Tales of the Sausage Factory:
Hurricane Michael A Wake Up Call On Why Total Dereg of Telecom A Very Bad Idea.

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Readers of Harry Potter should be familiar with Cornelius Fudge, the Minister of Magic who refuses to believe Voldemort will return because believing that would require taking precautions and generally upsetting lots of powerful and important people. Instead of preparing for Voldemort’s return, Fudge runs a smear campaign to discredit Potter and Dumbledore, delaying the Wizarding World from preparing to resist Voldemort until too late.

 

I was reminded of this when I read Federal Communications Commission (FCC) Chairman Ajit Pai’s statement of frustration with the slow pace of restoring communications in the Florida in the wake of Hurricane Michael. Pai explicitly echoes similar sentiments of Florida Governor Rick Scott, that carriers are not moving quickly enough to restore vital communications services. Pai is calling on carriers not to charge customers for October and to allow customers to switch to rival carriers without early termination fees.

 

What neither Pai nor Scott mention is their own roll in creating this sorry state of affairs. Their radical deregulation of the telephone industry, despite the lessons of previous natural disasters such as Hurricane Sandy, guaranteed that providers would chose to cut costs and increase profits rather than invest in hardening networks or emergency preparedness. That is how markets actually work in the real world (as opposed to in the delightful dereg fantasy land dreamed up by hired economists). But rather than take precautions that might annoy or upset powerful special interests, they chose to mock the warnings as the panic of “Chicken Little, Ducky Lucky and Loosey Goosey proclaiming that the sky was falling.”

 

Now, however, the Chicken Littles come home to roost and, as predicted, private market incentives have not prompted carriers to prepare adequately for a massive natural disaster. This result was not only predictable, it was predicted — and mocked. So now, like Cornelius Fudge, Chairman Pai and Governor Scott find themselves confronted with the disaster scenario they stubbornly refused to believe in or safeguard against. And while I do not expect this to change Pai’s mind, this ought to be a wake up call to the 37 states that have eliminated direct regulatory oversight of their communications industry that they might want to reconsider.

 

Still, as Public Knowledge is both suing the FCC to reverse its November 2017 deregulation Order, and has Petitioned the FCC to reconsider its June 2018 further deregulation Order, perhaps the FCC will take this opportunity to rethink the certainty with which it proclaimed that carrier’s have so much incentive to keep their customers that they would never cut corners and risk service going down. Or perhaps Congress will now pay attention and decide that their constituents need enforceable rights and real protections rather than promises and platitudes.

 

I provide a lot more detail below.

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Tales of the Sausage Factory:
The FCC Decides Rural America Has Too Many Broadband Options, So They Are Taking Away 5G Spectrum To Give To The Big Guys.

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The FCC is about to take spectrum away from rural providers and we are making a last minute effort to stop it. Last week, my employer Public Knowledge sent a letter to FCC Chairman Ajit Pai asking him to change the draft Order altering the rules for the “Citizen’s Broadband Radio Service” (CBRS) to keep several of the old rules in place. Specifically, we want the FCC to keep at least some license areas at census tract size, rather than making them bigger and therefore unaffordable for small providers like wireless ISPs (WISPs). We also want the FCC to keep “use or share,” a rule that says that if the licensee is not using a piece of their license area it becomes open for general use on an unlicensed basis until the licensee actually starts using it. We’re also asking the FCC to leave the license terms at 3 years with no expectation it will be renewed (that is to say, it gets re-auctioned at the end of 3 years) rather than go to 10-year terms with an expectation of renewal. Finally, if the FCC is going to change the terms of the licenses as proposed, they need to have some meaningful build out obligations to ensure that rural areas get served.

 

I explain all this below, as well as linking to this nifty tool so you can contact your member of Congress and ask them to tell the FCC to leave rural America some useful spectrum so those who actually want to serve rural America can do so.

More below . . . .

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Tales of the Sausage Factory:
The Upcoming IPAWS “Presidential Level Alert” Test Is Not A Trump Thing — Really.

