Satellite Radio Has Good Political Sense, NOT

Normally I like XM and Sirius just fine. But this rather sad attempt to claim they complied with the terms of their license by designing interoperable radios, but not producing them, makes me laugh.

Normally, I wouldn’t care (much) if XM and Sirius want to go all anticompetitive against each other or if the FCC lets them. But with a Senate bill pending to cut off satellite radio’s traffic and weather service, I’m not sure I’d pick this moment to look like I’m flouting the law. But hey, what do I know?

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Anonymous bidding and not so anonymous shakedowns at the FCC

Say what you like about Martin in other areas, but he is (so far) sticking to his guns on whether to require anonymous bidding for the upcomming AWS spectrum auction. MAP has actively supported this proposal, because it will make the auctions work better and facilitate entry by minority owned businesses and new, disruptive competitors (I’m stuck with them by statute, so I may as well try to get them to work right).

In perhaps the most telling evidence that anonymous/blind/sealed bidding (in which the identity of the bidder is not disclosed during the action) is a good idea, every incumbent (except VZ Wireless, which has been “targeted” in certain auctions) is lobbying fiercly against it. My favorite little tidbits of when the Sausage Factory turns nasty below.

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What did Martin Really Say About a “Tiered” Internet?

Much has been made over statements made by FCC Chairman Kevin Martin at this week’s TelecomNext trade show. As we at MAP have just had an experience with how often the press misunderstands Martin’s rather carefull statements, I am not as ready as many of my comrades to declare that the end is nigh. There is a huge difference between “customer tiering” (where a customer gets to chose the level of service), “provider provisioning” (where a provider pushes packets faster via Akami or bit torrent), and “Whitacre tiering” (where the ISP charges third parties for “premium” access to subscribers without regard to subscriber preferences). As explained below, figuring where Martin is proves harder than people assume.

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FCC Bidding Credits and Digital Inclusion

For the forseeable future, we’re stuck with spectrum auctions, so we may as well try to get them to work as well as possible. Contrary to what some folks argue, I don’t think that means just jacking up one-time revenue to the government. It means trying to get licenses to folks who don’t usually get ’em (like women-owned businesses, minority-owned businesses, and small businesses generally), trying to get services deployed to underserved communities, and trying to foster real competition.

So last week, MAP submitted a lengthy set of comments (including a 30-page econ analysis from my economist friend Greg Rose) on reforming the FCC’s designated entity “bidding credit” for the upcomming AWS auction.

What does all this mean, and why should the guy who says “spectrum auctions are the crack cocaine of public policy” care? See below . . .

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Wyden Introduces Net Neutrality

Wyden (D-Ore) has pushed back against the wussiness of the Enisgn (R-NV) bill. The Ensign Bill has a provision that would require “neuterednet neutrality.” The broadband access provider could still favor its own content and could offer “premium” service to others.

The Wyden “Internet Non-Discrimination Act of 2006” requires real Net neutrality and has a serious enforcement mechanism. If the FCC sits on a complaint, it is deemed granted in 90 days.

Of course I’m partial to the Wyden bill from shear vanity. The bill references the muni broadband paper I wrote last year in the legislative findings.

Stay tuned . . . .

Legal Cell Phone Blocking? Cell Phone Blocking Paint and the FCC.

TMCnet reports that a company called NaturalNano has developed a paint that blocks radio waves. The paint contains nanotubes with copper cores that block radio waves of all frequencies. The article says they will market it as a cell phone blocker, but one blogger has already suggested that those anxious about leaking wifi access paint their homes with it.

But is it legal? My first reaction was “yes.” But now I’m not so sure.

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Adelphia Transaction Advances

Lost in the hub-bub of yesterday, the Federal Trade Commission voted 3-2 along party lines to approve the proposed division of Adelphia between Comcast and Time Warner and accompanying system swaps. What surprises me is not so much the result (getting conditions in this administration, particularly on a cable merger, was always a long-shot) but the timing. The FCC is still chewing over the data request it made in December, and the Adelphia Bankruptcy proceeding has been rescheduled for mid-March. It smacks annoyingly of a political favor done for a stalwart Republican (did we mention Brian Roberts, CEO of Comcast, is a big Bush supporter and fundraiser?) than the careful reasoning of the anti-trust agency charged with protecting the public. But that’s probably just my imagination post-State of the Union grumpiness combined with discovering how many big companies are spying on us for the government.

My analysis below . . .

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Cable Market Power For Dummies

Most folks outside of Washington DC still find their cable company an obnoxious monopoly, despite the presence of competitors like DirecTV, Dish Network, and the occassional overbuilder like RCN. But, despite the fact that customers express far more satisfaction with satellite and overbuilder service, most folks remain subscribed to cable. What gives? And how does cable get away with raising prices and favoring affiliated programming in the face of this “vigorous competition.” Needless to say, the cable folks respond with a host of fancy economic papers that they file with the FCC and present to members of Congress.

My own impression, having spoken with a number of economists, is that the Cable Cos use economics the same way Creationists use intelligent design. The point isn’t to engage in real scientific inquiry. The point is to throw enough scientific sounding stuff out there to confuse the issue and make people believe there are two equally valid sides to the debate. My problem is that the FCC and Congress usually end up playing the the Dover School District Board rather than Judge Jones.

Anyway, in an attempt to cut through some of the nonesense, MAP released a white paper of my authorship yesterday: “The Switching Equation” and Its Impact on the Video Proramming Market and MVPD Pricing. As you can tell by the title, even an attempt to write a simple, plain language version of this ends up more complicated than I’d like. (Sad fact is, economics is hard.)

So here’s the short version — most people find it such a pain in the butt to switch from one service to another that they will put up with higher prices, worse programming, and worse customer service rather than kill two days futzing with unsubscribing to cable and resubscribing to someone else. As long as cable doesn’t stink too badly, they can keep enough market power to make it even harder for competitors by cutting exclusive deals for regional sports programming and jacking up the price of video on demand to competitors (Comcast and Time Warner own 78% of iN Demand, the leading supplier of VoD). If we want real competition, we need to have rules that actually address market power and make it easier for people to switch to competitors. Otherwise, we get a lot of empty rhetoric about “level playing field” and “free market” and blah blah, and we still pay ridiculously high prices for cable and broadband service that still suck.

You want proof? Go read the paper.

Stay tuned . . .

Senate Confirms Tate and Copps

Late last night the Senate confirmed Deborah Tate and Michael Copps for the FCC Commissioner slots. I’d like to think it was my eloquence shaming them into sanity, but I doubt it anyone on the Hill reads this blog (Wonkette this ain’t).

My congratulations to new Commissioner Deborah Tate and reconfirmed Commissioner Michael Copps. Sad for me, I will have to work for a living in January after all.

Stay tuned . . . .