Tag: fcc

My Insanely Long Field Guide To The LTE-U Dust Up. Part I: Spectrum Game of Thrones.

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I keep reading about the LTE-U/LAA dust up and deciding that, as I predicted back in January, this has become the epic Spectrum Game of Thrones. Which means it’s time for an epically long series of Insanely Long Blog Posts.

 

For those just tuning in, I can sum up this issue as follows: should we worry that wireless carriers are looking to deploy a protocol developed for the 4G licensed world (LTE, or Long-Term Evolution) over unlicensed spectrum (called “LTE-U” for LTE over unlicensed or “Licensed Assisted Access,” for reasons I explain later) will “kill” Wi-Fi — for various values of the word “kill.” You can read some stuff on this from my Public Knowledge colleagues here and here.

 

Let me give you the headline version:

 

  • Can you build a version of LTE-U that plays nicely with Wi-Fi? Yes!
  • Can you build a version of LTE-U that looks like it should play nicely but when you deploy it over hundreds of millions of devices it would stomp all over Wi-Fi and crush it flat totally by accident? Absolutely!
  • Can you make and deploy a version of LTE-U where it plays nicely unless the mobile carrier decides it doesn’t like competition from Wi-Fi first providers of rival mobile video and voice services? You bet your sweet patootie!

 

A lot of the argument you see in the press and from the LTE-U supporters has to do with whether the LTE-U Forum (more on them later) have the best interests of wireless users at heart, have gone to great lengths to make sure LTE-U will play nice with Wi-Fi, have released their specs on the LTE-U Forum website, etc. etc. But none of this addresses the points above. What happens if you put this out there and stuff goes bad, either by accident or intentionally.

 

To understand the thinking here, imagine Qualcomm and the rest of the LTE-U Forum are Iran building a nuclear reactor for peaceful purposes. Google and the Cable industry (and us public interest types, for all that anyone notices) are Israel and the Sunni Arab states like Saudi Arabia and Egypt. Iran/LTE-U forum maintains they are building their nuclear programs for peaceful purposes. GOOG/Cable asks how they can be certain, given that the same technology might (a) screw things up accidentally; and, (b) give the carriers the capability to screw things up intentionally, if they ever start to feel the competitive heat. Qualcomm, LTE-U Forum, et al. are shocked, hurt and offended that anyone could even suspect such a thing, despite everything Qualcomm has done in the last 3 years to turn LTE-U into a “Wi-Fi killer”, and despite some of the biggest global carriers telling 3GPP to shut out non-carriers from first generation of LTE over unlicensed. According to Qualcomm, the only reason anyone would question the peaceful intentions of LTE-U Forum is for anticompetitive reasons.

 

But here’s the complicated thing. As I’ll explain below, it’s not like LTE on unlicensed is intrinsically bad. There are lots of really good pro-competitive reasons for carriers to start using LTE on unlicensed. Heck, it may ultimately turn out that a stand alone version of LTE on unlicensed is as useful (or even more useful) than Wi-Fi is today. Who knows? That’s the beauty of the unlicensed band — innovation without permission and all that good stuff.

 

This puts the Federal Communications Commission (FCC) in a rather awkward position. On the one hand, the FCC recognizes the real problem of LTE-U, accidentally or intentionally, messing up Wi-Fi. Additionally, while Wi-Fi is in the unlicensed band and must therefore accept whatever interference comes its way, is only ONE of many, many protocols, etc., you don’t let companies with the obvious incentive to screw up Wi-Fi develop and deploy a potential Wi-Fi killer with no safeguards. But since the success of the unlicensed space comes from its flexibility and easy deployment, how do you not ultimately approve some version of LTE-U/LAA? Are we going to lock in Wi-Fi as the protocol for unlicensed the way LTE is the protocol for mobile wireless? That could be just as awful for the future of innovation as letting LTE-U/LAA trash the place.

