My Handy Guide To The May 15 FCC Meeting: What The Heck Is An Open FCC Mtg And How Does It Work?

Even before Chairman Tom Wheeler proposed to issue a Notice of Proposed Rulemaking (NPRM) on possible new net neutrality rules to replace the ones vacated by the D.C. Cir. the May 15 Open Meeting of the Federal Communications Commission (FCC) promised to be one of the more important meetings in recent memory.  As a result, it has become one of the more contentious in recent memory as well.

 

In addition to the net neutrality NPRM, we have an Order deciding key issues for the upcoming incentive auction (aka the 600 MHz auction, aka that really complicated thing where we pay broadcasters to get off spectrum they got for free by simultaneously selling it to wireless companies for mobile broadband). This mega item has two fairly important side pieces from my perspective: the future of unlicensed use in the TV broadcast bands (aka the TV white spaces (TVWS) aka “super wifi” aka “engineers will never be allowed to name anything ever again”) and possible limits on how much spectrum any one company can acquire (aka the “no piggies rule” aka spectrum aggregation policies aka “lawyers are not allowed to name anything ever again either”). The TVWS item has its own satellite proceeding about wireless microphones and coexistence between wireless mics and unlicensed use in an ever shrinking broadcast band.

 

So for those of you first timers, and those of you who have gone so long without a contentious FCC meeting you’ve forgotten how it’s done, I’ve prepared this helpful guide on “what is an open FCC meeting and how does it work.”

 

Mechanics of the meeting below . . .

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Tom Wheeler and the Defining Question of Network Neutrality

Federal Communications Commission (FCC) Chairman Tom Wheeler caused quite a stir last week when he circulated a new Notice of Proposed Rulemaking on network neutrality. As reported by the press, the proposed rule moves away from generally prohibiting wireline broadband providers from offering “paid prioritization” (aka Internet “fast lanes”) to explicitly permitting wireline providers to offer paid prioritization subject to conditions designed to guard against anti-competitive and anti-consumer conduct.

 

Needless to say, this pleased just about nobody. Supporters of network neutrality regard paid prioritization as intrinsically anti-competitive and anti-consumer by making the Internet experience dependent on the ‘commercially reasonable’ deals of the network provider rather than the choice of the subscriber. By contrast, opponents of net neutrality oppose any limitations on what ISPs can do as “regulating the internet.” To employ a crude analogy, network neutrality supporters see Wheeler’s proposal as roughly the equivalent of teaching the rhythm method in sex ed, while opponents are outraged that Wheeler would teach anything other than pure abstinence.

 

What Wheeler has done here is to frame the defining question of network neutrality. The upcoming Notice of Proposed Rulemaking (NPRM) gives those of us who believe that paid prioritization is the opposite of net neutrality and an Open Internet the opportunity to make the case. Even more importantly, Wheeler has now confirmed that the May 15 NPRM will ask whether the FCC needs to reclassify broadband as a Title II “telecommunications service” so that the FCC will have sufficient authority to create real and effective network neutrality rules. (You can see Wheeler’s blog post setting out his proposed approach here, and his aggressive speech in the veritable heart of enemy territory — the 2104 Cable Show in Los Angeles) here.)

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My Insanely Long Field Guide To Understanding FCC Chairman Tom Wheeler Statement On Peering.

At the press conference following the Federal Communication Commission (FCC) March 31 Open Meeting, Chairman Tom Wheeler made the following observation:

 

“Interconnection is part of the Network Compact.” Peering “is just a $3.50 word for interconnection.”

 

Wheeler followed up this statement by explaining that there was a difference between “network neutrality” and the “open internet” on one hand and “interconnection” as the ‘path to the Internet’ on the other hand. While government has a critical role in monitoring peering/interconnection to protect the values of the Network Compact, it isn’t a network neutrality issue. You can see Wheeler’s full statement here (Start at 144:45 – 147:23 has unrelated stuff in middle) (transcript here).

 

After the meeting, the FCC released a separate statement that they really mean it when they say that they aren’t going to do peering as part of the Net Neutrality rules. While Brendan Sasso at National Journal gets points for noticing that “the FCC could decide to enact separate regulations on the issue or force Comcast to accept new rules in order to receive permission to buy Time Warner Cable,” most folks I’ve read in the press have broadly interpreted this as indicating the FCC will not look into the Comcast/Netflix dispute or complaints by Cogent and Level 3 about large edge-providers squeezing them for higher interconnection fees.

