Not Giving Up On The Great Google Prophecy

You can read a far more brilliant analysis by Greg Rose on why the punditry on the trickle of data from the 700 MHz auction is all wrong here. Briefly, Greg maintains that this slow convergence on the reserve price over several weeks of bidding is what to expect from a serious auction, and that the failure of parties to bid heavily on C or D Block in the early rounds with so much activity going on in the smaller blocks is a sign of a strong auction to come. Little players on the side are active for the specific licenses that they want, while the large bidders slowly stalk each other up to the reserve price on the major block.

For me, having stacked much on the Great Google Prophecy, I will cheerfully admit to being too close to things to judge objectively. But here are two tidbits of food for thought.

1) Google CEO Eric Schmidt made the evolution of the wireless net a centerpiece of his speech at Davos. How likely is it that Google CEO would hype the importance of wireless if they were not planing to win licenses?

2) Most analysts predicted Google would come in, bid the reserve price for C Block, and leave. They haven’t. So far, no one has bid the reserve price for C Block. Instead, the price has crept up gradually. Now it could be that Google will only bid high if it must, for fear of getting stuck with licenses it doesn’t want. But if that is the case, why show up at all? “To save face with the FCC?” Yes, but we will know after the auction when the identities of bidders and round by round information is revealed if Google never bid. So the “save face” excuse doesn’t really hold water. Rather, it seems likely that they are bidding like everyone else, i.e., like bidders that want to win.

Straws in the wind, perhaps. But no worse than the straws of data everyone else is trying to spin into gold.

Stay tuned . . . .

Did Morgan OBrien and Cyren Call Kill Frontline?

I’m getting a number of folks from different walks of life coming forward with the same story: Morgan O’Brien was the direct cause of Frontline’s investors pulling out.

Of course, there is no way I can actually confirm this on the record because the people in the room either can’t talk about it (due to the anticollusion rules) or won’t. Nevertheless, having confirmed this with sources I find reliable and who could not have coordinated with each other, I feel I need to come forward here and put this on the table. D Block and the public safety partnership are far too important to end up falling victim to the combination of insider baseball, manipulation and greed that appears at play here.

I have absolutely not talked to anyone at the FCC about this. No one at the FCC can legally respond to any of this, and I would not ask them to do so. Similarly, in my discussions, I have been at pains to avoid any conflict with the anticollusion rules. Nevertheless, the sources I have are, I believe, reliable, and I have therefore made a decision to go forward with this story. I must also add that because I am on sabbatical, I have not had any discussions about this with my employer, Media Access Project, or with anyone at Media Access Project while developing this story.

Details below . . . .

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MPAA Suffers “Intelligence Failure” On Piracy, No Weapons of Mass File Sharing On College Campuses

“We have also learned that college students have used university networks to download 40% of all pirated movies, while eating yellow cake (aka ”Twinkies“).”

— Dan Glickman, CEO of the Motion Picture Association of America (MPAA), Testimony Before the House Wholly Owned Subsidiary Subcommittee on Intellectual Property

As some of you may know, the MPAA ad RIAA have been pushing their wholly owned subsidiaries in Congress to pass rather draconian laws against those vile dens of vice and iniquity, colleges and universities (Or, as RIAA President Mitch Bainwol explained: “never will you find a more wretched hive of scum and villany.” He was promptly sued by ally MPAA CEO Dan Glickman). They have justified this on the basis of a 2005 report Commissioned by the MPAA and created by
LEK Consulting Services that purported to show that an astonishing 40% of industry loses from internet piracy could be traced to file sharing at universities. Because the MPAA refused to share either the methodology used or the underlying data, a number of folks expressed a healthy skepticism about this evidence. Nevertheless, a credulous Congress accepted this as “credible evidence” of a “weapons of mass file sharing” in our nations colleges and universities, and sought to impose heavy sanctions and possible invasion by federal troops.

The MPAA now admits it overstated the numbers a wee bit. According to this story, it turns out that the real number even using the data and methodology approved by the MPAA and LEK was 15%, not 40%. Further, as Mark Luker at EDUCAUSE points out, since the number was based on college students without regard for whether the activity took place on campus, the real number of files traded illegally over college networks is more like 3%. (And again, that’s based on the MPAA’s numbers and methodology as now disclosed, not confirmed by independent evidence).

