Tales of the Sausage Factory:
FCC Loses It’s Muni Broadband Test Case. What Comes Next?

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Sometimes the law is clear. Sometimes it isn’t.

 

While that seems obvious, we often miss it in policy debates. But it is rather important to keep in mind when reading Tennessee v. FCC. In a case released August 10, the Sixth Circuit reversed the Federal Communications Commission (FCC) 2015 Order preempting restrictions the state of Tennessee and the state of North Carolina imposed on their municipalities with regard to providing broadband service. While Commissioners Pai and O’Reilly are certainly entitled to their victory laps, it is equally important to applaud Chairman Wheeler and Commissioners Rosenworcel and Clyburn for doing what they believed was both the right policy and the right call under the law. The petitions from the City of Wilson, NC and from the Electric Power Board of Chattanooga, TN raised novel questions of law. The FCC’s Order was a test case. On a very narrow and murky legal question, the FCC majority bet wrong — at least according to the 6th Circuit.

 

For myself, not surprisingly, I thought the FCC majority had the better argument. But I can’t say the Sixth Circuit was utterly wrong in holding the contrary. The limits of the Tenth Amendment and preemption power are generally unclear. The interpretation of Section 706 (47 U.S.C. 1302) as providing authority to the FCC remains relatively undefined. Based on the language in the dissent in Verizon v. FCC, which inspired munibroadband proponents to bring the petition and support the case, it looked like a good shot. Similarly, the facts of the case — already existing munibroadband providers, clear demand for them to expand their services, a willingness to expand service but for the relevant state laws restricting service — made this a favorable fact pattern.

 

Unfortunately, sometimes the best bet in the world doesn’t pay off. But that is why people bring test cases — to try to resolve questions in the law that move policy in the direction those bringing the case favor. It is neither an overreach nor illegal for Petitioners to bring test cases, to have an agency resolve them, and for the agency and those who brought the petition to the agency to defend them in court. To the contrary, this is how the rule of law works under the principles of the common law.

 

I stress this point because whether you bring conservative test cases to challenge laws and test limits or progressive cases to challenge laws and test limits — or cases that don’t easily fit in the conservative/progressive paradigm — we want agencies to actually address these cases in a timely fashion. As I remarked many years ago, when the FCC’s efforts to encourage competition in the 700 MHz auction resulted in a mixed result, we need  agencies to be willing to actually address novel circumstances and try new things because otherwise the law will ossify and we lose one of the most important elements of administrative law, the ability of an agency to respond to changing circumstances and provide a suitable record for Congressional action where necessary.

 

Bellow, I give a brief recap of the case and a forecast on what comes next for the muni broadband movement . . .

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Tales of the Sausage Factory:
NCTA Shocked — SHOCKED! — to Discover Ex Parte Process At FCC.

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Every now and then, I am reminded that the cable news networks such as Fox and MSNBC are members of NCTA. But seeing this recent blog post reminded me. While faux outrage and hypocrisy are hardly rare in Policyland, you rarely find this level of self-righteous sanctimony outside of cable news.

 

As some folks may recall, I recently opined that AT&T choosing to sulk like Achilles in his tent rather than engage meaningfully in the ongoing rulemaking process. NCTA — which also opposes the BDS proceeding and has adopted the same strategy of acting like a disappointed 6 year old — chooses to deliberately misconstrue this as something other than the FCC’s standard, open ex parte process. What magnifies this almost to the level of self-parody is that NCTA is engaged in exactly this behavior on set-top boxes (STBs), where it has popped out with a sudden alternative #ditchthebox to the FCC’s #unlockthebox proposal.

 

In all cases, of course, NCTA paradoxically insists that any refusal to negotiate around their proposals is somehow a sign that the FCC has impermissibly pre-decided. But if the FCC considers anyone else’s response to their proposals, or engages with stakeholders outside of the comment and/or reply comment period, it is a “smoke filled room.”

 

Mind you, hypocrisy and faux outrage are pretty standard stock in trade for NCTA, as I’ve noted before. But for those who don’t follow how the Sausage Gets Made here in Telecomland, I provide a review of the relevant process below. For the tl;dr version. Let me just quote NCTA’s own blog post:

 

“First, it’s jaw-droppingly hard to conceive that an advocate who has consistently complained about the “ILEC monopoly” in the BDS market for more than a decade would suggest that the biggest ILEC should join the second biggest ILEC in negotiating a regulatory regime that raises obstacles to emerging competitors.”

