The FAST PIIPS Connectivity Model, Part 5: The Role of Community Benefit-Focused Organizations

In the past I’ve written about the added value that public benefit-focused institutions (e.g., cooperatives, community anchor institutions (CAIs), municipal utilities, and social enterprises) can contribute to the connectivity equation, especially in relatively rural areas with high per-premise construction costs that make healthy competition among profit- and share price-driven entities extremely difficult if not impossible to achieve.

A key theme of this prior work has been that these public benefit-focused institutions tend to:

  • have less demanding criteria regarding the level and timing of the direct financial return on their investment;
  • are more likely to invest in directions they believe directly serve the public interest, as contrasted with organizations that prioritize private-owners’ interests but will, according to economic theory, serve the public interest if subject to market power-constraining competition, a situation unlikely to emerge in high-cost rural areas.

Other policy themes I’ve addressed in my earlier work relate to the development of the Internet and unlicensed spectrum models as key drivers of technical innovation, market entry and competitive options, and how these two developments relate to each other and can expand the range of entities and individuals able to cost-effectively use communication technology to pursue their goals, including CAIs, small businesses and others whose communication needs might otherwise be dependent on services provided by profit- and share price-focused companies with substantial and, in some cases, monopolistic market power.

New technical capabilities enable new models for serving the public interest

In 2008, when the FCC was weighing key policy decisions related to its treatment of TVWS, I drafted a policy analysis entitled Spectrum Policy 2.0: White Space, the Internet and the Public Interest.  In it I explained how the combination of an open high-speed Internet and expanded unlicensed spectrum opens the door to a more direct approach to serving the public interest than was possible when the 1934 Communication Act first established the electronic communication sector’s public interest standard and throughout the remaining pre-Internet era of the 20th century.  That paper introduced the term PIIP (Public Interest IP) to describe an Internet-era network and service model that provides an alternative to:

  1. the dominant industry models that evolved over decades in highly siloed telecom and media markets, which were built around less capable technologies than are available today and have exhibited a strong tendency toward consolidation and anti-competitive market power and;
  2. regulatory approaches applied to these markets intended to constrain the harms of excessive market power and to steer at least some impacts of private sector self-interested behaviors in the direction of a public interest standard that proved difficult to define and enforce, especially as technology and market dynamics evolved.

Later in 2008 I co-authored a report examining how the municipal fiber model is in some cases especially well suited to bring the full benefits of high-speed Internet access to insufficiently served local communities, especially if state legislatures don’t succumb to pressure from their state’s dominant ISPs (directly or via ALEC) to pass laws that impose unique and onerous burdens that weaken the economic viability of municipal networks, which these ISPs view as actual or potential competitors.  I’ve also found that electric cooperatives can be key players in extending fiber in very rural areas, and got involved in a particular approach to developing this potential around 2010, when USDA’s Rural Utilities Service (RUS) was investing stimulus funds to expand rural access.

More recently, I contrasted “generative” vs. “financially extractive” ownership and control models in both local access and backhaul (formerly Special Access, now Business Data Services) markets in a series of posts on the blog of Michigan State University’s Quello Center.  And most recently, I co-authored a Quello Center report entitled Wireless Innovation for Last Mile Access: An Analysis of Cases and Business Strategies that examined a range of emerging FAST PIIPS-friendly models for extending access to underserved populations in both rural and urban areas.

In addition to shedding light on the FAST (fiber and spectrum together) technology-related innovations that can help bridge challenging connectivity gaps, the wireless innovation report also considered the PIIPS element of the FAST PIIPS model.  It did so by examining the important roles played by public benefit-focused entities including: 1) nonprofit Research & Education Networks (RENs) that provide high-capacity fiber backhaul in many states, many of whose networks were expanded substantially with the help of stimulus funding; 2) community anchor institutions (CAIs), including schools, libraries and local governments, many of which are served by REN fiber connections and; 3) privately owned but public benefit-focused social enterprises, a good example of which is Axiom Technologies, an entrepreneurial ISP that, with the help of a Microsoft grant, has begun using TVWS to serve very rural and hard to reach parts of Maine.

Among the report’s conclusions was that:

“Given the economic and other challenges associated with bridging our nation’s remaining gaps in broadband access and the benefits it provides, locally-anchored enterprises and business models focused on sustainably addressing local needs may be better suited to this task than enterprises and business models focused on maximizing investor returns in national or global markets.”

