All posts in communications

Another merger

By On June 13, 2011 In communications, Uncategorized With 4 Comments Permanent Link to Another mergerPermalink

I have spent the day reading the AT&T/T-Mobile filing. Now the day is almost over.

There’s a short/sweet Competitive Enterprise Institute filing that you could read instead. It makes these points:

1.  AT&T will be able to use the T-Mobile cell sites and spectrum in order to address increases in traffic. This increased spectrum will also allow AT&T to expand its LTE coverage to underserved rural areas.

2.  OS vendors and device manufacturers will constrain the power of network operators. Network operators are consolidating in order to have enough scale and power in order to fight back.  (The battle is vertical, not horizontal.)

3.  The special access/backhaul market is highly competitive.  Don’t worry about incumbents’ market power there.

4.  Don’t impose conditions.  You’ll just stifle investment.  Uncertainty and delay will harm the public.

See how much time I saved you?

Now you can read a new post from cracked.com:

“5 Reasons Internet Access in America is a Disaster.”  Short version:  Rich are underserved by monopolistic carriers; poor/rural are often unserved.  Internet access is more essential than phone services ever were, because quality of life/livelihoods/access to services depend on it.  Offline equivalents are disappearing.

Think of all the jobs we could create with a combination of regulatory reforms and a major open-fiber infrastructure project nationwide for areas that aren’t served.  Not just the jobs that have to do with digging up the streets (although we’d have a lot of those).  We’d be building a basic building block for the country’s future.

Instead, because we think there is little we can do, we do little.  Other than merge.

It’s been a long day.  I’ll have something more entertaining to report tomorrow.

Comcast/NBCU will raise costs for consumers

By On November 10, 2010 In communications, Uncategorized With 3 Comments Permanent Link to Comcast/NBCU will raise costs for consumersPermalink

A study out this week from the American Cable Association (story here and here), conducted by Dr. William Rogerson of Northwestern, concludes that the merger will allow the combined company to raise the fees paid by consumers much more effectively than the two companies could acting alone.

This is Dr. Rogerson’s third study in connection with this transaction.  In this one, he finds that:

  • the combination will result in $2.4 billion in net consumer harms over a 9 year period;
  • the quantifiable consumer harms of the transaction ($2.57 billion) are more than 10 times greater than the quantifiable consumer benefits ($204 million) claimed by the Applicants;
  • the horizontal harm ($1.14 billion) is nearly as great as the vertical harm ($1.43 billion); and
  • the quantifiable consumer harms of the transaction will be felt by consumers across the country, but especially so in Philadelphia, PA, Chicago, IL, San Francisco, CA, Washington, DC, and Hartford, CT, where Comcast has both a significant cable presence and an existing Regional Sports Network (RSN).

Why will Comcast be able to raise consumer costs?  Because it will be able to raise programming costs to other competing pay-TV providers, and these fee increases will be passed on to subscribers.

Comcast, for its part, claims that its internal costs will go down (the “benefit of reduced double marginalization”) because it will have smoothed its interactions with NBCU.  Rogerson says that benefit is very small – and perhaps just $25 million a year.  (I also think it’s very unlikely that this reduced-internal-cost would be passed along to consumers.)  By contrast, the harm of the transaction will be more than ten times higher.

How can this happen?  Because this deal is really about NBCU’s very powerful cable networks – USA, Syfy, Bravo, MSNBC – which are “must have” programming.  Comcast wants to bundle those with its own very powerful regional sports programming.  With this killer combination, they’ll be able to raise their rivals’ costs substantially.  First, the NBCU cable channels will be more expensive for competing distributors to buy; second, the combination of NBCU cable channels and Comcast sports content will increase Comcast/NBCU’s market power over programming.

This should get the attention of the Department of Justice.  Last winter, Sen. Al Franken was questioning Attorney General Holder.  Franken suggested that the Comcast/NBCU merger could affect consumers’ cable bills.  Attorney General Holder, who had been parrying Sen. Franken’s previous points with bland statements about “putting into place a variety of conditions,” snapped to attention:

HOLDER:  Well now I care.  I’m a — a Comcast subscriber, and the fact that you point out it could have an impact on my cable bill has awakened me…

(CROSSTALK)

FRANKEN:  I knew I could reach you somehow.

Today’s news

By On May 5, 2010 In communications, Uncategorized With 2 Comments Permanent Link to Today’s newsPermalink

Amy Schatz article here.

