Author: Harold

Retrans Food Fight! Why This Administration Will Deal With Cable After All.

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Remember how once whacky old Kevin Martin the Cable Playa Hatah was gone the FCC was gonna forget all about cable? Because, after all, cable was all vibrant and competitive and stuff and who needs dumb old cable when everyone has Broadband?

Item one in communications land for the new year is the first round of retransmission fights. The biggies at the moment are Sinclair/Mediacom, where Mediacom has tried to get the FCC to weigh in on its side, TWC v. Fox, TWC v. Food Network/Scripps Howard (which no longer includes Scripps broadcasting properties), and Cablevision v. Food Network. Although TWC and Mediacom agreed to extensions with the various programmers to continue to try to sort things out, and TWC ultimately reached an agreement with Fox, Cablevision and Food Network ended up in stalemate.

Result, Cablevision has dropped Food Network and HGTV. In the war for the hearts and minds of customers, the Food Network folks have launched web based outreach with clips and fact sheets. Cablevision’s response is a little harder to find, but digging through their customer service led me to this page which basically says “Scripps wanted to much money for their programming, we hope you enjoy the other cooking shows we have.” Unfortunately for Scripps, the broadcast TV fights have significantly overshadowed them.

Which brings us to the first point of importance for all those folks in policyland who keep insisting that “broadcasting is dead.” You will notice that from the perspective of people reporting news to folks outside policyland, keeping broadcast programming was much bigger news than people actually losing popular cable-only programming. Second point – this is Food Network’s first round of negotiations as a stand alone cable company without also negotiating for broadcast properties. This gives them significantly less leverage.

But all these pale beside the third point — cable (and I mean cable, not “MVPD”) regulatory issues remain important and the market power and consumer protection issue don’t disappear because we now have multiple delivery platforms. Millions of people spend billions of dollars on these services and care a heck of a lot about them. Like it or not, and despite all the coventional wisdom about youtube, twitter, teh inerwebz, blah blah, this medium and these programmers dominate — indeed, arguably define — our common national culture. That means cable policy will continue to be a vital part of the FCC’s focus despite a desire to do sexier things like wireless and broadband.

Which means the folks on the 8th Floor need to wake up, grudgingly admit that whacky old Kevin Martin wasn’t so whacky after all, and reopen the proceedings on wholesale cable programming unbundling, retrans, leased access, Section 616 reform, and the other issues around boring cable programming the FCC hoped it could forget about because broadband and wireless would solve evrything and who watched TV anymore anyway.

Stay tuned . . . .

So Did Anything Actually Happen In Telecom In 2009? And What That Means for 2010.

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Ah, the inevitable end of the year summation post. This year certainly started with massive change of the relevant players in Congress, at the FCC, and in the Administration generally. It also began with some massive changes for me personally. Within the first month, Congress passed an economic stimulus bill that focused on the broader broadband ecology and explicitly required we shift from praying to the Gods of the Marketplace to trying to grapple with the very difficult challenge of developing a 21st Century information infrastructure.

So then what happened? More, including the inevitable overused sports metaphor, below . . . .

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Merry Christmas and Boosting Creative Commons License

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Wishing readers a happy holiday and taking the opportunity to provide a little advertising for Jonathan Coulton, an amazingly creative and funny musician who releases his material under a Creative Commons license, allowing the creation of such amusing videos as the one below by fans which hopefully pique the interest of potential buyers. So if the video below amuses you, check Coulton’s stuff and buy it if you are so inclined.

Stay tuned . . .

Susan Crawford and the Spirit of Cincinatus

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Susan Crawford is now back blogging again, looking forward to teaching next semester at Michigan Law and getting back into the blogging game. Because those of us in public policy land cannot imagine anyone ever wanting to do anything else, and because the folks on the right have wanted to claim a kill for their “anti-Czar Campaign,” a number of folks want to claim she was pushed to leave. I would ignore this on the right, but it has a distressing tendency to get picked up and believed on the left as well.

I’ve known Susan for over 10 years now, and consider her a friend, so I am hardly impartial. But I personally believe that Susan always meant to stay a year for the transition — no more no less — just as she told her Dean and everyone else at the beginning of this process. Because Susan is an example of a breed long thought vanished from America — one moved by the spirit of Cincinatus.

