Tales of the Sausage Factory:
The 700 MHz Endgame Part II: Assessing the Martin Offer and Manuevering Room for Replies

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In part I, I wrote about Martin’s carefull PR blitz to frame the 700 MHz endgame. But its important to look at the substance of Martin’s draft order itself. Because, as always, Martin is damn clever, and has put stuff in there that is bloody tempting to go for the compromise. To keep this manageable, I will limit my discussion here to just assessing the rumored offer and how I think we could improve it, keeping in mind that this is just press reports and really doesn’t cover the panoply of issues. In Part III, I will provide my Field Guide for the Endgame, reminiscent of my original Impossibly Long Field Guide from April (how much things have changed in 3 months).

Assessment below . . . .

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Tales of the Sausage Factory:
700 MHz Endgame Part I: Martin Tries To Redefine “Open Access” With A PR Offensive

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Martin has opened the endgame on the 700 MHz auction rules with some strategic press leaks to frame the debate and the circulation of his draft Order. According to USA Today and The Wall Street Journal, Martin’s draft proposes including a network attachment/wireless Cartefone rule on two blocks (the “C” and “D” blocks). At the same time, Martin is redefining “open access” to mean network attachment/wireless Cartefone (the issue popularized by Tim Wu with the help of the iPhone) rather than the wholesale obligation pushed by Frontline and the Public Interest Spectrum Coalition (PISC).

What makes Martin’s proposal particularly problematic is that it does actually do some good on issues I (and other folks in spectrum and media reform) care deeply about. It does represent a step forward. But it represents such a baby step, and deferred so far into the future, that it becomes useless for the near term (as Google argued in this recent filing (worthy of a post of its own)) and may actually take the pressure off the FCC to do something real like grant the Skype Petition or do something real on Network Neutrality.

Still, it presents a real challenge for the Democratic Commissioners as they enter into negotiations. Do they hang tough and risk losing everything on a 3-2 partyline vote? Do they accept a compromise, recognizing the political risk?

Worse for the Ds (and supporters of open access generally), the pressure from Congress has gone fairly hard against wholesale open access in recent days. The Republicans in the Senate and the House have bombarded the FCC with letters against wholesale open access. While some Ds (notably Kerry) have supported real open access, the Dem leadership and most Ds have remained on the sidelines. Still, tomorrow’s House Commerce Committee Hearing on Wireless Innovation will offer Democratic leaders to weigh in — if they so desire.

This Is long, so I am going to break it up into a couple of posts. First, the difference between Martin Open Access and Real Open Access . . . .

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Tales of the Sausage Factory:
David Weinberger's Excellent Piece On Structural Separation

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Despite the efforts to make common carriage and structural separation of wholesale and retail services a forbidden topic of discussion (go read the piece Greg Rose and I wrote last year on how industry rationalizes policy by controlling the debate), the old and highly successful idea of structural separation for carriers continues to undergo a significant revival. For starters, the Europeans have recently embraced structural separation as a policy goal, and have consequently begun kicking our rear ends in broadband speed, price and overall adoption. For another, some of us do not forget that structural separation used to be the law under the Computer Proceedings, and that this old form of open access is what gave us the internet in the first place. Finally, the argument advanced that simply because we have more providers in the market, the underlying rationale for structural separation goes away, as always struck me as poor policy driven by ideology.

I am pleased to see that David Weinberg has now written this excellent piece on structural separation. This marks the second internet “thought leader” to offer well-written and challenging pieces pleading the case of structural separation, the first being David Isenberg’s Making Network Neutrality Sustainable. Both these authors make the case for the next logical step in the Network Neutrality fight — going back to a set of rules that will prevent the network operators from interfering with the content that flows over the network by altering the economic incentives of the carriers.

Not surprisingly, we can anticipate two responses, the standard antiregulatory response (“Regulation is bad, hmmmmmmKay….Cause, if you do the regulation, then, that’d be government, and big government is bad, hmmmmmmKay….so regulation is bad, hmmmmmKay……”) and the economic response about how such a scheme destroys producer incentives so networks don’t get built. The chief problem with the producer incentive argument, however, is that the empirical evidence in Europe and Asia appears to prove the opposite case: a combination of structural separation and government subsidy facilitates deployment and maximizes incentives and revenue throughout the value chain, while focusing strictly on incentives for core network providers (e.g., the AT&T’s and Comcasts of the world) produces inferior results by every metric other than network operator profits.

My key takeaway here is that we continue to see a revitalized public policy debate that moves beyond the timid counsels of the edge-based industry players who define their “ask” in terms of what the incumbents have defined as possible, and despite every effort by the incumbents and their supporters to convince the broader public that “network neutrality” is dead and lawmakers should not worry their pretty little heads about it. Yes, we are in a legislative lull at the moment, as the public policy pendulum swings away from the incumbents and towards a more aggressive public policy more in line with the broadband success stories of Europe and Asia. But as Weinberg and Isenberg have shown, the public education and public debate remains quiet lively and continues to advance.

Stay tuned . . . .

My Thoughts Exactly:
“Come to Glasgow. . .”

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My mother grew up in Renton, on the banks of Loch Lomond. During the Clydeside Blitz she was in an Anderson shelter, tending to her younger brothers and sisters and doing her homework. Later during the war she was a telephone operator in Glasgow. Although I’ve never been to Scotland, I’ve always considered myself kind of a Glaswegian-by-proxy. My mother, grandmother, and all my aunts and uncles on my mother’s side all grew up within 15 miles of Glasgow, and the Glaswegian patter sounds natural to me.