The FCC is carefully moving towards a “third way” approach to regulation of high-speed Internet access.  Complete deregulation of this essential input no longer makes sense; heavy-handed regulation doesn’t either; the FCC plans to forbear from rate regulation but ensure that the transmission portion — but not Internet applications and content — is subject to basic rules of the road.  They still have a lot of work to do to develop the factual record that will support regulatory reclassification of transmission services, but courts will likely defer to their classification if they do their job right.  I have every expectation that they will.

update: here’s the FCC’s statement

“Tomorrow, FCC Chairman Julius Genachowski will announce a path
forward for the Commission to address serious legal issues raised by
the Comcast v. FCC case.

“The Chairman will seek to restore the status quo as it existed prior
to the court decision in order to fulfill the previously stated agenda
of extending broadband to all Americans, protecting consumers,
ensuring fair competition, and preserving a free and open Internet.

“The Chairman will outline a ‘third way’ approach between a weak Title
I and a needlessly burdensome Title II approach.  It would 1) apply to
broadband transmission service only the small handful of provisions
that, prior to the Comcast decision, were widely believed to be within
the Commission’s purview, and 2) would have broad up-front forbearance
and meaningful boundaries to guard against regulatory overreach.”

==
Under existing law the Commission may, and should, find that transmission of Internet communications is a common carrier service if the service is offered generally to the public.  This potential change of classification is an unremarkable, and long-overdue, step to ensure a level playing field.  In 2001, Powell said that high-speed Internet access was like a Mercedes – now we know it is a basic input to commerce and job-creation in this country.  The facts on the ground have clearly changed and the Commission is not barred from discovering this.

Julius Genachowski at CES on digital literacy

By On January 7, 2010 In 700 mhz, communications, Uncategorized With 2 Comments Permanent Link to Julius Genachowski at CES on digital literacyPermalink

Jim Steyer of Common Sense Media introduces Chairman Genachowski.  Paraphrasing:  “If there was one person in this country who could have the most impact on this, I guess I’d say it is the President…But if it’s anyone else, it’s the person I’m about to introduce:  Julius Genachowski.  It’s amazing that we have him there, because we need his leadership.  He’s a dad, with a teenage football star son.  … So he understands.  And he’s an extraordinary legal scholar. He clerked for two different SCT justices.  Definitely a really smart guy.  And he spent time in the public sector and introduced me to the field of public media and children’s television.  Also spent time in the private sector.

But fundamentally, he’s an incredibly devoted dad, and that’s why we should be pleased that he’s Chairman and can usher in this new era.”

Chairman Genachowski:  I’ve watched Jim Steyer thinking, educating, fighting, acting, for kids.  Round of applause for him.  [Recognizes other staff who are in the room, including particularly Colin Crowell, who personally gave birth to the children's television act.]

This is a time of unprecedented challenge around kids and media and unprecedented opportunity.  The world is a different place now.  When I was a child, my parents had to worry about one TV in the basement and they had rules that worked.  Parents today have a very different experience. There’s still a TV, but many different channels – and many other sources.  Kids have computers, and there are dangers lurking.  Kids have mobile phones, using them actively.  These create real challenges for parents.  The car is becoming the next screen.  In some ways, a terrific thing – in an accident, say.  But there’s no question that distracted driving is killing people every day.  Particular problem among new drivers and teens.

So there are enormous challenges created by innovation, digital technology, new markets.  But these same factors provide great opportunities.

Three categories:  technological innovation, business model innovation – creative thinking about how to create new markets -; and social innovation.  We are healthiest as a society when all of these forms of innovation are working together. We need our great innovators to be thinking about these challenges to kids as they develop these new technologies.  Same thing on the business model side. In the broad marketplace, lots of people looking for educational content – new markets to be tapped. Opportunities to think creatively about principles that animated the children’s television act.  How do we think about those levers in a digital world.

First, we have a proceeding at the FCC that is looking at how to apply these principles – please comment!  Second, we’re looking at our own communication ability and thinking about how to harness that to better educate kids and empower parents.  Finding new ways to get public information to the public – we’re trying to present information about educational programming on the FCC web site to parents in useful ways.

Here’s the big news.  http://reboot.fcc.gov.  Using technology to get advice about FCC’s web site and data strategy- and to help the Commission act more efficiently.

REBOOT .FCC .GOV is your portal to take part in improving citizen interactions with the Federal Communications Commission. At Reboot, you can not only stay informed on what’s happening at the FCC but also get involved. Together we can help make the FCC a model of excellence in government. Please join the discussion.

Latest from the blog

Conclusion:  The door is open at FCC for your best ideas and best suggestions for protecting and empowering children in the digital age.