 

Personally, I think most people are totally misreading this. Wheeler’s statements make it look more likely to me that the FCC will start looking closely at the Internet peering market, not less likely, especially as part of the Comcast/TWC deal. Indeed, Comcast’s Chief Lobbyist David Cohen, who ranks in my book as one of the absolutely smartest and most effective telecom lobbyists ever, has already started backing away from earlier statements that regulators would ignore peering issues and that he expects them to look at the Comcast/Netflix deal. (Unsurprisingly, Cohen also said he expects regulators to find no problems with the deal and called Netflix CEO Reed Hasting’s arguments that this eviscerated net neutrality “hogwash.”)

 

Below, I will rant at considerable length that (a) Wheeler is right, this is not a “network neutrality” issue, but the same goddam interconnection issue that we have struggled with for more than a hundred years in every networked industry from railroads to electricity to broadband; (b) The FCC needs to actually look at this and study it and understand how the market works before it makes any decisions on what to do; and, (c) While Wheeler is not saying in any way, shape or form he actually plans to do anything before he has real information on which to base a decision, he is signaling — for anyone actually paying attention — that he is, in fact, going to actually look at this as part of his overall transition of the agency around his “Fourth Network Revolution” and “Network Compact” ideas.

 

 

While this last would seem pretty basic and obvious, it represents a significant change in policy from the previous insistence that IP magic pixie dust obscures all things Internet and makes them invisible to the FCC. Whether I agree with what Wheeler ultimately does or not — and I have no idea what he might ultimately do here, he could decide the market is competitive and working just fine — I don’t believe Wheeler is going to go around with his eyes and ears covered blathering about the magic nature of the Internet. I think Wheeler is actually going to check under the hood and see what actually makes the damn thing tick — and Comcast is just the company to help him do it.

 

Much ranting below . . .

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Globalstar’s Stellar Chutzpah: Trying To Hold Up New Free WiFi To Leverage “Licensed WiFi.”

 

A very few of us have paid much attention to something called the “Globalstar Petition.” Briefly, Globalstar would like a couple of billion dollars in free spectrum favors from the FCC to offer what it calls a “Terrestrial Low-Power Service” (TLPS) on its satellite frequencies. As Globalstar has the great good fortune to have frequencies right next to the 2.4 GHz band most popular for WiFi, Globalstar hopes to leverage existing WiFi equipment and offer a “paid, carrier grade” WiFi-like service.

 

Recently, Globalstar attracted my negative attention by trying to leverage a fairly important FCC proceeding to expand unlicensed spectrum use above 5 GHz. Globalstar has raised bogus interference issues in the 5 GHz proceeding, and rather unsubtly suggested to the FCC that it could solve the WiFi “traffic jam” by granting Globalstar’s Petition for spectrum goodies so we could have a pay for WiFi service instead of having more of that pesky free WiFi (you can find Globalstar’s extremely unsubtle quotes here on page 3 and here on page 2.

 

So it seems an opportune moment to explain:

 

  1. What’s going on with the Globalstar Petition;

 

  1. What’s going on with the UNII-1 Band in the 5 GHz proceeding;

 

  1. How Globalstar are being utterly unsubtle in their efforts to hold the 5 GHz proceeding to try to leverage their ask in their Petition; and,

 

  1. How Globalstar’s jerkwad-ittude in the UNII-1 proceeding raises serious concerns about Globalstar’s willingness to play nice with the 2.4 GHz band, which could undermine the entire “WiFi economy.”

 

More on Globalstar’s truly stellar chutzpah, and why the FCC may want to rethink granting the Globalstar Petition, below . . . .

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A Wide Range of Possible Outcomes In Net Neutrality Case.

The Tea Party/Libertarian/Generally Anti-Net Neutrality Crowd were dancing in the streets after the network neutrality oral argument and declaring total victory! This seems not only premature, but short-sighted. Until the oral argument, the anti-net neutrality crowd had predicted that the court would utterly reject the FCC’s efforts to extend its authority to broadband access on either statutory or First Amendment grounds. But, as I noted previously, the entire panel seemed comfortable with Section 706 providing some level of authority over broadband access. Also, no one seemed terribly interested in the First Amendment argument except Judge Silberman. So – given the usual caveats that one can never really know how things will come out after oral argument – it seems the FCC will come out of this with some authority after all.

 

OTOH, it is certainly fair to say that two of the three judges on the panel indicated the “Common Carrier Prohibition” (aka, the thing Tatel made up in the Data Roaming Case) applied to at least the “no discrimination” rule and possibly the “no blocking rule.” As the two together constitute the heart of network neutrality protections, getting those struck down would certainly constitute a big win for anti-net neutrality folks. It would also create a fine muddle of confusion around the scope of the FCC’s overall authority.

