My Insanely Long Field Guide To The C-Band Spectrum Fight, And Why This Won’t End In December.

Like most everything else at the FCC these days, problems that have relatively simple and straightforward solutions turn into horrible complicated messes. Take the C-Band, a slice of spectrum that in the U.S. lies between 3.7 GHz and 4.2 GHz. When first authorized for commercial satellite use back in the day, these frequencies were considered far too high to have much value for terrestrial use. These days, of course, 3.7 GHz is considered prime “midband” spectrum perfect for mobile 5G deployment, and sits right on top of the CBRS spectrum the FCC intends to auction next June. So wireless carriers want the FCC to repurpose some or all of it for 5G. In addition, a bunch of folks (including my employer Public Knowledge) support opening up portions of the band in rural areas for point-to-point backhaul (on a secondary basis, which means the backhaul guys need to protect the incumbents from interference).

 

The logical and straightforward thing to do would be to treat this like we did the 700 MHz auction/DTV transition over ten years ago. Tell the C-Band guys “sorry guys, we’re shrinking your available spectrum from 500 MHz to 200 MHz and taking back the other 300 MHz for auction. We’re also going to allow point-to-point backhaul on a non-interfering basis because that will really help rural ISPs. Don’t worry, we’ll set aside some of the auction money for a transition fund.” Sure, the incumbent licensees would scream (they always do), but this is a fairly proven solution that worked well to get us spectrum for 4G (and raised $20 bn for the Treasury) so why not do it again?

 

Or, if you really want to bribe the incumbent licensees, we could do an incentive auction. I’m not a fan, especially when it’s folks who got their licenses for free. But fine. We crossed that bridge awhile ago with the broadcasters, the authority for incentive auctions is now part of 47 U.S.C. 309(j), let’s just use it.

 

But nooooooo . . . . . This FCC in particular seems to love delaying everything while it rethinks all the options so it can come up with its very own wrong decision. Just as the FCC delayed deployment of the CBRS spectrum by 2 years by reopening that proceeding to redo the rules at the behest of the big carriers, now the FCC apparently wants to try a “private auction” under which the current holders of the satellite licenses (as represented by a group of licensees called “C-Band Alliance” or “CBA”) will go off behind closed doors, “auction” the public spectrum themselves, and then promise to give a piece of the money back to the FCC.

 

After snoozing through this for over a year, members of Congress have suddenly woken up and made this all interesting. Why? Analysts estimate that an auction of 300 MHz of C-Band spectrum would yield $50-60 billion in revenue. If the government conducts the auction, then it gets to credit $60 bn as a “payfor” to the budget for things like rural broadband or Trump’s border wall (assuming the Congressional Budget Office, aka CBO, agrees with the estimate). Notably, Senator Kennedy (R-LA) of the appropriations Committee had a little hearing with Chairman Pai where he politely but firmly made it clear to Pai that he thinks a private sale is a dumb idea and he wants a public auction. When that apparently did not work to move the needle, Kennedy jumped over Pai’s head and took the matter to President Trump, although there is no indication that Trump has decided to do anything on the matter.

 

Meanwhile, in the House, Rep. Mike Doyle (D-PA), Chair of the House Telecom Subcommittee, dropped a bipartisan bill, the C-Band Act, that would require the FCC to do an auction. Doyle followed this up with a hearing where the majority of the Members in attendance made it clear they wanted the FCC to run an auction so they could use that money to pay for rural broadband.

 

To understand why the distinction between private sale and public auction matters so much to Congress, you need to understand one of the peculiarities of how Congressional budgeting works and and terms such as “CBO score,” “paygo” and “payfor.” To state the matter quickly, if the FCC holds an auction, CBO can score the projected revenue of the auction as part of its annual budgeting process and that projected revenue can be used to “pay for” other projects under Congress’ “pay as you go” (aka “paygo”) rules. But if the licensees have a private auction, there is no CBO score even if the licensees make a voluntary donation to the FCCSo from the perspective of Congress trying to find money to do stuff, the difference is not between $60 bn and something less than $60 bn. The difference is between $60 bn and zeroGranted, no one in Congress appears to worry about deficits these days, but as Senator Kennedy observed, that money could fund “several other government projects (including the wall),” and $60 bn is not a small amount of money whether you want to fund the wall (like Kennedy) or rural broadband (like the House E&C).