 

To make sure all you Tales of the Sausage Factory Readers know what’s going on, I bring you yet another in my occasional “Insanely Long Field Guide” series. Below, I cover everything from a brief refresher on what the heck is “unlicensed spectrum” v. “licensed spectrum,” the history of what’s going on here, and why I focus on Qualcomm rather than the wireless carriers as the chief bad guys here. However, as this is too long even for me, I will need to break this up into two insanely long pieces. In Part 2, I’ll explain about the FCC, why it got involved, why this is so complicated from the FCC’s perspective, and what the FCC can do about it.

 

But first, our insanely long background briefer below . . . .

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Phone Industry To The Poor: “No Privacy For You!”

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Back in June, the FCC released a major Order on the Lifeline program. Lifeline, for those not familiar with it by that name, is the federal program started in the Reagan era to make sure poor people could have basic phone service by providing them with a federal subsidy. Congress enshrined Lifeline (along with subsidy programs for rural areas) in 1996 as Section 254 of the Communications Act. While most of the item dealt with a proposal to expand Lifeline to broadband, a portion of the Order dealt with the traditional FCC Lifeline program.

As a result, the wireless industry trade association, CTIA, has asked the FCC to declare that poor people applying for Lifeline have no enforceable privacy protections when they provide things like their social security number, home address, full name, date of birth, and anything else an identity thief would need to make your life miserable. Meanwhile, US Telecom Association, the trade association for landline carriers, has actually sued the FCC for the right to behave utterly irresponsibly with any information poor people turn over about themselves — including the right to sell that information to 3rd parties.

 

Not that the wireless carriers would ever want to do anything like that, of course! As CTIA, USTA, and all their members constantly assure us, protecting customer privacy is a number one priority. Unless, of course, they’re running some secret experiments on tracking without notifying customers that accidentally expose customer information to third parties. Oh, and it might take longer than promised to actually let you opt out once you discover it. And in our lawsuit against the FCC’s Net Neutrality rules, they explicitly cite the inability to use customer information for marketing, the inability to sell this information to third parties, and the requirement to protect this information generally as one of the biggest burdens of classifying broadband as Title II. But other than that, there is no reason to think that CTIA’s members or USTA’s members would fail to respect and protect your privacy.

 

So how did the Lifeline Reform Order which most people assumed was all about expanding Lifeline to broadband became the vehicle for the phone industry to tell poor people they have no privacy protections when they apply for a federal aid program? I explain below . . .

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DISH DE Debacle Part 3: What Happens Now?

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In Part 1, I explained at considerable length what happened with the whole DISH DE Debacle and Why DISH owes the FCC $3.3 billion despite not having actually violated any rules. In Part 2, I explained how the FCC came to the conclusions it came to in the Order denying SNR and Northstar their DE credits but granting them their licenses.

 

Here, I will explain why (as readers have no doubt noticed) I have sympathy for DISH and why I would have done things differently – although I can’t say Wheeler was wrong. Heck, as I’ve noted many times before, I have the luxury of being neither a Commissioner nor a party with skin in the game. So take my Monday morning quarterbacking for what it’s worth.

 

More below . . .

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New D.C. Circuit Decision Knocks Fairly Large Hole In Anti-Net Neutrality Case.

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Every now and then, the D.C. Circuit throws you an interesting little curve ball. This opinion issued last week would appear to knock a serious hole in the argument made by the cable and telcos against the FCC’s reclassification of broadband as a Title II telecom service.

 

The case, Home Care Association of America v. Weil (HCAA) addresses the legal question that takes up about a quarter of the main brief for petitioners: does the Brand X decision that the Telecom Act was “ambiguous” mean that the FCC gets deference under the Chevron Doctrine when it reexamines the question in 2015 and comes out the other way? Or can Petitioners argue that the statute is not ambiguous and explicitly precludes the interpretation the FCC now gives it? Under HCAA, the D.C. Circuit appears to find that once the Supreme Court decides a statute is ambiguous, that settles the question. If the statute was ambiguous for an interpretation in one direction, it is still ambiguous — and thus subject to Chevron deference — when the agency reverses course. Nor does the agency have a higher burden when it reverses course then it did when it first made the decision.