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There is a bunch of hysteria running rampant about the September 20, 2018 test of the “Presidential Level Alert” functionality of the Wireless Emergency Alert System (WEA), which is part of the Integrated Public Alert Warning System (IPAWS).  (See FEMA Notice of Alert Here.) The thrust of the concerns is that Fearless Leader is creating a propaganda system that can blast through all cell phones and no one can opt out.

 

I ask everyone to please calm down. The fact that it is called a “Presidential Alert” has nothing to do with Trump. This all goes back to The Warning, Alert, Response Network Act (WARN Act) of 2006 (and tweaked by the Integrated Public Alert and Warning System Act of 2015).  That Act required that we integrate the old Emergency Alert System (EAS) which is on broadcast and cable with a newly created wireless emergency alert system (WEA) so that we could take advantage of the emerging communications technology (texting in 2006, broadened in 2015) to warn people in advance of disasters.

 

Most emergency alerts are local. Indeed, the primary challenge of EAS and WEA in the last few years has been focused on trying to get as narrowly targeted and hyper-local as possible, so that people who are not impacted don’t receive false alerts, while people who are impacted receive real-time instructions. There is also a long term element about incorporating new technologies capable of handling multi-lingual warnings (and not just Spanish) and other potentially life saving capabilities (such as locating the nearest evacuation shelter).

 

However, one element is the creation of an integrated national emergency alert system in the highly unlikely event that we might have some kind of national level disaster that requires immediate real-time communication of one set of instructions on a national basis. Prior to the WARN Act, such as capacity did not exist. It has now been developed, but it has never been tested on a national basis before. The test of this capability was scheduled for September 20, 2018 well before Hurricane Florence became a concern.

 

This absolutely has nothing to do with Trump. The WARN Act mandates that while users may opt out of other alerts, they may not opt out of  “Presidential Level Alerts.” This was decided way back in 2006, when Congress determined that people should not be able to opt out of anything so important that it triggers a nation-wide alert (although, annoyingly, they did give wireless carriers freedom to opt out of WEA entirely, which tells you a lot about the priorities of Congress back in 2006). See WARN Act Sec. 602 (b)(2)(E). This was not a choice by the Trump Administration. Nor can the current FCC allow people to opt out of “Presidential Level Alerts.” It’s in the WARN ACT of 2006.

 

The IPAWS Act of 2015 (Sec. 526(d)) further limits IPAWS (including Presidential Level Alerts) to messages relating to “natural disaster, act of terrorism, or other man-made disaster or threat to public safety.) And while it is entirely possible for President Trump to decide that generating support for his reelection campaign relates to either and act of terrorism or other man-made disaster, that still wouldn’t be enough to switch on IPAWS. As with many things, the request goes down the chain of command, with lots of safeguards along the way to prevent abuse of the system. Remember, this was modified back in 2015 by Republican Senator Ron Johnson when Republicans were convinced Obama was an evil socialist Kenyan out to destroy our way of life. You can bet they they put safeties in place.

 

So please, please stop spreading rumors about this. Please stop treating this as more evidence of Trump overreach with all kinds of possible sinister motives. The President can’t just press a button to send out a text. And while a determined President with enough effort can abuse any system, this is not something Trump can just decide to do with his morning Tweets.

 

We have enough real craziness going on in the world. We do not need to encourage people to freak out about a routine test of life-saving technology, or portray it as an abuse of authority or diversion of funds.

 

FULL DISCLOSURE: I was asked during the Obama Administration to apply to the FEMA IPAWS subcommittee to act as a consumer/privacy advocate (See IPAWS Act of 2015 (b)(2)(I)(IX)). My admission was not formally processed and approved until 2017. I have been an active member of the FEMA-NAC-IPAWS for approximately the last two years. This statement is entirely my own. It does not represent a statement of the FEMA-NAC-IPAWS or any other advisory committee or federal agency. This is just me asking people to stop panicking and resist the urge to see everything in the administration as an abuse of authority. Yes, the times warrant scrutiny. But there is a difference between laudable skepticism and scrutiny v. panic and conspiracy theory.