 

But what can Congress do, especially with Chairman Ajit Pai apparently determined to give C-Band Alliance what they want (especially now that AT&T and Verizon have supported C-Band)? Funny thing, we had a similar issue back in 2002 when the Powell FCC tried to move ahead with an unauthorized incentive auction, and Congress stopped that cold despite FCC authorization of the auction.

 

I explain below . . .

 

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How Not To Train Your Agency, Or Why The FTC Is Toothless.

You know your agency is pathetic at its job when Tea Party Republicans tell you to go harder on industry — especially in a Republican Administration that makes deregulation an end in itself and where despising government interference in “the market” is religious orthodoxy. So it was quite noteworthy to see Freshman Senator Josh Hawley (R-MO) tear the Federal Trade Commission (FTC) a new one for its failure to do anything about how tech companies generally (and Google and Facebook specifically) vacuum up everyone’s personal information, crush competition, swear general allegiance to Gellert Grindelwald and sell us out to the Kree. “The approach the FTC has taken to these issues has been toothless,” Hawley accused in his letter (apparently not meaning this adorable night fury over here).

 

I’m not going to argue with Senator Hawley’s characterization of the FTC. But since he is new in town I think it is important for him to understand why the FTC (and other federal agencies charged with consumer protection) have generally gone from fearsome growling watchdog to timorous toothless purse dog with laryngitis. Short answer, Congress has spent the last 40 years training agencies to not do their job and leave big industry players with political pull alone by abusing them at hearings, cutting their budgets, and — when necessary — passing laws to eliminate or massively restrict whatever authority the agency just exercised.   Put another way, Congress has basically spent the last 40 years conditioning consumer protection agencies to think about enforcement in much the same way Alex DeLarge was conditioned to think about violence in A Clockwork Orange, keep applying negative stimulus until the very thought of trying to enforce the law against any powerful company in any meaningful way makes them positively ill.

 

I explain all this, and the problem with “public choice theory” as applied here in Policyland, below . . .

 

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Hurricane Michael A Wake Up Call On Why Total Dereg of Telecom A Very Bad Idea.

Readers of Harry Potter should be familiar with Cornelius Fudge, the Minister of Magic who refuses to believe Voldemort will return because believing that would require taking precautions and generally upsetting lots of powerful and important people. Instead of preparing for Voldemort’s return, Fudge runs a smear campaign to discredit Potter and Dumbledore, delaying the Wizarding World from preparing to resist Voldemort until too late.

 

I was reminded of this when I read Federal Communications Commission (FCC) Chairman Ajit Pai’s statement of frustration with the slow pace of restoring communications in the Florida in the wake of Hurricane Michael. Pai explicitly echoes similar sentiments of Florida Governor Rick Scott, that carriers are not moving quickly enough to restore vital communications services. Pai is calling on carriers not to charge customers for October and to allow customers to switch to rival carriers without early termination fees.

 

What neither Pai nor Scott mention is their own roll in creating this sorry state of affairs. Their radical deregulation of the telephone industry, despite the lessons of previous natural disasters such as Hurricane Sandy, guaranteed that providers would chose to cut costs and increase profits rather than invest in hardening networks or emergency preparedness. That is how markets actually work in the real world (as opposed to in the delightful dereg fantasy land dreamed up by hired economists). But rather than take precautions that might annoy or upset powerful special interests, they chose to mock the warnings as the panic of “Chicken Little, Ducky Lucky and Loosey Goosey proclaiming that the sky was falling.”

 

Now, however, the Chicken Littles come home to roost and, as predicted, private market incentives have not prompted carriers to prepare adequately for a massive natural disaster. This result was not only predictable, it was predicted — and mocked. So now, like Cornelius Fudge, Chairman Pai and Governor Scott find themselves confronted with the disaster scenario they stubbornly refused to believe in or safeguard against. And while I do not expect this to change Pai’s mind, this ought to be a wake up call to the 37 states that have eliminated direct regulatory oversight of their communications industry that they might want to reconsider.

