Tag: fcc

A Wide Range of Possible Outcomes In Net Neutrality Case.

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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.

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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.

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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?

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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?”

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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.

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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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The Progeny Waiver: Will the FCC Wipe Out Smart Grid? Save Thousands of Lives? Both? This Season on Spectrum Wars!

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Depending on whom you ask, the Progeny Waiver will either (a) totally wipe out the smart grid industry, annihilate wireless ISP service in urban areas, do untold millions of dollars of damage to the oil and gas industry, and wipe out hundreds of millions (possibly billions) of dollars in wireless products from baby monitors to garage door openers; (b) save thousands of lives annually by providing enhanced 9-1-1 geolocation so that EMTs and other first responders can find people inside apartment buildings and office complexes; (c) screw up EZ-Pass and other automatic toll readers, which use neighboring licensed spectrum; or (d) some combination of all of the above.

 

That’s not bad for a proceeding you probably never heard about.

 

For me, the Progeny Waiver is a microcosm of why it has become so damn hard to repurpose spectrum for new uses. The added twist here is that this time it is largely the unlicensed spectrum users acting like incumbents and saying that it will be the end of the universe if Progeny lights up its system (although the licensed neighbors say the same thing, pretty much), and Progeny, the licensee, arguing that everything will be JUST FINE, really, and if it isn’t too damn bad because we are licensed and they are unlicensed so there!

 

You might ask, “if this Progeny thingie is so gosh darn important, why have I never heard of it?” Well that’s why you read this blog, you clever reader you. This amazing little proceeding is still so deep in the bowels of the FCC that only the true spectrum wonks have noticed. But action now appears imminent, so consider this a sneak preview of this season’s favorite telecom reality show, Spectrum Wars.

What raises the stakes on this too damn high, however, is the implications for the future of unlicensed generally and the implications for the credibility of the FCC as an agency able to actually do the technical job of managing an increasingly complex spectrum world. Fairly or unfairly, everyone is going to compare this to Lightsquared (waiver, followed by worries about interference, arguments that the FCC failed to follow its own rules and procedures, blah blah). Let us add to this House Republicans who would love to call the FCC on the carpet for mismanaging spectrum – especially around unlicensed. Add to that the car manufacturers in the 5 GHz band and the federal users generally wanting to show that the FCC can’t adequately manage the stuff it has and you have a pack of circling sharks just waiting for the FCC to screw this one up and commence the feeding frenzy. So no pressure.

 

Happily, I have, if not a solution, at least a better way for the FCC to cover it’s rear-end and contain the damage, below . . . .

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Shutting Down the Phone System: Comcast’s Very Scary Filing

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I’ve been sorting through the various filings at the FCC in the Phone Network to IP transition docket. I single out the 7-page filing by Comcast as the filing that scares the absolute bejeebers out of me.

 

Why? Because everyone else – no matter what their financial interest or political alignment – at least paid lip service to the idea that we ought to have some kind of regulation. Whether it’s a general nod to a “minimal and light touch regulatory regime” or a specific shopping list, the vast majority of commenters recognized then when you have something as big, complicated and utterly essential to people’s lives as the phone system, you need some kind of basic backstop for people to feel comfortable and to address problems that will invariably come up. Even AT&T has made it utterly clear that it does not see the future of phone service as a regulation-free zone.” Even staunch free market conservatives such as TechFreedom and Free State Foundation acknowledge that, as a practical matter, there is going to need to be some set of rules – even if they hope to keep these rules to what they regard as the barest minimum necessary.

 

Comcast, and Comcast alone, suggests otherwise. Comcast alone thinks we can manage the phone system as the Libertarian Nirvana. This smacks either of unbelievable hubris (“we’re so big everyone will have to deal with us – what could go wrong?”) or an incredible sense of market power (“we’re so big everyone will have to deal with us – heh heh heh”). Either way, this sends chills down my spine, because the filing signals loud and clear that Comcast – one of the largest providers of residential phone service in the United States, the largest residential broadband provider, and the single most powerful entity in U.S. telecom policy – simply doesn’t get it when it comes to the future of the phone system.

 

As I explain below, Comcast needs to understand that “With Great Market Share Comes Great Responsibility.” Because when you are this big, even what you don’t say can have huge consequences. Comcast is beyond “too big to fail.” It is now officially in its own regulatory category called “too big to be allowed to screw up.” Because Comcast is now so big, and so central to communications in the United States, that it could single-handedly crash the phone system by stupidly trying to manage it as if it were the cable world. Unless Comcast gets with the program and acknowledges the need for some kind of ongoing oversight of the phone system, this transition is guaranteed to become an utter disaster.

 

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AT&T to FCC: “I double dare you to show you’re serious about wireless competition.”

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Rarely do you see companies double-dare the FCC to back up their brave talk about promoting competition. That is, however, what AT&T has just decided to do – with a little help from Verizon. After gobbling a ton of spectrum last year in a series of small transactions, AT&T announced earlier this week it would buy up ATNI, which holds the last shreds of the old Alltel Spectrum. To top this off, Verizon just announced it has selected the purchaser for the 700 MHz spectrum it promised to sell off to get permission to buy the SpectrumCo spectrum. And guess what? The purchaser of the bulk of Verizon’s 700 MHz licenses, which Verizon promised to divest to promote competition – is AT&T!

 

In the last few months, we have seen billions of dollars in new investment as a result of the FCC’s decision to deny AT&T/T-Mo, force Verizon to divest in VZ/SpectrumCo, and otherwise draw some lines in the sand against further consolidation and to promote competition. For reasons I explain below, this transaction crosses just about every single red line the FCC (and Department of Justice (DoJ)) have ever indicated they had about wireless spectrum concentration. The question is — will the FCC (or DoJ) actually do anything about it?

 

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Lessons From The Derecho 9-1-1 Failure: When Industry Self-Regulation Is Not Enough.

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The FCC released a fairly thorough report on the widespread 9-1-1 failure that followed the June 2012 “derecho” windstorm. For those who don’t remember, the derecho differs from most weather events by coming up almost without warning. According to the report, carriers had approximately two hours of warning from the time the derecho started in the Ohio Valley to when it hit the D.C. Metro region.

 

As a consequence of the damage done by the derecho, Northern Virginia experienced a massive failure of its 9-1-1 network, leaving over 1 million people with working phones (at least in some places) but no access to 9-1-1.  West Virginia experienced systemic problems as well, as a did a scattering of locations in other states impacted by the derecho. Verizon maintains the network in Northern Virginia, while West Virginia is managed by Frontier.

 

In both cases, the report concluded that both Verizon and Frontier failed to follow industry best practices or their own internal procedures. To be clear, this was not a massive dereliction of duty. But the accumulation of some corner cutting over here, some poor practice over there, meant that when the unpredicted crisis hit the system suffered critical failures precisely when most needed. Unlike just about every other part of the network, where providers balance the cost of hardening a network against potential events with a number of other factors, the core 9-1-1 system is explicitly supposed to remain operational in even the most extraordinary circumstances.  It is the foundation of public access to emergency services. As long as I can contact the phone network, I should be able to get 9-1-1 service. Public safety responders rely on the public reporting emergencies so that they can efficiently deploy resources as much as the public depends on its ability to contact emergency services through 9-1-1.

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