Tales of the Sausage Factory:
Senator Durbin Consults With the People

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Tonight, and for the next several days, Senator Richard Durbin (D-Il), the #2 man in the Senate, is conducting an experiment in direct democracy and taking a bit of a risk. He will spend the next week in real time blogging over potential legislation. No carefully crafted “town meeting” or managed event, and no showing up as a walrus a la Second Life. Just a chance for people to actually hash out issues with someone who will vote on these things in the Senate.

Here is a reprint of the announcement. I will add that I will be participating as a featured blogger as part of the debate on wireless policy and munibroadband on Thursday night.

Stay tuned . . . .

Starting this Tuesday evening, July 24 and each evening this week at 7pm EST on OpenLeft.com, Senator Durbin and his staff will blog nightly on a broad swath of broadband policy issues. Based on this discussion, the Senator wants to attempt to write legislation this session. Each evening kicks off with discussion from individuals who have worked a long time on the topic of the evening, but the intent is to spur broader comment from as many as is possible. This is no meaningless exercise: it is a genuine attempt to try to open up the legislative process. All input matters in a very real way.

I’ve attached below links to the letter announcing the initiative as well as the schedule for the week. Please feel free to share it with those you think might be interested in taking part. It is my hope that those who care deeply about these issues will blog about it, point folks to our discussion, and comment themselves. We’ll also be scouring the web for other places that related discussion happens this week, so if you blog about it, please let me know so we can follow where discussion goes on your site too.

I hope you’ll join us and help to get the word out. Please feel free to contact me with any questions.

Press release: http://durbin.senate.gov/record.cfm?id=279504
Open Letter: http://www.openleft.com/showDiary.do?diaryId=318

Inventing the Future:
Can you smell the logic?

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I was petting a cat this week. She was smiling and arching her back and obviously enjoying being alive. Then she suddenly turned and started licking herself, after which she repositioned her neck back under my hand. I realized then that cats don’t “decide” to clean themselves. How do they keep track of which spot needs cleaning? Now? A cat’s skin must have some distributed chemical mechanism that causes particular areas to itch on some approximate schedule.

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My Thoughts Exactly:
Jet Blue and me

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I live on the island of Martha’s Vineyard, which is served by Cape Air. Cape Air owns planes that seat nine passengers.

I fly to San Francisco airport (“SFO”) on business about eight times a year. I’m making this post from a lonely hotel room 7 miles from SFO right now, as a matter of fact.

Often I fly to Boston on Cape Air, & then catch a flight from Boston to SFO (although sometimes I take the boat & then drive or take the bus to Boston). I’ve taken about 8 round trips between Boston and California on Jet Blue in the last 2 years.

Recently Jet Blue did two things that greatly increased their attractiveness to me when booking my round-trip flights Boston/SFO: they partnered up with Cape Air to make it easier to book flights and check baggage, and they initiated direct service from Boston to SFO (until recently I had to fly into San Jose or Oakland if I wanted to take Jet Blue).

Their prices are good, their airplanes are clean and comfortable, they offer a lot of legroom (which is very important to me, as I’m 6’3″), and they have nifty in-flight TV. So while I have never been a crazy JetBlue fanboy, I have certainly been willing to give them my business.

Alas, no more.

As Google can tell anybody who’s interested, JetBlue has decided to cast its lot with Bill O’Reilly and the radical right.

Good for them. Let them spend their dollars as they see fit. As will I.

Unless and until Jet Blue changes its policy, I’ve taken my last flight with them. It should be interesting to see how their kowtowing to the radical right plays out. Who knows, it may be a money-making decision for them. That would surprise and sadden me, but stranger things have happened. I would suspect that demand for seats on their Boston-SFO routes will go down, but maybe not enough so they’ll notice. In any event, they’ve pissed on me and mine, so they can kiss my travel dollars goodbye.

So it goes.

Tales of the Sausage Factory:
700 MHz Endgame: Martin Antes. AT&T Raises. Google Calls. Does AT&T Fold or Call?

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So yesterday, AT&T was extolling the virtues of the Martin plan. Among its virtues, Jim Ciconni included:

In effect, Chairman Martin’s plan faces Google and others with a “put up or shut up” opportunity. If they are serious, they will be able to bid and test their model in the marketplace against the business models of companies already enjoying widespread consumer acceptance.

Critically, Ciconni was referring to the “reserve price” feature of the Martin plan. To protect himself against the threat that even his device only open access would depress auction revenues, if the 22 MHz “C” block did not fetch at least $4.6 billion in bids, the FCC would cancel that part of the auction, split the 22 MHz int two 11 MHz blocks, and reauction without conditions. (Reserve prices are not uncommon in spectrum auctions, although as far as I know they have never been tied to a specific condition.)

So today, Google’s Eric Schmidt called Ciconni’s raise. In a letter to Chairman Martin, Schmidt committed to bidding a minimum of $4.6 for the “C” Block — but only if the Commission adopts all “four opens” that Google demanded in its letter last week and endorsed by the public interest coalition, Frontline, and a bunch of others. That means not just real device attachment and open application rules, but also real wholesale obligations at non-discriminatory prices. (You can find Google’s blog post explaining their letter here.)

