All posts in communications policy

While we’re waiting

By On August 5, 2008 In communications policy, election, internet policy, network neutrality, Uncategorized With 3 Comments Permanent Link to While we’re waitingPermalink

Back in early July, we heard that the McCain tech policy (eight months behind the Obama tech policy) was going to be released in… July. It’s August, it’s humid, and no policy.

We can predict to some extent what the in-process policy will say.

The bottom line: Sen. Obama sees the promise of technology. He understands that technology policy should be closely tied to this country’s economic policy, because technology may provide answers — solutions — for our sagging standing in the world.

Sen. McCain, from all we can tell, thinks technology is a problem. We’ve all heard the line from the Chronicle article last week:

McCain said he is well aware that technology “does drive the news. It is changing the shape of the news. … It’s changing the information age, and I’ve got to stay up with it.”

He added, “But I am forcing myself … let me put it this way, I am using the computer more and more every day.”

The problem isn’t that he doesn’t use a computer. The problem is that he thinks it’s acceptably funny to shrug away the entire ecosystem.

Sen. McCain is much more interested in offshore drilling than innovation.

He’s bought into the idea that the “free market” in highspeed internet access in this country is functioning just fine – when in fact we’re failing on every measure. Enormous incumbents have successfully avoided competition by facilitating ongoing regulatory gymnastics, prices are high, and speeds are slow.

Sen. McCain’s got that bemused, “let the kids play around” tone when it comes to technology, even as the country slumps and looks backwards towards its prouder days.

We need new ideas. Those new ideas will generate economic growth and get us out of this hole, someday, with a lot of effort. Tinkering around with capital gains breaks for big companies is not going to do it – we need a concerted, well-led, public effort to invest in the internet access infrastructure the country needs. There is no greater source of new ideas than the internet, and no greater source of hope for our economic future than better technology policy.

Back in 1904 the “Good Roads” movement gathered strength in this country. We had ignored this basic infrastructure and our roads were covered in mud and deeply rutted. It was embarrassing; other countries had invested in their roads and were able to get move their goods to market much more easily. It took leadership to dig ourselves out. One writer said at the time, “If America be the most progressive nation in the world, her citizens will not much longer endure medieval discomforts when they go out to mingle with their fellows and market the fruits of their fields.”

Our basic communications transport infrastructure today is internet access, and we’re in some medieval pain right at the moment. Sen. Obama understands this.

It’s not just internet access that Sen. Obama understands. It’s technology generally. Here’s a paragraph from his technology policy:

The 21st century tools of technology and telecommunications have unleashed the forces of globalization on a previously unimagined scale. They have “flattened” communications and labor markets and have contributed to a period of unprecedented innovation, making us more productive, connected global citizens. By maximizing the power of technology, we can strengthen the quality and affordability of our health care, advance climate-friendly energy development and deployment, improve education throughout the country, and ensure that America remains the world’s leader in technology.

I don’t want Sen. Obama stuck in front of a screen all the time. I just want him to understand what people using millions of graphical screens networked together are capable of. I think he does.

Sen. McCain? I’m still waiting.

We won’t defer when you’re wrong

By On July 24, 2008 In communications policy, fcc, internet policy, Uncategorized With No Comments Permanent Link to We won’t defer when you’re wrongPermalink

When should a court defer to an agency’s interpretation of its governing statute and/or its own regulatory actions?

I got interested in this question because deference by a flummoxed Supreme Court gave us Brand X, with its ahistorical “this looks really tricky so we’ll let the FCC categorize highspeed internet access” approach.

In this week’s Third Circuit opinion about the Janet Jackson Super Bowl incident, the court doesn’t defer much. At least three times, it corrects the FCC’s reinterpretation of past regulation.

1.

FCC: We gave notice of and a reasoned explanation for our new policy on “fleeting expletives” before the Superbowl in 2004 and the policy wasn’t much of a change anyway.