 

Stay tuned . . . .

Tales of the Sausage Factory:
Verizon California Throttling Mistake Shows How Radical Pai’s Repeal Order Really Was.

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Congress created the Federal Communications Commission (FCC) in order to ensure we would have working communications infrastructure for, among other things, handling public safety. It says so right up front in Section 1 of the Communications Act. This critical authority has allowed the FCC to do things like impose 911 obligations on VOIP providers before Congress got around to it, and even set up the original High Cost and Lifeline Programs before Congress got around to it. So you would think that when Verizon throttled the Santa Clara Fire Department’s mobile broadband connection for coordinating response to the Mendocino Complex Fire — the largest wildfire in California history — that the FCC would naturally be all over it.

 

The vast and mighty silence you hear is the utter lack of response by the FCC — for the simple reason that last December the FCC utterly, completely and totally divested itself of all authority over broadband. This was, as I and others pointed out at the time, utterly, completely and totally unprecedented. Regardless of classification, every single FCC chairman prior to Ajit Pai asserted authority over broadband to prevent exactly this kind of disaster. Under Michael Powell and Kevin Martin it would be under Title I ancillary authority. Under Julius Genachowski and Tom Wheeler (prior to reclassifying broadband as Title II in February 2015), it would have been under Section 706. Under Ajit Pai — bupkis.

 

Which leaves us with a major problem. How the heck do we stop this (and other potential failures of our broadband infrastructure) from happening again when the agency Congress actually directed to handle this has decided to abdicate its responsibility entirely? I have been preaching for nearly 10 years now that Title II authority over broadband is absolutely necessary to protect and manage our critical communications infrastructure. As I keep saying, this goes way beyond net neutrality. As broadband becomes integrated into everything in our lives – including public safety – there needs to be someone other than a group of unaccountable private companies looking out for the public interest. Because, as this event demonstrates, we are not just talking about ‘Netflix and cat videos’ or about ‘innovation’ or any of the other industry deflections. We are talking about stuff that literally impacts people’s lives. According to this report from NPR, the Verizon incident occurred just at the moment firefighters were deploying to stop the Mendocino Complex Fire. It’s impossible to determine just how much this screwed things up and whether the fire could have been better contained at the outset if throttling hadn’t knocked out their entire command-and-control for hours at the outset. But it is certainly safe to say that the first few hours of organizing to contain a wildfire are critical, and having your ISP throttle your command center broadband connection down to effectively useless is like trying to organize a parade while wearing a blindfold, earplugs and a gag over your mouth.

 

Happily, we have an easy answer to the question of “how do we make sure someone is responsible from preventing these kinds of screw ups going forward.” Congress needs to vote the CRA and force the FCC to take back authority for broadband. Or, if you’re California and don’t like seeing your state literally go up in flames while on hold with customer support, then you need to pass SB 822 — the California net neutrality bill. Anything else is literally fiddling around while California burns.

 

Lots more below . . .

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Tales of the Sausage Factory:
I Take the #CallYourRep4TheNet Challenge, and You Can Too!

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My buddies at Free Press are running a challenge to get people to call their Member of Congress to support the Congressional Resolution Act of Disapproval (CRA) to repeal the FCC Order eliminating net neutrality rules (more info here). You can find out more about #CallYourRep4TheNet Karaoke Challenge here.

I was tagged by Free Press’ Candace Clement. So here is my contribution. I’m posting the lyrics below the fold. If you can’t think of your own lyrics for the #CallYourRep4TheNet Challenge, feel free to steal use these. Creative Commons attribution license on the lyrics. Music is copyright to Disney. Given Disney’s traditional opposition to net neutrality, I believe this is transformative social commentary/fair use — and I’m hoping they have a sense of humor (but if I get a takedown notice I will let you know).

 

Even if you don’t make your own entry, you can call your Congressional Representative by using this tool from my employer Public Knowledge. And reminder, you don’t need to call your Senators because we already won that vote! Booyah!