 

Good lawyers can always distinguish cases, of course — as can a conservative panel of the D.C. Cir. that wants to find a particular result. Furthermore, Petitioners have lots of other arguments to make that are not impacted by the HCAA decision. Nevertheless, it seems clear this case is good news for the FCC (and those of us who support the FCC), and Petitioners will no doubt need to spend a good portion of their reply brief explaining why HCAA doesn’t dictate the result here.

 

I explain in more detail below . . . .

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So What’s This “Designated Entity” Thing, and Why Does DISH Owe The FCC $3 bn When They Didn’t Break The Rules?

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Generally, I loath the cliche “be careful what you wish for.” But I can think of no better way to describe the vast consternation in the spectrum world over the licenses won by SNR and Northstar in the AWS-3 Auction. If you don’t recognize the names off-hand, that’s because most of the time people just refer to them as the “DISH Designated Entities” or the “DISH DEs.” As detailed in many articles and petitions to deny SNR and Northstar their DE credits (totaling $3.3 billion), most people regard SNR and Northstar as “sham” or “fake” DEs, owned and controlled by DISH.

But here’s the funny thing. As far as anyone can tell from the filings, DISH, SNR and Northstar followed the precise letter of the law. And, what’s even more surprising, if you look at the results, this was the most successful auction ever for DEs. Both SNR and Northstar are minority owned (as defined by the FCC’s rules). All the “loopholes” DISH used with regard to ownership interest and bidding coordination were designed to make it easier for DE’s to get capital, win licenses, and benefit from partnering with a larger telecommunications company — which SNR and Northstar certainly did.

As a result, as noted by my usual frenemies at Phoenix Center, as measured by every traditional metric, the AWS-3 auction was the single most successful auction in awarding licenses not merely to small businesses, but to minority owned firms specifically. By every past criteria ever used, the AWS-3 auction results ought to be celebrated as a ginormous success for the DE program. Every aspect worked exactly as intended, and the result was exactly what people claimed to want. Indeed, as noted by Phoenix Center, even the $3.3 bn in bidding credits was in line with other spectrum auctions as a percentage of revenue.

Except, in classic “be careful what you wish for” fashion, when you scaled these results up to their logical outcome, no one was really happy with the result (except for DISH). Which has now prompted FCC Chairman Tom Wheeler to circulate an order denying SNR and Northstar their designated entity credits. As a result, SNR and Northstar (meaning their financial backer DISH) must cough up $3.3 bn within 30 days of issuance of the Order or — unless granted a stay or extension — the licenses will revert back to the FCC. Oh yes, and the FCC might need to deduct an additional $10 bn from the auction revenue. And there might be default charges (the FCC charges a penalty for defaulting on payments so people don’t bid and hope they find the money later). Or it might get more complicated, since there has never been a clawback of this magnitude before.

 

In Part 1, I will explain what exactly happened, why DISH did not violate the rules as written and why SNR and Northstar are technically “minority owned.” Along the way, we will consider some delightful ironies about the whole business.

In Part 2, I’ll tackle why the FCC decided that it could yank the DE discount anyway, and try to figure out what happens next.

More below . . . .

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What the Heck Is The “Duplex Gap” And Why Has It Blown Up The July FCC Meeting?

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Difficult as it is to believe, there are times in policy when issues do not break down simply by partisan interest or into neat categories like incumbents v. competitors or broadcasters v. wireless carriers. Sometimes — and I know people are not gonna believe me on this – issues break down on pure substance and require lots of really hard choices. Of course, because these issues are highly technical and complicated, most people like to ignore them. But these kinds of issues are also usually the hardest and most intractable for people who actually care about what the world looks like and how this policy decisions will actually work in reality.