It’s worth noting here that it is the usage of a broadband network rather than its mere existence that generates value and contributes to economic growth and quality of life. Certainly profit- and share price-maximizing access providers have strong incentive to attract paying customers and, in some cases, have invested in digital literacy programs coupled with discounted service and low cost devices to increase adoption.  But I’d argue that CAIs and social enterprises will, in most cases, place less emphasis than profit-focused firms on generating financial surpluses and more on supporting community benefits (an assertion I’ve suggested be tested by research focused on both access and backhaul networks).

Related to this is the fact that some CAIs, notably libraries and schools, bring to the table not only a strong motivation to promote network usage, but also a range of content and services that can help turn that usage into educational and other individual- and community-level benefits.  For example, according to a recent Pew Research survey, 78% of American adults (including 87% of millennials) believe public libraries “help them find information that is trustworthy and reliable,” and 76% of adults (85% of millennials) say libraries “help them learn new things.”

Michigan as a FAST PIIPS pioneer and testbed

As noted earlier in this series, Michigan has emerged as a leader in deploying networks that will help explore whether and under what circumstances the FAST PIIPS model can help expand broadband availability, adoption, usage and benefits in rural America. For example:

As discussed in a prior post, the EBS-based Educational Access Network (EAN) being deployed by Northern Michigan University–which uses LTE technology, relies heavily on backhaul provided by Merit Network, and involves cooperation with other schools and CAIs–represents an emerging education-focused FAST PIIPS model.

Michigan is also poised to become a pioneer in combining innovative use of TVWS with institutional innovation in ways that are consistent with the FAST PIIPS model.  As part of its 12-state Airband initiative (discussed in an earlier post), Microsoft, working with the Gigabit Libraries Network  (GLN), Merit Network, the Library of Michigan and other entities, is providing technical and financial support for TVWS deployments by: 1) three of Michigan’s public library systems (these projects are described briefly here and in somewhat more detail here) and; 2) Allband Communications, a fiber-based local access cooperative that operates in very rural areas of northeastern Michigan.

Working with Merit, Microsoft and the area’s community anchor institutions, Allband aims to use TVWS to cost-effectively reach still-unserved rural homes, businesses and CAIs beyond the reach of the fiber that it and Merit have deployed. Though the project’s use of available TVWS channels may be limited in its pilot phase, it seems unlikely to face a shortage of available TVWS spectrum since, as discussed in an earlier post, the rural areas it’s targeting enjoy a relative abundance of unlicensed FAST PIIPS-friendly spectrum.  In some areas this amounts to more than 200 MHz of TVWS, plus another 67.5-112.5 MHz in the EBS band, the use of which is being pioneered further north in the state by NMU and its partners.

Given that the key local participants in these Michigan EBS and TVWS connectivity projects are public universities and libraries working with cooperatively-owned fiber backhaul and access providers and a mix of other CAIs (e.g., schools, local governments, community centers), I consider them valuable testing grounds for the economic viability, impacts and evolution of FAST PIIPS connectivity models.

In the final post in this series I’m going to briefly outline a research agenda intended to help maximize the positive impacts on connectivity and digital empowerment of these pioneering projects and similar ones in other states, including those that will be part of Microsoft’s recently announced 12-state Airband initiative.

Below are links to the other posts in this series. Feedback from readers, especially constructive criticism, is welcome.

 

 

 

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The FAST PIIPS Connectivity Model, Part 6: Research to Support Success

In announcing Microsoft’s Airband project, company president Brad Smith cited “a need for improved data collection regarding rural broadband coverage,” adding that:

“The FCC can help by accelerating its work to collect and report publicly on the state of broadband coverage in rural counties, thereby aiding policy makers and the private sector in making targeted investments.”

While I wholeheartedly agree with Smith, I’d expand on his recommendation along the following lines:

Matching unmet needs with available resources & economically sound strategies 

In addition to an FCC effort to accelerate its collection and public reporting of broadband availability data, I’d also recommend an expanded data integration and analysis effort that might involve not only the FCC, but also other governmental and private sector entities.  The goal of this effort would be to develop a user-friendly and expandable data and analysis platform that contains not only the FCC’s existing data on broadband coverage (or lack thereof) referenced by Smith, but also additional components that add to the platform’s value in developing broadband policies and action plans at local, state and national levels.  Among the additional GIS layers this platform could include are:

  • the amount of available TVWS spectrum;
  • the amount of unlicensed EBS spectrum;
  • service areas not only of wired and wireless broadband providers but also of rural electric cooperatives and municipal utilities;
  • locations of community anchor institutions (CAIs), including universities, libraries, K-12 schools and district offices, government facilities and, where possible, the status (i.e., speed and cost) of their connectivity (for an example of the latter, see this interactive map from Education Superhighway.)
  • location of fiber backhaul lines and points of presence, including those connecting CAIs;
  • vertical assets suitable for antenna siting;
  • topographical features (e.g., contours, vegetation) impacting wireless coverage;
  • FCC and Census data on residential broadband adoption levels (as distinguished from measures of broadband availability)
  • population demographics and density data, and business/economic data available from the Census Bureau and other government agencies.

