Wetmachine – Page 46 – A group blog on telecom policy, software, science, technology, and writing

Tales of the Sausage Factory:
How Dynamic Is The Mobile Internet Marketplace? Good Question. No, It Really Is A Good Question.

Harold February 22, 2011 February 23, 2011Life In The Sausage Factory, Spectrum, Tales of the Sausage Factory

I’m torn between whether or not to respond to Adam Thierer’s post on this subject at Techliberation. Part of the problem is that I’m not exactly sure what the post is trying to say other than that those of us who doubt that we have what I have previously referred to as GMPBIITGBCGHEGMOTFOTE (“God�s Most Perfect Broadband Infrastructure in The Greatest Best Country God Has Ever Given Man On The Face of the Earth”).� As far as I can tell, the argument goes:

1. This post here shows that lots of cool things happen in wireless.

2. The fact that cool things happen proves we have GMPBIITGBCGHEGMOTFOTE. Since regulation is only warranted if we don’t have GMPBIITGBCGHEGMOTFOTE, and since we obviously have GMPBIITGBCGHEGMOTFOTE, anyone who calls for regulation of anything is a moron.

3. Neener neener.

This is a pretty common mode of analysis here in D.C., give or take a few neeners. It proceeds from what I refer to as the “binary” fallacy, which holds that a market is either “competitive” or “not competitive.” A few more nuanced folks might go so far as to say there is a third category called “not competitive enough.” But as far as I know, I’m the last die hard who thinks this is probably not a terribly relevant question.

More below . . . .

Tales of the Sausage Factory:
Join Me For Lunch and Spectrum Policy At Senate 2-23-11

Harold February 22, 2011 February 22, 2011Spectrum, Tales of the Sausage Factory

Tomorrow, from Noon-1:30 p.m., I will be at the Senate Russell Office Building, Room 253,� as part of this exciting event on spectrum policy. The big draws will be Phil Weiser, Senior Adviser to the National Economic Council, Larry Atlas, Senior Adviser to the NTIA Administrator,� and Ruth Milkman, Chief of the FCC’s Wireless Bureau. Expect them to explain why Obama is so pumped up about wireless. Singing back up will be yr hmbl obdn’t blogger, Michael Calabrese from New America, Paula Boyd from Microsoft, and Rick Whitt from Google.

OK, you have to be totally into spectrum policy — or told by your boss you need to understand spectrum policy — to get as excited about this as I am. But there will be sandwiches.

to RSVP, so you can be sure to get your sandwich, click here.

Stay tuned . . . .

Tales of the Sausage Factory:
I Apologize To CTIA/CEA For Needless and Counterproductive Snark

Harold February 17, 2011 February 17, 2011Spectrum, Tales of the Sausage Factory

As occasionally happens from time to time (indeed, as some might say, more than occasionally), I get worked up about an issue or — even worse — fall in love with my own cleverness and snark and say things that I regret on reflection and need to publicly apologize. Ideally, of course, I would avoid saying such things in the first place and I do not pretend that an after the fact apology somehow makes everything all better. When it does happen, however, the honorable thing to do is make the apology and correction and take my public drubbing.

Which brings me to yesterday’s post about the CTIA/CEA Report projecting $33 bn in revenue from incentive auctions. I stand by my criticism of the report. They do not address how many stations in the top markets need to participate to reclaim the 120 MHz of broadcast spectrum on which they base their estimate and their projected payout to broadcasters is, in my opinion at least, far too low to induce any broadcasters to participate. However, it was needlessly snarky and counterproductive to refer to this as an “infomercial” or otherwise imply deceptive tactics. As I’ve said myself on a number of occasions, we have better and more productive policy debates when we stay focused on the merits and avoid gratuitous insult. That doesn’t mean being all sweetness and light or unduly dry (Lord knows this stuff is dry enough already). But it does mean exercising some restraint and remaining within the bounds of reasonable debate.

As readers know, I dance pretty close to those bounds on a regular basis. That imposes a responsibility to publicly apologize when I cross over it. My apologies to CTIA and CEA, and I have edited the offending post to reflect this.

Stay tuned . . . .

Tales of the Sausage Factory:
Why The White House and CTIA Don’t Agree On Incentive Auction Revenue, And Why I Think Both May Be Wrong.

Harold February 16, 2011 February 17, 2011Spectrum, Tales of the Sausage Factory

The White House budget proposed last week contains an estimate of about $28 billion from auctioning federal spectrum and giving the FCC authority to conduct incentive auctions. �By contrast, the CTIA � The Wireless industry Association — and the Consumer Electronic Association (CEA) have published a study showing that the FCC could raise $33 bn from an incentive auction of the broadcast bands alone. So what gives?

