Month: February 2008

For the Clueless Among Us: Why Comcast Paying Folks to Attend FCC Hearing Is Wrong.

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I can’t believe I actually need to explain this.

Suppose Comcast made the following offer: If you vote “yes” on a ballot initiative we like (and agree to take a pocket recording device into the voting booth with you so we can have proof), we will pay you $50.

Most of us would not only say that this is wrong, we would have no problem understanding why that’s a crime. We would not be persuaded by Comcast defending itself by saying “well, Free Press and other organizations have campaigned in support of the bill and are calling people to ask them to go out and vote — they even provide free rides to people likely to vote for the initiative. That’s just like paying people directly to vote the way we want.” In general, we recognize a difference between organizing ad trying to persuade people to vote the way you want and actually paying people for their vote (and wanting a receipt).

Which brings us to Comcast’s exercise in seat packing at Monday’s FCC Hearing in Boston.

More below . . . .

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Senator Pryror Angry At Right Problem, But Picks Wrong Solution.

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UPDATE: On reflection, I’ve decided to modify the tone of this considerably. After all, when someone basically agrees with you (the incumbents have too much market power), slapping them around for relying on the press is a pretty stupid and counterproductive move. Besides, my real frustration is with the press for offering up speculation as if it were fact, not Pryor for reading the press and getting upset about the supposed failure of the auction to produce a new competitor. So with apologies to Pryor for needless snark the first time around, here we go again.

Senator Mark Pryor (D-Ark) is upset with reports that AT&T or Verizon probably won C Block. More specifically, he is angry that we don’t have more wireless competition. That’s good. But he accusses Kevin Martin of fixing the 700 MHz auction to benefit the telcos. That’s where he goes wrong, in my opinion. As I’ve said before, I don’t think Martin rigged this for the telcos, especially in light of Verizon’s persistent efforts to get the C Block conditions “clarified” away and Martin’s telling them to go take a hike. Further, adoption of the anonymous bidding rules means that we don’t know yet who won the licenses. We may very well be surprised when we see the results.

But if it turns out that, as predicted, the incumbents did win the lion’s share of the licenses, that doesn’t make the outcome Martin’s fault. Rather, Senator Pryor should direct his anger where it belongs — at the statutory requirement for the FCC to auction licenses for use of the public airwaves. As I explain below, and as many of us explained before the auction, incumbents enjoy real advantages even under the best of conditions because they don’t have additional costs new entrants have — like building the network from scratch or pulling customers away from a service they already use. To make matters worse, Senator Pryor’s Republican colleagues are constantly haranguing the FCC to “not pick winners” and objecting to any kind of mechanism that could neutralize these incumbent advantages.

We can’t have it both ways, and Congress makes the call. Either Congress eliminates auctions, or allows the FCC to exclude incumbents from the auction, or gives up on auctions as a way of generating competition and goes back to regulating market power directly. But blaming Kevin Martin and the FCC for the fact that incumbents keep winning auctions makes as much sense as blaming Bud Selig for the fact that the Yankees and the Red Sox always make the playoffs and the Nationals haven’t gotten to the World Series.

More below . . . .

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The FCC holds a hearing on Net Neutrality, and YOU! ARE! THERE!

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So yesterday morning over coffee I was doing what most people do over their first daily cup o’ joe, which is bring up technorati and see if anybody’s talking about me. That process took me to Joho’s page, from which I learned that the FCC was to be holding an hearing on why Comcast sucks, I mean Net Neutrality broadband network management practices only hours thence. Now although to my surprise & delight, Wetmachine, thanks to the work of my fellow wetmechanics Harold Feld and Greg Rose has become quite the FCC policy site with a side-order of net neutrality, I had never been to an FCC hearing. A quick check of the boat and bus schedules showed that I could probably make it to Hahvahd in time for most of the festivities. I decided to go. So, after securing the blessings of Dear Wife and throwing a few things in a bag, off I set to lose my FCC-hearing virginity.

Below the fold, some totally subjective impressions of the day, told in that winsome wetmachine way that you’ve come to treasure, or if you haven’t yet, which you soon will. More sober-styled reports have surely appeared by now, and I’ll dig up some links & post them at the end for those of you who like a little conventional reportage to ballast what you get from me.

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Is Obama v. Clinton Really Style v. Substance? Or Is the Internet Changing Another Facet of Campaigning?

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Unsurprisingly, Clinton has sought to portray Obama as mostly oratory style rather than substance. Whereas Obama may give uplifting speeches, she tells crowds, she is the one with the command of the facts and the true knowledge of policy. Clinton backs this up by giving well researched specifics and detailed policy recommendations in her stump speeches and in her debate appearances.

Also unsurprisingly, the herd beasts of punditryland in their never ending quest for simplistic themes that nicely boil down to “X v. Y” arguments have gobbled this up with a spoon. We hear constantly either about how Obama will need to show he has the same command of the facts, or how voters are more in the mood for change than for experience, and on and on and on.

I will humbly suggest, however, that what Obama has done is to match his message to the medium. He has put the details on his website for folks interested in specific issues. But when speaking in the context of a mass medium (huge rally, television appearance), he makes his broader campaign appeal.

Other candidates have done this in the past. But I believe we have now hit a sufficient critical mass on the wider availability and greater use of the Internet as a tool to become an effective campaign strategy. This relates back to my earlier observations on the interplay between the internet and the traditional mass media. I would love to see some actual empirical research on the subject. But my speculations based on what I know now below. . .

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And Now for D Block

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It’s apparent to anyone who has been following the 700 MHz auction that the plan to allocate spectrum for a nationwide public safety network which would allow a private company to deploy the infrastructure and sell access to the network to private users, who could be preempted by public safety users in an emergency, isn’t going to happen. D Block has miserably failed to reach its reserve price for a number of reasons, not the least of which was the apparent bullying of Frontline by the Public Safety Spectrum Trust’s agent Morgan O’Brien which led to Frontline’s withdrawal from the auction.