 

Still, as Public Knowledge is both suing the FCC to reverse its November 2017 deregulation Order, and has Petitioned the FCC to reconsider its June 2018 further deregulation Order, perhaps the FCC will take this opportunity to rethink the certainty with which it proclaimed that carrier’s have so much incentive to keep their customers that they would never cut corners and risk service going down. Or perhaps Congress will now pay attention and decide that their constituents need enforceable rights and real protections rather than promises and platitudes.

 

I provide a lot more detail below.

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Why Platform Regulation Is Both Necessary and Hard.

This is the first blog in a series on regulating digital platforms.

 

As digital platforms have become increasingly important in our everyday lives, we’ve recognized that the need for some sort of regulatory oversight increases. In the past, we’ve talked about this in the context of privacy and what general sorts of due process rights dominant platforms owe their customers. Today, we make it clear that we have reached the point where we need sector-specific regulation focused on online digital platforms, not just application of existing antitrust or existing consumer protection laws. When platforms have become so central to our lives that a change in algorithm can dramatically crash third-party businesses, when social media plays such an important role in our lives that entire businesses exist to pump up your follower numbers, and when a multi-billion dollar industry exists for the sole purpose of helping businesses game search engine rankings, lawmakers need to stop talking hopefully about self-regulation and start putting in place enforceable rights to protect the public interest.

 

That said, we need to recognize at the outset that a lot of things make it rather challenging to  figure out what kind of regulation actually makes sense in this space. Although Ecclesiastes assures us “there is nothing new under the sun,” digital platforms combine issues we’ve dealt with in electronic media (and elsewhere) in novel ways that make applying traditional solutions tricky. Before diving into the solution, therefore, we need to (a) define the problem, and (b) decide what kind of outcome we want to see.

 

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“A Woman of Valor Who Can Find?” Farewell to Commissioner Mignon Clyburn.

This week has been the going away for Chairwoman Mignon Clyburn, often called “the Conscience of the Commission.” Not some soppy, Jiminy Cricket-style conscience sitting helplessly on your shoulder pleading and wheedling to try to get you to be good. Clyburn has been a conscience that kicks ass and takes names. The fact that, despite these hyper-partisan times, so many of her Republican colleagues and former colleagues were positively clamoring at her official FCC send off to praise her with genuine warmth for her empathy, graciousness and passion proves (as I once said about Jim Cicconi, who came out of retirement to add his own praise at Clyburn’s official farewell), you can be extremely effective without being a total jerk.

 

Many people understand the duty of public service. But for Mignon Clyburn, it is a calling.

 

As you can tell, I’m a big fan. If you wonder why, read her going away speech from the appreciation/going away party the public interest community held for her last Wednesday — although simply reading the words cannot convey the stirring passion and eloquence with which she read it. Too many people who care deeply about social justice dismiss communications law as a wonky specialty. Those with the passion to follow the instruction of the prophet Isaiah to “learn to do good, seek justice, comfort the oppressed, demand justice for the orphan and fight for the widow” often chose to go into fields where this struggle is more obvious such as civil rights or immigration law. But as Clyburn made clear through both words and actions, we desperately need this same passion in communications law. “The communications sector does not just intersect with every other critical sector of our economy, society, and democracy; it is inextricably intertwined. Healthcare, education, energy, agriculture, commerce, governance, civic engagement, labor, housing, transportation, public safety—all rely on this modern communications infrastructure. Any weaknesses or shortcomings, systemic or isolated, will have ripple effects that can be difficult to discern, but are unmistakable in their impact.”

 

Some reflections on Clyburn’s tenure below . . .

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UPDATE: Net Neutrality Repeal Goes Into Effect June 11 (Absent CRA Passage Or Anything Else).

We now have an official date on when the 2017 Net Neutrality repeal will go into effect. The Government Printing Office now gives a preview of what will get published in Fed Reg 24 hours in advance. They announced today that tomorrow will have both the OMB approval of the new and undermined transparency rule and the FCC notice that things will officially go into effect in 30 days from tomorrow.

 

Apparently stung by being called out on this peculiar process, Pai has issued a new and exciting statement totally doubling down on everything he has ever said about the terribleness of the previous rules and the awesomeness of our new and exciting Internet freedom. You can read it here. (I have got to believe this Administration at least borrows speech writers from Russia. This reads like something from Pravda in the Cold War announcing “glorious triumph of new 5 year plan in crushing capitalist running dogs.”) Commissioner Rosenworcel has a much shorter and rather less bombastic counterpoint here.