 

 

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Tales of the Sausage Factory:
We Need To Fix The News Media, Not Just Social Media Part I

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A substantially similar version of this appeared on the blog of my employer, Public Knowledge.

Focusing blame Google and Facebook for the decline of in-depth news reporting and print journalism ignores the real and long-standing problems that lie at the heart of our troubled relationship with corporate media. Insisting that these companies should fund existing corporate media, or that we should solve the problem by allowing even more consolidation, would be a disaster for democracy.

Almost 20 years ago, I left private practice to work for a nonprofit law firm called Media Access Project (MAP). MAP focused on promoting policies designed to encourage the production of diverse news and views in the electronic media. When I joined MAP in July of 1999, we were facing a crisis of consolidation in the news industry, the rise of polarization, and the dissemination of “fake news” for both commercial and political purposes. Academics and pundits lamented the death of serious journalism, the tyranny of the ever faster news cycle, and the poisoning public discourse with increasingly coarse, angry, and vile commentary that pandered to people’s worst instincts. A new class of wildly popular and increasingly influential pundits sowed distrust for the “MSM” (“mainstream media”) and denounced anyone who disagreed with them as enemies of freedom. Meanwhile, the increasingly vertically and horizontally concentrated news industry cut costs by dramatically cutting reporting staff and reporting resources, and chased “synergies” by using the news to shamelessly cross-promote their entertainment and publishing products. News coverage was increasingly turning into “infotainment” (or, more politely, “soft news”). To the extent political coverage existed outside the polarized world of political punditry, it was reduced from genuine analysis to “horse race” coverage. No one in the news, it seemed, wanted to discuss actual substance – only which political party or politician was “winning” or “losing.” Even worse, a new cottage industry emerged to create and promote “fake news” in the form of Video News Releases and national syndicated broadcasts designed to appear both local and live.

Small wonder that audiences for news increasingly declined, and distrust of the media reached historic levels. To make matters even worse, the “cure” proposed by the Federal Communications Commission (FCC) was to relax the remaining broadcast ownership rules, inviting further consolidation. Only by increasing consolidation, the industry argued, could the news industry survive in the face of fragmenting audiences, emerging competition from the internet, and declining newspaper revenues.

That was back in the late 1990s and early 00s. To quote Yogi Berra, “it’s déjŕ vu all over again.” Except this time, instead of blaming “the internet” and the public’s supposed lack of interest in real news, people now blame Google and Facebook. Why? Because they are big. Because they derive their revenue from digital advertising at a time when print journalism has seen revenue from classified advertising drop precipitously low. Because “Google and Facebook, we hates it precious!,” and one should never miss an opportunity to link a problem to Google and Facebook and proclaim “delenda est!” Likewise, the proposed remedies have a very familiar feel. Allow the news media to consolidate further by relaxing the FCC ownership rules and creating exemptions to existing antitrust law, and/or preserve their historic revenue stream from classified ads (either by destroying Google and Facebook or making them pay tribute to existing media companies). These solutions have particular appeal to incumbent publishers, as they simultaneously absolve the existing media of any responsibility for the current state of journalism and cement the dominance of the existing corporate media giants.

It is precisely because the stakes are so high, however, that we need to look with extreme skepticism at proposals primarily designed to prop up the current consolidated and dysfunctional media landscape. If we want to address the very real problems created by a dysfunctional media, we need to separate which of these problems can properly be attributed to dominant platforms and which to structural problems in the traditional news industry. Additionally, legitimate fears of the ability of dominant platforms to act as gatekeepers, or concerns about their outsized influence on the economics of news production and dissemination, should not justify solutions that destroy the extremely important role these platforms have played – and continue to play – in civic engagement and enhancing the creation of new and independent outlets for news.

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Tales of the Sausage Factory:
What Problem Does Cryptocurrency Solve? Ask Any Small Business — or the Collins Family.