Members of Congress — who uncritically accepted the MPAA’s previous statistics despite the lack of any corroborating evidence, the refusal of the MPAA to disclose its data or methodology, and the utter ludicrousness of the number to anyone who actually knows anything about file transfers and the amount of bandwidth and computer powering it would take to even come close to the numbers MPAA estimated for college campuses — expressed surprise at the disclosure. “Wow,” said a Spokesman for a Senator from California who has vigorously supported the sanctions against colleges when she can take time away from supporting immunity for telephone companies who secretly spied on Americans based on Administration insistence this was “necessary for national security” and who voted to authorize the war in Iraq based on intelligence reports and statements by the Bush Administration that later proved to be filled with outright lies, questionable data, and utterly ludicrous statements questioned by the vast majority of reputable experts. “Who would think we’d fall for this again?”

Nevertheless, both California Senators and a majority of the California delegation to the House issued a joint statement that while the MPAA and RIAA evidence continues to turn out to be total self-serving bunk, support for a raft of bills that would curtail fundamental freedoms and cost tax payers billions in both direct costs and lost productivity remained strong. “We will continue to support whatever means prove necessary to end the scourge of piracy that do not impact the monopoly profits of the entertainment industry for as long as the threat against this industry — which produces more of our home state’s jobs and revenues than you could possibly imagine — persists,” said the statement. “Sticking it to colleges and universities seems like a good way to do that even without any real evidence that it will help.” The statement was pointedly not joined by Rep. Zoe Lofgren (D-CA), who, in a separate statement, pleaded with her colleagues to “please get a Goddamn clue already” And to “stop embarrassing me, the State of California, and the Democratic Party.”

The MPAA blames the gross overstatement of internet piracy on college and university campuses — which it pushed aggressively for the last two years — on “human error.” The MPAA has promised a thorough investigation to determine what has went wrong. “We take this error very seriously and have taken strong and immediate action to both investigate the root cause of this problem as well as substantiate the accuracy of the latest report,” the group said in a statement.

In an unrelated item, the MPAA announced it would give LEK Consulting, which created the 2005 Report, the coveted “Oscar of Freedom” at this year’s Academy Awards.

Stay tuned . . . .

700 MHz Auction: D Block Panic, Damping Expectations, And My Final Thoughts Before the Opening Bell.

After so much pre-game hype, it’s hard to believe we have actually gotten down to the 700 MHz Auction week. The fun and games will start January 24, although we won’t know (much) about the auction until it is all over sometime in late February or early March.

Not surprisingly, the news that Frontline Wireless , the company that did so much to shape the rulemaking around the “D Block” public/private partnership, went belly up before the auction even started has triggered a round of hand-wringing about the fate of D Block and finger-wagging by those who always thought it was a bad idea to impose any kind of conditions on licenses. As a result, we see a slew of stories questioning whether anyone will bid for D Block (or, at least, meet it’s $1.3 billion reserve price), with some spillover questioning about the future of the auction itself.

While I agree with GigaOm that wireless auctions aren’t for wimps, I do think the panic over Frontline’s failure to scrounge up capital to make the necessary up front payment (the “ante” required to buy “bidding credits” to participate in the auction) is exaggerated. Nor am I as pessimistic that the auction will produce some groundbreaking changes as others, although it could well happen that we get through this auction with no new “disruptive third-pipe providers.” I think we will certainly see the auction hit the $10 billion Congress estimated (and the FCC set as aggreagte reserve price), and we will see C Block meet its $4.6 billion reserve price.

On the other hand, if things start to go poorly in the auction, we may see some panic moves by the FCC, particularly with regard to D Block. The possibility that the FCC may retroactively drop the reserve price on D Block (possibly without holding a reauction) may introduce strategic behavior into the auction. Of course, since no one (including the FCC) can actually talk about this possibility makes the speculation even more insubstantial than usual. Still, since the possibility does exist, and because I think such a course would create real problems with the auction, I briefly discuss it below.

Analysis below . . . .

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Cleland's “Common Sense.”

“You keep saying that word. I don’t think it means what you think it means.”
–Inigo Montoya, The Princess Bride

I suppose it’s just overkill for me to pounce on Cleland’s over-the-top (even for him) blog post purporting to make the “common sense case” against our complaint against Comcast and Petition for Declaratory Ruling. After all, Dave Isenberg and others have already taken this on. But (a) it helps to restate the facts and focus on the issues, and (b) it gives me a chance to quote Angels by Within Temptation, and I ABSOLUTELY LOVE THAT SONG (In fact, if y’all haven’t done so, scurry to your favorite place to buy music online and download this and their other stuff. I’ll wait . . . .)

Cleland’s claims can be divided into two: whether Comcast’s behavior was “reasonable network management” and whether the FCC Policy statement is enforceable. I shall address each (and get to the music quote) below . . . .

