A Guide To The Mechanics of the Comcast/TWC Deal. Part I: Introduction

Those unfamiliar with how the merger review process works will want to know what happens next in the Comcast purchase of Time Warner Cable (TWC). In this 4 part series, I sketch out how the application will proceed and what role Congress plays in all this. I’m going to save for another time the arguments on the merits and what the likelihood is of blocking the deal (or getting stronger conditions than Comcast/TWC have already put on the table). I intend this simply as mechanical guide so that folks playing at home can follow the action, and weigh in as they see fit.

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Jessica Rosenworcel And the Mantle of Michael Copps

The Federal Communications Commission (FCC) moved forward on the transition of the phone system by adopting an order at its February open meeting. By a 5-0 vote, in addition to a number of other important first steps, the FCC adopted a set of governing principles for the transition. The principles focus on core values: Universal Service, Consumer protection, Competition, and Public Safety.


These principles did not just drop out of thin air.  Commissioner Jessica Rosenworcel first proposed them in this speech in December of 2012. While few have noticed, Rosenworcel continued to quietly and effectively push this framework, culminating in a unanimous vote with broad approval from both corporations and public interest groups.


More amazing for this hyper-partisan and contentious times, the principles capture both progressive values and conservative values, traditionally shared by Republicans and Democrats alike. The idea that access to communications services is so essential to participation in society that the Federal government has a role in making sure that ALL Americans have affordable access goes back to the New Deal and Section 1 of the Communications Act. But the basic precept is even older, going all the way back to Founding Fathers. Article I of the Constitution gives Congress the express power ”to establish post offices and post roads” in recognition that ensuring that all Americans can communicate with each other is what helps make us a single country and one people — a core conservative value. As the arteries of commerce and the means of communication have evolved from post roads and post offices to steam trains and telegraphs to the automobile and the telephone, we have continued to preserve this idea of universal service to All Americans as a core traditional value of what it means to be an American.


But as essential and shared as these values are, no one was talking about them as the basis for the Phone Transition, or how to bring them forward into what Chairman Wheeler calls “The Fourth Network Revolution,” until Commissioner Rosenworcel started the conversation. From the time AT&T first proposed a “sunset of the Public Switched Telephone Network” during the National Broadband Plan in 2009 until Rosenworcel’s December 2012 speech, no one even talked about values – let alone proposed that a set of fundamental values needed to guide the transition. The conversation remained mired — and stalled — in myopic focus and bickering on the details of specific regulations. Commissioner Rosenworcel understood well before anyone else that the best way to move forward, and the way to keep the process firmly centered on the public interest, required reaffirming our fundamental values as the first step.

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Cell Phones On A Plane Do Not Deserve The Same Freak Out As Snakes On A Plane

So it appears people like the idea of using their tablets on planes, but not using cell phones on planes.Or, to paraphrase Samuel L. Jackson, a lot of people do not want mother——ing cellphones on these mother—–ing planes.


Whatever the merits of this position, however, we should not ask the FCC to use interference rules for what is plainly a social policy. To the contrary, as the Washington Post Editorial Board rightly points out, the FCC ought to have rules that acknowledge reality. Bluntly, do we really want agencies to lie to us about technology rather than simply own the social policy?


For those freaking out over the possibility of adding “Loud Cell Phone Talker” to the airline bestiary along with “Crying Baby Beast,” “Barfy Neighbor” and “Snoring Person That Drops The Seat In My Lap,” I discuss a few things to give you hope before you start shooting out windows to pull cell phones out of planes.


More below . . . .

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Will The Fed Shutdown Screw Up This Season’s Xmas Tech Toys?

No one outside the small world of telecom policy cared much that the Federal Shutdown would close the Federal Communication Commission (FCC). Other than the hope that closing the FCC would open the door for Joss Whedon to slip in some full frontal nudity and cussing on the next episode of Agents of S.H.E.I.L.D., most people don’t think of the FCC as having much impact on their lives.


It turns out, however, that the shut down of the FCC may very well delay the sale of new tech toys scheduled for release this Christmas season. And I don’t just mean the obviously FCC things like new cellphones. Every toy with a computer chip, every TV set, every microwave oven, and just about everything else that produces “radio frequency emissions” needs an FCC certification before it can get shipped to stores for sale.


