Tales of the Sausage Factory

An insider’s view of the media hegemony

Tell Hollywood “Thou Shalt Not Put A Stumbling Block Before The [WIPO Treaty For The] Blind!”

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Thou shalt not curse the deaf, nor put a stumbling-block before the blind, but thou shalt fear thy God: I am the LORD. — Lev. 19:14

In a few weeks, the 186 governments that are members of the World Intellectual Property Organization (WIPO) will gather in Morocco with the goal of ratifying the Treaty For The Blind – an agreement that would facilitate global production and lending of audio books and otherwise enable the visually impaired and those with certain learning disabilities to have access to printed material and visual works.  But last minute lobbying by Hollywood and publishing interests in the U.S. and Europe have threatened to derail the Treaty for the Blind at the last minute. Despite previously expressing support for the Treaty in the past, the Obama Administration is — surprise! — wavering in its support.

Why would the Obama Administration, or anyone else for that matter, throw the blind under the bus in favor of Hollywood and the rest of the IP Mafia, especially when the laws of the United States already comply — or go beyond — what the new Treaty for the Blind would require? Perhaps this Biblical verse can provide an answer:

Do not take [campaign contributions from corporations and trade associations] for [campaign contributions from corporations and trade associations] blind the eyes of the wise and twist the words of the righteous. Deut. 16:19

As we all know now from long experience, the Obama Administration can do the right thing when they get pushed hard enough. So remind the Administration: Thou shalt not put a stumbling block before the [Treaty for the] Blind. Please sign this We The People Petition telling the Obama Administration to side with the blind, not Hollywood and the rest of IP Mafia.

Click Here To Sign Petition

More details  below . . .

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Commissioner Pai: A ‘Consensus’ Of Incumbents Without Consumers Is No Consensus And means Disaster For 600 MHz.

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Last week, the Federal Communications Commission (FCC) Wireless Bureau issued what should have been a fairly routine and highly technical Public Notice about possible alternative band plans for the 600 MHz Auction aka the Incentive Auction aka “that incredibly crazy, complicated deal Congress came up with last year where broadcasters sell back licenses to the FCC so the FCC can sell them to wireless companies.” Since public comment makes it clear that the various proposals present a lot of challenges (see my incredibly long and wonky explanation here), it shouldn’t surprise anyone that the Wireless Bureau asked for further comment after holding a band plan workshop a few weeks ago.

 

But Commissioner Pai issued a separate statement blasting the Wireless Bureau. In particular, Pai berated the Bureau for departing from what he called the “consensus framework” for one particular band plan – the band plan favored by AT&T, Verizon, the National Association of Broadcasters (NAB) and the largest equipment manufacturers. Pai ignored objections to the AT&/VZ/NAB plan and support from consumer groups (including Public Knowledge), competitors such as Sprint, or tech companies such as Microsoft. Over and over in his statement, Pai cited to the comments of AT&T, Verizon and NAB as proof of a “broad consensus” as if none of these objections existed.

As someone fairly active in this proceeding, who actually participated in the Band Plan Workshop, I am more than a little peeved. Yoo hoo! Commissioner Paaaaiiiiii!!! What am I, chopped liver? I am also more than a little irked at the allegations that the Bureau somehow behaved improperly in issuing the Public Notice. Pai’s accusation that the PN violates the Bureau’s delegated authority by soliciting comment on alternatives to the AT&T/VZ/NAB “consensus plan” appears designed to bully the Bureau into submission.

Setting my personal pique aside, as I keep trying to explain, letting the broadcasters and the largest wireless incumbents write the rules for the auction spells absolute disaster. If Pai genuinely wants to see a successful Incentive Auction, that means looking past industry “consensus” and getting into the very nasty and complicated details to figure out the right set of tradeoffs that will (a) get the broadcasters and wireless guys to the auction, but (b) not let them short the U.S. Treasury out of the cash it expects to collect in the process.

I vent and take one more shot at explaining this below . . . .

 

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Associated Press is shocked –SHOCKED — To Discover Government Cannot Be Trusted With Power to Spy

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Dutch explorer and author Arthur Wichmann summed up the history of bungled exploration attempts of New Guinea with the phrase “Nothing learned, everything forgotten.”

I find myself thinking of this phrase in light of the revelations that the Department of Justice (DoJ) asked for, and got, two-months of phone and data records for Associated Press reporters. DoJ apparently asked for the data because it wanted to find the source of a leak that the Administration foiled an Al-Qeda plot. According to sources, the AP apparently sat on the story for several days to protect the lives of U.S. agents, but balked at further delay so the Administration could break the news itself in a press conference. AP accuses the DoJ of abusing its surveillance powers to punish AP for raining on its parade. Verizon apparently turned over the information with nary a quiver or question.

