While the Future of TV is Apps, the FCC is Locked in the Box of the Past

Posted by: AT&T Blog Team on February 3, 2016 at 6:00 am

By Stacy Fuller, AT&T Vice President of Federal Regulatory

Google has proposed that the FCC impose a new technology mandate on all pay-TV providers (MVPDs) purportedly “to ensure the commercial availability of navigation devices used by consumers to access services from MVPDs.”  Based upon press coverage, the FCC seems enamored with that misguided proposal.  Instead of just listening to a few favored companies hoping to game the system solely for their own financial advantage, the FCC should take a look around at the abundance of competitive options the market is delivering to consumers today.

In my house alone – and trust me, I am far from tech-savvy – I can access DIRECTV, as well as Netflix, Amazon, Hulu and other over-the-top (OTT) services on my tablet, computer, mobile phone and TV. I need only one gateway set-top box (STB) in my home that works with all of our televisions (without additional STBs on each set) through an “open standard” called RVU.  AT&T U-verse and other pay-TV and OTT services are available on the Xbox.   I didn’t even mention Roku, Google Chromecast, Kindle Fire and Apple TV – there are more than 450 million retail devices and counting in use that can receive pay-TV and OTT services.  More than that, virtually every content provider on the planet has an app to provide consumers with access to its content.  The video “app” model has enabled consumer choice without any need for government or regulatory mandates.  Indeed, according to Apple CEO Tim Cook, “the future of TV is apps.” (Emphasis added)

As the market for video has become even more competitive, consumers have more choices than ever to watch what they want, when they want it and on the device of their choosing anywhere they happen to be. Apps have enabled such competition by enabling content companies to directly reach their consumers.  Apps have enabled smart phone, television, tablet, computer and game console manufacturers to provide their distinct user interfaces, features and functionality.  At the same time, apps respect the ability of Netflix, Amazon, YouTube, PlayStation Vue and many others to compete through their own user interfaces, features, and functionalities when a consumer chooses their app.

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AT&T Statement on FCC
Chairman’s Set-Top Box Proposal

Posted by: AT&T Blog Team on January 28, 2016 at 10:29 am

The following statement may be attributed to Jim Cicconi, AT&T Senior Executive Vice President of External and Legislative Affairs:

“The Chairman’s proposal is another disappointing example of an FCC that thinks it’s smarter than highly competitive markets.  Pretending to favor consumers, they’re instead favoring one company that seeks to siphon profits away from those actually investing to build broadband and create exciting content.  In short, by once again putting its thumb on the scale, the FCC will discourage the very investment it claims to want.”

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What the Data Shows: Special Access is Not Very Special Any More

Posted by: Bob Quinn on January 20, 2016 at 3:48 pm

On Friday, Mother Nature willing, we will file our first set of comments analyzing the data submitted in the special access proceeding.  As a refresher course for the uninitiated, the special access services at issue here are not very special at all.  They are services sold mainly to businesses which provide pretty low speed data connections – almost 90% of which are 1.5 Mbps.  Businesses have traditionally used those connections to provide voice and data services as well as Internet access service.  Special access services were deregulated by the FCC back in 1999 (during the Bill Clinton administration) because of the significant competitive fiber investment that occurred in the wake of the Telecommunications Act of 1996.  The theory was that regulation was not necessary where competitive fiber had been deployed in a market.  However, after deregulation, some carriers continued to complain to the FCC that the agency’s rules had deregulated services even in areas where no one had built competitive facilities.

So, some 13 years later, the FCC announced it was going to re-examine the level of competition in these markets.  A funny thing had happened in those 13 years, of course.  The Internet – and particularly the broadband Internet market – exploded.  The FCC commissioned a massive team to craft a National Broadband Plan, which concluded that the focus of Internet policy should be to encourage investment in fiber and other technologies that could deliver gigabit services. The Broadband Plan also cited the need to develop a strategy to retire legacy technologies – like “not so special” access services – to make that fiber investment more economic.  The Commission has even more recently upped the definition of broadband to 25 Mbps (17x faster than the bulk of these services).  Consequently, when the FCC began its tortured trek over this 1.5 Mbps Bridge to Nowhere, we predicted that this backwards looking regulatory effort  would waste an enormous amount of industry and agency time on a meaningless and futile exercise over services that would be obsolete by the time we crossed the bridge.  Guess what?  While we are still – 3 ½ years later – just beginning our trek across that bridge, our predictions have quite predictably already come to pass.

