth. And with more than 500 million connected devices and counting in America, we may only be at just the beginning of the mobile broadband boom. That’s what makes President Obama’s focus on spectrum so critical. More spectrum will mean more powerful networks, which will mean more innovation, which will inspire more investment in more powerful broadband networks.

As long as government policies continue to encourage investment in our nation’s broadband networks, this cycle of investment and innovation has the potential to become an even bigger economic powerhouse. President Obama has called for every part of America to be connected to the digital age. For Silicon Valley, and the country’s other tech hubs, that’s a goal worth achieving.

Competitive Field of Spectrum Bidders Benefits Everyone

As featured on Daily Kos 
By: Mike Montgomery

$12 billion.

That’s a lot of clams, even to the federal government. But that’s approximately how much the Federal Communications Commission (FCC) will be leaving on the table if they restrict some bidders during their upcoming spectrum incentive auctions, according to economists Robert J. Shapiro, Douglas Holtz-Eakin, and Coleman Bazelon. In their study published by Georgetown University, “The Economic Implications of Restricting Spectrum Purchases in the Incentive Auctions,” the trio warn that limiting just two participants — Verizon and AT&T — from taking part in spectrum auctions could “reduce auction revenues by about 40 percent.”

But wait, there’s more. The group also estimates that forcing certain providers to watch from the sidelines could raise consumer bills by 9 percent. In short, the federal government will be refusing money, and consumers will be paying more money for their wireless service.

If that sounds backward to you, you’re not alone.

The fact of the matter is providers big and small desperately need more spectrum to meet the customers’ demands. The unprecedented popularity of smartphones and tablets — and all the mobile data their owners use — are taxing networks. It’s a problem former FCC Chairman Julius Genachowski called “America’s looming spectrum crisis.” And unless more airwaves are freed up for wireless use soon, the word “looming” will no longer apply.

Congess’ bold incentive auctions — which, in a nutshell, will enable broadcasters to voluntarily sell their spectrum holdings in exchange for compensation — are aimed at helping alleviate this problem. On paper, the auctions could be a boon for both the broadcasters and the federal government, and wireless providers will be able to breathe a bit easier knowing their networks won’t suddenly seize up due to overcapacity. Call it a win-win-win.

Actually, call it four wins. The tech industry will also benefit, since more spectrum will mean more powerful and reliable wireless network capabilities. Bigger pipes, as they say, for bigger ideas.

But in order for us to rack up all these wins, the FCC must ensure the same rules apply to every bidder across the board. Restricting some carriers from being able to purchase the spectrum they need at auction won’t foster competition; if anything, it fosters the spirit of uncompetitive behavior.

Whatever framework the FCC decides upon should depend on two factors: getting the most bang for the spectrum buck, and perhaps more importantly, ensuring that those bidding are able to put newly acquired spectrum to use quickly and efficiently. After all, airwaves purchased and locked in the vault won’t help anybody.

That’s what makes the idea of restricting some providers from fully participating in the spectrum auctions about more than the potential loss of billions in much needed revenue for the federal government. In the end, consumers — the very ones the FCC are theoretically trying to help — will end up losing the most, either through higher prices or declining service quality. Those are two consequences consumers shouldn’t have to face.

View the article on the Daily Kos website here

Broadband + Education = Bright Future

There was some good news on the education front, courtesy of The White House:

“Today, President Obama called on the Federal Communications Commission to take the steps necessary to build high-speed digital connections to America’s schools and libraries, ensuring that 99 percent of American students can benefit from these advances in teaching and learning. He is further directing the federal government to make better use of existing funds to get this technology into classrooms, and into the hands of teachers trained on its advantages. And he is calling on businesses, states, districts, schools and communities to support his vision.”

The tl;dr read version: President Obama wants every student in America online. And he wants it to happen sooner rather than later.

Smart. Students today are better served by carrying a tablet rather than a backpack full of books, especially if they’re going to learn the skills they’ll need to play in the global economy and avoid future back pain.

But hitting the president’s mark will take more than words, especially with cities and school districts strapped for dough. Broadband networks don’t build themselves, which means continued private investment — and a regulatory environment that encourages it, both on the state and federal level — will be key.  Connecting 99% of students isn’t a moon shot, by any means, but it is a heavy lift. This means everyone, from government to business, needs to roll up their sleeves and work together to get it done.

Appallicious & the Age of Open Data

By: Mike Montgomery 

To quote the great philosopher, Ferris Bueller, “Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it.”

As fast as life moves, technology moves even faster. It only took Facebook eight years to land a billion users. Twitter hit the five hundred million mark in just six years. Apple’s App Store launched in 2008 and is already closing in on 50 billion downloads.

Government, in contrast, does not move quickly. Especially on the local level, and especiallywhen it comes to embracing technology. Want to take a trip down memory lane? Catch a glimpse of what the Internet was like five years ago? Ten years ago? All you have to do is fire up a municipal website. Chances are you’ll come face-to-face with a dusty web design with information buried behind confusing menus, documents with inscrutable titles, and slideshows that move at the speed of continental drift.