 

So it is with the question of whether to put broadcasters in the duplex gap as part of the repacking plan in the incentive auction. Did your eyes glaze over yet? Heck, for most people, it’s gonna take a paragraph or two of explanation just to understand what that sentence means. But even if you don’t know what it means, you can understand enough for this basic summary:

 

  1. Just about every stakeholder in the auction — wireless carriers, broadcasters, wireless microphone users, tech company supporters of using unlicensed spectrum in the broadcast bands, public interest groups — all told the FCC not to put broadcasters in the duplex gap.

 

  1. Nevertheless, the Auction Team proposed putting broadcasters in the duplex gap, based on a set of simulation that suggested that the FCC would only get back 50-60 MHz of spectrum to auction if they protected the duplex gap. The Chairman circulated a draft order adopting the Auction Team’s proposal.

 

  1. Everybody freaked out. The Chairman found he did not have 3 votes, or possibly not even 2 votes, to adopt his proposal on duplex gap. The freak out is so intense and so bad that the FCC actually waived the Sunshine Period for this itemso that interested parties can continue to talk to FCC staff and commissioners until the night before the meeting. The FCC also released additional data showing the impact would be limited to a relatively small number of cities.

 

  1. That helped some, but not enough. Despite progress on negotiations, the FCC clearly did not have time to get to the right solution in the 5 days between the release of the new data and the actual vote. Also, a bunch of people were pissed that the Auction Team hadn’t released the data sooner, and hadn’t provided more explanation of the underlying model and the assumptions behind it. On Tuesday, the Republican Chairs of the House Energy & Commerce Committee & the Telecom Subcommittee wrote Wheeler a letter chastising him for having a bad process and calling on Wheeler to pull the item from the agenda entirely. On Wed., the day before the vote, Wheeler wrote back defending the process but agreeing to pull the item (and the associated item on whether or not to change the spectrum reserve) until the August Meeting three weeks from now.

 

In Policyland, this passes for high drama. It is, to say the least, highly unusual. Enough so that even folks who find technical issues like this complicated and boring to the point of insanity are asking: “what the heck just happened there? Who lost and who won?” The equally complicated answer: “no one lost or won, we’ve got a serious debate about a technical problem which has consequences no matter how you resolve it” is not nearly as satisfying as “the carriers” or “the tech companies” or whatever.

 

I explain and unpack all of this below, as well as consider possible impacts and ways to resolve this. But again, I want to stress this is a super hard problem. This is about competing goals and the difficulty of predicting the future with any certainty. It’s also about trust and stuff, which is hard to come by in Washington even at the best of times. This is not subject to simplistic plotlines like “Oh, the Auction Team are out of control” or “The broadcasters and unlicensed supporters are just being stubborn.” (Wait, the NAB and the unlicensed guys and the wireless microphone guys are on the same side? And they agree with Verizon? WTF?) This stuff is hard.

 

More below . . .

 

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The First Net Neutrality Complaint Under The 2015 Rules Is Likely To Lose, And That’s A Good Thing.

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As reported by Brian Fung at Washpo and others, a company called Commercial Network Services (CNS) has filed the first network neutrality complaint under the FCC’s new rules — which went into effect June 12 after the D.C. Circuit denied a stay request. You can read the complaint here. While I probably should not prejudge things, I expect the FCC to deny the complaint for the excellent reason that — accepting all the facts alleged as true — Time Warner Cable did absolutely nothing wrong.

 

I elaborate on what CNS gets wrong, why this differs from other high-profile disputes like Cogent and Level 3, and why such an illustration is good for the FCC’s rules as a whole, below . . .

 

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Net Neutrality Litigation: Round 1 Goes To the FCC.

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Good news! The D.C. Circuit denied the request by the carriers suing the Federal Communications Commission (FCC) to prevent the FCC’s net neutrality rules and reclassification of broadband as a Title II telecom service. As of today, the Net Neutrality rules are in effect, and broadband access is once again a Title II telecommunications service — pending the final outcome of the lawsuit challenging the the FCC’s actions.