Given that most of this data is already compiled by one or more entities, the incremental tasks involved relate more to data integration than to data collection.  Though the former is not a trivial task area, it seems manageable in relation to its potential value.

Making the data platform user-friendly and expandable

To extract the most value from this integrated dataset, it should be readily accessible and usable by a range of stakeholders.  With this need in mind, and citing the value of data access platforms like Waze and Data.govBlair Levin and Larry Downes suggest in a Washington Post op-ed piece that the FCC “create an interactive broadband dashboard…designed so that anyone can build new tools to analyze particular state and local infrastructure.” They recommend that this dashboard be “continually updated with the most current information on broadband technologies, speeds, performance and coverage…[and] include new data sources and reporting methods.”

In keeping with this expansive vision of a toolkit to support the research and planning needs of a range of broadband stakeholders, I’d recommend that it also include a regularly updated version of the kind of detailed comparative network cost modeling done in 2009-2010 by CostQuest Associates as part of the National Broadband Plan exercise.  This cost-modeling component would not only update costs for the network options considered in the original National Broadband Plan analysis, it would also consider cost data for emerging network strategies, including the “fiber + wireless” solutions discussed in this series of FAST PIIPS blog posts and in my recent Wireless Innovation for Last Mile report.  In addition to drawing on cost data available from these innovative projects, it would also integrate updated cost data available from public and private sector sources, including the FCC, consultants like CostQuest, and the TVWS-focused study recently conducted by Microsoft and Boston Consulting Group and cited in Microsoft’s Airband announcement.

For the comparative cost modeling component to be most valuable, the data platform should be designed so that the broadband dashboard enables stakeholders to compare the costs of alternative network models for the particular geographic areas of interest to them, perhaps with the ability to adjust some of the model’s parameters to better reflect the real-world situations these stakeholders face.

Also helpful for policymakers and planners would be data on broadband pricing.  Though this data is inherently “messy” due to heavy use of and frequent changes in multiservice bundles and promotional offers, it is tracked by commercial firms.  For example, pricing data compiled by Telogical was used in preparing the National Broadband Plan, which recommended that:

“The FCC and the U.S. Bureau of Labor Statistics (BLS) should collect more detailed and accurate data on actual availability, penetration, prices, churn and bundles offered by broadband service…and should publish analyses of these data.”

Telogical broadband pricing data has also been used in studies conducted by consulting firms and academics.  In one such academic paper, entitled Measuring Broadband Internet Prices, authors Gabor Molnar, Scott Savage and Douglas Sicker, noting the limitations on available broadband pricing data and its analytical utility, recommended an “industry-wide collaborative effort” to develop an “ongoing, rigorous, nationwide study” of U.S. broadband pricing trends.

As I see it, the integrated set of data and analysis tools discussed above would help policymakers, network investors and other stakeholders develop more effective strategies and action plans at local, state and national levels.  It would do so by enhancing their understanding of:

  • remaining gaps in broadband availability, performance, affordability and adoption;
  • the extent to which fiber, spectrum and other network resources are available to help bridge these gaps;
  • what types of public benefit-focused or shareholder-focused entities might be available to employ these resources to support the application of FAST PIIPS-friendly or other network models and;
  • the relative costs associated with applying different network strategies in specific local communities.

Learning from Airband and other pioneering projects

In addition to the kind of GIS and financial model-intensive research described above, I’d also recommend an effort to update, expand and deepen the kind of case study research we did for the Wireless Innovation for Last Mile Access (WILMA) project.

Because our WILMA research included several groundbreaking network projects still in early stages of development, we were very limited in our ability to investigate the challenges these projects faced, how they responded to these challenges, the lessons they learned, and the impacts they achieved.  Given their significance as pioneers in the “last mile innovation” space, I strongly believe they deserve in-depth follow-up study.

Another valuable and timely direction for expanding the body of case study work in this space would be to examine the development of the Airband projects from a range of perspectives, including technology, business models, intra-and inter-organizational structure and dynamics, and economic and social impacts and outcomes.  With projects in twelve states, the Airband initiative–especially if carefully and impartially studied–can generate an abundance of lessons regarding strategies that can help address the nation’s remaining rural broadband availability gaps, including the role of TVWS in doing so.

How to proceed, and who will take the lead?