As more and more people carry an Internet connection in their pocket wherever they go, many local governments are struggling to effectively serve their citizens. People don’t need a Hall of Records. They need information at their fingertips. They need a government that is more open, more available; a government that speaks their technological language.

Enter Appallicious, the brainchild of San Francisco innovator, Yo Yoshida. The former Founding Director of the nonprofit Under the Baobab Tree, Yoshida is a Government 2.0 evangelist, and his goal with Appallicious is to transform the way governments and citizens engage. Here’s how Jeremy Wallenberg, Director of External Affairs for San Francisco Citizens Initiative for Technology and Innovation, described Yoshida’s work:

 Yo and his team have spent years developing a revolutionary technology utilizing open data that makes it easier for San Francisco residents to effectively engage with City Hall and elected representatives. The Appallicious platform is an invaluable tool helping San Franciscans find and navigate through city parks, playgrounds and museums.

One way Appallicious is already helping the City of San Francisco better connect with its citizens is the freeRec & Park app, developed in 2012, which utilizes open data to provide information on the city’s many parks. Or as Mashable described it in more detail:

 The app… helps people find and navigate thousands of parks, playgrounds, dog runs, museums, recreation centers, picnic tables, gardens, public restrooms and other points of interest and facilities that are maintained by the city of San Francisco.

The Appallicious Rec & Park app is just one example of the good that can come from the utilization of government data. The platform is also being used by SFArts and the San Francisco Department of Public Health to create useful tools for the public using open data—stay tuned for these new apps which are due out later this year.

The software created by Appallicious is easy to scale and gives governments the ability to build apps in a number of days rather than months—as long as there is open data available.

So what is open data?  According to the Open Knowledge Foundation, “Open data is data that can be freely used, reused and redistributed by anyone—subject only, at most, to the requirement to attribute and sharealike.”  Trailblazing Government 2.0 advocate Alan Silberberg calls open data “Information that was previously only available via fax, paper or walking into an office that can now be found in a media form that can be used on websites or mobile phones.”

Phil Ginsburg, the visionary General Manager of San Francisco’s Recreation and ParkDepartment, says that, “Open data allows government to leverage the talents of app developers all for the benefit of those relying on our services and programs.”  Ginsburg reminds citizens that no personal information is shared with app developers.  The anonymous data is being utilized to serve residents in ways never before envisioned by government or private industry.  “It’s a win-win,” says Ginsburg.

In order to get the Rec & Park app off the ground, Appallicious worked with San Francisco city leaders like Ginsburg and San Francisco CIO Jay Nath to revise open data legislation, steps other cities will need to take in order to fully leverage the power of mobile apps and social networks to reach their citizens. According to Yoshida, every major city in America could have its own Rec & Park app within a year—all they have to do is embrace the age of open data.

Technology moves fast. Platforms like Appallicious can help governments keep up.

Two Days With Touré

As a strong proponent of preserving the Internet as a platform for communication and commerce kept free from burdensome regulation, I geeked out when I knew I would be spending time with the guy I perceived as leading the charge against our virtuous, sacred Internet.

I refer, of course, to the head of the International Telecommunication Union (“ITU”), Dr. Hamadoun Touré, who convened the World Conference on International Telecommunication (“WCIT”) late last year. I expected Dr. Touré to be the Internet’s equivalent of a goose farmer cultivating foie gras, force-feeding regulation down the Internet’s throat.

But for all the criticism heaped upon the ITU for its goals and process before, during and after the WCIT, I was surprised by a few of the notes Touré struck during his visit to Stanford University. During his keynote speech, Touré advocated for every single draconian proposed change to the world’s telecommunications laws, which was exactly what I expected from him. But what really stood out to me was his recognition of the need for updated communications infrastructure.

Touré spoke of all-IP (Internet protocol) networks springing up around the world and the need to embrace this technological advance as the next frontier in a hyper-connected world. He told the sold-out crowd that nations around the world are installing these IP networks with great success, spawning the creation of exciting micro-economies that didn’t previously exist. Touré implied that the U.S. has an opportunity to lap the rest of the world in terms of installing all-IP networks. Extrapolating on Touré’s statement, the U.S. must speed the transition in order to continue to stay ahead of the curve domestically while retaining our competitive edge globally.

Interestingly, while Dr. Touré seems to prescribe regulation as the solution to virtually every problem facing the Internet, his answer to the question of how to encourage faster and greater deployment of IP networks stands in stark contrast to that position. Oh the irony! He says the way to go is “light-touch regulation,” which limits the extent to which government should intervene with the management of the Internet ecosystem.