Fellow Wetmachiner Harold Feld’s trenchant analysis lays out the options for D Block. I have a few things to say on the matter as well.

A national public safety broadband system is a vital national security interest of the United States. The notion of handing vital national security infrastructure over to private enterprise is one of the worst ideas the Bush administration has ever had. It hasn’t worked well in Iraq and it’s a non-starter for D Block. Let’s drive a stake through the heart of the idea that private providers can more efficiently deliver a vital public good than government can. The FCC should simply shelve the D Block proposal until the new Congress is elected.

The new Congress should definitively decide whether a national public safety network is, as the 911 Commission opined, a vital national security need. If so, it should appropriate the funds for the federal government to build and deploy the necessary infrastructure. It’s what Dwight Eisenhower did with the interstate highway system. The 700 MHz auction has already raised nearly twice the projected revenue. Either a national public safety is needed or it isn’t.

Such a federally-built public safety network offers an additional benefit. There is little additional marginal cost to building a network which allows capacity to be used by others while allowing public safety to preempt them during emergencies. Such capacity could be offered at cost to municipalities for community wireless broadband networks. The presence of such a government-owned network would force the major wireless broadband providers to cease redlining rural and inner-city America, closing the digital divide, as well as provide partial reimbursal to the Treasury for the costs of building the network. We would have our third broadband pipe, and it would be a joint federal-state-local asset.

If a national public safety broadband network is needed, we should do it right and the government should build it, or the Democrats and Republicans in Congress should publicly admit that there is no compelling national security need. And if it is built, it should be built with the benefit of all Americans in mind, not just the profits of the corporate greed machine.

Probably won’t happen, for all the reasons Harold cited. But it makes me nostalgic for a visionary like Dwight Eisenhower (and those are words I don’t often utter).

McCain and the Dirty Deed

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John Sundman wants sexy details on John McCain, Vicky Iseman, and Paxson Communications. I’ll tell all I know.

Cornerstone TeleVision had sought to obtain the noncommercial license for WQEX, owned by Pittsburgh public broadcaster WQED, and then to transfer the license to Paxson Communications with Cornerstone and WQED splitting the $35 million Paxson was putting up for the sale. The proposal was virtually unprecedented since it involved transfer of noncommercial license held by a public broadcaster to a commercial enterprise. The complicated plan was an attempt to end-run a 1996 FCC ruling that WQEX could not be “dereserved,” i.e., commercialised, by a direct sale to a commercial broadcaster.

The Republican minority on the FCC supported the plan, the Democrats opposed… until John McCain weighed in via his December 10, 1999 letter to the FCC, demanding that the FCC Commissioners ”advise me, in writing, no later than close of business on Tuesday, Dec. 14, 1999, whether you have already acted upon these applications…. If your answer to the latter question is no, please state further whether you will, or will not, be prepared to act on these applications at the open meeting on Dec. 15. If your answer to both of the preceding questions is no, please explain why“ (the full text of McCain’s letter to FCC Chairman William Kennard may be found here).

McCain had held up confirmation of Democrat Susan Ness’ reappointment to the FCC since the previous July. Apprised of McCain’s adamant support for Paxson on this issue, Ness voted against her fellow Democrats to approve the deal. As far as I know, the only ones getting screwed in all this were the Democrats by Ness (who caved to pressure from McCain — and despite repeated gutlessness in dealing with the Republican Congress Ness is frequently mooted as the next FCC Chairman if Clinton is elected).

And even then the well-laid plan of Paxson fell apart over a condition placed by the FCC on the deal, prohibiting Cornerstone from ”proselytising,” an important issue, since the transfer involved a religious broadcaster taking over an educational TV station.

No, I Don't Know Anything About the McCain Story.

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I regret to disappoint my fellow Wetmachiner John Sundman and legions of of folks discovering telecom policy is incredibly sexy (a fact I mentioned in my very first Wetmachine post), but I really have nothing to add about the McCain/Iseman story. This is not Wonkette here folks.

Policy, sure. I can tell you what made this transaction so controversial. And it may even have some bearing on the next FCC, given that one of the folks involved was Susan Ness, the former FCC Commissioner whispered about as the most likely nominee to replace Kevin Martin if Clinton wins. It also, of course, involved Bill Kennard who, along with Reed Hundt, is advising Obama. So I suppose the policy might have some relevance here. But as for the “juicy stuff:”

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John McCain & Vicki Iseman: So FCC policy *is* sexy? Who knew!

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Thanks to an innuendo-laden story by the New York Times last Thursday, everybody who follows USian politics at all knows that Vicki Iseman is a quasi-hot telecom/media lobbyist who for a while eight years ago had a pretty close friendship with Senator John McCain, and that he threw some of his political weight around on behalf of some of her clients. (I tried to find a flattering photo of Ms. Iseman to grace this here blog entry, but all I could find were an elongated pic of her in an evening gown, too big for my purposes, and a horribly unflattering portrait from her company’s website. Oh well, by now you’ve either seen those photos or this story likely ain’t for you anyway.)

What few suspect, however, that this whole story was a cleverly planted plot designed to boost the google rank of Wetmachine into the stratosphere!

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700 MHz Auction: Whither The D Block?

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With even Chairman Martin publically agreeing that D Block is unlikely to attract any new bids, the question logically arises — what now? Needless to say, folks have not been shy about voicing their suggestions — especially those who think we ought to focus on maximizing revenue. Instead, I have a novel suggestion. Why don’t we actually investigate what the heck happened first?

More below . . . .

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