Why? Because things that draw a lot of electric current that oscillates rapidly, like a computer chip, produces radio interference. If you have something that shoots short bursts of high powered radio waves, like your microwave oven (aka “radarrange oven” for you spectrum trivia buffs), you want to make sure the device won’t ‘leak’ into neighboring spectrum and cause interference with things like cordless phones. Also, if your cell phone or wifi chip gets the power jacked up too high, it can microwave your ear off or something.


So to keep your microwave from interfering with your cellphone, and to keep your cellphone from microwaving your face, federal law requires the FCC to certify all devices that produce radio waves (either intentionally for communication or just incident to use). Most of the actual testing is done by outside laboratories, and the process as a whole is fairly well streamlined. But with no one at the FCC to review the lab reports and process the paper work, the backlog is starting to mount and all the tech toys for this year’s Christmas season are stuck in Santa’s workshop, aka storehouses Singapore, waiting for certification so they can get to U.S. stores in time.


The FCC on average processes a little over 1000 applications for certification a month. They process them in the order they arrive. But not only is no one at home right now processing the ones that were already filed, you can’t file new ones. If you are a manufacturer, you now have absolutely no idea if your product will be on shelves on Black Friday. Worse, your competitor’s product could be there a week or two weeks ahead of yours, getting all the reviews and becoming The Hot Tech Toy of The Season while your product languishes on loading docks.


And it’s even worse for us Jewish people. Chanukah hits at Thanksgiving this year. Thousands of disappointed little Jewish boys and girls will be stuck with all the Uncool Last Year’s Models, while all their non-Jewish friends can still get the latest models on the 24th of December. Our last Thanksgivingukkah for the next millennium, ruined by the federal shutdown!


Will this be the Shutdown That Ruins Christmas? Or will the spirit of peace on Earth and goodwill to all men come back to Washington, and get those hardworking, lovable little federal elves back to the FCC branch office at Santa’s workshop in time?


Stay tuned . . . .

Why Does The Internet Innovation Association Hate The Rural Call Completion Order, Privacy, and Next Generation 9-1-1?

The Internet Innovation Alliance (IIA) became the latest trade association demanding that the Federal Communications Commission (FCC) and the states stop working to solve the Rural Call Completion problem. IIA also called for state and federal agencies to stop working on Next Generation 9-1-1 issues, apparently deciding the recent report by CalNena about the declining reliability of mobile 9-1-1 location information was nothing to worry about.  The new report preemptively called for an end to any effort to deal with the growing problem of caller i.d. spoofing and related vulnerabilities in voice-over-IP (VOIP) services. Finally, IIA demanded we eliminate the “legacy rules” that limit the ability of the government or companies to read your call records. You can read the report here..


Granted, the report didn’t say that explicitly. Instead, the IIA repeated what has become the standard industry refrain about how the key to transitioning our phone system from traditional technology to Internet protocol (IP) and wireless is to totally eliminate all federal or state authority over the new phone services. But it amounts to the same thing. A demand that we end the FCC’s authority under “legacy phone regulations” that allow it to address Rural Call Completion translates rather directly into consigning Rural America to telephone purgatory — especially when you give no indication of what should replace it.


The IIA Report is only the latest in what appears to be a never-ending series of white papers, opinion pieces and typical Washington blather on how the bestest thing we can do to transition the phone system is get rid of “legacy regulation.” Because although the market is apparently already so totally going there that we don’t need to worry about the 100 Million people and millions of small business that rely on copper (the one third of the market that still has a traditional copper line), pernicious legacy regulation is sadly holding things back so much we must eliminate it right away. Try not to think about this contradiction too hard.


If the IIA talking points sound familiar, it’s because they are exactly the same as those used by Verizon to explain why Voice Link was just the medicine Fire Island needed to recover from Sandy.  If we want the PSTN Transition to get the same reaction that Fire Island residents gave Voice Link, by all means let us continue down this path. If we would prefer to avoid a crash and burn that makes the opening days of the Affordable Care Act look like smooth sailing, I highly recommend industry groups like IIA stop trying to leverage this for regulatory arbitrage and start coming up with some real proposals on how to upgrade our policies while we upgrade our phone system.


More below . . . .

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When Neocons Became NeoConfucians — Jeff Eisenach’s Conversations With Imaginary Harold Feld.