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NY Times Columnist and Nobel Prizewinning economist Paul Krugman is a cryptocurrency skeptic. I don’t follow it closely enough to have an informed opinion, but I see nothing wrong with being skeptical of cryptocurrency. But after explaining his reasoning for skepticism, Krugman concludes with the following question:

“So that’s why I’m a crypto skeptic. Could I be wrong? Of course. But if you want to argue that I’m wrong, please answer the question, what problem does cryptocurrency solve? Don’t just try to shout down the skeptics with a mixture of technobabble and libertarian derp.”

Challenge accepted! Because while I respect Dr. Krugman and generally have similar politics, he has fallen into the classic mistake of establishment economists in this area. The current set of electronic transaction mechanisms works very well for him and most people like him — so why would anyone want to change? Other than for nefarious purposes, of course.

 

Short answer: The highly concentrated nature of the payment processing industry and the banking industry generally creates lots of hidden transaction costs, permits extraction of rents and imposition of onerous terms on merchants, and can be exploited by government to impose extra-legal sanctions on disapproved businesses or individuals without due process.

 

Even shorter answer: Cryptocurrency solves the gatekeeper problem and creates competition in electronic payment processing.

 

I unpack below, but it will speed things along if you first read the recent Supreme Court decision in Ohio v. Amex and this Washington Post article on how the Collins family of Kansas found their Bank of America account frozen.

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Tales of the Sausage Factory:
CPNI Is More Than Just Consumer Privacy — How To Apply It To Digital Platforms.

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This is the fourth blog post in a series on regulating digital platforms. A substantially similar version of this was published by my employer Public Knowledge. You can view the full series here. You can find the previous post in this series on Wetmachine here.

 

“Customer proprietary network information,” usually abbreviated as “CPNI,” refers to a very specific set of privacy regulations governing telecommunications providers (codified at 47 U.S.C. §222) and enforced by the Federal Communications Commission (FCC). But while CPNI provides some of the strongest consumer privacy protections in federal law, it also does much more than that. CPNI plays an important role in promoting competition for telecommunications services and for services that require access to the underlying telecommunications network — such as alarm services. To be clear, CPNI is neither a replacement for general privacy nor a substitute for competition policy. Rather, these rules prohibit telecommunications providers from taking advantage of their position as a two-sided platform. As explained below, CPNI prevents telecommunications carriers from using data that customers and competitors must disclose to the carrier for the system to work.

All of which brings us to our first concrete regulatory proposal for digital platforms. As I discuss below, the same concerns that prompted the FCC to invent CPNI rules in the 1980s and Congress to expand them in the 1990s apply to digital platforms today. First, because providers of potentially competing services must expose proprietary information to the platform for the service to work, platform operators can use their rivals’ proprietary information to offer competing services. If someone sells novelty toothbrushes through Amazon, Amazon can track if the product is selling well, and use that information to make its own competing toothbrushes.

 

Second, the platform operator can compromise consumer privacy without access to the content of the communication by harvesting all sorts of information about the communication and the customer generally. For example, If I’m a mobile phone platform or service, I can tell if you are calling your mother every day like a good child should, or if you are letting her sit all alone in the dark, and whether you are having a long conversation or just blowing her off with a 30-second call. Because while I know you are so busy up in college with all your important gaming and fraternity business, would it kill you to call the woman who carried you for nine months and nearly died giving birth to you? And no, a text does not count. What, you can’t actually take the time to call and have a real conversation? I can see by tracking your iPhone that you clearly have time to hang out at your fraternity with your friends and go see Teen Titans Go To The Movies five times this week, but you don’t have time to call your mother?

 

As you can see, both to protect consumer privacy and to promote competition and protect innovation, we should adopt a version of CPNI for digital platforms. And call your mother more often. I’m just saying.

Once again, before I dig into the substance, I warn readers that I do not intend to address either whether the regulation should apply exclusively to dominant platforms or what federal agency (if any) should enforce these regulations. Instead, in an utterly unheard of approach for Policyland, I want to delve into the substance of why we need real CPNI for digital platforms and what that would look like.

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Tales of the Sausage Factory:
Stoping the 5G Digital Divide Before It Happens.