The Administration denies any knowledge of DoJ’s actions, it also denies any comparisons to Nixon, saying: “People who make these kinds of comparisons need to check their history.”

Actually, a bunch of us do and did. Which is why I say “nothing learned, everything forgotten.”

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Briefly on Bitcoin — There Is Nothing New Under The Sun.

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After lurking around for some years, Bitcoin has become quite the buzz. For those fortunate enough to have avoided Bitcoin mania to date, Bitcoin is a digital currency, best explained by Stephen Colbert. It has certain qualities that make it attractive to some people. Specifically, it is not associated with any government, and the algorithm that generates Bitcoin creates a preprogrammed number that cannot be increased faster than they can be “mined.”

Bitcoin appears to have reached the tipping point where enough people treat it as a currency to raise some questions about its future as a currency rather than a fad. In addition to online trading, we now have what might be the first Bitcoin exchange floor in meatspace.  An increasing number of people and businesses are willing to take Bitcoin as payment for transactions. Needless to say, this has generated great excitement among some and yawns among others. Some fret that Bitcoin has become a new way for money launderers, drug dealers, and other unsavory characters to engage in illegal transactions untraceably. Others celebrate Bitcoin as the realization of the Libertarian dream of divorcing money from government.

I fall into the yawn category. Back in 2006, we briefly had a similar buzz around the artificial currencies used in massively multiplayer online roleplaying games (MMORGs). Second Life was going to replace real life, news organizations were setting up “Second Life Bureaus,” and Congress actually held hearings on whether to find some way to tax the transactions in imaginary worlds. In a post I wrote back then called “Keep Azeroth Tax Free,”  I observed that existing tax law already did the job quite nicely. Imaginary currencies and transactions that stayed within the game and had no impact on the real world stayed imaginary. Transactions impacting the real world, such as selling game-based artifacts for cash or converting game currency to traditional government-backed currency, were already captured by existing regulations.

The U.S. Treasury has now conducted a similar analysis for Bitcoin, and come to the same conclusion. Addressing laws that regulate money transfer service, the Treasury  explained in this advisory memo that existing law already addresses virtual currencies. If the transfer is convertible into real money or other value, then it is a money transfer. If the exchange is to facilitate a “bona fide sale” (e.g., I exchange Bitcoin for real goods or services), then it is a sale and not a money transfer. If all it does is swap virtual currencies, no one cares.

In other words, virtual currency does not create an exciting new loophole to engage in illegal transactions or escape taxes — which should be the limit of what policy cares about. To the extent Bitcoin may teach folks that money is simply a medium of exchange and that there is nothing magic about, say, gold or other precious metals — well and good. To the extent Bitcoin crashes and takes down unwary investors — sucks to be them. For all that Bitcoin may create excitement in a subset of the tech set, it is fairly boring from a policy perspective. Hopefully it will stay that way.

Stay tuned . . .

First Reactions To The FCC’s 600 MHz Band Plan Workshop.

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I was pleased to participate in the FCC’s 600 MHz auction (aka the Incentive Auction) band plan workshop last Friday. This was a pretty intense nerd-fest, with discussion limited as much as possible to real honest-to-God technical issues that arise with the band plan. While I knew some of this, the full scope of the problems associated with developing a band plan for this auction had not truly become clear to me until I sat through about 6 hours of technical discussion on the subject.

My biggest take away from this is that about the only way to get a rational bandplan on this is to go back in time to 1996 and tell Congress not to stop at Channel 51, but to clear all the way to Channel 37. Then, we go ahead to 2002, and tell Congress not to require the FCC to hold the first 700 MHz auction so we can actually com up with a rational band plan ion 2007. Given that I am unlikely to find either a souped-up DeLorean or a blue police box anytime soon, we are probably stuck with the existing constraints.

Most importantly, all the people yapping about how the FCC needs to focus on getting the maximum amount of spectrum to maximize revenue, please review this workshop before you open your yaps again. Srsly.

I explain why people who seriously care about the auction outcomes — even if it is only from a revenue maximization perspective — need to actually care about the technical issues before blathering on about recovering the most spectrum below . . . .

 

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Would Tom Wheeler Really Have Approved The AT&T/T-Mo Merger? Why I don’t Think So.

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After weeks of speculation, it now appears certain that President Obama will nominate Thomas Wheeler to replace Julius Genachowski as Chair of the Federal Communications Commission (FCC), with Commissioner Mignon Clyburn to serve as acting until Wheeler’s nomination gets confirmed by the Senate. In recent weeks, Wheeler’s background as a lobbyist many years ago for first the cable industry and then the wireless industry have raised concerns that Wheeler remains more sympathetic to business interests than the public interest. As anyone who has read Public Knowledge’s official statement in response to the nomination can see, while we understand those concerns, we agree with many other public interest colleagues who think that Wheeler has an independent perspective and an open mind. Certainly we will have disagreements with the new Chairman (assuming Wheeler is confirmed), but we expect that Wheeler will actively work to promote competition and protect consumers.

