Author: Harold

A Bad Bit of Timing For RCN — Public Comment Opens On Merger Day After Blocking Goes Public.

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Welcome back everyone to the new and improved Wetmachine.com! I beg everyone’s indulgence while I figure out our new interface.

Every now and then, the universe hands you some lousy timing. Case in point for RCN. Back in March, when RCN announced its pending acquisition by Yankee Group, no one gave it a second thought. It all looked very uncontroversial and part of the natural consolidation for the few survivors of the debacle we call “intermodal competition.” But in what RCN can only view as the worst possible timing, the FCC put the deal out for public comment right after several stories that RCN had settled a class action for blocking p2p applications in a manner reminiscent of Comcast. (RCN “vigorously denies all wrongdoing,” but it is unclear whether they deny blocking or whether they deny they did anything wrong by blocking.)

Why does this matter? Because RCN has just become the prime opportunity for the FCC to answer the question “What’s our authority after the Comcast/BitTorrent case?”

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The FCC Never Regulated DSL, Oceania Has Always Been At War With Eastasia, and My Offer To AT&T.

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Hank Hulquist over at AT&T writes that the FCC never regulated internet access.
It’s a funny thing, because I distinctly remember going through a process where the FCC reclassified DSL from a Title II telecom service to an information service. Let me rummage for a bit . . . . ah yes. Here is the link to the FCC’s 2005 Order reclassifying DSL as an “information service.”

In fact, come to think of it, I’m old enough to remember when the telephone companies wanted DSL classified as an “interstate telecommunications service.” Can I find that link on line? Why yes! Here it is: GTE’s DSL Tariff and the Bell Atlantic, BellSouth, GTE, and PACBELL DSL Tariff. (The telcos wanted these classed as Title II telecom to preempt state regulation, if you were wondering.)

And what does the first paragraph of the GTE Tariff Order say?

In this Order, we conclude our investigation of a new access offering filed by GTE that GTE calls its DSL Solutions-ADSL Service (“ADSL service”). We find that this offering, which permits Internet Service Providers (ISPs) to provide their end user customers with high-speed access to the Internet, is an interstate service and is properly tariffed at the federal level.

Which is why carriers providing DSL paid Universal Service support (paid only by Title II telecommunications carriers) until the FCC 2005 Reclassification Order.

[Funny story. The 2005 Reclassification Order phased out USF payments over the course of a year, but in 2006, rather than dropping the USF fee, the carriers tried to keep charging customers for a fee they no lnger had to pay. Then Kevin Martin threatened to investigate the Bells for false billing, and they backed off.]

More below . . .

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SkyAngel Files Program Access Complaint — Has Media Bureau Really Changed, Or Will They Again Sit On Sidelines?

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Some people wonder why I remain so down on the Media Bureau. “Harold,” they say. “Why do you keep saying the Media Bureau are in the pocket of the cable industry? Aren’t they just all fired up and rarin’ to go on the upcoming cable set top box proceedings?”

Perhaps I am allowing the experiences of the past to cloud my vision of a hopeful tomorrow. Perhaps, despite an utterly abysmal track record on cable matters, the cable folks in the Media Bureau have now turned over a new leaf. Perhaps now they will at least process complaints in less than three years, so that companies other than cable operators might feel they get some due process — if not actual justice — at the FCC. Who knows?

Which is why I shall watch the developments around the Sky Angel program access complaint with considerable interest. Sky Angel used to distribute programming by satellite, making it eligible for the “program access” rules that require cable operators with affiliated programming to make that programming available to rivals. (I’ve written about these rules at length before here.)

From what I can tell from the limited data available, Sky Angel is now a “Christian IPTV distributor.” It resembles a cable/satellite-like service (or “MVPD” for “multichannel video programming distributor”) in every way except for the fact that it does not own its own facilities. It distributes its programming online. We generally call these things “over the top” video distributors. According to the Broadcasting and Cable story (since I haven’t been able to find a copy of the complaint), the Discovery Channel has decided to terminate its distribution contract with Sky Angel four years early — apparently because Sky Angel has switched its distribution model to become a pure over-the-top distributor.

My problem is, that this looks very similar to a complaint a company called VDC (“Virtual Digital Cable”) filed three years ago. The Media Bureau has yet to process that complaint, but there’s no rush — since the company went bankrupt and shut down while waiting for Media Bureau action.

More below . . . .

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The Comedy of Comcast v. FCC Part I — What Did The Court Actually Do?

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It’s been rather busy the last few weeks. Between my unfairly holding Sprint responsible for its own screw ups, shamelessly cheering on the documentation of our national broadband drought by Our Great Google Overlords, and generally crushing all who dare oppose me, it’s been hard to find time to blog about stuff. So naturally, while I was away for the last day of Passover, the DC Circuit issued its long awaited decision in the Comcast/BitTorrent case, Comcast v. FCC.