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?

Thursday links

By On March 13, 2008 In communications, communications policy, fcc With No Comments Permanent Link to Thursday linksPermalink

The House Commerce committee investigation of the FCC continues. According to the Washington Post, a detailed letter signed by Rep. Dingell has gone out to the FCC asking for a host of documents that (among other things) relate to “management practices that may adversely affect the Commission’s ability both to discharge effectively its statutory duties and to guard against waste, fraud, and abuse.”  This is serious – business as usual at the Commission must be under severe pressure, and the idea of real structural reform of the Commission (and perhaps a new telecommunications act) can now be talked about with some confidence.  This won’t happen now, but it could be happening a year from now.

According to CDT, the House should approve H.R. 3773, the FISA Amendments Act. It requires prior FISA court approval of surveillance procedures (if not of actual surveillance), ongoing judicial oversight of compliance with those procedures, does not grant retroactive immunity to the carriers, and has a Dec. 31, 2009 sunset.

I’m feeling prescient (or maybe just trend-aware) about yesterday’s post – today, WIRED has a substantial article covering a music industry notion of charging highspeed internet access subscribers a levy for access to music. Never mind that it’s impossible to figure out who’s doing what – particularly if everyone starts encrypting their communications. Never mind that the network access provider may not be shielded from liability if it starts looking at every transmission. As the article concludes, the music industry’s feeling is:

Pay up. . or we’ll sic Washington on you — and London and Paris and anybody else we can find.

The rock star, the Christian Coalition, and NN

By On March 12, 2008 In communications, communications policy, fcc, filtering, network neutrality With No Comments Permanent Link to The rock star, the Christian Coalition, and NNPermalink

Yesterday’s House Judiciary hearing (witness statements and archived video here) had a deeply political angle – what committee should have jurisdiction over network neutrality issues – but also revealed to me that:

We’re seeing the moment when Hollywood, law enforcement, and the network access providers publicly attempt to join hands in favor of monitored/monetized network access.

I loved meeting Damian Kulash and hearing him testify.  His opposite number (for purposes of the hearing) was the president of the Songwriters Guild, Rick Carnes.  Carnes was there to talk about piracy, p2p file-trading destroying his industry.  Here’s the angle, from Carnes’s point of view:  isn’t it true mandating neutral internet access won’t allow network access providers to watch for copyrighted files?

And then there was the “but what about pornography” line of questioning.  Although the Christian Coalition representative, Michele Combs, was there to testify about the importance of neutral network access for speech of all kinds (and it was great to see the alliance with the ACLU), the direction of questioning seemed to be:  isn’t it true that mandating neutral internet access won’t allow network access providers to watch for nasty files of various kinds?

There are many responses to both of these points.

Copyright infringement is a judgment call, not something that can be figured out automatically at the network level;

screening for infringing files will make the last mile grind to a halt;

network access providers will lose their immunity from copyright claims if they search for these files;

given the concentrated market for internet access, the idea of screening for (and filtering out) particular content creates the opportunity for a great deal of anticompetitive mischief;

content-layer applications are a far better place for this kind of screening – they know what artists they have licenses with, and they can actually respond to notices under the DMCA structure.

On the indecency etc. front, same kinds of arguments:

there’s a dramatic risk of overblocking, threatening innocent speech;

it’s impossible to tell in advance which packet bears the “wrong” kind of flesh tones;

screening will cause the last mile to grind to a halt;

network access providers already cooperate with law enforcement;

we should go after behavior, not tech mandates that will burden all uses of the network;

etc.

But it’s a concerted theme.  Avoid network neutrality by summoning up all the evils that it will loose upon the world.  Never mind that law still applies online, and that the idea of neutral access is not predicated on facilitating unlawful activity; never mind the costs to all users of creating a carefully (and invisibly) filtered access regime; never mind the outright impossibility of the task – just do it.

It seems to me that it is not in the long-run interests of network access providers to be too closely tied to any particular content industry representative, or set of representatives, given the dramatic change in liability risk that such a partnership represents; it also seems to me that it is not in the long-run interests of law enforcement to push users towards a dramatic uptick in the use of encryption technologies; and it seems clear that it is in no one’s interest to establish a kind of private police force in this highly-concentrated market for highspeed internet access.  Mischief, unaccountability, arbitrariness, censorship for commercial reasons – why would we want this?

I had my picture taken with the guys from OK Go.  It was an interesting hearing.  I’m hoping that these various industries discover their differing interests soon.