The short answer is that spectrum auctions are extremely hard to predict, and incentive auctions are even harder to predict because we�ve never done one before. The longer answer is that because the White House is banking on the revenue as part of the budget process with real world consequences, they have therefore hedged against uncertainty by including an easier to estimate spectrum auction. CTIA/CEA, have written an advocacy piece. As with all such pieces, it tends to accent the positive. Unfortunately, the Report fails to address some rather pivotal issues, a factor that renders it of rather limited utility for resolving what I consider the most critical question no one has answered: will enough broadcasters participate in a voluntary auction to make it happen at all. It is on this point in particular that I remain profoundly skeptical.

Fair warning, as with all spectrum policy posts, this one tends to run pretty long. Still, I’m hoping the prospect of all that money� will rivet folks as I unpack the �known unknowns,� the �unknown unknowns,� and why I raise a skeptical eyebrow over the CTIA/CEA estimate below .� .� .� .

UPDATE: As I’ve explained here, I’ve edited this article considerably to take out some unwarranted snark on my part against CTIA/CEA.

Tales of the Sausage Factory:
What To Expect From The National Broadband Map.

Harold February 11, 2011 February 11, 2011Life In The Sausage Factory, Tales of the Sausage Factory, The Stimulus Package (ARRA)

Hey everyone, remember the National Broadband Map? As part of the Broadband Stimulus in the American Recover and Reinvestment Act (ARRA), Congress let the National Telecommunications Information Administration (NTIA) use a chunk of money to fund a national broadband map that they had ordered NTIA to create in 2008 as part of the Broadband Data Improvement Act (BDIA). Congress ordered NTIA to finish the project by February 17, 2011. NTIA handed out a chunk of change to make it happen back in 2009, and no one has heard much about it since.

NTIA has now leaked that they plan to release the first iteration of the map on February 17 � the day Congress ordered them to release it. This gives NTIA serious bragging rights at the next social get together with the Federal Communications Commission (FCC). �Yes, we got it done on time.� Asst. Secretary Larry Strickling, head of NTIA will say to FCC Chairman Julius Genachowski over a plate of nachos. �It would have been so awkward to have to ask for a month extension. We spent all our grant money on time as well, despite having to totally invent a multibillion dollar program and a tracking system from scratch. Really, staying on time isn�t that hard. You just need to have a plan. Speaking of which, how goes the National Broadband Plan implementation? Still on track?� At which point Genachowski will smile politely and head off for another mojito.

My predictions for the National Broadband Map below:

Tales of the Sausage Factory:
First Step Reforming FCC’s Universal Service Fund? An Honest Evaluation of the Goals and Trade offs.

Harold February 8, 2011 February 8, 2011Life In The Sausage Factory, Series of Tubes, Tales of the Sausage Factory

The problem of reforming the Universal Service Fund (USF) without Congressional direction means working without clear guidance on what the FCC should, institutionally, hope to achieve. �Broadband!� Is the usual answer from reform proponents. �Basic broadband for everyone! And eliminate waste. And spur investment. And promote innovation. And create jobs. And education. And �� Well, you get the idea.

Listening to the FCC Commissioners at the open meeting, and reading through the released materials, my sense is the FCC has decided that we ought to maximize the number of people who have access to a threshold level of broadband. That�s not necessarily a bad goal. At the same time, the general impact of the proposed reforms favor larger carriers providing minimal service over smaller, local providers that may provide significantly better service.� That may still end up being the best way to maximize �bang for the buck� and may ultimately benefit the largest number of Americans. But if we are going to make that choice, we ought to do it explicitly, and in a way that minimizes the harm to those who did a good job under the old rules. Even better, we ought to consider whether we will really get the broadband bang for the USF buck the FCC appears to expect by reverting to what is, in essence, a return to the universal service model we had under the AT&T monopoly and the Communications Act of 1934 rather than the more locally-oriented model adopted by Congress in the Telecommunications Act of 1996.

Tales of the Sausage Factory:
Can We Please Maintain Perspective, Or “Julius Genachowski Is Not A Death Eater.”

Harold February 3, 2011 January 25, 2012Tales of the Sausage Factory

I do not believe I am writing this blog post. But then, we appear to be living in an age when even the most ridiculous things will be believed –provided it confirms our worst and most cynical expectations.