Needless to say, the opinion was greeted with the total hysteria that has become the hallmark of the network neutrality debate — with terms like “Nuclear Option,” “World War III,” and “spanking.” Opponents of FCC jurisdiction rejoiced, supporters of network neutrality lamented, and a few shrewd observers noted that the actual outcomes could prove far worse for Comcast and the incumbents than if Comcast had lost (as I noted after oral argument last January).

My co-counsel, Marvin Ammori, has written up his retrospective here. Understandably, he’s rather bummed. Despite this whole thing being my idea in the first place, however, I’m actually rather pleased and amused with how this whole thing is turning out. Sure, I would much rather have won. But as the history of the last 2+ years of this unfolds, the tale of how Comcast managed to bluff, badger, and bungle itself into a position where it has not only guaranteed harsher condition on its merger with NBC-Universal, but revived the possibility of classifying broadband access as a Title II telecom service for the first time in 10 years, is the stuff of high farce. And while I wish I could claim credit for this outcome, the real “heroes” here are Brian Roberts (head of Comcast) followed closely by AT&T, NCTA and the Republican party.

To try to keep this manageable, I’ll divide this into two posts. Below, I will try to set forth what the court actually said and the immediate legal implications, without worrying too much about the overall policy. While I can hardly claim to be an impartial observer, I’ll do my best to identify my editorial comments as such and note where reasonable minds can differ. In Part II, I shall shamelessly indulge myself with my own eyewitness to history and why I think the Comedy of Comcast v. FCC deserves its special place in the realm of farce — although we have by no means reached a certain conclusion.

More below . . .

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Will Minnesota Senate Screw Duluth's Chances of Getting Google Gigabit Project?

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As reported by Christopher Mitchel from the Institute for Local Self-Reliance, Qwest has scored quite the little victory in its efforts to keep itself the world safe from real competition socialism. A state Senator and a state Rep introduced a bill that would have made it easier to for local governments to build municipal networks. Right now, it takes a local referendum vote with 65% to authorize a locality to build a network that offers commercial telephone service (and therefore any “triple play” broadband access service — or so they read it in MN). A State Senator and State Rep offered a bill to reduce the threshold on the referendum to a simply majority. By the time the relevant jurisdictional committee was finished, the revised bill included one of the favorite incumbent roadblocks to localities: a mandatory “feasibility study” designed to be so onerous and expensive to conduct that few local governments will want to even try.

Meanwhile, the good folks of Duluth are so desperate for real broadband that they made this joke video to get citizens to show support for bringing Google Gigabit Fiber project to town.

Question for the good Senators and Representatives of Minnesota: when you’ve got folks clamoring for real broadband, do you really want to be “protecting” your underperforming incumbent? By “clarifying” that your referendum law applies to any indirect provision of telecom service, and imposing a five year plan on municipalities, you are making it very hard for your local governments to — in the words of Duluth’s mock Public Service Announcement — “suck up even harder” than the competition. While I am hardly privy to Google’s secrets and innermost workings, I am willing to bet real money that when they weigh where to set up their pilot project, they will consider any possible legal landmines. Would you want to set up shop in a city where Qwest or some other provider might sue to block your use of city assets under the amended state law? Even if Google were to ultimately prevail, it would tie up the deployment in litigation. Who wants that, when the number of communities begging for Google to come and work its fiber magic keeps growing?

Mind you, there’s a good argument that even this version of the bill is better than the current law. Dropping the referendum requirement from 65% to a simple majority will do a lot of good even with the feasibility study requirement. But should that really be the choice? Don’t the people of MN deserve the better bill, without throwing (yet another) bone to Qwest to reward its failure to provide what people want and need?

So folks in Duluth, and other communities in MN trying to get Google Fiber, you might want to ask Qwest’s buddies in the legislature to cut y’all some slack and pass the original bill without the study requirement. that would send a signal that MN is serious about bringing broadband to its citizens and would welcome the sort of public/private partnership that Google appears to be offering. Or perhaps the MN legislature is just rooting for the people of Topeka “Google,” KS instead of the folks in Duluth.

Stay tuned . . . .

A Quick Addendum To My AWS-2/AWS-3 Prediction

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Last week, I predicted the FCC would opt to auction the AWs-2/AWS-3 spectrum rather than adopt the M2Z proposal. Yesterday, the FCC issued it’s teaser for recommendations to improve broadband adoption. One of these was “[c]onsider use of spectrum for a free or very low cost wireless broadband service.”

That, of course, was M2Z’s chief selling point. They would provide a free tier for for everyone supported by adds and by the higher-speed, ad free pay tier. So do I want to revise my prediction on whether the FCC will adopt the M2Z or T-Mobile asymmetric auction proposal?

Not at this point. Sure, this tea leaf looks much more favorable to M2Z than it does to T-Mobile. But I note two things. First, the language says “consider” rather than simply “use.” The question of whether to require free service of some kind as a public interest obligation was teed up in the pending AWS-2/AWS-3 proceeding. If they were going to go with M2Z, they wouldn’t say “consider,” they’d say “use spectrum . . . .” Second, there are a number of other ways to use spectrum for free or low cost wireless. These range from expanding the use of unlicensed spectrum to facilitate creation of community wireless networks to mandating “wireless lifeline”-type programs that would require all carriers to offer cheap or free access on a needs basis. It also remains to be seen whether the FCC will actually do anything other than “consider” such an approach, or whether revenue concerns and incumbent resistance will ultimately carry the day.