Court: “[W]e find the Commission’s unsubstantiated contentions in this regard contradict the lengthy history of the Commission’s restrained enforcement policy. While ‘an agency’s interpretation of its own precedent is entitled to deference,’ deference is inappropriate where the agency’s proffered interpretation is capricious.”

2.

FCC: Anyway, our old “no problem with fleeting imaterial” standard only covered words, not images.

Court: No. You admitted that there was a fleeting material policy. Now you’re “seek[ing] to revise the scope of the policy by contending the policy never included fleeting images. But extensive precedent over thirty years of indecency enforcement demonstrates otherwise. Our reluctant conclusion that the FCC has advanced strained arguments to avoid the implications of its own fleeting indecency policy was echoed by our sister circuit in Fox.…”

3.

FCC: A broadcaster is on the hook for indecent material, even if it didn’t know the material was going to be broadcast. We’ve always said so – we have a regulation that says so.

Court: No. “[T]he Commission’s proffered interpretation of [its rule], which appears to contradict the plain language of the regulation as well as the history of its adoption, would appear to be erroneous and inconsistent with the regulation.”

And more: “The FCC’s interpretation of its own regulation is, of course, entitled to considerable deference. But our deference to an agency’s interpretation of its own regulation is tempered by our duty to independently insure that the agency’s interpretation comports with the language it has adopted. Accordingly, we need not accept the agency interpretation if it is plainly erroneous or inconsistent with the regulation.” [many internal quotes and cites omitted in this last bit].

=====

It’s nice to see some limits to deference. Judicial deference and a sleepy Congress have gotten us to where we are right now in communications-policy land.

BT and Ofcom

By On July 16, 2008 In communications policy, internet policy With 5 Comments Permanent Link to BT and OfcomPermalink

About 16 months ago, I heard Ed Richards of Ofcom speak at a CITI conference at Columbia, and blogged about it here. I remember thinking that Richards didn’t seem to think that highspeed access to the internet was all that important. The market had to demand it, and the market wasn’t being demanding.  Also, he wasn’t interested in government intervention to support highspeed access.

[In April 2007] Richards said (paraphrase mine): We won’t give network providers money — instead, we want to let the market make the decision. Are consumers willing to pay for a higher-speed broadband network? It has to be be funded by consumers. I see no case for funding broadband by the government. A national response of government funding would likely waste taxpayers money, preempt the market, and re-create a state monopoly. So we have to encourage consumers to pay more — they need to like the service proposition that they get. This can include content rights, bundles of services, etc.

(Note the well-informed anonymous comment following that post:

Since 2001 the UK Government has provided one billion pounds of “incentive” through state aid (channeled through the Regional Development Authorities), public-private partnerships and induced/aggregated demand from public services (egovernment projects, schools- and hospitals-online) to get BT to install DSL equipment in areas where the company said it was not “economically viable.” For documentation see “Broadband Procurement To Improve Efficiency and Effectiveness of Public Service Delivery” by Mike Gunston, UK Office of Government Commerce, presented at an OECD Broadband Workshop, Paris, France (2-4 December 2002).
This huge subsidy bribe sum was supposed to achieve the Government’s goal of making the UK “the most extensive and competitive broadband market in the G7 by 2005″ (UK online: the broadband future – An action plan to facilitate roll-out of higher bandwidth and broadband services, Office of the e-Envoy, 13 February 2001).)

Well, this week it looks as if the regulator, Ofcom, has again moved towards providing “incentives” to BT, this time to encourage BT to install fiber.

BT’s announcement is here.  Here’s a key phrase:

A supportive and enduring regulatory environment is essential if this investment is to take place. Given this, BT will be discussing with Ofcom the conditions that would be necessary to enable this programme to progress. These include removing current barriers to investment and making sure that anyone who chooses to invest in fibre can earn a fair rate of return for their shareholders.