 

I couldn’t have said it better myself. It is rather jaw droppingly hard to conceive that I have suddenly abandoned all principles and advocacy of the last 15 years to behave as NCTA suggests. That ought to suggest to folk genuinely interested that NCTA has chosen to knowingly and willfully utterly misinterpreted what I said. Likewise, it is rather “jaw-droppingly” obvious that NCTA has no more interest in promoting transparency than it does in letting go of its monopoly control over set-top boxes.

 

A bit more about how FCC processes actually work, and what I meant (and continue to mean) when I call on stakeholders and the public to continue to actively engage, below . . . .

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Tales of the Sausage Factory:
The FCC Sets the Ground Rules For Shutting Down The Phone System — And Sets the Stage For Universal Broadband.

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Here’s the funny thing about the world. The two Orders the FCC will vote on tomorrow (Thursday, July 14) probably have more impact on the future of our communications infrastructure than the Title II reclassification of broadband. But like most momentous things in technology, no one notices because they are technical and everyone’s eyes glaze over.

 

In particular, no one notices the sleep inducing and incredibly vaguely named item “Technology Transitions,” we are talking about the conclusion of a 4 year proceeding on how to shut down the legacy phone system and move all our national communications platforms to a mix of digital platforms. That does not mean we’re getting rid of copper and going to all fiber (a common misconception). In fact, in many communities, the old copper lines might get pulled out and replaced with wireless technologies (what we call wire-to-wireless transition). Those who still remember when Verizon tried this after Super Storm Sandy on Fire Island will understand why so many of us wanted to make sure we have an organized transition with quality control and federal oversight.

 

But most people don’t remember this anymore. And, if you are not one of the 60 million or so people (mostly rural, poor or elderly) who still depends on the traditional copper line telephone, you may wonder what this has to do with your life. The short answer is: the old phone system still provides the backbone of our communications system of shiny digital thingies we take for granted. The old copper line phone system is also the workhorse of most ATMs, retail cash registers, and thousands of other things we take for granted every day. Why? Because the old copper line network has been around forever. It’s an open system everyone can – by law – plug into and no one ever imagined would go away.

 

But even more important for the future of our communications infrastructure – the Federal Communications Commission made this a values driven transition. In a bipartisan unanimous 5-0 vote back in January 2014, the FCC rejected the idea of making the Tech Transition a “get out of regulation free zone” and adopted four basic principles to guide the transition: Universal Access, Competition, Consumer Protection and Public Safety.

 

As a result, for once, for once, we actually have a chance to prevent the inequality before it happens. It took 100 years, but if there is one thing Americans took for granted, it was that we all had the same phone system and could all communicate with each other on equal terms. The rules the FCC adopts will make it possible to preserve this principle of universal access. Because this network forms the backbone of the broadband network, if we work together and don’t blow it, we can achieve the same success with broadband that we achieved with basic telephone service.

 

I dig into this below . . .

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Tales of the Sausage Factory:
AT&T’s BDS Hissy Fit Is Bad Strategy.

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Hell hath no fury like an ILEC scorned. So it is perhaps no surprise that AT&T has decided to heap much scorn on Verizon for playing smart and flipping sides on the debate on how to improve regulation of the Business Data Serve (BDS), nee special access. While perhaps understandable from an emotional perspective, this response is — to use a techncial legal phrase — silly. Worse, taken to its logical extreme, it has the same corrosive effect on rulemaking as the accusation of “flip flopping” has on politics. We keep saying we want people to actually negotiate and look for compromises that reflect the changing reality. But when someone actually says “OK, you know what, lets recognize that reality isn’t so black and white as people make it out and we should look for a workable compromise,” then everyone is like “Flip Flopper! How can we possibly take you seriously now that you will no longer fight to the death!”

 

As I explain below, AT&T (and other ILECs) would gain much more by joining Verizon in negotiating for a transition away from the ILEC monopoly on the high capacity data circuit to a more competitive market structure. Rather than throwing a hissy fit, AT&T should embrace its usual path of shrewd negotiation . . .

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Tales of the Sausage Factory:
Free Internet Is NOT For Porn — And Isn’t Broadband Access

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As some folks may have heard, New York City has begun a really awesome project in free broadband access with it’s LinkNYC program. NYC is replacing no longer used pay phone kiosks with free WiFi access points (and an available interface built into the kiosk for those who cannot afford a smart device).

