In sharp contrast to the rest of Washington, where little of substance is getting done, Tom Wheeler's FCC is actively engaged on many important fronts. And that's a good thing. You might disagree with their stance on network neutrality, the 'fast lane' proposal, views on potential mergers, and so on, but at least there's dialog, debate and action.
This is a critical time in the communications and digital media industries. I'm not arguing for a spate of new regulations, but we do need the public sector to be proactively engaged and involved, in two respects. First, it is time to develop a broader vision, or roadmap, for what the industry should look like, over the next five years, and think about how to most effectively and equitably get there. This will help guide many of the key decisions currently on the docket, and also anticipate how to address issues that are sure to arise. Second, there are some industry segments, such as m-health and m-payments that have stalled, and in my view require some level of public sector involvement in order to realize their potential.
The Vision/Roadmap Thing
The FCC has an incredibly busy docket, in part because of items that have landed in its lap and in part because of an unusually proactive chairman and senior staff. The development and articulation of a broader vision or framework for where we need to be in five to seven years would, I think, help the government deal with some of these key issues as part of a whole, rather than piece parts. Some of the elements that would form this vision include:
- How much wireless capacity is needed to address demand? Take a given city, consider the number of users and project average usage per month in five years. Cisco can help you here. We need to get at some tough questions, such as how much rich media/video we can, or want to, handle over wireless networks.
If regulators are concerned about consolidation and concentration of spectrum resources, there are proactive steps they could take to encourage competition and innovation in mobile. They could be more forceful in mandating spectrum sharing, in exchange for merger approvals or allowing the larger operators to own more bandwidth. They could allocate a certain number of channels for fixed wireless broadband services, creating a 'Cricket' or 'MetroPCS' equivalent for a more affordable broadband option for price sensitive consumers. There are opportunities to expand the role of Wi-Fi as part of the wireless/broadband landscape, such as the recently approved 5 GHz initiative and opening of Channel 14 at 2.4 GHz as proposed by Globalstar in its TLPS petition.
- Become a 'first-tier' country in broadband (like we are in wireless). Right now, U.S. consumers are under-served by broadband, in terms of performance, price and competitive choice. Faster, cheaper, and more competitive broadband services would be great for innovation, and could also accelerate the pace of change in the content distribution landscape.
A key part of this discussion is the role of wireless as part of the broadband universe. The FCC could also take a look at resale as part of its examination of the Comcast-TWC, AT&T-DTV, and other mergers.
- Develop a future vision for video and media distribution. Cable/satellite has had a great 30-year run. But there are too many forces aligning--technology, consumer frustration with the current model, and a broadening, dispersed content universe--that necessitate some change in the distribution model for content. From a corporate perspective, the pay TV business is not very profitable, and from a consumer perspective, the OTT landscape is fragmented and confusing.
There are three centers of power in the communications/media landscape today: broadband networks, wireless networks, and ownership of desired content/rights (Netflix, NFL, Viacom, Amazon). Right now, changes in content distribution are being handled on a piecemeal, crisis-to-crisis basis: Aereo, Netflix/Comcast battle, TWC/CBS standoff, and so on. The 1992 Cable Act and the 1996 Telecom Act are outmoded. Perhaps we need one über act: The Broadband and Content Distribution Act, anyone?
Help for Promising, But Stalled, Sectors
Consumers are embracing new and creative business models, particularly in heavily regulated industries that haven't changed a lick in years. Witness the success, and valuation, of AirBnB and Uber. In these cases, government is being forced to play catch up.
I'd like to present two examples where government, with some small steps, might be able to make a substantial difference.
1. Electronic Health Records
It is 2014, and every time you go to a new doctor or hospital, you have to fill out some poorly photocopied form, by hand, with your personal information and medical history. Amazon, Netflix, and LinkedIn have a lot more information about you than the key stakeholders in your "care community."
One of the reasons m-health, and even the wearable and fit-tech segments have stumbled is that there is so little health/medical data about the average consumer that has been captured digitally, or can be accessed, electronically. All the heath and fitness information being captured by the expanding array of devices and apps is completely divorced from one's network of health care providers.
There have been many stumbles with regard to the development of electronic health records (EHR), but this is one area where the federal government might need to get involved in some way. I realize this is a tough hill to climb, given the snafus involved with the Affordable Care Act, distrust about security, and suspicion of how insurance companies and other interests might misuse sensitive data. Trust could be rebuilt with a couple of modest victories here. There is a great deal of utility waiting to be unleashed if there's progress on EHR, and huge pent-up demand in the innovation community to do something meaningful in e- and m- health.
2. Mobile Payments
Payments is one other example I'd like to highlight. We all thought that m-payments/m-wallet initiatives would be a lot further along than they are today. I think the public sector, particularly on a more local level, could help accelerate the mobile payments market. Entrenched businesses, such as the big banks and credit card companies, have held back the development of a more secure, contemporary payments infrastructure in the United States. A few days spent in Toronto this past weekend demonstrated to me how much further along most countries are in EMV and PIN Debit than we are in the U.S.
The other aspect of this is the consumer angle on m-payments. The current system works pretty well in most type of merchant and online transactions. It is the smaller transactions, mundane stuff like paying for public transportation and parking meters that would be made more convenient with the wave of a phone. The government role here is two-fold: deploying the infrastructure to enable 'public sector' e-payments; and working with industry to establish a standardized and coordinated system, so it's not a different adventure in every city or town. Government agencies cooperated to deliver effective electronic tolling across states. The public sector should be more involved in engaging with the myriad private m-payments initiatives, so devices can be used for a broader array of payment scenarios.
Mark Lowenstein, a leading industry analyst, consultant, and commentator, is Managing Director of Mobile Ecosystem. Click here to subscribe to his free Lens on Wireless monthly newsletter, or follow him on Twitter at @marklowenstein.