BT is probably asking for subsidies, if the comment above is accurate.  It’s also saying in its press release that it will act as a wholesaler, which is a fascinating development.  (And makes BT sound quite different from Deutsche Telekom.)  BT wants cable to be similarly open.  Given the “barriers to investment” and “fair rate of return” language the company using, I wonder what BT has in mind.  It may be that “wholesaling” isn’t the same thing as equivalent access – so BT could offer super-duper services that its competitors can’t.  Also, just providing “wholesale” access doesn’t mean offering access that anyone can afford.

Which leads to the question:  How much fiber, and where?  Karl Bode characterizes BT’s offering as “Fiber To The Press Release.”  (That’s probably only funny to telecom-conference-attendees, but side-splitting to them.)  His summary is that “the majority of BT customers will still be on copper unless the government ponies up subsidies and passes the laws BT wants.”

Ofcom, for its part, is producing the sounds that BT wants to hear.  According to a story in The Register, Ed Richards recently said:

“They [investors in fibre] need a time horizon that gives them a degree of assurance for a realistic period in the future; that they know for example that the regulator will not suddenly change the rules of the game to reduce the returns just as the rewards for the risk start to flow in.”

Ah, the regulatory holiday.  That sounds very Deutsche Telekom.

Battling over clouds

By On July 8, 2008 In communications, communications policy, network neutrality With 1 Comment Permanent Link to Battling over cloudsPermalink

More than 40 years ago, the FCC was worried about telephone companies using their power over communications to control the then-nascent (and competitive) data processing marketplace. The Bell System at that point was already banned from providing services that weren’t common carriage communications services (or “incidental to” those communications services).

In Computer 1, the Commission tried to distinguish the use of computers for processing information from the use of computers as part of communications, with the goal of not allowing the Bell System into the data processing business.

In a 1999 article in the Texas Law Review, Steve Bickerstaff pointed out that Computer 1 meant that no one could provide a “computer utility” service.  The Bell System couldn’t as a matter of regulation, and no one else could because they’d be completely dependent on the good graces of the Bell System for transmission.  There weren’t enough highspeed lines to make a computer utility viable, and other companies probably didn’t want to test the regulatory boundaries anyway – they didn’t want to suddenly become telecommunications carriers by providing transport to remote computing services.

Today, we’d call the “computer utility” something different – we’d use the term “cloud computing.”

Fast-forward:  Computer I was the right decision, arguably, in that it allowed the internet to come into being.  Our government made a number of policy decisions (and delayed action in a number of ways) that supported internet access, as Bickerstaff describes.

Since then, Computer I and the divestiture conditions that continued the Computer I regime have been completely dismantled.  More than that – they’ve been reversed.  Now the telephone companies are *only* in the data processing business, which we now call “enhanced services” or “information services.”  No more common carriage transmission.  Nice note from Bickerstaff, writing, remember, in 1999:  “Mostly escaping attention has been the successful effort of the BOCs to position themselves as a very potent future force in the Internet market.”

You can reframe the net neutrality battle as an argument for re-imposing the restrictions of Computer I.  Keep these companies from providing “information services”!  Put them back in the “transmission” box!

That hasn’t happened – yet.  Meanwhile, though, what about cloud computing?  Bickerstaff suggests that the conditions for cloud computing emerging would have to be (1) an increase in highspeed internet access, (2) increasing frustration with PCs, and (3) the existence of ample competitors to provide carriage.

Let’s say the first two conditions have been met now.  The third is still a major problem.  Yet there are companies – including Google – who have a great interest in providing the cloud.  What will happen?

The carriers have no particular reason to give up voluntarily on the regulatory gains they’ve made over the last 40 years.  Google is doing its best to open up or limit the control of the carriers (plus finding alternative pathways), but surely wants to move forward with the cloud more than it wants to win on principle.  Of course, I could be wrong.