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About 10 years ago, the telcos and the cablecos argued that they needed “franchise reform” to deploy fiber to the home high speed broadband. Anyone offering cable services (which, at the time, were a necessary part of any bundle including broadband — yup, times change) needs to get a franchise. At the time, all franchises were local. They also usually required the franchisee to serve the entire franchise area with same quality service. This requirement to serve the entire service area with the same quality service is called an “anti-redlining” provision. It is designed to ensure that providers of service do not avoid traditionally unserved communities (particularly communities of color), who were on the wrong side of the “red line” drawn by real estate developers to separate the whites only neighborhoods from the “colored” neighborhoods. (For more info, see this clip from Adam Ruins The Suburbs.) While we no longer have laws mandating segregation, the combination of stereotypes about urban neighborhoods dominated by people of color, combined with the unfortunate economic reality that non-whites systemically earn lower incomes than whites often means that providers simply ignore these neighborhoods when they offer services and focus investment on whiter (and wealthier) areas. Anti-redlining laws are designed to prevent that from happening.

 

To return back to the mid-00s, telecos (later joined by cable cos demanding a level playing field) pushed states to reform their franchise laws to (a) replace local franchising with state franchising; and, (b) eliminate most of the requirements of the franchise — including eliminating the anti-redlining provisions. The carriers argued that OF COURSE they intended to provide FTTH everywhere, including communities of color. But if they had to deal with local franchise authorities dictating deployment schedules and demanding all sorts of conditions to get a franchise, then — gosh darn it — they just would not be able to invest in FTTH no matter how much they wanted to do so. Although I and my then employer Media Access Project worked with the handful of local and national orgs fighting repeal of local franchises generally and anti-redlining provisions specifically, we lost bigly.

 

Today, I am once again feeling the Cassandrefreude. As predicted 10 years ago, in the absence of anti-redlining provisions, carriers have not invested in upgrading their broadband capacity in communities of color at anything close to the same rate they have upgraded in wealthier, whiter neighborhoods. As a result, the urban digital divide is once again growing. It’s not just that high-speed broadband is ridiculously expensive, although this is also serious barrier to adoption in urban areas. It’s also that in many low-income and predominantly non-white neighborhoods, speeds on par with those offered in wealthier and whiter neighborhoods are not even available.

 

This problem is further compounded by the belief that we have solved the problem of urban deployment and the only places where deployment (as opposed to simply cost of access) remains an issue is in rural America. But while the problems in rural America are very real, we need to recognize that the digital divide problem is actually growing in urban areas as carriers rush to provide gigabit speed in some neighborhoods while leaving other neighborhoods in the digital dust.

 

With the focus on 5G deployment, however, we have a rare opportunity to avoid repeating past mistakes. Just once, just once, we could actually take steps to prevent the inequality before it happens.

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Tales of the Sausage Factory:
Using The Cost of Exclusion to Measure The Dominance of Digital Platforms.

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This is the third blog post in a series on regulating digital platforms. A version of this first appeared on the blog of my employer, Public Knowledge.

 

In my last blog post, I explained my working definition for what constitutes a “digital platform.” Today, I focus on another concept that gets thrown around a lot: “dominant.” While many regulations promoting consumer protection and competition apply throughout a sector, some economic regulations apply to “dominant” firms or firms with “market power.” Behavior that is harmless, or potentially even positive when done by smaller companies or in a more competitive marketplace, can be anticompetitive or harmful to consumers when done by dominant firms — regardless of the firm’s actual intent.

For reasons discussed in my previous blog posts, defining what constitutes “dominant” (or even identifying a single market in which to make such a determination), presents many challenges using the traditional tools of analysis favored by antitrust enforcers and regulators. I therefore propose that we use the cost of exclusion (“COE,” because nothing in policy is taken seriously unless it has its own acronym) as the means of determining when we need to apply regulation to “dominant” firms. That is to say, the greater the cost to individuals and firms (whether as consumers or producers or any of the other roles they may play simultaneously on digital platforms), the greater the need for regulations to protect platform users from harm. If a firm is “too big to lose access to,” then we should treat that firm as dominant.

 

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