Homeowner's Blog

Providing Universal Broadband  to all American Homeowners

On February 29 Federal Communications Commission Chairman Julius Genachowski said that bringing basic broadband Internet service to American households without access could cost as much as $20 billion This will be expensive, but the penalty paid by Americans who do not have broadband access grows every day. They don't have the growing number of educational, economic, healthcare, or many other options available to those who do, and they are destined to becoming even  more disadvantaged over time as the digital divide widens. Devising the most cost-effective way to bring broadband Internet service to the three million to six million American households without access is by far the most important priority for U.S telecom policy today.

The immediate challenge is spending the $7.4 billion in broadband economic stimulus funding efficiently, since that process is already underway. The goal here is universal broadband availability and there are several common sense conclusions:

• Spend all of the money on deploying broadband to areas that do not have it now, and are not in the path of private broadband build-out for the next few years.

• Rely on temporary subsidies to help those who have broadband services available to them but can't afford them. As competition evolves, available speeds and choices will increase, prices, will  drop and many subsidies can be cut back.  

• Tap the $7 billion federal fund that subsidizes phone services in rural areas and for low-income Americans. The use of land lines is declining as both broadband and cell phone use (and mobile computing) is increasing. There is no longer any point in subsidizing a rural telephone company's land line expenses where mobile voice/computing service is available, so subsidize the latter. Rural telephone companies have the choice between morphing into broadband solution providers or else becoming the 21st century's buggy whip manufacturers.

• It is worth investing reasonable amounts in efforts to try to improve adoption rates, but important to recognize that they will increase organically anyway as more technology oriented generations succeed their elders.

Agencies in charge of distributing the funds will have to make subjective decisions in many cases on whether to spend the same amount of  money on higher speed broadband to fewer unserved or slower speed broadband to more of the unserved. They will get criticized even when they make the right decisions. It is inevitable that in any major ramp-up of this magnitude that some bad choices will be made as well. The most that we can expect, but what we all have a right to expect, is that the FCC and other organizations involved in the path to universal broadband availability keep their eyes on the ball, be willing to admit mistakes, learn and improve as they go, and continue their role as universal broadband evangelists until broadband is available to every home in America. So long as they are doing a reasonable job of it, the rest of us also need to continue to stand up for the importance of achieving universal broadband availability, and support the FCC and other involved agencies in this critical mission.

The $7.4 billion in broadband economic stimulus funding alone is not going to achieve universal funding. The government can't afford to pay for all of the costs anyway. We also need to think about new economic incentives to encourage the private sector to increase its investment in broadband rollout and related areas.

Promotion of Teleworking Should be Top Federal Communications Commission Priority, Says National Homeowners Group

In response to a request for comments from the Federal Communications Commission, we suggested a variety of new policies to promote teleworking. Teleworking incentives will help the environment, homeowners, and businesses. Homeowners are welcoming telework for many reasons. With the dramatic growth in two income families, time-starved parents find that teleworking helps them cope with the many responsibilities of child-rearing. As commuting distances and times lengthen due to suburban sprawl, teleworking also provides a way to recapture precious hours lost to traffic jams. Surveys consistently show that telecommuting programs are among the most popular employee benefits. A recent survey of members of the American Institute of Architects revealed that home offices are the most popular special function room of new home buyers for the third year in a row."

Home-based technology-centric businesses (we call them telehome businesses) benefit society in many ways. Telehome business owners and telecommuters are helping to reduce rush hour traffic jams and defer the need for state and federal transportation infrastructure expansion and maintenance investments. No vehicle gets better mileage during rush hour than one that remains in the driveway. A study by TIAX LLC determined that a full time telecommuter who lives 22 miles from her office would save 320 gallons of gasoline and reduce CO2 emissions by 4.5 to 6 tons per year. The shift to teleworking is thus helping reduce environmental pollution and global warming.
 
Our policy recommendations:

a. Provide federal and state tax credits to encourage teleworking.
 
b. Prohibit state sales taxes on Internet transactions in order to stimulate home-based Internet commerce businesses and reduce driving to shopping malls.
 
c. Reduce the depreciable lifespan of technology products to 2 years. Recordkeeping should also be simplified and liberalized for home offices, and limited personal use of computers, Internet access services, cell phones, etc., should be exempt from taxable liability.

d. Focus the $7 billion+ in stimulus funds allocated for expanding broadband service to unserved areas which will not soon be served by other private/public sector broadband deployments already in process.

e. Focus the $7 billion+ in stimulus funds on rural areas with urban/suburban demographic characteristics, which are good candidates for broadband deployment from an ROI standpoint.
AHGA also recommended several tax incentives to encourage businesses to invest in telecommuting programs and help broadband service providers both strengthen their networks and expand the availability of broadband services in unserved areas. The complete text of the American Homeowners Grassroots Alliance's FCC submission is here.

Punish the Perpetrators, Not the Stockholders

Yesterday U.S. District Judge Jed Rakoff threw out the Securities and Exchange Commission's proposed federal settlement with Bank of America over its failure to disclosure controversial bonuses paid to Merrill Lynch employees as part of Bank of America's agreement to acquire Merrill Lynch. Merrill Lynch had agreed to pay a fine for the violation, but the judge ruled that a fine paid by the company would unfairly punish Bank of America's stockholders for the actions of its corporate executives. The decision lends credibility to  the New York State attorney general's announcement that he  may bring civil-fraud charges against Bank of America's chief executive, Kenneth Lewis, and Chief Financial Officer Joseph Price.

We totally agree with Judge Rakoff.  Penalizing stockholders for decisions  made by corporate executives is unfair and undermines the a primary function of those penalties, which is  to deter future misbehavior. Corporations don't make decisions - they are an inanimate form of business. Corporate executives make the decisions, and it is they who should be held accountable in this and other cases.