So while I’m pleased to see the FCC looking at spectrum from a public interest/public welfare perspective, I’m not changing my bet on how the FCC resolves the AWS-2/AWS-3 band fight. The real questions are (a) timetable, and (b) spectrum caps, yes/no? (and no, I haven’t forgotten about Fred Campbell’s standing invite/challenge for me to justify spectrum caps generally, just haven’t gotten time yet). The FCC could conceivably issue an Order with service rules and schedule an auction date. Or it could put out a final set of rules for further notice. My personal bet is thy will move quickly — both to show they are taking action and because OMB would really like to book that revenue. But we’ll have to see.

Heck, I could be entirely wrong in my prediction and they could go with M2Z, or some variant thereof. Stranger things have been known to occur.

Stay tuned . . . .

USTR 301 Comments: Crashing the IP Mafia's Party

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Time for another little instructional video, aka “5 Minutes With Harold Feld.” Here, I talk about the US Trade Representative’s “Special 301” Process. This is where the US Trade Representative (USTR) makes a “naughty list” for countries which, in the words of the statute: “deny adequate and effective protection of intellectual property rights” or “deny fair and equitable market access to United States persons that rely upon intellectual property protection.” (You can find last year’s list here.)

But while Congress intended this to be about protecting U.S. interests from wholesale piracy — you know, the warehouses with the industrial copying machines that crank out 10,000 counterfeit DVDs and hour and such what — the usual suspects have hijacked this to ratchet up intellectual property law in other countries. That includes trying to outlaw in other countries things that are not only legal here, but critical to our electronics industry and online services (not to mention free speech and civic expression). For example, because “space shifting” is a perfectly legal fair use, SlingMedia can sell a product that lets me watch shows I pay for through my broadband connection. Because we don’t hold “providers of interactive services” liable for copyright infringement if they follow the Digital Millennium Copyright Act notice and takedown provisions, Youtube can have an open video service that’s easy to use and easy for people to upload content.

Eliminate these provisions and we don’t just lose access to foreign markets for these goods and services. We potentially expose U.S.-based providers to foreign liability. Needless to say, Hollywood and the music industry are deeply concerned about how mucking around with other countries and pressuring them to change copyright law hurts other businesses — let alone the impact on civil liberties. But while it is not the job of these industries, and their associated trade organizations, to care about others, it is the job of the USTR to care about all U.S. goods and services, not just the entertainment industry.

You can read more about this issue from my Public Knowledge colleague Rashmi Rangnath here, including her exciting day testifying before USTR staff here. Rashmi is too polite to say as bluntly as I will that USTR staff give every sign of having been so thoroughly indoctrinated by the entertainment industry that they don’t even remember what their actual job is anymore. So we will need to whack them up the side of the head with a pretty big Clue Hammer a few times to get this process heading back in the right direction.

Stay tuned . . . .

Genachowski's Secret $15 bn Piggy Bank, or T-mobile Triumphs Over M2Z.

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I’ve been rather pressed for time, hence have not had much chance to blog on the FCC’s recent spectrum policy announcements for D-Block and the broadcast migration offer. Combine these two speeches with Genachowski’s recent statement in an interview that the NBP will finance the $25 billion via existing programs and it is clear that the FCC will adopt the T-Mobile’s “asymmetric auction” proposal for the AWS-2 and AWS-3 band, leaving M2Z high and dry. The only question is whether or not there will be spectrum caps to keep AT&T and Verizon from snarfing the good stuff, but do not expect the NBP to touch something as “controversial” as spectrum caps even by veiled implication the way the DoJ did in its comments.

Mind, this is another example of the “spectrum auctions are the crack cocaine of public policy” problem. The thirst for revenue pushes all other considerations out the window. I’m not convinced the T-Mobile approach is wrong (especially if subject to spectrum caps), and I think the D-Block finesse was extremely clever. But when revenue sits in the driver’s seat, policy invariably takes a wrong turn somewhere along the road. But it is difficult to imagine how Genachowski could resist a $15 bn secret cash cow to fend off accusations that Democrats are once again writing checks against our children’s future blah blah blah.

I unpack all this below. . . .

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Richard Bennett Invites Me To A Panel On Tuesday March 2

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Back in October, Richard Bennett wrote a paper on why he thought network neutrality was particularly inappropriate — indeed, dangerous to the future evolution of — mobile internet access. On Tuesday March 2, his employer, The Information Technology & Innovation Foundation will be hosting an event to discuss the paper, mobile internet access and policy. He’s asked me to join Barbara Esbin from Progress and Freedom Foundation and Morgan Reed from the Association for Competitive Technology on a panel to discuss the issues. Should be fun.

Click here for the event announcement, which contains an RSVP link.

Stay tuned . . . .