To refresh, back in 1999 when the Bill Clinton FCC issued its order, it realized it did not have perfect insight (or data) into the level of actual facilities competition in the marketplace.  Therefore, it attempted to approximate that competition by looking at the number of competitors who had built fiber into a particular area (an MSA) and connected that fiber to the incumbent telephone company’s facilities.  To ensure that it did not over deregulate that market, the FCC permitted deregulation only in those areas where a very high percentage of telephone company offices were connected to competitive fiber (the specific criteria were called “triggers”).  To be sure, those triggers only captured some of the competitive providers in any particular MSA.  To give just one example, cable companies generally don’t build to telephone company offices, choosing to rely instead solely on their own network investment.  Consequently, they are not captured by the triggers   Despite that, the application of the triggers resulted in more than 250 MSAs across the country realizing some level of price deregulation, including the ability to lower prices from the tariffed rate.

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Remarks of Jim Cicconi at the Emerging Issues Policy Forum: 2016 Digital Pathway Summit

Posted by: AT&T Blog Team on January 14, 2016 at 5:09 pm

The following are remarks of Jim Cicconi, AT&T Senior Executive Vice President of External and Legislative Affairs, as prepared for delivery at the Emerging Issues Policy Forum: 2016 Digital Pathway Summit, Amelia Island, Florida, Thursday, January 14, 2016:

Thank you, it’s a pleasure to be among so many friends.  I’d like to give you an industry perspective.  Specifically, I’d like to share a few thoughts on how investment and innovation in broadband infrastructure has brought about technological advancements and adoption faster than any technology ever.

First, a bit of historical perspective.  After Edison invented the incandescent filament light bulb, it was 46 years before electricity had been adopted by one-quarter of the US population. It took 35 years for the telephone, 31 for radio.  It was 26 years before a quarter of the country adopted television. It took 16 years for PCs, 13 years for mobile phones, 7 years for dial-up Internet and even less for broadband.  It’s staggering to think that the first iPhone was introduced on 2G technology only 8½ years ago.  The velocity of technological change is incredible.

And what does that adoption look like?

Today, a full 84% of Americans adults use the Internet, compared to just 52% in 2000. That figure is even higher when looking just at younger people: 96% of those between the ages of 18 and 29 use the Internet.

Today, 90% of U.S. households have three or more Internet-connected devices, and the average number of connected devices per household is 5.2.

In a remarkably short amount of time we have gone from the cellphone being a gimmicky toy of the rich and famous to having nine in ten Americans owning a cell phone. Even more impressive, more than two-thirds of American adults now own a smartphone, up from 35% just 5 years ago.

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The FCC’s Half-Shoveled Sidewalk

Posted by: Hank Hultquist on January 13, 2016 at 11:40 am

Many communities have laws that require residents to shovel their walks within 24 hours of a snowstorm. Where I live, it’s become something of a game to take pictures of the unshoveled sidewalks of politicians or other prominent citizens and post them on the Internet. But the people who really get under my skin are the ones who apparently think they’ve discharged their duty by clearing a narrow, shovel’s-width path that may not even connect to the path shoveled by their neighbor. I suspect this half-hearted approach is sometimes taken by kids who are told that they can’t play in the snow until they shovel the walk.

Unfortunately, the FCC appears to have its own half-shoveled sidewalk. At its December open meeting, the Commission acted on a petition for forbearance that was filed by USTelecom. While the FCC granted some of the relief that was sought, it denied USTelecom’s request for forbearance from universal service obligations in places where price cap incumbent local exchange carriers (ILECs) receive no high-cost universal service support. In explaining this denial, the FCC sounds an awful lot like a kid explaining why he shoveled only part of the sidewalk.

The FCC acknowledges that the places where ILECs continue to have these universal service obligations “are expensive to serve.”  In fact the FCC goes so far as to say that “[d]ue to the challenges of serving such [high-cost and extremely high-cost areas, the FCC] cannot reasonably predict that the price cap carrier or another provider would have a business case to maintain voice service at reasonably comparable rates absent support. . . .” 

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