So many questions – is cloud computing desirable?  Are people willing to possibly lose access to their entire portfolio of stuff if their internet connection goes down?  If cloud computing is desirable, will companies that are good at clouds be striking deals with the companies that have a lock on transmission?  Or will the companies that have a lock on transmission be emerging with clouds of their own?

Supernova 2008

By On June 17, 2008 In communications policy, internet law, internet policy, Uncategorized With No Comments Permanent Link to Supernova 2008Permalink

This is the first time I’ve been able to attend Supernova, and it seems like a fine conference. It’s all being made available online:

Conversation Hub:
http://www.conversationhub.com

Live video stream:
http://www.mogulus.com/supernova2008

IRC Chat:
irc://irc.freenode.net/supernova2008

Twitter feed:
http://twitter.com/supernova2008

Yahoo Pipe:
http://pipes.yahoo.com/pipes/pipe.info?_id=055fe30a2c9cbcfc197e494d6db2885a

In a back-and-forth this afternoon between David Morin of Facebook and Kevin Marks of Google, Morin said that FB had “turned off” Google’s Friend Connect application because it was a violation of FB’s Terms of Service. Morin also said that that FB wants to make sure that privacy settings applied to FB data travel with that data, even if those settings change. When asked by Marks how the Friend Connect service violated the TOS precisely, Morin declined to respond. The violation was “a legal matter,” he said, and “our representatives are talking.”
Also, this afternoon, Joi Ito made clear that he thinks of Creative Commons as a standard, like TCP/IP. And Chris Sacca of Google made clear that the thing to worry about is the physical infrastructure layer and the control that gatekeepers (increasingly, wireless companies) have – and that we’re asleep at the wheel.
A good day.

Bit caps, consolidation, and Clearwire

By On June 16, 2008 In communications policy, internet policy With 4 Comments Permanent Link to Bit caps, consolidation, and ClearwirePermalink

The news that Comcast, Time Warner, and AT&T are all considering capping use of their networks – so that “overuse” would trigger a charge – has prompted intense discussion of just why these network operators are moving in this direction.  One camp suggests that these operators have to do *something* to manage congestion, and because any protocol-specific discrimination plan raises howls of protest from the Net Neutrality side of the fence adopting bit-usage discrimination schemes is inevitable.  It’s the least-bad approach, following this view.

The Net Neutrality side, for its part, points out that (1) each of us will fall into the 5% of “over-users” at some point or another, (2) the operators want to make sure that they remain the chief sources of video content, rather than allowing internet access to video undermine their business plans, and (3) it seems odd to manage to scarcity rather than invest in improved access for everyone.  It’s as if the operators would prefer to keep internet access expectations at 2003 levels.  And if you really wanted to manage congestion you’d charge differently for usage at different times.  (Meanwhile, Korea.)

People in countries with experience in volume limits (e.g., Australia) tell us that it’s miserable having fixed caps and overage charges.  In Japan, they began with expensive metered access and left it as soon as they could move towards an unbundled/separated regime – now costs are low (and flat) and speeds are very high.

Bit caps are portrayed as similar to familiar cellphone models – getting a “bucket of minutes” for a fixed price.  But the history of internet usage hasn’t proceeded that way, and it should be hard to force users into these plans.   Should be – but may not be, both because users here in the US don’t expect to be able to access enormous amounts of video online at high speeds, and because users don’t have a lot of choices for network provision.  If most of the big ones move in the bit-cap direction there will be few opportunities for users to vote with their subscription fees and escape.

Speaking of “most of the big ones,” the big ones may get bigger.  Verizon’s purchase of Alltel will mean that two companies – AT&T and Verizon – will “control 150 million of the 260 million wireless customers in the US.”  (From Public Knowledge.)  Verizon will have 80 million of those customers alone.  All around the world, wireless providers are consolidating as they seek to “become national players in next-generation mobile networks.”

So here we are:  a retrograde move towards metered pricing, increased consolidation, and no necessary link between any of this activity and better internet access for everyone.