 

In a surprise to no one but the bright eyed innocents who set up the program, homeless people followed the advice of Avenue Q and decided that the Internet was indeed really really great — for porn. On the plus side, this certainly silenced those critics of the program who alleged that LinkNYC would only serve rich tourists. On the downside, the sight of the unwashed whacking hordes gathering around WiFi access points like pigeons clustered around lonely people with breadcrumbs on Central Park benches was not exactly the “proof of concept” the City hoped to get. So, once again to no one’s surprise, LinkNYC decided to install filters to block porn sites.

 

 

As has been the case since we first started debating Internet blocking in 2008, some folks raise the argument that net neutrality will prevent people from blocking porn sites. I testified on this back in 2008 at the FCC’s open hearing at Stanford University when folks claimed that if Comcast couldn’t block file-swapping sites it couldn’t block porn. Naturally, it also got debated in the lead up to the 2010 Open Internet Order and the 2015 Open Internet Order. So it’s not like we never thought of this before and it’s not like we don’t know the answer: free access sites can block porn (or otherwise filter) no problem. Indeed, as others have observed in the past, free access sites (like coffee houses or libraries) do not count as broadband Internet access providers and free Internet access is not Title II broadband Internet access service (BIAS).

 

Why? See below . . .

 

UPDATE: LinkNYC made this reply to my post through their official twitter account.

 

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Tales of the Sausage Factory:
Broadband Privacy Can Prevent Discrimination, The Case of Cable One and FICO Scores.

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The FCC has an ongoing proceeding to apply Section 222 (47 U.S.C. 222) to broadband. For those unfamiliar with the statute, Section 222 prohibits a provider of a “telecommunications service” from either disclosing information collected from a customer without a customer’s consent, or from using the information for something other than providing the telecom service. While most of us think this generally means advertising, it means a heck of a lot more than that — as illustrated by this tidbit from Cable One.

 

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Tales of the Sausage Factory:
How DSRC Makes Us Less Safe: Privacy and Cybersecurity (Part 1)

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As I discussed previously, the auto industry and the Department of Transportation (DoT) via the National Highway Traffic Safety Administration (NHTSA) plan to mandate that every new car include a technology called “Dedicated Short Range Communication” (DSRC), a device that talks to every other car with a DSRC unit (something called “vehicle-2-vehicle” or “v2v” communication). The auto industry fully supports this mandate, which is surprising (since industries rarely like mandates) until you (a) read this report by Michael Calabrese showing how the the auto industry hopes to monetize this with new services and harvesting your personal information (while piously claiming the mantle of saving lives); and, (b) the mandate helps DoT and the auto industry avoid sharing the spectrum with potential unlicensed uses (which actually do contribute to saving lives, but I will save that for latter).

 

As it happens, in addition to being a full time spectrum nut, I spend a fair amount of time these days on privacy, with just a touch of cybersecurity. So I started to dig into the privacy and cybersecurity implications of mandating DSRC on every car. My conclusion, as I discuss below, is that the DSRC mandate as it now stands is a disaster for both cybersecurity in cars and for privacy.

 

Yes, NHTSA addresses both privacy and cybersecurity in its 2014 Research Report on DSRC in terms of evaluating potential risks and solicited comment on these issues in their “Advanced Notice of Proposed Rulemaking” (ANPRM). It is in no small part from reading these documents that I conclude that either:

(a) NHTSA does not know what it is talking about; or,

(b) NHTSA does not actually care about privacy and cybersecurity; or,

(c) NHTSA is much more interested in helping the auto industry spectrum squat and doesn’t care if doing so actually makes people less safe; or,

(d) Some combination of all of the above.

 

As for the auto industry and its commitment to privacy and cybersecurity, I will simply refer to this report from Senator Markey issued in February 2015 (and utterly unrelated to DSRC), find that the auto industry (a) remained extremely vulnerable to cyberattacks and infiltration by hackers; (b) the auto industry had no organized capability to deal with this threat; and, (c) the auto industry routinely collected all kinds of information from cars without following basic notice obligations, providing meaningful opt out, or adequately protecting the information collected. (You can read this article summing up the report rather nicely.) For those who think the auto industry has no doubt improved in the last year, I refer you to this PSA from the FBI issued in March 2016 on vulnerabilities of cars to hacking.

 

I note that these remain problems regardless of whether the FCC permits sharing in the band, although it does call into question why anyone would mandate DSRC rather than rely on the much more secure and privacy friendly technologies already on the market — like car radar and LIDAR systems. But if the auto industry and NHTSA insist on making us less safe by mandating DSRC, the FCC is going to need to impose some serious service rules on the spectrum to protect cybersecurity and privacy the way they did with location data for mobile 911.