 

Yeah, I know, that sounds like either wishful thinking or Washington insider talk. So allow me to explain my line of reasoning (since, unlike a number of other Wheeler supporters, I actually don’t know Wheeler at all). In particular, I want to tackle the current “Tom Wheeler would have approved the AT&T/T-Mobile merger in 2011.” It’s easy to say “oh, all that lobbying for the cable and wireless industry was long ago when they were scrappy upstarts. Why, that was so long ago that the cable industry were battling the broadcasters and the wireless industry were battling the telcos (as opposed to these days when the cable industry battles the telcos and the wireless industry battles the broadcasters)!” But if Wheeler was actually a supporter of AT&T/T-Mo, then it would seem to prove he still has sympathies to his old industry incumbent comrades.

 

I examine the People v. Tom Wheeler in the matter of AT&T/T-Mo below . . .

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Google Fiber and the Next Stage In The Evolution of T. GOOG

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Back in 2007, when Google was suddenly interested in the 700 MHz auction and everyone was speculating whether or not Google planned to enter the wireless business (and if so how badly it would fail), I wrote this piece about Google’s behavior.

As I explained in the intro:

“Unless you own a cat, or have a bizarre interest in parasite-induced behavioral changes, odds are good you never heard of a critter called toxoplasma gondii (or “T. Gondii” to its friends). This little protozoa lives a complex lifestyle. In its immature phase, it can live in any mammal. But to reach the mature stage and reproduce, it must get into a cat. It does this by the expedient of reversing the usual aversion mice have to cats. A mouse infected by T. Gondii will find the odor of cat a powerful attraction and, on spotting a cat, will rush out to challenge the cat instead of hiding. As a result, the cat eats the mouse and the T. Gondii gets on with its reproductive business.

“I find myself regarding this as a very apt analogy for Google and its interest in wireless. Google has no real interest in becoming a network provider. Sure, it has dabbled a bit in broadband over power lines (BPL) and muniwireless, but nothing major. But this summer, Google got told in no uncertain terms that if it wanted access to the wireless world, the only way to get it was to win licenses and set up its own network.

“Google, of course, still doesn’t want to have to build a network. So it has adopted the strategy of our friend T. Gondii. Modify the behavior of someone else to make your life easier. I don’t regard this as “bad” or “freeloading” or “evil” anymore than I regard T. Gondii as evil. A protozoa (or a profit maximizing firm) has to do what a protozoa (or profit maximizing firm) has to do.”

And didn’t Google do just that? Without owning a network, Google is now happily embedded within the mobile world. And all the mobile companies, that swore in 2007 they would fight to the death to keep their platforms closed and that disruptive Google out, out OUT! plan a good portion of their lifecycle around Google’s Android operating system and Google mobile applications. Even its arch-rival Apple discovered it couldn’t displace Google Maps and get Google entirely off the platform.

Some years back, when Google announced their plans for a fiber network, I predicted that Google had similar intentions. Google did not intend to become a major network operator, if it could help it. But it needed to do something to get the landline mice, particularly cable, to start servicing us consumer cats better so that T. GOOG could get into our guts and alter our behavior better. Three years later, with recent announcements of Google expanding to Austin and Provo, I think it’s time to check in on how our favorite behavior-altering parasite is doing.

More below . . . .

 

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Is Fear of Wireless Foreclosure “Speculative?” Depends. Is this About Intent Or Effect?

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Recently, the Antitrust Division of the Department of Justice  (DOJ) filed these comments with the Federal Communications Commission (FCC) in the proceeding on spectrum aggregation limits (aka spectrum screen v. spectrum cap). The DOJ comments have some good stuff about the economics of the wireless industry and competition (in a theoretical way), and about why it is important to make sure potential competitors have spectrum, particularly low-band spectrum. Mostly, DOJ’s argument rests on the idea of “foreclosure,” that a wireless firm will bid on licenses at auction just to keep them out of the hands of competitors.

Asked about this on a recent earnings call, VZ CFO Fran Shammo basically said that there is no evidence that Verizon is bidding on licenses just to keep them out of the hands of rivals, so DOJ’s argument is “theoretical” and the FCC should not adopt any limits.

VZ basically argues that we should not worry about possible foreclosure unless there is evidence of an actual intent to foreclose. This treats a spectrum screen (and concern about foreclosure) as a precaution against bad actors. As long as bidding on licenses at auction makes sense for reasons other than foreclosure, and there is no evidence of any intent to foreclose, then everything should be just fine even if the outcome has the same effect as a foreclosure strategy (e.g., competitors don’t have enough spectrum to offer viable competing services.)