The Sprint/Clearwire transaction seems like a possible work-around (thanks to those of you who sent me the filing from last week – I still can’t link to it but I will when it’s available).  Their claim is that they’ll create “a new nationwide advanced wireless broadband network that will increase competition across the country and vault the US into a leadership position in the broadband innovation and deployment.”  They’re planning to provide speeds that are five times as fast as current wireless speeds, as they roll out the “world’s first nationwide WiMAX network.”  (It’s always good to appeal to our national pride.)  They’re planning to allow wholesale access – although perhaps only by the cable investors in the plan, Comcast and Time Warner. (There’s a vague mention of other unaffiliated firms, but no assertion that just anyone will be allowed to re-sell their network.)   Now, they’re not giving up on “reasonable network management” or “no devices that harm our network.”    But they’re asserting that wireless access is the future, that it’s the fastest-growing segment of the US telecom industry, and that a new competitor is needed.

There are worries – will the $3.2 billion from the investors be enough to make a nationwide network possible?  Will the technology actually work – penetrate walls, go through anything?  What about backhaul problems?  Backhaul may be the big unexplored issue here – without a line taking all of those WiMAX communications somewhere, they won’t succeed, and those lines are controlled by incumbents who don’t have any incentive to charge market prices.  Because there isn’t a market.

So that’s today’s picture.  Head-scratching about bit caps, intense consolidation, and the glimmer of a possibility that a “third pipe” might emerge.  It all ties together, because without the cooperation of the incumbent network operators (the people who feel bold enough, market-powerful enough, to float metered pricing), the third pipe may not have a realistic chance of succeeding.

Meanwhile, the rest of the world watches US wireless policy closely.

Hitting the nails on the head in Canada

By On May 14, 2008 In canada, communications policy With 4 Comments Permanent Link to Hitting the nails on the head in CanadaPermalink

In The Deal of the Century, the 1987 classic account by Steve Coll of the breakup of the Bell System, one of the Bell local operating company presidents (pre-breakup) is furious about MCI’s attempts to build microwave private lines for companies. Here he is, arguing to the AT&T chairman that MCI has to be stopped:

There are large amounts of revenues that are vulnerable, which we can preserve if we choke off now. I think you have to hit the nails on the head.

The AT&T Chairman, John deButts, eventually follows his advice – and when MCI comes to AT&T asking for interconnection agreements in major cities so that it can sell private line services, AT&T delays, avoids, and then directly challenges MCI. Coll says deButts “call[ed] for nothing less than a public anointment of Ma Bell’s right to exercise its monopoly in the national interest” in this speech:

The time has come, then, for a moratorium on further experiments in economics, a moratorium sufficient to permit a systematic evaluation not merely of whether competition might be feasible in this or that sector of telecommunications but of the more basic question of the long-term impact on the public.

In other words, AT&T’s deButts was calling for a moratorium on MCI’s efforts to interconnect with AT&T.

The news today is from Canada, where Bell Canada has called for a moratorium on the efforts of independent ISPs to compete across its lines. “Canadian Regulators Deny Relief For Bell Canada Traffic Shaping.”

The argument from Bell Canada is that its throttling of PDP traffic (before it even reaches independent ISP networks) is not creating a disadvantage to competitors – and thus is not violative of its obligation to sell wholesale access to its network. Although the CRTC found that the ISPs had raised serious questions about tariff compliance, the regulator wasn’t convinced that the harm caused by this practice was irreparable, and so didn’t want to grant interim relief prohibiting the practice.

This isn’t over – the argument against Bell Canada’s throttling practice is that it amounts to “an anticompetitive move aimed at ensuring that nobody could offer higher quality service than Bell Canada’s Sympatico unit,” and the CRTC will hear that question. This is just an interim order.