 

And, just to make things even more exciting, as explained in last week’s letter from the auto industry, GM is rushing out a pre-standard DSRC unit in its 2017 model cars. Because which is more important? Creating facts on the ground to help the auto industry squat on the spectrum, or making sure that DSRC units installed in cars are actually secure? Based on past history of the auto industry in the cybersecurity space, this is not a hard decision. For GM, at least, spectrum squatting rules, cybersecurity drools.

 

On the plus side, if you ever wanted to live through a cool science fiction scenario where all the cars on the highway get turned into homicidal killing machines by some mad hacker baddy, the NHTSA mandate for DSRC makes that a much more likely reality. In fact, it’s kinda like this Doctor Who episode. And lets face it, who wouldn’t want to drive in a car controlled by Sontarans? So, trade offs.

 

I explain all this in detail below . . . .

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Tales of the Sausage Factory:
Auto Industry Crosses The Line on 5.9 GHz By Using Dead Pedestrians To Justify Spectrum Squatting.

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For the last 3 years, the auto industry and the Department of Transportation (DoT) have been at war with the open spectrum community of 75 MHz of spectrum up at 5.9 GHz. I will save the longer history for an upcoming “Insanely Long Field Guide To the 5.9 GHz Proceeding” post.  For now, it is enough to know that, as we enter the last few months of the Obama Administration, the auto industry and DoT have been doing everything they can to run out the clock and wait for this FCC to go away, hoping the next FCC will not be as interested in opening spectrum for sharing. You can read the history of 3 years of bad faith and bait and switch in this filing here. You can read the auto industries most recent insistence on testing that will take us well past the end of the Obama Administration here.

 

So far so normal. This is how spectrum politics works. Incumbents pay lip service to the idea of spectrum sharing, stress the awful terrible things that will happen if the FCC allows the new entrant to operate and cause interference, and insists on an endless series of tests while dragging their feet on anything that would make testing possible. The new entrant, meanwhile, complains bitterly about how the other side are stalling, the interference claims are baseless, and hundreds of billions of dollars in economic benefits are lost as the delay continues.  With the final months ticking down, both sides are now ratcheting up their efforts. Last week, PK, a number of our other spectrum public interest allies (OTI, PK, SHLB) and industry folks (Intel, MS, NCTA, WISPA) sent a letter to the President asking the White House to weigh in at DoT and tell them to stop helping the auto industry stall testing so we can open the spectrum to more unlicensed goodness. Yesterday, the auto industry sent its response.

 

And yesterday, the auto industry finally crossed a line on common decency that just pisses me off.

 

It is one thing to claim that your technology saves lives and that if the FCC doesn’t do what you want, people will die. It is another thing to knowingly and deliberately invoke actual, real dead pedestrians and dead cyclists you know damned well your proposed technology could not conceivably save  in an effort to support your own spectrum squatting. It is even worse when the technology you are pushing, “dedicated short-range communication” (DSRC), would replace the actual existing collision avoidance system you are deploying today that would save cyclists and pedestrians — car radar and sensing systems that use unlicensed spectrum and LIDAR.

 

 

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Tales of the Sausage Factory:
Cable Set-Top Box Arguments: Nothing But Reruns

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It is inevitable that right before a major filing on an issue that the cable guys HATE!!! with all the passion of an injured monopolist, the we see a flurry of distracting nonsense designed to fuzzle the FCC, generate bad trade press, stoke the wholly-owned subsidiaries in Congress, and provide more material for the chanting cheerleader chorus. You may remember this from 2014’s: “Net Neutrality — The FCC Is Totally Gonna Lose On Banning Paid Prioritization,” and its 2015 Sequel: “No Wait, We Were Totally Lying Last Time, Banning Paid Prioritization is Cool But The FCC Is Totally Gonna Lose on Title II.”

 

Meanwhile, Comcast steps up with some “deal” that supposedly totally solves the problem they say doesn’t exist anyway so now there is no reason to do anything. In net neutrality, that was “look, we cut a deal with Netflix so you don’t need that silly old net neutrality.”