 

There are, however, a range of possible options and outcomes that could still happen, ranging from the unlikely extreme of total affirmance for the FCC (if Rogers persuades one of her colleagues) to total reversal on some other grounds (if Silberman persuades one of his colleagues on First Amendment or Administrative Procedure Act (APA) grounds). I explore these (and what they might mean for the long term) below . . . .

 

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Commissioner Pai: A ‘Consensus’ Of Incumbents Without Consumers Is No Consensus And means Disaster For 600 MHz.

Last week, the Federal Communications Commission (FCC) Wireless Bureau issued what should have been a fairly routine and highly technical Public Notice about possible alternative band plans for the 600 MHz Auction aka the Incentive Auction aka “that incredibly crazy, complicated deal Congress came up with last year where broadcasters sell back licenses to the FCC so the FCC can sell them to wireless companies.” Since public comment makes it clear that the various proposals present a lot of challenges (see my incredibly long and wonky explanation here), it shouldn’t surprise anyone that the Wireless Bureau asked for further comment after holding a band plan workshop a few weeks ago.

 

But Commissioner Pai issued a separate statement blasting the Wireless Bureau. In particular, Pai berated the Bureau for departing from what he called the “consensus framework” for one particular band plan – the band plan favored by AT&T, Verizon, the National Association of Broadcasters (NAB) and the largest equipment manufacturers. Pai ignored objections to the AT&/VZ/NAB plan and support from consumer groups (including Public Knowledge), competitors such as Sprint, or tech companies such as Microsoft. Over and over in his statement, Pai cited to the comments of AT&T, Verizon and NAB as proof of a “broad consensus” as if none of these objections existed.

As someone fairly active in this proceeding, who actually participated in the Band Plan Workshop, I am more than a little peeved. Yoo hoo! Commissioner Paaaaiiiiii!!! What am I, chopped liver? I am also more than a little irked at the allegations that the Bureau somehow behaved improperly in issuing the Public Notice. Pai’s accusation that the PN violates the Bureau’s delegated authority by soliciting comment on alternatives to the AT&T/VZ/NAB “consensus plan” appears designed to bully the Bureau into submission.

Setting my personal pique aside, as I keep trying to explain, letting the broadcasters and the largest wireless incumbents write the rules for the auction spells absolute disaster. If Pai genuinely wants to see a successful Incentive Auction, that means looking past industry “consensus” and getting into the very nasty and complicated details to figure out the right set of tradeoffs that will (a) get the broadcasters and wireless guys to the auction, but (b) not let them short the U.S. Treasury out of the cash it expects to collect in the process.

I vent and take one more shot at explaining this below . . . .

 

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Would Tom Wheeler Really Have Approved The AT&T/T-Mo Merger? Why I don’t Think So.

After weeks of speculation, it now appears certain that President Obama will nominate Thomas Wheeler to replace Julius Genachowski as Chair of the Federal Communications Commission (FCC), with Commissioner Mignon Clyburn to serve as acting until Wheeler’s nomination gets confirmed by the Senate. In recent weeks, Wheeler’s background as a lobbyist many years ago for first the cable industry and then the wireless industry have raised concerns that Wheeler remains more sympathetic to business interests than the public interest. As anyone who has read Public Knowledge’s official statement in response to the nomination can see, while we understand those concerns, we agree with many other public interest colleagues who think that Wheeler has an independent perspective and an open mind. Certainly we will have disagreements with the new Chairman (assuming Wheeler is confirmed), but we expect that Wheeler will actively work to promote competition and protect consumers.

 

Yeah, I know, that sounds like either wishful thinking or Washington insider talk. So allow me to explain my line of reasoning (since, unlike a number of other Wheeler supporters, I actually don’t know Wheeler at all). In particular, I want to tackle the current “Tom Wheeler would have approved the AT&T/T-Mobile merger in 2011.” It’s easy to say “oh, all that lobbying for the cable and wireless industry was long ago when they were scrappy upstarts. Why, that was so long ago that the cable industry were battling the broadcasters and the wireless industry were battling the telcos (as opposed to these days when the cable industry battles the telcos and the wireless industry battles the broadcasters)!” But if Wheeler was actually a supporter of AT&T/T-Mo, then it would seem to prove he still has sympathies to his old industry incumbent comrades.

 

I examine the People v. Tom Wheeler in the matter of AT&T/T-Mo below . . .

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Is Fear of Wireless Foreclosure “Speculative?” Depends. Is this About Intent Or Effect?