But the Communications Act does not work this way. Specifically, Section 309(j)(3)(B). Whether Verizon (or any other carrier’s) intent is as pure as the driven snow, or black as any comic opera villain, does not matter one iota. What matters is whether we avoid a “concentration of licenses” and “disseminate licenses among a wide variety of applicants” so that we “promot[e] economic opportunity and competition and ensur[e] that new and innovative technologies are readily accessible to the American people.”

As I will discuss below, the evidence from the 700 MHz auction and subsequent transactions demonstrates that we are feeling the effects of foreclosure, regardless of whether there was an actual intent to foreclose. As a result, the DOJ concern is not “theoretical,” but very real.

 

More below . . .

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The Right Cell Phone Policy In Boston.

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The Associated Press reported that cell phone service had been shut down in Boston in the aftermath of today’s tragic Boston Marathon bombing. Happily, this report — sourced to an anonymous official — appears to be mistaken. Verizon and Sprint report that their networks are overwhelmed by the sudden spike in volume (common after a sudden disaster) but they have not been asked to suspend service and are in fact looking to increase capacity.

It is times like this when we remember exactly how dependent we are on cell phones, and why suspending cell service in an emergency like this (as happened with the BART nearly 2 years ago) is such a phenomenally bad idea. As a legal matter, the legality of law enforcement asking for a shut down of local cell service is much stronger than in the BART case. This is, arguably, the “ticking bomb” scenario that arguably justifies a brief shut down to protect lives. But the odds against a terrorist using a cell phone to detonate a follow up device after a shut off order are fairly low (terrorists try to coordinate, the explosions fairly closely, as we saw in Boston, and generally don’t like to rely on cell phones because they are not sufficiently reliable for this purpose).

As we are seeing in action, cell phones become the best anti-panic technology deployable at times like these. Everyone is calmer when they can stay in touch with family and loved ones, or receive updates from the authorities. Every “I’m fine” texted to a frantic relative is one less person tying up the information hotline or — even worse — going out to search. Indeed, with about 35% of people now without any landline service, cutting cell service would isolate about a third of people at just the moment they need to stay in contact. And while I have no information on how people are contacting the tip line, I would imagine that many are doing so with the most convenient phone available — their mobile phone.

The event also highlights the vital contribution of open WiFi hotspots as a furthering communication. At a time like this, every single means of communication comes into play. This is what I mean when I talk about the reliability that comes from redundancy. The ability to shift among networks can cut down on congestion and facilitate communication by public safety authorities. If we deployed mobile hot spots as well as cells on wheels (COWs), we could have substantial impact on the congestion situation. Something to think about as part of overall emergency preparedness. Because, sadly, there will be a next time. And when it comes, we will need to remember that we want to enhance communication and the flow of information and avoid congestion wherever possible.

Last summer, my colleagues at Public Knowledge and a number of other public interest organizations wrote these comments to the Federal Communications Commission (FCC) on why shutting down cell phone service for any extended period would be a very bad idea and probably a violation of law. (See also my colleague Sherwin Siy’s blog post here. The tragic events in Boston demonstrate once again how critical mobile phone service have become to all of us in a disaster, and what a terrible mistake it would be if local officials actually did shut down cell service at a time like this.

(I used to watch the Marathon go by on Heartbreak Hill (Commonwealth Ave, well back from the finish line). I was one of those frantically texting and posting status updates asking if family and friends were safe. I’ve been grateful for every response.)

 

Stay tuned . . . .

Will Walden Wipe Out DMCA and CISPA To Take Out Net Neutrality In The Name of “Internet Freedom?”

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Today, the House Energy and Commerce Subcommittee on Communications and Technology will begin mark up of the so-called “Internet Freedom Bill.” As explained in the Majority Briefing Memo, we’re still on about that whole “the ITU will take control of the Internet and black helicopters will come for out name servers” thing.”  Unfortunately, as keeps happening with this, it looks like some folks want to hijack what should be a show of unity to promote their own partisan domestic agenda. Specifically, does the bill as worded undercut the (by accident or design) the Federal Communications Commission’s (FCC) authority to do things like Network Neutrality?

 

As I elaborate below, however, this is not so much a stab at net neutrality and the FCC generally as it is a murder/suicide. You can’t claim that this clips the wings of the FCC to do net neutrality by making a law that the U.S. is opposed to “government control” of the Internet without also eliminating laws that deal with cybersecurity, copyright enforcement online, privacy, and a range of other stuff that are just as much “government control” of the Internet — but that most Republicans opposed to net neutrality actually like. Plus, as I noted last week when discussing the rural call completion problem, taking the FCC out of the equation may have some unforseen nasty consequences that even Republicans might not like.

 

More below . . . .

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