In ancient Rome, it was the custom in times of crisis for the Senate to appoint a supreme leader, a dictator (this being the origin of the term), who would wield absolute power for the duration of the crisis, then step down afterward. According to legend, in a time of crisis, the Senate elected the retired Consul Cincinatus to act as dictator, and dispatched messengers with the news. The messengers found Cincinatus plowing on his farm. When he heard that Rome needed him, he left his plow and returned with the messengers to take up his duties in Rome. When the crisis passed, he gave up his position and returned to his plow — picking up precisely where he left off.

Public policy is not a quiet way to make a living. It involves long hours on things ranging from the mind-numbingly complex to the even more mind-numbingly complex. People do not play well with one another. There is little understanding of the work, little credit for doing a good job, and plenty of people who will tell you to your face (and even more who will say behind your back) how they could do a better job. Some folks do it for money, and there are no lack of examples of folk who have done well for themselves after a stint in policyland. Some do it for ideology, or for the fun of it (I confess to falling into the later category myself; much as I often find the work wearing and difficult, I find it enormously engaging and intellectually challenging).

But a handful do it because they are asked, and because they understand that they can do something that will benefit people and their country by devoting some portion of their lives to a process they do not find enjoyable or potentially profitable. They serve as genuine public servants, acting where they believe they can do good, returning to what they really want to do with their lives when their service is complete.

Susan Crawford has enjoyed a very successful career as a law school professor and as the founder of One Web Day. She agreed to join the ICANN Board when asked not because she got anything out of it (other than a great deal of work and little thanks), but because she believed she could make a difference for the better. She did not seek it out, but did not decline when asked, because she knew that her talents were needed. Similarly, when the Obama people came calling, she agreed to help with the transition and to get the ball rolling. This she did splendidly and selflessly. Work done, in the best spirit of Cincinatus, she returned to her normal life.

As I say, those of us who live in Policyland — including the wags, talking heads, bloggers and hosts of others who follow the doings in Policyland with the same fervor as football fans prepping for the Bowl Season — may have a difficult time grasping this. In our modern age, the false wisdom of cynicism has far more appeal than the belief that someone would come for a year, do what she felt was her duty, then simply leave. But knowing Susan, I believe it. So I am grateful she set aside her life for a year, grateful for what she did, and glad to see her back where she wants to be. My one regret is that the spirit of Cincinatus, which was once the ideal to which citizens of this country aspired, has passed so into obscurity that we cannot recognize it when we see it.

Stay tuned . . . .

DC Gives Hollywood A Little Holiday Pick Me Up To Show They Care — With A Surprise SOC Ending.

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The Copyright Mafia have certainly been feeling needy recently. Maybe it’s all that talk about how wonderful broadband access is — with all the awful piracy it creates — clouding out how movies made record breaking profits this year. Maybe it’s because the London Times linked to studies that show that musicians (but not labels) do better in a world of file sharing. Maybe it’s just the sadness of winter time and the end of a decade in which PK managed to hold off nearly all the awful legislation the Copyright Mafia proposed. But whatever it is, Hollywood has been saying to it’s friends in DC “hold me,” and their DC friends have been ready to oblige.

But what caught my attention was not just the usual round of festivities by Democrats to reassure Hollywood before an election year that “we love you like no other, don’t pay that foolish broadband stuff no mind.” No, it was the surprise statement by Professor Chris Yoo that if the FCC gave Hollywood a waiver so it could shut off your television’s analog outputs (what we call in this biz Selectable Output Control or SOC), it would help stop live sports piracy?

Funny, whenever we say to the folks at the FCC (or anywhere else) that Hollywood wants to control analog outputs generally and that after they get a “narrow waiver” for releasing movies to VoD earlier than they do on DVD, they will come after live sports events, the MPAA does that eye-rolling thing where ya know, whacky info commies and their crazy conspiracy theories about how big bad Hollywood wants to control everything and the FCC staff get those fixed smiles on their faces that anyone who has ever dealt with teenagers will recognize as the “I’m stuck sitting here pretending to listen until you go” look.

So to have Yoo come out and — apparently unprompted and after a hearing that had nothing whatsoever to do with SOC — come out and say “yeah, the FCC ought to waive SOC rules for live sporting events, because everyone knows analog outputs are just STRAWS OF PIRACY SUCKING THE LIFEBLOOD OF THE CONTENT INDUSTRY INTO THE GREEDY CRIMINAL MORASS THAT IS TEH INTERWEBZ” kinda grabbed my attention. As I always tell my critics — if I’m delusional, it seems to be a functional and prescient sort of delusion.

More below . . .