In the meantime, however, Bell Canada is successfully choking off competition and hitting the nails on the head. It’s required by law to open up its DSL network to competitors (just as the old AT&T was required to interconnect), but it is unwilling to do so in ways that might leave revenue on the table.

[update:  privacy complaint from the Univ. of Ottowa clinic - all that deep packet inspection is troubling]

The New Clearwire

By On May 9, 2008 In communications policy, internet policy, Uncategorized, wimax, wireless With 2 Comments Permanent Link to The New ClearwirePermalink

The new Clearwire could be game-changing, but the rules of the game may not be quite as Clearwire presents them. I have been wondering since last July whether something significant would happen in the Google/Sprint world. The deal announcement earlier this weekseems to be that key development. (Here’s the press release and here are slides describing the transaction.)

In a nutshell, Sprint will contribute its substantial spectrum licenses in the 2.5 GHz range and its WiMAX-related assets and intellectual property. Google, Intel, Comcast, Time Warner Cable, and Bright House Networks will invest a total of $3.2 billion. The idea is that this combination of investment and spectrum will allow the resulting “new Clearwire” to get a jump on AT&T and VZ in introducing highspeed mobile internet access – perhaps a two-years’ lead. Part of this time-to-market advantage will come through Sprint’s agreement to allow the new Clearwire to use its towers, fiber network, and IT support. Plus the new Clearwire is saying that it’s using a standard — WiMAX — that was developed in 1995. (More about that below.) Verizon’s preferred standard, LTE, or “Long Term Evolution,” isn’t as longstanding.

It’s clearly exciting to have a potential competing provider of highspeed mobile internet access out there that could cover 140 million Points of Presence (units of coverage – a POP is an access point from one place to the rest of the internet that has its own unique IP address) by the end of 2010. But there are . . issues.

Money. Not to sniff at the $3.2 billion investment of the cable/Google team, but there is already a prediction that the new joint adventure won’t have enough money to carry out its plans. To get to the 140 million POPs, the venture knows it will need an additional $2-2.5 billion. Okay, maybe that’s easy, but it’s a hole. And some people are even saying that the venture is radically under-estimating the amount of money it needs – they’re asserting that even after the additional $2.5 billion comes in, the new Clearwire will need another $5.5 billion to roll out “a mobile WiMax network with supporting backhaul in 50 markets in the U.S.” (“Backhaul” means the part of the wireless network, owned or borrowed, that allows the communication to travel from a cell tower to a central site – either a switch or a node on an internet backbone. There’s apparently a backhaul bottleneck that doesn’t get talked about enough.) So it’s unclear whether there’s enough actual or potential money in the system to make it work.

On the other hand, all of this buzz and interest in WiMAX, as well as Intel’s involvement, make it a possible trigger for gadgets and devices etc. for WiMAX – whose presence could in turn make the venture into an attractive investment opportunity in the years to come.

Technology. There seems to be a good deal of concern about WiMAX itself. Will it work? It’s supposed to cover long distances, but will those high frequencies travel through walls? Won’t it be awfully expensive to get towers (and their antennas) close enough to users to make coverage adequate? Clearwire talks a lot about its test of WiMAX going on in Portland, but that is still a beta installation and no one seems to have definitive results. Techies seems to think that you need lots of wires to make wireless work – wires to provide adequate backhaul and reach rural users — and that using the investors’ cable systems for backhaul won’t work because of all the slow upload problems we know about. Although maybe this will prompt the cable guys to upgrade. At any rate, lots of dubitante out there about WiMAX itself.

Openness. It’s hard to tell exactly what’s going on from the limited information we have on this transaction, but the press release does say that “Google will be THE search provider and a preferred provider of other applications for the new Clearwire’s retail product.” And”Google will become the default provider of web and local search services, both of which will be enabled with location information, for Sprint.”