In an article called “Why Verizon and AT&T Are More Innovative Than ‘The Left’ Thinks,” Economist Jeff Eisenach makes some observations on his ascendancy to head the American Enterprise Institute (AEI) new Center For Internet, Communications and Technology Policy. Among these, Jeff says that I would attribute Comcast’s effort to block BitTorrent back in ’08 as motivated by a desire to leverage their broadband market power to protect video. “That’s the story Harold Feld would apply to Comcast and BitTorrent. I think it’s far-fetched to believe that Comcast thought BitTorrent was a competitive threat.”


Except, of course, I said exactly the opposite in this blog post back in 2008 when Comcast filed its full disclosure document with the FCC. What I actually said was: “it appears to me that Comcast did not block P2P for anticompetitive reasons.”


This did not, of course, make Comcast’s conduct acceptable. As I went on to explain:

“Rather than invest in upgrading its network, Comcast opted for the cheapest solution from its perspective without waiting for significant congestion to occur. It used the Sandvine equipment to block (“delay”) P2P transfers and (according to the Florida AG) targeted the top 1000 users per month, no matter what capacity these users actually consumed. This provided an effective means (from Comcast’s perspective) for managing potential congestion, even if it sucked rocks from a consumer perspective.”




While I like Jeff, this does not look like the sort of rigorous research one would hope for from a scholar of Jeff’s caliber and AEI generally – if they want to be taken seriously.



This brings me to my broader point. While I’m flattered that Jeff Eisenach regards me as the face of the ‘Left,’ and I enjoy the opportunity to tweak him over this, it highlights a broader problem among neo-conservative economists (or, as we might generalize, the ‘Right’). They have stopped listening to people who disagree with them. As a result, they keep saying the same thing over and over again – largely to each other and their Republican groupies.


I explore this a bit below . . . .


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Our Bogus ‘Debate’ About PSTN Trials.

One of the more common and frustrating problems in Policyland is when a debate over something vital and important gets hijacked for broader agendas. Or, as we call this in Washington, any day of the week on any issue.


Case in point, AT&T’s much debated proposal to do some form of trial or pilot program (or series of same) to move forward as part of AT&T’s plan to upgrade its networks from traditional TDM-based copper to VOIP in some spots and to retire copper in favor of wireless only in other places. This debate over whether to conduct trials has become the proxy war for AT&T and its allies who want carte blanche to move forward with the conversion without much regulatory supervision (and use the conversion to eliminate most regulatory oversight) on the one hand, and those who see the the conversion of the PSTN primarily as a bid by AT&T to eliminate all regulatory oversight on the other.


The problem with the usual fun and games is that, as anyone following the Fire Island Voice Link Debacle should realize, this is much too important to play around with the usual fun and games. This stuff needs to actually work. Meanwhile, FCC Staff, who are actually doing their job, get crapped on by both sides as either standing in the way of progress by moving too slowly or being handmaidens to AT&T for moving at all.


My PK Colleague Jodie Griffen tried to make this point politely a few weeks ago by expressing our disappointment with AT&T’s failure to put forward a substantive detailed proposal, and providing some general principles for what we actually need to see in a real proposal. I am going to be much more blunt: we need to stop dicking around on this. AT&T needs to actually put in a real proposal that passes the laugh test or stop pretending this is an actual effort to gather real information. On the flip side, opponents of AT&T’s deregulatory efforts need to stop thinking that conducting any kind of trial is tantamount to totally deregulating the phone system so it must be resisted at all costs.


More ranting, and the kind of trials I think we need to start doing, below . . . . Continue reading

Verizon Brings FIOS to Fire Island

As regular readers know, Verizon and I have had considerable differences about Verizon’s plan to replace the copper phone network on Fire Island destroyed by Superstorm Sandy. Today, Verizon acknowledged that customers do not find Voice Link an adequate substitute for traditional copper-based phone and DSL. Verizon will deploy FIOS to Fire island by next Memorial Day, offering voice and broadband (but not TV — everyone on Fire Island already has satellite and offering cable programming would seriously drive up the cost). Verizon will continue to offer Voice Link as a less expansive alternative for those who want it.

I’m pleased that Verizon has stepped up and recognized that customers just did not regard Voice Link as a substitute service for a traditional copper line — no matter how much Verizon at first tried to tell them otherwise. I’m also pleased because this is exactly what I asked Verizon to do back in May — replace copper with FIOS and offer Voice Link as a cheaper alternative to those who don’t want to upgrade to fiber. Which leads to the first important lesson from this:  Always Listen To Harold — it will make your life ever so much easier and save us all so much needless wasted time and effort.