Raising the stakes

By On February 28, 2008 In communications, communications policy, fcc With 2 Comments Permanent Link to Raising the stakesPermalink

The first panel discussion during Monday’s FCC hearing in Cambridge provided a useful summary of the first stages of what will be/already is a much bigger battle.

I think it would be a good idea to raise the stakes in this discussion. Even the most pro-public interest of the five commissioners, Cmmr. Copps, talks only about a case-by-case adjudication by the FCC of the “rules of the road” for “reasonable network management.” But that won’t get us faster, more open high-speed internet access. Commr. Adelstein makes more headway – he’s suggesting that we need to explore a “comprehensive solution” for this issue. Commr. McDowell, by contrast, slides way way back, saying internet access is (to him) “new media” that is mostly made up of people passively watching video. Even Vuze asks only for better disclosures of network management practices.

Although nothing goes away, it seems to me that these older “media” modalities of cable and telephone “services” are melting gradually (like the Wicked Witch of the West) into simple transport of bits. (Broadcast has melted into cable and scarcely counts as a separate category any more.)

Now, these modalities, these silos don’t want this, don’t have any use for such a change, and so they are hanging on to friction, management, control – and they’re saying that self-regulatory efforts are all that is needed to ensure that the public interest is served by their management efforts. We know they’re competing with the internet. They want to stay “media” companies and avoid commoditization. They’ve got enough market power to make this happen, and if the system can stay just about the way it is until the people inside these silos reach retirement age, that’s a fine goal.

Will we have a future shaped by the choices of these particular informational gatekeepers? Or will we have a general-purpose network that anyone can use for his/her own reasons? Will we replicate the models of the past, just because we’re used to them?

The witnesses keep talking about “services” – but these aren’t services, this is just access, transport, commodity roads on which unimaginable complexity can flourish. These gatekeepers have every interest in maintaining scarcity, when we could have abundance – with an injection of leadership, national planning, and will.

The stakes couldn’t be higher.  The idea of keeping these networks subject to nondiscrimination obligations isn’t some crazy newfangled heavyhanded overreach – it’s the way we have run communications for hundreds of years.  These are communications networks (or should be), transport functions – not “media.”  We subject communications networks to regulation for the good of all; if we hadn’t acted that way, the internet would never have come into being.  (Remember, the internet is not the same thing as the World Wide Web – it’s a logical architecture for transport, not a vessel from which we download streams.)  If these few duopolist actors get away with “management,” the promise of the internet will not be fulfilled.

Rulemaking: Timing is Everything

By On October 8, 2007 In communications, fcc, Uncategorized With No Comments Permanent Link to Rulemaking: Timing is EverythingPermalink

Last week’s GAO report, “FCC Should Take Steps to Ensure Equal Access to Rulemaking Information,” didn’t have too much impact. All the telecommunications “stakeholders” with offices in Washington, D.C. know how things work.

Rulemakings go on indefinitely. They start at some point, these proceedings, and then they just keep going. There may be interim rules, notices of further proposed rules, requests for additional information, any number of other filings. There are deadlines for comments on particular pieces of paper, but the process keeps rolling and doesn’t have to be completed by any particular date.

But timing is everything. When the Chairman is ready to put an order on the public agenda, he circulates a draft to the other commissioners. This usually happens about three weeks before the public meeting – and about two weeks before the agenda for the meeting is released to the public. Once the agenda is public, a “Sunshine Period” begins during which no one can lobby the commissioners. Here’s the GAO:

FCC officials told us that, for stakeholders to successfully make their case before FCC, “timing is everything.” Specifically, if a stakeholder knows that a proposed rule has been scheduled for a vote and may be voted on in 3 weeks, that stakeholder can schedule a meeting with FCC officials before the rule is voted on. In contrast, a stakeholder who does not know that the rule is scheduled for a vote may not learn that the rule will be voted on until the agenda is announced 1 week before the public meeting.

At that point, a week before the meeting, no one is allowed to lobby.

Stakeholders other than those representing consumer and public-interest groups hear about scheduled votes in advance. Remember the first part above – these rulemakings go on without tight deadlines. Advance knowledge that a vote is coming up is supposed to be nonpublic FCC information. No one is supposed to know outside the FCC. But that’s not how things have worked at the FCC. Here’s the GAO again:

[S]takeholders who generally represent consumer and public-interest groups, told us that they do not know when FCC is about to vote on a rulemaking or when it would be best to meet with FCC staff to make their arguments.

