US voters have put Barack Obama in the White House and a big Democrat majority in the Congress, signaling the end of 20th century American politics and paving the way for what commentators are already calling a second New Deal. The victory is likely to have a transformative effect on several key verticals—including a populist telecom slate hostile to incumbent carriers.
Chief among these goals is a federal ‘Net neutrality mandate banning tiered carriage deals for broadband content. Congressional efforts to deal with the issue have been so deadlocked by competing interests that conservative Federal Communications Commission chairman Kevin Martin took matters into his own hands earlier this year with the legally questionable claim that neutral carriage is FCC policy.
A formal network neutrality law would tilt the balance of Internet power from distributors to content providers. This is where Obama stands in starkest relief to Republican opponent John McCain, who has said carriers have the right to charge for preferential transport—in the worst case scenario regressing the Internet to the disastrous walled gardens that have held back mobile data uptake for years.
The liberal win could also spell trouble for the fledgling behavioral ad segment. Obama is keen to beef up digital privacy protections and could establish a national “opt in” policy that would likely scale back near term deployment of targeting technologies. This consumerist stance extends to the wireless space, where Obama wants to address despised early termination fees.
BROADBAND BOOST: But service providers can take comfort in Obama’s desire to boost US broadband. The candidate has voiced a desire to boost minimum access speeds to 20Mbps—just a third of the Japanese broadband average yet shockingly more than seven times faster than current average US speeds. Obama wants to redefine “broadband” in light of archaic FCC terminology that qualifies 200kbps as a high speed connection and co-sponsored the $40 million Broadband Data Improvement Act calling for more accurate rollout metrics. And he champions a direct government hand in boosting broadband deployment, using tax and loan incentives to persuade operators to rollout high speed access in rural communities.
At least one plank in the Obama platform could be accomplished before he takes office. His enthusiasm for improving wireless spectrum use is expected to gain a shot in the arm as the FCC meets to vote on white space airwaves this week. The commission signaled it was likely to unanimously back the unlicensed use of fallow broadcast spectrum—a proposal heavily backed by would-be wireless upstart Google, which believes white space services could provide a killer platform for its fledgling Android mobile platform.
Other expected policy shifts include an overhauled Universal Service Fund and reduced leasing arrangements for competitive local exchange carriers. Obama is known to support a nationwide wireless public safety network and agrees with McCain on the need to make a moratorium on state Internet service charge taxes permanent. The networking industry would also see a boost from his health care platform, which includes a $US50 billion drive to put consumer medical records online in an attempt to drastically reduce overheads.
Little of this should be surprising, not least because his first major piece of legislation as senator was penning the Google Government Act—to say nothing of his campaign’s unprecedented and galvanizing use of the Internet as a key communications tool. Obama is advised on telecom policy by former FCC chairmen Reed Hundt and William Kennard, the latter of whom oversaw the agency during the second Clinton term and aggressively pushed mobile technology while attempting to narrow the digital divide.
Indeed it is Kennard who has been tasked with promoting the Obama telecom agenda among wonk media outlets such as C-SPAN, where he recently implied the presumptive winner would likely legislate ‘Net neutrality during his first year in office to eliminate the legal uncertainty over the FCC's claimed jurisdiction on the matter.
Established interests are likelier than ever to face significant roadblocks to taking advantage of their positions under Obama, although the global liquidity crisis could curtail his more ambitious plans. His would be the first White House in history to appoint a federal technology czar, signposting an intention to monitor the communications sector more closely than ever before in repudiation of George W Bush’s laissez faire approach.
But it may not be time to panic just yet. Service providers could see an upside by viewing ‘Net neutrality as a long game. Sacrificing the immediate revenue hike tiered data carriage would bring might prove a canny pathway to future riches in an America whose 111 million homes have become digital media consumers feasting on Japanese-style broadband links. Ubiquitous fast connectivity could transform the telecom space into a key entertainment platform in a culture glued to their DVRs and iTunes accounts, rocketing ad spend and multimedia services while creating the potential for operators to become as powerful as terrestrial broadcasters.
Disgruntled incumbents might also want to grit their teeth and recall Obama voted in favor of telecoms immunity—potentially saving them from being driven out of business by multi-billion-dollar class action lawsuits for helping the Bush administration illegally spy on their subscribers. A little quid pro quo goes a long way.
And that proposed tech czar? Among the names being bandied about are industry friendly heavyweights Steve Ballmer, Jeff Bezos and Vint Cerf. Small wonder Silicon Valley endorsements favored Obama by a landslide.
Patrick Neighly is CommsDay’s US correspondent
and a former managing editor of America’s Network