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Could the FCC Structure A Broadcaster Clearance Auction Without Congress? Yeah, actually . . .

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Progress and Freedom Foundation has recently published this piece by Adam Theirer and Barbara Esbin on how encouraging a deal between broadcasters and wireless providers to reduce the spectrum used by broadcasters and auction more spectrum for wireless use would serve the public interest. The piece raises some good points. For one thing, it is happily free of the “broadcasters are obsolete and we ought to take their spectrum back” rhetoric that often accompanies these proposals (not from PFF, I should add, but from a number of others). But the paper is woefully short on specifics. It touts the value of such a deal (freeing up spectrum for wireless) and lays out some general approaches, then urges the FCC and Congress to broker a deal between the broadcasters and the wireless industry through a number of possible auction mechanisms.

And now, the FCC has issued a public notice in the National Broadband Plan soliciting input on what they should think about using broadcast spectrum as part of the national broadband plan.

This got me thinking. Is there a mechanism the FCC could use, consistent with existing law, which would allow for the sort of broadcast band clearance the FCC would like to see? And, as a bonus, could this also clear some space for white space use? After some consideration, I hatched the scheme below. It is somewhat slower than than the wireless industry would like. I expect it would take about 5 years to finish the transition. But that is not bad given that it took 4 years to manage the DTV transition and auction from the time Congress set the hard date in 2005 to the end of analog broadcasting in June 2009. Also, my plan would allow continuing gradual build out, and combines some sticks to go with the carrots.

I’ll add that I’m not convinced this is worth doing. I think the current obsession with broadcast spectrum as the solution for the upcoming spectrum crisis suffers the same myopia as focusing on offshore drilling to cure the energy crisis — it defers the crunch but doesn’t solve the underlying problem. Wireless demand is going to continue, and we need to fundamentally change how we manage spectrum access (rather than spectrum allocation) to remain on a sustainable path for growth. I also point out, as we discovered while doing the broadcast white spaces proceeding, that there are a lot of non-broadcast uses in the existing television bands that are not broadcast users. These secondary services are going to get awfully squeezed if we crunch the broadcast bands further.

All that said, a well constructed auction could free up a nice chunk of spectrum in the short term that could promote wireless services and competition — especially if it came with a spectrum cap so VZ and AT&T didn’t hog all the good stuff again.

More below . . . . .

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“Will Comcast Join the NAB?” Measuring the Merger On The Trade Association Scale

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Few rivalries in the media world match those of cable operators and broadcasters. Since the first cable regulation by the FCC to prevent cable operators from importing blacked out sports events and “distant signals” that threatened local broadcast content back in the 1960s, broadcasters and cable operators have constantly sought regulatory advantage over one another. Broadcasters once ruled video as its unchallenged masters. Then came cable, which became the dominant platform for delivery of video. But broadcasting continues to aggregate mass audiences and produce more popular programming. Despite all the yapping about how no one can tell broadcast and cable apart anymore, neither one can survive without the other, but both have radically different interests. As a result, the broadcasters and the cable operators, and therefore their trade associations, are constantly at loggerheads.

The fact that Comcast, after acquiring NBC’s broadcast stations, will be eligible to join the National Association of Broadcasters, underscores just how radically and completely the proposed Comcast acquisition of NBC extends Comcast’s reach into every sector of communication. In ideological terms, it is rather like Vatican City joining the Arab League. But that’s not the only powerful trade association Comcast would now be eligible to join. Comcast will also be able to join the MPAA. Depending on how it develops its broadcast spectrum and other wireless assets, it could join CTIA and other wireless trade associations. These, of course, join the already impressive list of trade associations Comcast already belongs to as the largest broadband access provider, one of the largest residential phone companies, purchasers of telecommunications equipment, etc.

So I propose a new metric for measuring antitrust impact of mergers, the uniquely Washington “Trade Association Scale.” How many trade associations will you qualify for after the merger. If the number is too high, that shows you are getting into far too many lines of business to be healthy, because you have too much influence on everybody else’s business. And on the Trade Association Scale, the Comcast/NBC merger ranks a 10 out of 10.

More below . . .

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An Open Letter To Blair Levin On The Subject of National Broadband Public Notices

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Dear Blair:

I surrender! I admit defeat. I cry “uncle.” You win. Despite my earlier doubts, I am now prepared to say the National Broadband Plan process is the most open, transparent, comprehensive, bestest and wonderfullest proceeding ever in the entire history of the FCC since passage of the Communications Act of 1934! Just please, please PLEASE no more public notices. [break off into uncontrolled sobbing]

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White Spaces Lurches Forward Again. OET Issues Good But Weird Proposal.