 

Stay tuned . . .

 

Net Neutrality Does Not End Today. We Still Don’t Know When It Will. Which Is Weird When You Think About It.

There is a lot of confusion on the effective date for the 2017 Net Neutrality Repeal Order, aka “Restoring Internet Freedom — Which Is Not In The Least Overdramatic Unlike You Hysterical Hippies.” This is not surprising, given the rather confusing way the Federal Register Notice reads.

 

You can see the Federal Register Notice here. If you look at the section labeled dates, you will see it says the following:

“Effective dates: April 23, 2018, except for amendatory instructions 2, 3, 5, 6, and 8, which are delayed as follows. The FCC will publish a document in the Federal Register announcing the effective date(s) of the delayed amendatory instructions, which are contingent on OMB approval of the modified information collection requirements in 47 CFR 8.1 (amendatory instruction 5). The Declaratory Ruling, Report and Order, and Order will also be effective upon the date announced in that same document. (Emphasis added.)

 

Which is a very confusing way of saying the following: ‘Before net neutrality gets repealed and the new, much weaker disclosure obligations go into effect, we are going to wait for the Office of Management and Budget (OMB) to review the much weaker transparency rule under the Paperwork Reduction Act and other legislation that is supposed to make it harder to pass rules. Once OMB signs off, we at the FCC will publish a second notice in the Federal Register announcing when everything goes into effect. But until we do that, nothing actually happens. Zip. Nadda. Zero. Total psyche!’

 

This is, to say the least, highly unusual. There is absolutely no reason for FCC Chairman Ajit Pai to have stretched out this process so ridiculously long. It is especially puzzling in light Pai’s insistence that he had to rush through repeal of net neutrality over the objections of just about everyone but the ISPs and their cheerleaders because every day — nay every minute! — ISPs suffer under the horrible, crushing burden of Title II is another day in which Princess Comcast Celestia, Princess Twilight Verizon Sparkle, and all the other Broadband Equestria Girls must endure the agonies of a blasted regulatory Hellscape rather than provide us all with wonderful new innovative services at even lower cost than they do now. Because Broadband Is Magic.

 

So yeah, if Pai thought it was a total emergency that he take his vote in December, why did he basically extend the current Title II regime indefinitely? We hasn’t Pai restored our Internet Freedom? Why has Pai instead forced us to languish here in the terrible regulatory Hellscape that is the merely “open Internet” rather than the private sector controlled de-regulatory paradise he and his fellow Republican Commissioners have promised us? Hell, the FCC didn’t even submit the new rule to OMB for approval until March 27. For a guy who was all on fire to repeal Title II and free his Broadband Ponies, Pai sure has taken his time making it actually happen.

 

An excellent question. Somebody who is an actual reporter might want to ask him about that. I have some guesses and rank speculation — but they are just that, guesses. It’s like wondering why Number 6 resigned, or why the Minbari surrendered at the Battle of the Line. Unless we get a big reveal, we’ll never know.

 

But one thing is clear. For whatever reason, Ajit Pai is taking his own sweet time restoring that Internet freedom he claimed to be so obsessed about back in December. Whenever the net neutrality appeal does happen, it won’t be Monday, April 23.

 

Stay tuned . . .

What You Need To Know About Repealing The Repeal of Net Neutrality — How The CRA Works.

There is a great deal of excitement, but also a great deal of misunderstanding, about the effort to “repeal the repeal” of net neutrality using the Congressional Review Act (CRA). On the one hand, we have folks who are confused by the enormous progress made so far and think that we are just one vote shy of repealing the repeal. On the other extreme, we have the folks declaring the effort totally doomed and impossible from the start.

 

You can read the relevant statutory provisions here at 5 U.S.C. 801-08. Briefly, a “Resolution of Disapproval” (which we refer to as a “CRA” rather than a “CRD” just to confuse people) must pass both the Senate and the House (in either order) and then be signed by the President like any other piece of legislation. If the President vetoes Congress may override the veto with a 2/3 vote as it can with any other vetoed legislation. You might think that this makes it impossible for the minority party to get legislation passed. But the CRA was designed to allow a majority of members to pass a Resolution of Disapproval over the objections of the leadership and on a bare majority (so it circumvents the filibuster). And while yes, it must still get past the President, there are reasons to think that is not as impossible as some folks think.