In the last few days, I have been hearing the most ridiculous rumor, which only grows more lurid in the retelling. It goes like this. After the Comcast/NBC merger was approved, FCC Chairman Julius Genachowski and his staff got together after hours in the Chairman’s office and toasted the merger with champagne. My response to this was “yes, after which they feasted together upon the living hearts of independent programmers and drank their blood from crystal goblets, laughing manically and toasting to evil.” Because really, this is the kind of nonsense I’d expect to see in some over the top made-for-cable movie. So I tweeted: “I am inclined to doubt rumors that Chairman’s staff met w/Comcast lobbyists after merger to become Death Eaters.”

My intent, of course, being to show how ridiculous the Comcast/NBC rumor was. To my surprise, I have now heard that some people seem to think my intent with this tweet was to confirm the rumor!

I find this rather stunning, but perhaps not surprising in the overall zeitgeist of popular culture about DC these days. But it’s important to maintain perspective. There is plenty of room to disagree with how Genachowski is running the FCC, that’s how the policy game works. Nor have I been shy in speaking up when I think Genachowski and the agency have gone off-course and put politics before policy. And while I was relatively pleased with the Comcast/NBC online video conditions, I would much rather have seen Copps’ view prevail and seen the merger rejected. But, as I said repeatedly when the Republicans were running things, that I disagree with someone does not make them a sellout. Really.

So let us please have a bit of a reality check on some of the wilder rumors. But to be clear.

1. Contrary to assertions by the Mubarak government and some protesters, Genachowski is not responsible for fomenting unrest in Egypt through his control of the American media.

2. Genachowski was not really born in Kenya.

3. And no, I do not believe that Genachowski and his staff gathered together in the Chairman’s Office to drink champagne after the Comcast/NBC merger closed. Really.

Stay tuned . . . .

Tales of the Sausage Factory:
Why Did The White House Support Reallocating D Block? It’s Smart Politics.

Harold February 2, 2011 February 2, 2011Life In The Sausage Factory, Spectrum, Tales of the Sausage Factory

The announcement that the White House that it would support reallocating the D Block � the 10 MHz of spectrum left over from big broadcast band auction of 2008 (the 700 MHz Auction) � to public safety use rather than auction it for commercial use defies conventional wisdom on two fronts. First, the National Broadband Plan called for an auction of D block to commercial providers as a means of providing critical spectrum for broadband, using the revenue to fund the construction of the public safety network, and giving public safety access to the rest of the 700 MHz band. Given that the Administration generally supported the FCC�s assessment that we have a looming �spectrum crisis� (although they took no position, until now, on D Block), why pull 10 MHz of prime spectrum ready for auction out of contention? Second, conventional wisdom holds that because of deficit concerns, lust for auction revenue will drive spectrum policy. But the White House not only endorses taking prime spectrum off the market, it wants to spend additionally billions on public safety infrastructure (under the FCC�s original plan, the auction of D Block would fund the build out of an interoperable national public safety network). So what happened?

Tales of the Sausage Factory:
What’s A POTUS SOTU Shout Out On Wireless Worth?

Harold January 26, 2011 January 26, 2011Life In The Sausage Factory, Spectrum, Tales of the Sausage Factory

Last night, the wonkiest corner of telecom policy experienced its 15 picoseconds of fame when President Obama invoked spectrum policy in his State of the Union (SOTU) Address. In nerdness terms, this would be like James Franco and Anne Hathaway pausing before the Best Picture Oscar to announce this year’s Nebula Award for Best Dramatic Presentation.

Needless to say, I am uber-pleased to have the geekiest of Presidents acknowledge the wonkiest of my issues. But does it do any actual good? I explore this below . . . .

Tales of the Sausage Factory:
What the DoJ Documents Tell Us About the Comcast/NBCU Merger

Harold January 24, 2011 January 24, 2011Cable, Life In The Sausage Factory, Media Ownership, Series of Tubes, Tales of the Sausage Factory

In all the hoo ha about the Comcast/NBCU Merger, few folks troubled to read the Department of Justice�Competitive Impact Statement,�Complaint, andConsent Decree. That�s rather unfortunate, as these documents sets forth a straightforward case under the antitrust laws for program access conditions for online competitors and for network neutrality. Here�s the short version:� Comcast pre-merger makes almost 30 times more money from providing cable service than from programming revenues. Even adding all of NBCU�s revenue, Comcast will still make more than twice as much from selling cable service ($34 billion) as from programming ($16.9 billion). Anyone who can do basic arithmetic would therefore conclude that yes, Comcast�s incentive to protect its cable business from erosion by online distributors (or even from traditional rivals) outweighs the potential gain from increasing programming distribution. As an added bonus, for those ideologically committed to believing otherwise, turns out Comcast�s own documents agree with the simple arithmetic and not the fun theoretical models their experts submitted. Which is why (among other reasons) DoJ continued oversight is not merely something extra. It really matters.

Lets break this out some below �