The fear that Google would not bid no matter what, or that only one or two companies would bid on a license with wholesale open access conditions, has been one of the central features of the debate. Even ardent believers in real open access like Commissioner Adelstein have expressed real concerns over this. And, as I have noted previously, AT&T and its various sock puppets and Republican subsidiaries have used the threat of messing with the revenues as a major weapon against wholesale open access.

In a stroke, the Google letter changes the nature of the game. Google has now guaranteed that the feds will make their auction projections — but only if they include real open access. Meanwhile, rumors swirl that it may be AT&T, rather than Google, that sits this auction out. Suddenly, we switch from “will including wholesale open access keep out bidders and lower the revenue” to “will not including wholesale open access keep out needed bidders and drive down revenue.”

Meanwhile, the clocks ticks toward deadline. What does it mean? What happens next? And will I ever get a vacation this summer?

See below . . . .

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Tales of the Sausage Factory:
700 MHz Endgame: AT&T Reverses Course So Fast It Gets Whiplash

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AT&T did a full reverse thrust on Martin’s proposed open access plan. According to this USA Today piece, Jim Cicconi, Senior Executive Vice President for Public Policy at AT&T, has nothing but praise for the genius of Kevin Martin and the utter perfection of his proposed 700 MHz band plan with “open access-lite”. No, seriously, that Solomon Guy was a moron compared to Kevin Martin and the clever way he has cut this spectrum baby in half. Further, to hear Cicconi sing it, he cannot imagine why anyone would think that AT&T was threatening to sue the Commission if it implemented this wonderful, perfect, glorious plan that the genius that is Kevin Martin has brought down from Heaven after spending 40 days and 40 nights reading the docket.

So, in the last two weeks, we have seen: AT&T hint that it will bid even if there is a wholesale open access condition, followed by AT&T bactracking without actually denying they would bid, followed by AT&T breathing fire and threatening lawsuits if the FCC adopts the “Google plan” of full wholesale open access. Now, a mere week later, AT&T loves the Martin plan and can’t imagine how anyone could have thought otherwise.

I hope the AT&T Deathstar has good shock absorbers, or they are going to have serious whiplash from all these radical course reversals.

But I know y’all don’t come here just to see me mock incumbents (although I like to think of that as an added service). The big question that everyone wants to know is WHAT THE HECK IS GOING ON AT AT&T? Sadly, short of sneaking some veritaserum into Jim Ciconni’s coffee, there is no way to tell for sure. But I provide some guesses, theories, and speculations on the implications for the 700 MHz Endgame below…..

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Tales of the Sausage Factory:
Comcast Morally Outraged That America Channel Adjusts Business Model to FCC Rules. Cats outraged when mice fight back.

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Some of you may recall The America Channel and their efforts to blow the whistle on Comcast’s exercise of market power in the cable programming world. As part of resolution of the Adelphia transaction, the Commission declined to provide any specific relief for The America Channel. They did promise to have a general rulemaking on the carriage complaint process (whereby independent programmers complain that cable operators have illegally discriminated against them) and the leased access process (whereby independents can lease access to the cable system) (a proceeding the Commission announced last month). The Commission also created special protection for regional sports networks (RSNs) so that Comcast could not do unto others as they did unto Mid-Atlantic Sports Network. As part of the FCC’s order approving the Adelphia transaction, a regional sports network can demand carriage on Comcast or Time Warner, and can require that an arbitrator resolve the cost issues.

TAC, seeing that it would get nowhere with its old programming idea, proceeded to reinvent itself as a regional sports network. It has deals with a number of NCAA Division I schools — particularly for the less popular women’s sports, which it will bring to the various regions the schools are in. TAC will pay for the production costs but will not pay for the games themselves, a reversal of the usual royalty agreement I understand. TAC has gotten carriage on cable overbuilder RCN, provided TAC can reach the critical mass of carriage on other providers to achieve viability.

So how’s that working out, and what will the FCC do? More below . . . .

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Tales of the Sausage Factory:
700 MHz Endgame: Has AT&T Asked Bush to Put Thumb On Scale?

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Unsurprisingly, in the swirl of folks around this week’s House Commerce “iPhone” Hearing, rumors and gossip about the 700 MHz Endgame abounded. In the nasty-but-sadly-believable category comes a rumor that the Bells have asked (through a wholly owned subsidiary in the House) for the Office of Management and Budget (OMB) to do a “study” on whether any open access condition (of any definition) or other incumbent restriction (such as the spectrum caps urged by the Public Interest Spectrum Coalition) will depress auction revenue.

To those who know how these things usually work, the first question is “Why Ask OMB and not the Congressional Budget Office (CBO) or the Congressional Research Service (CRS), which usually do this sort of thing?” And to those of us who have lived through the last 6 years of an Administration that spells “research” P-R-O-P-O-G-A-N-D-A will cynically answer, “because that way the telcos can make sure they get the ‘right’ result.” Unlike CBO or CRS, which are under the control of Congress and generally take their research pretty seriously, OMB is directly under the control of the Bush administration.

Man, Telco spying for NSA is just the gift that keeps on giving. First the Bush Justice Department behaves like a nice little lap doggie and rolls over and plays dead for AT&T buying BellSouth. Then Bush tried to give the Bells retroactive immunity for what they did. Now, according to rumor, Bush will help the telcos rig the auction to keep the status quo.

Some needed background and why the oft-repeated idea that open access will automatically reduce auction revenue is a load of nonsense below . . . .

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