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Over a year ago, the FCC took a major leap forward on deployment of broadband and rethinking our national spectrum policy by voting to open the unused broadcast channels for unlicensed use (aka the “broadcast white spaces”). The Order left a bunch of questions unanswered, such as who would run the proposed database of available frequencies for white space use. Petitions for Recon got filed, lots of requests for revision and modification of the rules got made, and then nothing happened.

In fairness to OET, it’s been a busy year. First there was a change in administration, then it was “all DTV all the time” until the magic June 12 deadline. Then it was bringing on a new FCC Chair and two additional new Commissioners. Then it was “National Broadband Plan all the time.” But still, it was with a tremendous sense of relief that the process had not utterly vanish off the FCC’s radar screen that I saw the FCC’s Office of Engineering and Technology release a Public Notice on the database. At last! We can get moving on this again, and hopefully move forward on the most promising ‘disruptive’ technology currently in the hopper.

And move we are, in a very peculiar fashion. Rather than resolve the outstanding questions about how the database provider will collect money, operate the database, or whether the database will be exclusive or non-exclusive, the Public Notice asks would-be database managers to submit proposals that would cover these issues. Further, parties have until January 4, 2010 to submit proposals. The FCC will take comment from members of the public on the proposals a month later.

I label this approach “good, but weird.” On the one hand, this seems to my non-engineering and well ordered mind to be totally backwards. How the heck can anyone tell if they want to manage the database when they don’t even know what the requirements are. On the other hand, this basically accomplishes the same thing by having would-be operators that have been pestering the FCC to resolve the matter and trying to get the FCC to adopt rules that favor their own technology/business model a chance to stop pretending that these rules are neutral and the opportunity to make their pitch directly to the FCC. It also cuts down on the number of steps until we actually have a functioning database and can start deploying the technology. Finally, having just gone back and looked at the 2008 Order, the FCC was fairly explicit (Par. 221) that this was always the plan.

And, as usual, I really wish the FCC would not sit around taking months to decide things and then want an immediate response out of us poor public interest folks with our limited resources.

But on the whole, I’m very happy indeed.

More below . . .

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Why Eliminating Handset Exclusivity Drops the Price of Cell Phones; or “How Is A BlackBerry Like A Pill?”

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Back in February, I bought a Samsung Omnia and regretted it almost immediately thereafter. So when my touch screen finally died, I resolved to get a BlackBerry Curve 8330, as my wife has one and recommended it. Yes, she is on Sprint and I am on Verizon, but you can get the same model on both networks.

I was totally unprepared for the sticker shock. $450. Why? Because I was not eligible to buy new equipment. Did I want a replacement Omnia? No, I decided I really did hate my Omnia $450 worth. Out of curiosity, I asked how much it would cost if I were getting a new contract. Answer: $150, plus a $100 rebate.

Verizon claims here in policy land that this represents a subsidy, which they can only do if they have handset exclusivity. Mind you, this model is not actually exclusive, but let that go. Could it really be that Verizon subsidizes my phone $400? That seems an awful lot. So I decided I would look on Best Buy, assuming that it would represent the actual unsubsidized retail price. So I went to bestbuy.com and plugged in Blackberry Curve 8330. Sure enough, the price for the Verizon phone was $499, close enough to $450 to make Verizon’s subsidy claim feasible.

Then I noticed something odd. The same model phone, but for Alltel, cost $680, for Sprint, $750, and for MetroPCS, $400. Why should the same model phone, purchased at the same place, have such a wild swing in price? Remember, these are the prices without the subsidies for buying a new contract, so it can’t be the difference in what the companies chose to provide. The Best Buy price should reflect the unsubsidized retail price. The only difference, in theory, is the plan, (unless we are pretending to make the same model available to every provider and really aren’t). How could the wireless plan make such a difference?

Then it occurred to me where else I’ve seen this dynamic. Go to the drug store and you can see three people getting exactly the same prescription. But one pays $10, another pays $120, and the third pays $500. How is that possible?

Before elaborating below, I will first make it clear that I am rather short on critical data because most of the critical data is proprietary. So what I’ve got is a tentative hypothesis based on observed facts rather than something I can say with certainty. But it is enough for me to say: “Hey! FCC! Go and use your regulatory powers to get the providers to fork over the necessary data to see if I’m right.”

More below . . .

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