How does this fit with Google’s earnest (we thought) efforts in connection with the 700 MHz auction to ensure that VZ and AT&T open their devices and networks to foreign applications? It is true that Google’s own blog posting about the transaction says that the resulting highspeed wireless internet access will “allow consumers to utilize any lawful applications, content and devices without blocking, degrading or impairing Internet traffic,” but how does that square with the assertion of Google-exclusiveness (ex-gloogleness?) for the Clearwire “product” — whatever a “product” is in this context?

So we’re cautiously optimistic, here at the Susan Crawford blog. We hope the thing will fly; we hope we’ll be flying down freeways uploading wildly some day (from the passenger seat), and it’s certainly good to see some disruptive investment in the wireless highspeed access area. But we wish Google hadn’t asked for that excloogle placement as part of the deal.

Tying, subsidizing, and IMS

By On May 7, 2008 In 700 mhz, communications policy, fcc With 8 Comments Permanent Link to Tying, subsidizing, and IMSPermalink

In response to my post a couple of days ago about the possibility that VZ might not plan to comply with the 700 MHz “open platform” rules, someone wrote:

would you have the FCC mandate that every mobile device must be capable of running every operating system? If Verizon sells me a BlackBerry, should the device allow me to install Android, Palm OS, Windows Mobile, or Symbian OS? Obviously, Google believes the answer is yes (they will make the most money if they can install their OS on every device). Is it good for consumers if the FCC starts managing software specifications for computers and mobile devices?

Here’s the problem that the question doesn’t aknowledge:  VZ controls its network AND markets devices, and would like to tie the two together. The Google petition suggests that VZ plans to give its subsidized devices exclusive “better” access rights to its network (we don’t know in what way) than other, non-VZ-connected devices.  VZ also plans to “cripple” the devices it provides (or “optimize” them) to run only the applications and operating systems and everything else it wants to offer.  This isn’t good for anyone other than VZ, and puts VZ in control of innovation in both devices and applications.

Marketing differently-abled devices is obviously fine in the abstract.  The problem here is that if VZ can say “only our devices will work well with our network,” “only our devices can be subsidized in the way you’re used to,” and “you can do only X, Y, and Z with these devices, but don’t worry, they’re cheap,” they will have successfully returned us to the pre-Carterfone days.  Without Carterfone, we wouldn’t have had modems. Without modems, we wouldn’t have had the commercial internet.  That’s why we should be deeply concerned about VZ’s plans.

The problem is that VZ is a dominant, vertically-integrated network operator and device-provider.  This isn’t any old new-gadget-maker – it’s Ma Bell, reconstituted.

VZ will say: Trust us.  We’re here to provide the best possible consumer experience. Why would we ever do anything that would interfere with all possible uses of our network? Don’t force us to allow all devices to use our network – that will squelch our wildly-innovative nature.

Well, VZ has every incentive to compete with the open internet.  They can’t adequately monetize the open internet.  So the point of the “open platform” conditions, weak and game-able as they were, was to de-link network provision from both device-provision and application-provision.  Now it appears that VZ may argue that those links are necessary in order for their network to work properly.

Now, I’m not saying that government drafting specs is generally a good idea – but to characterize the certification of Part 15 devices (say) as the drafting of specs is unfair.  To the extent there is a need for ANY specifications for attachment to internet access, and perhaps there may be for wireless access, there is a role for government to come up (in cooperation with all netops) with a standard set of specs for devices that are permitted to attach to highspeed networks, to work to ensure that those specs don’t allow the network operators to discriminate in ways that serve its revenue plans, and then to police an effective de-linking of devices from network-provision.

Here’s why this is so important:  VZ plans to overlay on all of its networks, wired, fiber, and wireless, a cell-phone-like-billing-system called IMS.  IMS comes in many guises and isn’t fully baked yet (I believe, but who knows), but it’s a child of the mobile phone system.  It allows for discrimination and billing and other “management” efforts that VZ thinks are appropriate.  Add IMS together with network-provision and subsidized-device-provision, and you’ve achieved the traditional telephone model:  a fully-managed network, where everything requires permission and can be billed for perfectly.