 

So it is no surprise that in 2016 we see another rerun. With comments on the FCC’s wildly popular (outside the Beltway) #unlockthebox rulemaking going on, aka the “Expanding Consumer’s Video Navigation Choices” proceeding due tomorrow, the cable industry has run true to form. Yesterday, Comcast announced it would make an ap available to Roku to let consumers stream Comcast content (under Comcast’s licensing terms, subject to Comcast control, and only to those Comcast finds sufficiently non-threatening). The fact that Comcast was messing around with the HBO Go ap on Playstation just last year  has not stopped the usual chorus of useful idiots from chanting hosannah’s of praise and declaring the problem solved. (Hopefully I will get to deal with everything wrong with the ap approach in a future post. But the short version is: “swapping one thing Comcast controls for something else Comcast controls is not “solving the problem.”)

 

But perhaps more importantly, we now come to the inevitable second act of this  well worn cable rerun. The press call headed by NCTA CEO Michael Powell with a panel of high power corporate lawyers who will trot out the same arguments they always do on why the FCC is totally gonna lose. I am eternally mystified why anyone takes this seriously because Duh, what else do you expect the cable guys to say? “Oh yeah, we don’t have a legal leg to stand on and the FCC is totally going to win. Damn, I knew I shouldn’t have drunk that bottle labeled Veritaserum!”

Nevertheless, for some reason, pronouncements by lawyers paid to make such pronouncements seem to have some mind clouding effect which not only makes people forget all the previous times these people have made exactly the same prediction, but forget the actual FCC detailed refutation of these arguments in the notice of proposed rulemaking. So once again, we here at Tales of the Sausage Factory will play the part of the annoying little dog exposing the man behind the curtain while everyone else trembles at the Great and Powerful Oz — played here by NCTA CEO Michael Powell.

 

Curtain pulled back bellow . . .

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Inventing the Future:
Ben’s Social VR Adventure

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There are lots of old and new VR sites with prognostications. This guest blog from a VCpreneur has four “requirements” for social VR, and it sparked some discussion at our office.

It reads to me very much like this investor fellow might be talking with some startup that features his four points, and he just wants to sort out whether the concepts are sticky. I’m imagining a company that uses Facebook for login, uploads your 2D and 3D albums and videos into your 3D space (which is zero-install via WebVR), lets you and your friends like/share from in-world, and folks that click on those shared things in Facebook get brought into your 3D space at the corresponding item. (I pitched such a thing five years ago as “Beyond My Wall”, using the Unity browser plugin instead of WebVR.)

One of the blogger’s “requirements” was that participants use their real-world identity, and this was what interested our gang, both for and against. I think this is a red herring. Although I use my real name online alot, my gut is that an alwful lot of VR is going to be about sex, and folks won’t want to use their real name. But overall, I don’t think it’s killer one way or the other. I’m guessing that he’s trying to turn the limitation of Facebook-login into a feature called real-world identity, and I think it’s a stretch. There’s clearly a lot of things that went into making Facebook win over MySpace, and I’m not persuaded that that real-world identity is the magic ingredient. Indeed, both Twitter and his other example, Youtube, are both counterexamples. I think real-world identity can be a part of many potentially successful killer apps, but I don’t see it being required for all such killer apps. (I think verified identity, whether real-world or not, will be a great service for High Fidelity to offer, but it won’t be required for everything.)

I do think he’s on the right track, though, with his feature set including pre-established friend links and content-sharing. But I’m not sure the guy has really understood why those two things matter or what they are part of. They feed the virality of a lot of social media winners, but the magic is in the viral math, not specifically in the features. For example, “pre-established friends” is helpful, but not necessary for Twitter, Youtube, or EBay. I think that each one of a Facebook liked-story, Twitter hashtag, Ebay auction, and Youtube video/discussion page forms a micro-community of interest with a specific “address” that can iself be shared out-of-band. Each user can and does “belong” to many such micro-communities. I believe that’s the real driver for virtuous-circle virality. High Fidelity is going to be great for this, because anyone can easily create any number of separate, persistent, domains of interest, and each one can have the computation shared by the people who are interested in it. (Our upcoming Beta makes it easy to organize one domain per user’s computer, which I think is a good initial model.) Nothing else I’ve seen (not even Beyond My Wall) can scale like that. This is so very different from social VR startups that offer even a large number of hosted chat rooms.

Of course, none of this is to say what is interesting about any of these domains. That is a separate – and more important – question that remains. The blog (and this response) are about what qualities are necessary, given something interesting, for it to catch on.

Separately, the comment from DiGiCT was interesting, that the huge numbers of Chinese HMD sold are just a series of upgrades to very bad/cheap/unsatisfying units. I wonder if that’s true.