Recently, the Antitrust Division of the Department of Justice  (DOJ) filed these comments with the Federal Communications Commission (FCC) in the proceeding on spectrum aggregation limits (aka spectrum screen v. spectrum cap). The DOJ comments have some good stuff about the economics of the wireless industry and competition (in a theoretical way), and about why it is important to make sure potential competitors have spectrum, particularly low-band spectrum. Mostly, DOJ’s argument rests on the idea of “foreclosure,” that a wireless firm will bid on licenses at auction just to keep them out of the hands of competitors.

Asked about this on a recent earnings call, VZ CFO Fran Shammo basically said that there is no evidence that Verizon is bidding on licenses just to keep them out of the hands of rivals, so DOJ’s argument is “theoretical” and the FCC should not adopt any limits.

VZ basically argues that we should not worry about possible foreclosure unless there is evidence of an actual intent to foreclose. This treats a spectrum screen (and concern about foreclosure) as a precaution against bad actors. As long as bidding on licenses at auction makes sense for reasons other than foreclosure, and there is no evidence of any intent to foreclose, then everything should be just fine even if the outcome has the same effect as a foreclosure strategy (e.g., competitors don’t have enough spectrum to offer viable competing services.)

But the Communications Act does not work this way. Specifically, Section 309(j)(3)(B). Whether Verizon (or any other carrier’s) intent is as pure as the driven snow, or black as any comic opera villain, does not matter one iota. What matters is whether we avoid a “concentration of licenses” and “disseminate licenses among a wide variety of applicants” so that we “promot[e] economic opportunity and competition and ensur[e] that new and innovative technologies are readily accessible to the American people.”

As I will discuss below, the evidence from the 700 MHz auction and subsequent transactions demonstrates that we are feeling the effects of foreclosure, regardless of whether there was an actual intent to foreclose. As a result, the DOJ concern is not “theoretical,” but very real.

 

More below . . .

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Will Walden Wipe Out DMCA and CISPA To Take Out Net Neutrality In The Name of “Internet Freedom?”

Today, the House Energy and Commerce Subcommittee on Communications and Technology will begin mark up of the so-called “Internet Freedom Bill.” As explained in the Majority Briefing Memo, we’re still on about that whole “the ITU will take control of the Internet and black helicopters will come for out name servers” thing.”  Unfortunately, as keeps happening with this, it looks like some folks want to hijack what should be a show of unity to promote their own partisan domestic agenda. Specifically, does the bill as worded undercut the (by accident or design) the Federal Communications Commission’s (FCC) authority to do things like Network Neutrality?

 

As I elaborate below, however, this is not so much a stab at net neutrality and the FCC generally as it is a murder/suicide. You can’t claim that this clips the wings of the FCC to do net neutrality by making a law that the U.S. is opposed to “government control” of the Internet without also eliminating laws that deal with cybersecurity, copyright enforcement online, privacy, and a range of other stuff that are just as much “government control” of the Internet — but that most Republicans opposed to net neutrality actually like. Plus, as I noted last week when discussing the rural call completion problem, taking the FCC out of the equation may have some unforseen nasty consequences that even Republicans might not like.

 

More below . . . .

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Rural Call Completion and the Problem of Network Neuropathy.

I made a passing reference to the rural call completion problem in a post about 2 months ago. I’ve now written a much longer piece explaining the problem of rural call completion, and the nature of the problem, for the Daily Yonder. You can find the article, and the very nice illustrations they added, over here.

To give a very brief recap for why y’all should click through to learn the details of rural call completion — rural call completion is an unexpected side effect of the transition of the Public Switched Telephone Network (PSTN) to an all-IP based network. Using IP-packets gives you greater flexibility to pick how you route calls. To avoid very expensive rural termination fees (which subsidize rural systems and keep them operating), Least Call Router systems can send calls through lots of hops, creating latency or even trapping the call in a perpetual loop. As a result, calls to some rural systems don’t go through, or quality degrades to where rural areas may not be able to have reliable phone service or reliably reach 9-1-1. The FCC has issued a Notice of Proposed Rulemaking to address the problem, and every Commissioner has emphasized that making sure the phone netwok remains reliable is a core mission of the FCC.

I and my Public Knowledge colleagues have emphasized both network reliability and service to all Americans as part of our “Five Fundamentals Framework” to guide the transition of the PSTN to all-IP. The rural call completion problem demonstrates precisely why we need a framework to guide us, rather than jumping right away into the “deregulation v. regulation” fight so many people want to have instead of focusing on the real issues.

It is also an example of a phenomenon I call “network neuropathy,” how problems in networks may first manifest themselves in failures of service around the extremities.

More below . . . .

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