That’s not the internet.

700 MHz Update: Will VZ comply with the rules?

By On May 5, 2008 In 700 mhz, communications policy, fcc, google, internet policy With 3 Comments Permanent Link to 700 MHz Update: Will VZ comply with the rules?Permalink

Last Friday (HT:  IPDemocracy), Google filed a petition [PDF] asking that the Commission ensure that Verizon understands what those “open platform” requirements for the C Block really mean.  Verizon has taken the position in the past that its own devices won’t be subject to the “open applications” and “open handsets” requirements of the C Block rules, and Google says it is concerned that Verizon doesn’t plan to follow those requirements in the future.

This is big.  Here’s the background.

In the 700 MHz auction rules, the Commission noted that public advocacy organizations were claiming that “incumbent wireless carriers . . . routinely choke bandwidth to users, cripple features, and control the user experience” in order to protect their highspeed internet access businesses.  Verizon had argued strenuously that “imposing an open access business model undermines the auction process and competitive bidding,” but the Commission nevertheless stated that it would “require licensees to allow customers, device manufacturers, third-party application developers, and others to use or develop the devices and applications of their choice.”  The nickname for this requirement imposed on the C Block of spectrum (a large 22 MHz  block divided into a few regional licenses) was “open platforms for devices and applications.”

Accordingly, . . .we will require only C Block licensees to allow customers, device manufacturers, third-party application developers, and others to use or develop the devices and applications of their choosing in C Block networks, so long as they meet all applicable regulatory requirements and comply with reasonable conditions related to management of the wireless network (i.e., do not cause harm to the network.).

Specifically, a C Block licensee may not block, degrade, or interfere with the ability of end users to download and utilize applications of their choosing on the licensee’s C Block network, subject to reasonable network management.

The rules explicitly say that C Block licensees may not “disable features on handsets it provides to customers,” and “shall not deny, limit, or restrict the ability of their customers to use the devices and applications of their choice.”

When this rule was released I expressed skepticism about the “reasonable network management” and “regulatory requirements” wiggle room provided.  I also noted that Verizon had insisted on retaining the ability (1) to privately “certify” applications and devices for use on its network (a process during which a great deal of mischief is possible, as we know from the pre-Carterfone days),  (2) to sell  heavily-subsidized handsets of its partners in its retail stores (which will make it unlikely for competing, full-price handsets to be popular), and (3) to prioritize its proprietary or charged-for content over “ordinary” Internet traffic.

But even I didn’t imagine that Verizon would actually claim that the handsets *it sells* for use on its 700 MHz network would not be subject to these limitations, weak as these limitations are.  That’s what Google’s petition says:

Notwithstanding the clarity of the rule, Verizon has taken the public position that it may exclude its handsets from the open access condition.

Apparently VZ plans to treat customers using non-VZ handsets differently from VZ-handset customers, by giving them different access rights.  And maybe VZ plans to not allow *its* handsets to download particular applications.  In a nutshell, it’s unclear what VZ’s plans are in detail, and for this reason Google wants to make sure that VZ will adhere to the rules.

This petition appears to be designed to smoke out the truth:  did the Commission draft these conditions so loosely (“regulatory requirements”) that VZ’s reading is tenable?  Or is VZ simply playing fast and loose, hoping that it will be too difficult for any single actor to challenge it, given the Commission’s comfort with ambiguity?  Or were the rules actually designed to be unambiguous?

My own opinion is that VZ will do anything it can to retain discretion over use of its networks, both wired and wireless, and that there likely is at this moment a strongly-held belief inside that company that no reasonable regulator could possibly require VZ to operate an “open platform.”

“Where’s the revenue in being a commodity transport provider?  VZ is a broadcaster!”  Watch for First Amendment claims from VZ in response to the Google petition.

[My article on the auction is available here.]

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