Given its resources and role, an important source of data and potential lead player in developing such a data platform is the FCC, perhaps working with other federal agencies that have datasets and areas of responsibility related to the availability and use of broadband connectivity (e.g., economic and job growth, effectiveness of education and healthcare sectors, etc.).  A variation on this would be for one or more states, private companies and/or foundations to take the lead, hopefully with active cooperation from federal agencies.

Personally, I’d love to see Michigan–where I’ve been working on broadband-related policy issues since returning here a few years ago–be involved in such a project.  As noted in earlier posts, the state has already emerged as a leader in deploying FAST PIIPS-friendly initiatives employing both EBS and TVWS spectrum.  Both of these Michigan initiatives involve active support from Merit Network, one of the nation’s oldest and largest Research and Education Networks (RENs), while the TVWS projects also involve Microsoft, the Library of Michigan (part of the state’s Department of Education), the Gigabit Libraries Network, and three of the state’s local and regional library systems.

The type of research and analysis capability I have in mind could also benefit from the expertise and years of Michigan-focused work of Connect Michigan and its parent Connected Nation.  In addition to many years of broadband-related GIS work in Michigan and other states, Connected Nation also operates other research-intensive programs, including a Connected Community Engagement Program that uses surveys and other tools to help local stakeholders develop, execute and monitor broadband-related Community Technology Action Plans. Additional expertise to support this kind of collaborative research initiative could come from Michigan’s universities. [Full disclosure: I worked with Michigan State University’s Quello Center from 2014 to 2016 on broadband related issues and have talked to Connect Michigan about helping them put together a series of case studies focused on innovative approaches to expanding broadband connectivity and digital empowerment.]

Below are links to the other posts in this series. Feedback from readers, especially constructive criticism, is welcome.

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A question to consider on Christmas: Is love a scarce resource to be hoarded in a “market society” or a renewable resource to be nurtured in a “human society with markets”?

The Christmas season strikes me as an especially appropriate time to consider the issues raised in this video by Michael Sandel, a professor of political philosophy at Harvard University and Senior Fellow at the Institute for New Economic Thinking (INET).   Having just watched the video and been deeply impressed (I’d strongly recommend watching the entire 49 minutes), I thought I’d take an initial shot at this, which marks my first blog post in more than a year…

Personally, I’ve always found the Christmas season a bit strange, in that it simultaneously intensifies two seemingly conflicting sets of human tendencies.

Given the nature of the holiday, it’s not surprising that one of these threads of human nature is tied closely to the life and message of Jesus Christ, which embody the values of love, generosity and compassion, and remind us to extract the beam in our own eye before condemning our neighbor for the mote in his.

The second and very different human tendency aroused during the Christmas season is an intense and even obsessive focus on buying, selling and marketing, and for economists, journalists and politicians, on measuring how such activity translates into merchandise sales and corporate profits.

Though there is some overlap between these two “Christmas spirits” (e.g., the joy of gift-giving, especially to loved ones and the needy), the mob-level activity on Black Friday (and now even on Thanksgiving Day), the shortened tempers in stores and parking lots, the mawkish, manipulative and relentless marketing, and the intense media focus on sales and profit metrics, makes one wonder whether Jesus, were he physically present to witness them, might respond as he did when he drove money changers from the temple for having turned it, during an important religious holiday, into a “den of thieves.”

By intensifying both these tendencies at the same time, the Christmas season provides a unique backdrop for examining the issues raised in Sandel’s talk, which begins with the question “What should be the role of money and markets in our society,” and ends by asking whether “altruism, generosity, solidarity and civic spirit [are]…commodities that are depleted with use” or are “more like…muscles that grow stronger with exercise.”

To provide a concrete example that suggests where he stands on the latter question, Sandel asks:

[Should] a loving couple…treat one another…when they can, in a calculating fashion, so as to save their love for the moments when they really need it…Or would it turn out that loving acts toward one another would increase this resource?

While this “loving couple” example triggered some laughter from Sandel’s audience, he was nevertheless presenting a serious critique of mainstream economics and many of its leading practitioners.  Among these is Sandel’s Harvard colleague Larry Summers, one of the nation’s (and probably the world’s) most influential economists, who, among other things, has served as Treasury Secretary, Chief Economist at the World Bank and, most recently, director of President Obama’s National Economic Council.

Near the end of his talk, Sandel quotes Summers, who was then president of Harvard and had been invited to give the morning prayer in the university’s Memorial Church. The theme of Summers’ talk was “what economics can contribute to thinking about moral questions.”