In the category of lessons that might actually stick, however, I will note once again how critically important having a state commission providing oversight and the Federal Communications Commission (FCC) providing oversight proved to be. Without these important public forums to provide a focus for these complaints, and without the threat of regulatory backlash, no one would have any reason to believe that customers were unhappy and Verizon could have simply forced them to take whatever it wanted to provide. Instead, people stood up for themselves and forced Verizon to respond.

As we finish the series finale of the summer sitcom That Darned Voice Link, I reflect below on how we all learn some very important lessons . . .

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I Testify at Tomorrow’s Incentive Auction Hearing on Connection between Wireless Auctions and Larry Bird.

I am testifying at this hearing tomorrow at the House Energy and Commerce Subcommittee on Communications and Technology: “So, How’s that Incentive Auction Thing Going?”  You can read a copy of my testimony here. I can guarantee I am the only one to bring up the 1985-86 World Champion Boston Celtics, or ask the question: “What if The Chairmen and the Ranking Members of the committee and subcommittee were real estate developers?”

To elaborate a bit more, my testimony hits the following points:

1. We actually can still design an auction where we (a) get more low-band spectrum licenses for wireless broadband; (b) boost competition by making sure some of those licenses go to someone other than AT&T or Verizon; (c) pay for FirstNet all while (d) actually improving the current availability of unlicensed TV white space (TVWS) aka “super-WiFi” by opening up more TV white space in the urban markets. Oh yeah, and we’ll still have free over-the-air television for them what wants it.

Sounds too good to be true? Weird as it seems, we can for once have some serious wins on all fronts, giving something to everyone and overall improving public policy. We just have to be smart, patient, and work our way through this very complicated puzzle in a transparent process that emphasizes evidence rather than rhetoric.

Yes, you knew there would be a catch, didn’t you.

For those not up to reading my testimony, here is the brief summary of how we get to — if not the Promised Land, at least the ‘pretty decent place to be’ Land.

Step one: Please stop bashing FCC staff for trying to do their jobs.  Srsly. This is not helpful, particularly since your next question is: “why don’t we have more public notices on stuff.”

Step two: Stop refighting the “yes unlicensed” v. “no unlicensed” battle and accept that fact that the statute says “yes unlicensed.” We can find good ways to get enough open spectrum out there to create a national band for unlicensed use that will have significant value for urban and rural broadband (as well as other uses, like machine-to-machine). The FCC should have a workshop and Public Notice on this issue to get the ball rolling.

Step three: We need a “No Piggies Rule” to keep Verizon and AT&T from snarfing all the good spectrum licenses like the did back in’08. Yes, this is legal under the statute. And, while auction revenue is not supposed to be the focus of all this, a “No Piggies Rule” will likely increase auction revenue.

Should be a fun hearing. Remember, you can find livestreaming link on the Committee’s Hearing Page right before things start at 10:30 a.m. July 23.

Stay tuned . . . .

Update: You can see a copy of my opening statement here.

Lessons From The Fire Island Voice Link Debacle — This Is Still A Public Utility And People Really Do Care.

We now have some preliminary data for how much Fire Island customers love Verizon using them as guinea pigs for untested services such as Voice Link. Turns out – surprise! – they totally hate it.


Actually, “hate” understates the matter. Forcing Fire Island residents to take Voice Link ranks up there with Microsoft Vista as “most loathed involuntary ‘upgrade’ from our monopoly provider.” Reaction has been so terrible that it likely will have ripple effects for the broader question of the whole copper-to-wireless conversion.


Which in some ways is a shame, because Voice Link is not intrinsically a bad idea and is not a bad product in and of itself. But a combination of disregarding the inability to support certain features as “not important” and a failure to properly introduce the product into the community has created a serious backlash on Fire Island.


On the plus side for our summer sitcom series That Darned Voice Link, everyone has the opportunity to learn some valuable life lessons to make things better for next time. This is, after all, the typical time in the story arc when everything hits the fan.  But if you learn the right lessons, scrappy little Voice Link can still have a the Montage of Self-Improvement, regain people’s trust, and be a successful replacement product for grouchy old Uncle Copper so he can finally retire in peace.


But seriously, above all else, do not use disaster victims as guinea pigs for your new product. They totally hate that.


More valuable life lessons on a Very Special Episode of That Darn Voice Link below . . .

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