Obviously, I didn’t agree with everything Dr. Hamadoun Touré had to say over the course of the two-day Stanford symposium. However, I was thrilled to learn that the leader of the ITU is a vocal opponent of heavy regulations when it comes to transitioning the United States to the IP future we so desperately need.

Follow Mike Montgomery on Twitter: www.twitter.com/@calinnovates

There’s Something Crazy in the Air

Bananas.

That’s the best way to describe the current state of the wireless industry. Absolutely bananas.

Smartphones, tablets, LTE-enabled laptops, wirelessly connected cars… each day brings some new gadget, some new device tapping into the power of wireless networks. There are north of 300 hundred million people in the U.S., and according to Pew some 85% of them now own a cellphone. Of that group, 58% have upgraded to a smartphone. Do a little scribbling on the back of an envelope and you get something around 135 million people walking around with a wireless connection to the Internet in their pocket.

That’s a lot of people pushing out a lot of data. Billions of bytes, 24 hours a day. And all that traffic, all those bits and bytes and gigs, they all require spectrum to travel from points A to B, which is why wireless providers are currently on major shopping sprees. Investing billions to acquire more airwaves. Swapping frequencies in different markets. Working with the government to free up more spectrum in order to keep up with demand.

Earlier this month, T-Mobile merged with smaller provider MetroPCS. Early last week, satellite TV provider DISH Network pitched north of $25 billion to acquire wireless provider Sprint — a bid above what Japanese company SoftBank had also offered for the company. And those are just the two most recent moves. As mobile broadband continues to explode in popularity, there are going to be many more deals to come.

Call it a free market frenzy. A wireless lollapalooza, even. As the Federal Communications Commission continues to creep toward its proposed spectrum incentive auctions — which will, hopefully, free up a ton more spectrum for wireless use — providers aren’t waiting around. They can’t afford to. The wireless industry is one of our most vibrant sectors, and a big reason for that is competition. Even the biggest players are constantly forced to invest billions in order to meet the demands of their customers.

In such a highly competitive environment, the best thing the government can do is keep things from slowing down. That starts with ensuring the FCC auctions are open to every player willing to make the investment in — and quickly put to use — newly freed up airwaves. Hitting that mark will bring the government the most bang for its spectrum buck. It will also provide customers and the tech community with more robust networks. Ones that are able to keep up with innovations just around the corner.

The government can also help by encouraging wireless providers to work together in order to meet the challenge of ever increasing demand. As DISH’s flirting with Sprint shows, there’s no shortage of players hoping to get into the provider game. But even with the FCC’s auctions, it will take providers striking deals with each other to keep connections strong and the industry growing.

By focusing on smart oversight, regulators can protect consumers and maintain a vibrant wireless industry at the same time. That way, when it comes to the future of the industry,bananas will be just the beginning.

Follow Mike Montgomery on Twitter: www.twitter.com/@calinnovates

Mike Montgomery: Two Internets may be reality after United Nations treaty

Back in 2000, George W. Bush was lambasted for butchering the English language by making up the word “Internets.” He may have unintentionally predicted the future of the Web, which, under its current governance structure, has played a vital role in creating this amazing and interconnected online world in which we live.

Unfortunately for everyone who enjoys the Internet as a free and open platform for innovation, communications and commerce, the rug may have been pulled out from underneath us. When the United Nations’ World Conference on International Telecommunications ended last week, the idea of two “Internets” became plausible.

Regardless of how well the current multi-stakeholder approach is working for most of us, conference participants charged forward with new regulations that should alarm every tech company, aspiring entrepreneur, Skype lover, blogger or Etsy shop owner in the world. In an 89-54 vote, the United States, Canada, most Western European countries and Japan came up short against the likes of China, Iran and Russia, countries not necessarily known for eagerness to enact sensible regulations on behalf of their citizenry. The vote approved the text of a treaty that would put the Internet on the road to reckless regulation in two short years.

Read the Full Article on the Silicon Valley Mercury News

2012 is the Year of the Internet, Again, But Could it be its Last?

If you can believe it, the end of 2012 is fast approaching.  Some of us filled with glee; some of us filled with anxiety that the holidays and New Year are just around the corner.  But the end of 2012 is also bringing a critical issue to the forefront of the U.S. and global agenda: the future of the Internet.

Several events in Washington, D.C. over the past few weeks have caught our attention regarding the innovation economy, Internet regulatory policy, and the upcoming World Conference on International Telecommunications (WCIT) that all have tremendous economic and social implications globally, nationally, and in Silicon Valley.

With the elections (finally) over, tech and policy experts assembled at the Brookings Institution for “A First 100 Days Innovation Agenda for the Next Administration” focusing on how policymakers can encourage growth through innovation and entrepreneurship, ensure robust communications infrastructure, and protect our digital products and services.  The American Enterprise Institute’s and Mercatus Center’s star-studded tech panels discussed key issues, expectations and the U.S. position on the upcoming WCIT (pronounced “wicket”) conference.

Read the Full Post on Daily Kos

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