 

Reactions from net neutrality opponents have ranged from defiance to “no biggie” with a side of trying to claim a partial win for getting expedited briefing (I’ll explain below why this is a tad disingenuous). On Twitter, I did see a few of my opposite numbers wailing and gnashing their teeth, at the prospect that their beloved Broadband Equestria ruled by the wise Queen Comcast Celestia and Princess Verizon Twilight Sparkle is now going to be converted into a Hellscape overrun with Tyrannosaurus Tariffs that will devour helpless ISPs like tourists dumb enough to go to Jurassic World. Needless to say, supporters of net neutrality and Title II, like my employer Public Knowledge, have been somewhat more upbeat.

 

So what does all this mean for the litigation and the ongoing machinations in Congress around net neutrality? Short version — the court was not impressed with the arguments of the carriers that the FCC was so whacky crazy power-usurping unlawful that this case is the slam-dunk reversal the carriers and their cheerleaders keep saying it is. Mind you, that doesn’t mean the FCC will win. But it does mean that opponents of net neutrality and Title II might want to ratchet back the TOTAL CONFIDENCE OF VICTORY they have exuded until now just a wee bit. It also provides a psychological lift to the pro-net neutrality side that the FCC can win this even in the D.C. Circuit.

 

On the political side, Republicans had hoped that a stay would push Democrats to the bargaining table to avoid the litigation risk. Because the FCC’s odds improve with the denial of the stay, this may have the opposite effect, with Democrats more likely to wait for a court decision rather than try to strike a deal. This could either prompt Republicans to sweeten their offer, or double down on efforts for total repeal.

 

I provide the longer version below . . .

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First Round of Lawsuits Filed In Net Neutrality Case. Now What?

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Yesterday, the U.S. Telecom Association (USTA), the trade association for incumbent telecoms like Verizon and AT&T, and a Texas WISP called Alamo Broadband, filed separate appeals from the FCC’s Order reclassifying broadband as Title II and applying net neutrality rules. (This Ars piece links to both Petitions). USTA filed in the D.C. Circuit, while Alamo filed in the 5th Circuit (which is generally considered one of the more hostile to the FCC).

 

I dig into this a bit, and try to explain what happens next, below . . .

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Title II, Robert McDowell, And The Boy Who Cried ‘Black Helicopter.’

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I noted with some considerable interest the February 17 Wall St. Journal Op Ed by Former FCC Commissioner Robert McDowell and Gordon M. Goldstein describing how reclassifying broadband as a Title II telecommunications service will invariably lead to “the International Telecommunications Union (ITU), a regulatory arm of the United Nations” asserting jurisdiction over the Internet. As a consequence, McDowell warns us, the ITU will allow freedom-hating dictatorships such as Russia and China to take control of “Internet governance,” extend censorship to the Internet, and generally crush freedom-as-we-know-it.

What I noted, however, was the remarkable similarity between this column and McDowell’s 2010 Wall St. Journal Op Ed on the same theme. “The U.N. Black Helicopters will swoop down and carry off our Internet if we try to reign in carriers from abusing consumers and adopt real net neutrality” has become a perennial favorite for McDowell and some others. We heard the same cries in 2012 as we geared up for the ITU’s World Conference on International Telecommunications (WCIT). In the lead up to the WCIT, the refusal of then-FCC Chairman Julius Genachowski to close the inquiry into whether to reclassify broadband as Title II prompted more than a few anti-net neutrality advocates to claim that supporting Title II, or even just plain ‘ol net neutrality, gave aid and comfort to Russia, China, Iran, etc. in their efforts to use the ITU to take over the Internet.

So no surprise, as we move closer to actually reclassifying broadband and getting strong network neutrality rules in place, it is time once again for the annual reunion tour of Robert McDowell and the Black Helicopter Band. Despite making the same wrong prediction about the ITU for the last 5 years, we will once again see Robert McDowell and the usual suspects singing backup that reclassifying broadband will serve the nefarious agenda of Russia, China and anyone else we don’t like by allowing the U.N. to swoop in with their black helicopters and carry off our Internet and crush our freedoms.

For those new to this performance, I debunk it (once again) below . . .

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