 

 

Right now, the action has been in the Senate, where Minority Leader Chuck Schumer has announced that all 47 Democrats (and the 2 independents who caucus with them) will vote for the CRA. With Republican Susan Collins (R-ME) joining her fellow Senator from Maine Angus King (I-ME), that makes the total number of yes votes 50. So if Dems find one more “yes” vote in the Senate, they can clear that hurdle. But while this is extraordinary news in a very short period of time (technically, it is still too early to even introduce a CRA on the FCC’s net neutrality vote, since the item has not been published in the federal register) — we still have a long way to go to get this over the finish line.

 

But, just to provide some historic perspective. Back in 2003, the nascent (and totally unanticipated by anybody — especially anybody with any experience in media policy) media reform movement rose up against the roll back of all media ownership rules by then-FCC chair Michael Powell. Republican FCC, Republican Congress, Republican President — all supportive of the roll back and big deregulators. Nevertheless, against all odds, we managed to push through a partial roll back by freezing the national ownership limit at 39% (which, not by coincidence, was the ownership level of the largest holding companies — News Corp. and Viacom — as seen in this West Wing episode). So yeah, sometimes the universe give us some long-shot unexpected surprises.

 

I discuss the details of a CRA, and why I think we can win this (and even if we don’t, why it still works in our favor overall), below. In the meantime, you can go to this Public Knowledge resource page to contact your Senators and Representative directly and push them to vote for the Net Neutrality CRA.

 

UPDATE: Matt Schettenhelm pointed out to me that while 30 Senators bypases the Committee and gets on the calendar, you still need to win a motion to proceed before debate and final up down vote. See this article here. I’ve corrected this below.

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The History of Net Neutrality In 13 Years of Tales of the Sausage Factory (with a few additions). Part I

I keep being asked by people “Harold, can you please summarize the last 20 years of net neutrality for me while I stand on one foot?” Usually I answer: “do not do unto other packets what you find hateful for your favorite bitstream. The rest is commentary — located at 47 C.F.R. Part 8.” Alternatively, I send them to John Oliver’s 2017 piece on net neutrality. Or, if you want the longer story going back to the 1960s/70s, you can read this excellent piece by Tim Wu (who invented the term “net neutrality” in the first place).

 

But, as I’ve mentioned more than a few times in recent weeks, I’ve been doing this issue for a very, very long time. In fact, pretty much since the first time the question of how to classify cable modem service came up in 1998. So, in the spirit of “end of year montages,” I will now take you on a brief tour of the history of net neutrality at Tales of the Sausage Factory (with a few outside link additions) from my first post on the Brand X case back in 2004 to June 2016, when the D.C. Circuit affirmed the FCC’s 2015 Reclassification and Net Neutrality Order.

 

Although I suppose you could read the version I wrote about this in December 2015 to bring everyone up to date before the last court fight. Have I mentioned I’ve been doing this for a long, long time now and am repeating myself an awful lot? That’s why I spend more than 5000 words here and only get up to the beginning of 2009.

 

Prepare you favorite montage music and see more below . . .

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The 5 Weirdest Things About That Ajit Pai Video.

Federal Communications Commission (FCC) Chairman Ajit Pai has made one of those “break the ‘net” videos — but not in the usual way. In an apparent effort to either pump up his base or win over undecideds, Pai made a video called “Seven Things You Can Still Do On the Internet After Net Neutrality.

 

If the intent was to win over critics by showing how opponents are needlessly “fear mongering” (a favorite term thrown around by defenders of Pai’s net neutrality repeal), it backfired badly. But whatever its intent, I can say unequivocally as someone doing this for 20 years, this video is truly bizarre in the annals of FCC history for a number of reasons. While most of the attention has gone to the copyright issues or the Twitter fight between Mark Hamill and Ted Cruz, the genuinely weirdest thing about this video is that it ever got made in the first place.

 

So here are my picks for the Top 5 Weirdest Things About Ajit Pai’s ‘Seven Things’ Video.

 

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