By contrast, it’s likely that large organizations will know about the scheduled vote:

Several stakeholders told us that they learn which items FCC is about to vote on even though that information is not supposed to be released outside of FCC. . . . [N]ine stakeholders. . told us that they hear this information from both FCC bureau staff and commissioner staff. One stakeholder — representing a large organization that is involved in numerous rulemakings — told us that FCC staff call them and tell them what items are scheduled for a vote.

FCC isn’t playing fair — but we knew that. If you don’t know about a vote, you’ll lose your chance to lobby when it matters. The GAO report sharply criticizes the FCC:

Situations where some, but not all, stakeholders know what FCC is considering for an upcoming vote undermine the fairness and transparency of the process and constitute a violation of FCC’s rules. Since the success of lobbying for a particular issue can be highly dependent on whether an issue is being actively considered, FCC staff . . could be providing an advantage to some stakeholders, allowing them to time their lobbying efforts to maximize their impact.

The GAO gave FCC a draft of their report, but FCC had nothing to say about it.

This week in the white spaces

By On October 5, 2007 In communications, communications policy, fcc With No Comments Permanent Link to This week in the white spacesPermalink

The FCC says today that it’s continuing “the process of investigating the potential performance capabilities of TV white space devices in an open and transparent manner. To that end, the Laboratory will be conducting additional laboratory and field testing of prototype devices.” This probably means that the FCC will be re-testing the (apparently broken) Microsoft prototype device. (Background here: Even If It’s Broken..)

1. The Maximum Service Television group (against portable unlicensed devices) asks questions about this future testing. A sample: “In the event that devices in the new tests are found to meet manufacturers’ suggested performance levels, will further testing be done to determine the proper sensing threshold necessary for protection of TV viewers?”

2. The Open Mobile Video Coalition (who want Americans to carry around new versions of television sets), is anxious too. Their filing urges the Commission “not to permit unlicensed devices to operate in the DTV spectrum unless there is fully effective protection against interference to the mobile broadcast service from mobile devices.”

3. Cox Communications weighs in, claiming that no one is bothering to test the effects on cable headends that might be caused by unlicensed portable devices in the white spaces. They’re also pointing out that there are no generally-accepted standards for sensing detection thresholds, so how can the Commission claim to be meeting them? Most importantly, they argue, the DTV transition is complicated enough – and “[p]ermitting personal and portable devices could effectively undermine these [transition] efforts – introducing considerable confusion, as well as degrading existing services, to the detriment of American consumers.”

4. Both Cox and the Rural Telecommunications Group argue that limiting use of the white spaces to fixed, licensed devices will bring highspeed internet access to rural areas. Not to mention, says the Rural Telecommunications Group, that “[b]y limiting new services in the TV bands to those that are both fixed and icensed, the Commission would avoid having to rely upon ineffective and unproven technologies to avoid degrading incumbent operations.”

5. The New America Foundation visited the FCC, with actual engineers in tow, to say that they’re ready to help the FCC with measurements. They’re pointing out that the sensitivity standards used by the White Spaces Coalition may themselves be too sensitive, particularly in light of “the huge opportunity costs for wireless service and innovation associated with allowing spectrum to lie fallow because in a few places a high-gain antenna could view a signal that most of the shrinking share of over-the-air viewers would find to be below the threshold of visibility.” Translation: The FCC’s (and Congress’s) political obsession with protecting the small (and getting smaller) percentage of Americans who use rabbit ear antennas to receive over-the-air broadcast limits innovation – to protect those viewers, we’re giving up wireless uses that could be very valuable. Yes, there could be a well-focused antenna that would pick up some portable devices’s transmission by accident, but just about everyone else using rabbit ears will never be bothered.

6. The Hispanic Technology and Telecommunications Partnership writes in, pointing out that “Hispanic households use over-the-air broadcast television at significantly higher rates than the non-minority national average. For example, in Houston nearly 459,852 homes (23.2%) receive signals over the air. Of these over-the-air homes, 290,000 (58.9%) are Hispanic homes. This is typical in many cities with large Hispanic audiences. Their argument is that the DTV transition is meaningful and shouldn’t be interfered with by portable, unlicensed devices. This is powerful: “With the DTV transition less than 18 months away, now is not the time to experiment with a new policy that could disrupt the transition and cause permanent damage to consumers. Unchecked interference from new unfixed and unlicensed devices in the TV spectrum could effectively disenfranchise over-the-air digital viewers across America. The “free” information safety net for many
Hispanic homes will be lost and they will be left behind in the new digital era.”

Bottom line: some devices will be re-tested, we don’t know which, we don’t know what standards will apply, and the advent of the DTV transition is putting a lot of pressure on this process.

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