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Time Warner May Pilot Metered Pricing With Easy Consumer Monitoring Tools. Good for now, but bad for ecommerce in the long run.

As reported by Broadband Reports and now confirmed elsewhere, a Time Warner internal memo indicates Time Warner will pilot a program where it has an explicit bandwidth cap, and users that exceed the cap will pay additional explicit fees — rather like what happens now with your standard cell phone package where you buy a bundle of minutes and then pay for any overages. The pilot will include a website to allow customers to track their usage, moderate their behavior, or buy additional capacity if they wish.

I agree with Dave Isenberg that this is the best way for Time Warner to handle its network capacity constraints and address the supposed 5% of users gobbling 50% of the bandwidth. We can expect some heavy users to move to other networks without caps, but also expect that users that use much less capacity and frustrated by congestion caused by heavy use by others to prefer plans like Time Warner’s because it should produce a less congested pipe overall.

I would be remiss if I failed to note that I was just musing about this the other day, giving me a chance to do another Stephen Colbert I CALLED IT!!! dance.

O.K., shameless gloating over. Analysis below . . . .

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Oh Canda! Lessons for My Native Land.

Someone tell me why Canadians seem to be so much smarter than we are, at least on the public policy fronts that I cover. Maybe we should try to convince Michael Geist to take a position at one of the local law schools here in DC?

Whatever it is, two recent developments in Canadian media and information policy highlight that a does of common sense and a willingness by government ministers to (a) actually listen to what people have to say, and (b) learn something from our mistakes.

First, the Candian Radio-Television Commission (CRTC) just announced it will impose new national ownership limits and cross ownership limits on its broadcast media. Why? As stated in the CRTC release:

The trend toward greater consolidation in the broadcasting industry has raised concerns that a large ownership group could achieve a dominant position through acquisitions, which could bring about a reduction in the diversity of local, regional and national content. To address these concerns, the Commission has decided to:

* impose limits on the ownership of broadcasting licences to ensure that one party does not control more than 45 per cent of the total television audience share as a result of a transaction; and
* not approve transactions between companies that distribute television services (such as cable or satellite companies) that would result in one person effectively controlling the delivery of programming in a market.

While I think their national cap is too high, I applaud CRTC for recognizing the need for regulation staring them in the face as consolidation continues to grow. What a far cry from the debate we have in public policy circles in this country, in which regulators vie with each other for who can do more favors for their industry patrons, discuss how to raise ownership limits to permit more consolidation, and argue over whether to deregulate just a little more or a whole lot more.

The second “Canada is smarter than we are” example comes from last month’s succesfull citizen campaign to delay introduction of a “Canadian DMCA”. When Canada’s Conservative government seemed quite willing to acquiesce to industry demand to produce — in a fair use parody of Simpson’s Comic Book Guy — the worsht copyright ever, a grass roots movement organized that apparently shocked the government with its vehemence and popularity with mainstream Canadians. The government delayed introduction of the proposed Copyright Bill until at least the end of this month, where hopefully Canadian common sense will once again send it packing.

Meanwhile, in the United States, Democrats and Republicans join together for bipartisan legislation designed to turn the Department of Justice into the enforcement arm of the entertainment industry, and judges weigh whether the act of copying a legally obtained CD onto your computer for your own personal use constitutes a copyright violation for which you can be fined and/or do jail time.

Oh Canada, why can’t you teach my native land a thing or two?

Stay tuned . . . .

Dave Sez: AT&T Are [Bleep!]

My friend “Dave” recently moved from San Francisco to Sacramento. Being of the modern mobile generation that has “cut the cord” and lives by the cell phone, Dave wanted to get “naked DSL.” i.e., DSL (or other broadband) without any kind of telephone or video contract (Dave also refuses to pay for cable TV, on the grounds that 99% of the programming “sucks”). To his surprise and disappointment, Dave couldn’t find any naked broadband available in his neighborhood. So he wrote to me, as the known expert on all things broadband. “Isn’t there any way I can just get broadband without a telephone contract?” Dave wrote me in an email.

So I thought about it, and I said: “Is Sacramento AT&T territory?”

“Yeah.”

“Well AT&T has to offer $20 naked DSL, as a merger condition from when they bought BellSouth. Why don’t you try for that.”

So Dave dug around until he found the offer for AT&T DSL until he found the AT&T Yahoo! High Speed Internet Package With No Voice Contract:

Basic 768 kbps $19.95
Express 1.5 mbps $23.99
Pro 3.0 mbps $28.99

We talked, and I recommended the “Express” package as probably the best suited to his needs. Dave went to order it. His reactions below (warning, contains frank language and highly suggestive ASCII)….

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