As Sandel explains, Summers ended his commentary by saying:

 Economists like me think of altruism as a valuable and rare good that needs conserving.  Far better to conserve it by designing a system in which people’s wants will be satisfied by individuals being selfish and saving that altruism for our families, our friends and the many social problems in this world that markets cannot solve.

Continue reading

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The Intention Economy: Free Markets Require Free Customers

I’ve just started reading a relatively new book entitled The Intention Economy and written by Doc Searls, a leading Internet thinker and co-author of the 1999 classic, The Cluetrain Manifesto. And though I’ve only read a few chapters so far, I can already enthusiastically recommend it to anyone interested in the future of the Internet, our economy and our society.

The book, and a project Doc has been spearheading at Harvard’s Berkman Center for Internet & Society, build on an article he wrote for Linux Journal back in March 2006. The Berkman Center project is called ProjectVRM, with VRM standing for “vendor relationship management.” As Doc explains, in the emerging Intention Economy, VRM will serve as a healthy and market-improving counterbalance to what’s known today as “customer relationship management” (CRM).

As Doc puts it in the book’s prologue:

Behind ProjectVRM was a thesis: Free customers are more valuable than captive ones.  And, as a corollary, Free markets require free customers.

Doc wrote the original 2006 article for the Linux Journal, while attending an industry conference focused on “The Attention Economy.”  It begins with a few important and insightful questions:

Is “The Attention Economy” just another way for advertisers to skewer eyeballs? And why build an economy around Attention, when Intention is where the money comes from?

Later in the article Doc elaborates a bit more on the core idea that led to his book and ProjectVRM (bolding is mine). Continue reading

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Understanding MMT: Recommended Video & Audio

For anyone wanting to better understand Modern Monetary Theory (MMT), I’d highly recommend the following:

A nearly 2 hour joint presentation (including extended Q&A) at the Columbia Law School by Prof. Stephanie Kelton of UKMC and investor and MMT pioneer Warren Mosler.    The YouTube video is embedded below and you can also find it here (with comments) at the New Economic Perspectives blog site.

An audio interview of Prof. Kelton on Harry Shearer’s Le Show.  If you prefer reading a transcript, you can find it here.

As I’ve said many times on this blog, an understanding of MMT opens up all sorts of positive economic policy possibilities, especially when compared to the current austerity-focused policies that are slowing and distorting growth, and threatening to do so even more severely in the future (i.e., it’s austerity, not federal deficits, that will place an onerous burden on future generations).

Posted in Economics, Modern Monetary Theory | 2 Comments

Freeing Progressives From Their Deficit-Fear Shackles

Since the federal deficit was a central (and, in my view, misguided) focus of both of the two recent political conventions, it seems like a good time to revisit the Modern Monetary Theory (MMT) perspective on the deficit (in what will be my first post since finishing up a two-month project that left me with no time for blogging).

The timing is also good (and my job a lot easier) because I can refer to several very good blog posts that have addressed this issue in the past few days.

In a post at New Economic Perspectives (NEP), J.D. Alt critiques a key premise underlying today’s economic conventional wisdom, the acceptance of which he claims is “the principal dilemma of the progressive cause.”

In Alt’s view, progressives have seriously weakened the power and public embrace of their arguments by “allow[ing] a bedrock conservative premise to go so long unchallenged.” In fact, he says, “progressives themselves have either overtly or implicitly agreed with the premise, making it virtually impossible for them to effectively advocate their goals.”

The faulty premise, says Alt (and other MMT advocates) is that “The money for federal government spending must come from the Private Sector, either through the collection of taxes and fees, or government borrowing.”

Alt points out that this premise, a foundation of today’s dominant “economic Common Sense,” ignores a key piece of economic reality:

Where does the money come from that the people earn in the first place? Continue reading

Posted in Economics, Modern Monetary Theory | 4 Comments

Minimizing Competition, Maximizing Extraction

A few things I read recently strike me as good (make that “painful”) examples of how the dominant incumbent ISPs are continuing their quest to minimize competition and thereby maximize financial extraction.

The first relates to anti-competitive developments in the political and legislative sphere.  The second relates to the ongoing trend among dominant ISPs to either merge or cooperate in ways that reduce competition and maximize financial extraction.  The third relates to the integration of “content” and “distribution,” as exemplified by Comcast’s recent acquisition of NBC Universal.

Taken together, these three developments highlight a multifaceted trend toward consolidation of market power in the communication sector, and how this trend is threatening the health of an Internet ecosystem that has been a vehicle for massive innovation, entrepreneurial activity and economic growth, and has enhanced the ability of citizens to exercise their First Amendment rights and engage in voluntary association and self-organization. Continue reading

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