So take a listen to Glaswegian John Smeaton on why and how he subdued one of the jerks who tried to blow up Glasgow airport. It’s poetry. “Glasga doesn’t accept this. This is Glasgow. We’ll set about ye.”

Those Scots are some tough hombres. Like Mr. Smeaton said, The British people have been through worse than this, and they stand proud. I only wish my late Uncles John and Tommy could have seen this. How they would have laughed, and how they would have loved to raise a pint in his honor.

Tales of the Sausage Factory:
The Value of Diversity, Or, Lessons of a Canadian Folksinger to the US Supreme Court.

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The Surpreme Court has now ruled by 5-4 that school districts cannot use race as a means of determining placement to maintain integrated class rooms. Unsurprisingly, the four of the Court’s “Conservative” wing (Scalia, Thomas, Roberts, and Alito) believe that any race conscious consideration by government is intrinsically harmful and would overturn the 2003 decision in Grutter v. Bollinger that upheld the use of race as one of several factors to promote diversity in higher education. (Technically, Roberts only goes so far as narrowing Grutter‘s holding to higher education, but it amounts to the same thing.) Kennedy, the eternal swing vote, still affirms that diversity (including racial and gender diversity) is an important value that the government can support, without really indicating how the school systems can do so.

Reflections on the fallacy of “color blindness,” and how a completely unrelated folksong by the Canadian folksinger Heather Dale makes the point about the need for diversity and role models more eloquently than I ever could, below…

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Tales of the Sausage Factory:
Blogswarm against Theocracy: I know What I Have To Lose

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So here I am, a nice Jewish Boy whose faith provides a critical motivation for media advocacy, and who believes that the Bible has critical lessons to teach us on social justice and effective advocacy, participating in this year’s Blogswarm Against Theorcracy.

Why? Because as a student of history, I know how much I have to lose.

A bit of philosophical musing below . . . .

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My Thoughts Exactly:
Libby communtation == obstruction of justice

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Bush is a liar and a coward and a presumptive monarch; Cheney is a traitor who gives aid and comfort to the enemies of the United States of America. And Libby is their soldier, a made man, a capo de regime with a sharp knife.

I have nothing original to say on this subject, but do want to go on the record.

Another day with traitors at the helm of the ship of state and too many of my compatriots cool with that. Oh well. Maybe the congress will step up and do what they’re there for; act as if they’re worthy of the countless “last full measures of devotion” that preserved the institution they now inhabit.

But I’m not going to bet on it.

Tales of the Sausage Factory:
Open Access Gains Another Convert, AT&T Denies Poisition Change

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A brief update on my recent post that AT&T recently conceded it might consider bidding on an open access license. Unsurprisingly, Frontline Wireless — the party pushing for the “E Block” public safety/open access network — filed a copy with the Commission stating that this proves that an E Block auction would attract bidders and that the business model is workable. In response, according to today’s (6/29) Communications Daily an AT&T spokesperson said: “Our position has not changed. As we’ve stated on the record at the FCC, mandated ‘open access’ conditions on licenses in the 700 MHz band should be rejected. We need to see the specific rules the FCC adopts for auction before determining our level of participation.”

The carefull reader will note that these statements are not inconsistent. Of course AT&T would prefer not to have open access, and — at the drop of a hat — will explain why open access is an unworkable awful idea and you should ignore all the evidence from Europe or from the U.S. until we abolished open access in 2005. But there is a huge difference between “we hate open access and think it’s a bad idea” and “we absolutely refuse to bid on a license with an open access condition and nobody else with any money would bid either.” Given that the most potent argument against open access from a political perspective is “don’t mess with the revenue” (as evidenced by the recent Op Ed in the Washington Post by two CTIA lobbyists wearing their “think tank” hats), proof that folks other than Frontline will even show up to bid (and folks with deep pockets at that) on an open access license is rather significant.

Meanwhile, open access for the 700 MHz auction continues to attract new supporters from different sectors of the industry. Northop Grumman, rather a heavy-weight in the equipment manufacture and public saftey/defense contracting world, filed this document supporting open access and explaining that yes, you really can construct a secure public safety network that shares spectrum with an open access commercial network. So much for “it will never work, it’s too hard, lets stick to what we’ve always done.”

In addition, the Frontline cover letter on the submission that introduced the “Well Connected” post with the AT&T interview stated that Citibank had made a presentation to the Commission “last week” explaining that open access is a workable business model. Annoyingly, I can find no record of this presentation in the record for Docket 06-150, but I may just be missing it (it is a pretty big docket). (UPDATE: My thanks to Susan Crawford for pointing me to the appropriate ex parte filing.)

But assuming that Frontline accurately describes a presentation that took place, we now have:

1) A statement by a major financial investor that open access is an attractive and workable model from a business perspective;

2) A statement by a major equipment manufacturer and network operator that commercial open access — even in the more complicated universe of a dual use public safety network — is technologically feasible;

3) A statement by a major incumbent that it would at least “look at” bidding on an open access license if the Commission adopts such a rule;

4) Statements by wireless equipment and wireless application providers that there is a desperate need for open access in the wireless world and in the provision of broadband services generally;

5) Over 250,000 individuals saying the status quo sucks and we want open networks and new providers.

On the other side, we have the entire incumbent industry and its usual cheer leading section chanting that everything is vibrantly competitive, we live in the best of all possible worlds, everything works perfectly and competitively, and even thinking “open access” too loudly will scare away bidders and reduce revenue to a fraction of the expected $10-15 billion. And besides, open access can’t possibly work either on the business side or the technical side.

And all the while, the clock ticks away, as everyone scrambles to get this done before the end of the summer.

Stay tuned . . . .