700 MHz Endgame Part I: Martin Tries To Redefine “Open Access” With A PR Offensive

Martin has opened the endgame on the 700 MHz auction rules with some strategic press leaks to frame the debate and the circulation of his draft Order. According to USA Today and The Wall Street Journal, Martin’s draft proposes including a network attachment/wireless Cartefone rule on two blocks (the “C” and “D” blocks). At the same time, Martin is redefining “open access” to mean network attachment/wireless Cartefone (the issue popularized by Tim Wu with the help of the iPhone) rather than the wholesale obligation pushed by Frontline and the Public Interest Spectrum Coalition (PISC).

What makes Martin’s proposal particularly problematic is that it does actually do some good on issues I (and other folks in spectrum and media reform) care deeply about. It does represent a step forward. But it represents such a baby step, and deferred so far into the future, that it becomes useless for the near term (as Google argued in this recent filing (worthy of a post of its own)) and may actually take the pressure off the FCC to do something real like grant the Skype Petition or do something real on Network Neutrality.

Still, it presents a real challenge for the Democratic Commissioners as they enter into negotiations. Do they hang tough and risk losing everything on a 3-2 partyline vote? Do they accept a compromise, recognizing the political risk?

Worse for the Ds (and supporters of open access generally), the pressure from Congress has gone fairly hard against wholesale open access in recent days. The Republicans in the Senate and the House have bombarded the FCC with letters against wholesale open access. While some Ds (notably Kerry) have supported real open access, the Dem leadership and most Ds have remained on the sidelines. Still, tomorrow’s House Commerce Committee Hearing on Wireless Innovation will offer Democratic leaders to weigh in — if they so desire.

This Is long, so I am going to break it up into a couple of posts. First, the difference between Martin Open Access and Real Open Access . . . .

Martin clearly gets George Lakoff’s framing argument. Aware of how closely watched this proceeding has become, Martin has opened his push for rules with a controlled PR offensive. Most notably, he has sought to create confusion for the public interest community and silicon valley folks by changing the definition of the word “open access.”
It helps that Martin has been more succesfull than any other Chairman I can recall in stopping leaks at the FCC — usually by transferring the offending parties to the FCC equivalent of outer Siberia as a warning to others. This has given Martin an unparalleled opportunity to control the information flow and the public debate through strategic press leaks and interviews.

Martin also gets props for how he pitched this — as a “win” for Google and the Silicon Valley guys. As I’ve observed in the past, the press remains agog over Google and will gleefully report this as more evidence of the mighty power of the Google Overlords. As with last time, the fact that this is really a setback for Google and the tech guys will blow completely past the Google worshippers. This framing puts Google and the tech guys at a serious disadvantage in public opinion war, since the press has already called what Martin is offering a “huge victory” and a mighty defeat to the incumbents. “Now now,” Martin, the incumbents, and the incumbent cheering squads can say. “You may not have gotten everything, but you got a ‘big win.’ No one gets everything they want, and complaining that ‘open access’ doesn’t give you anything is just posturing. After all, haven’t you been pushing for ‘open access’ as the cure for what ails us?”

To which the rather complex answer of “yeah, real open access, not this fake open access, which we can’t even use until the networks get built and become widely available (probably not until 2010)” does not make a particularly good talking point. And, of course, while it is mostly useless, it isn’t completely useless (as I will explain in my next post), which makes it very hard for those pushing for real open access to mount an effective counter offensive.

So hats off to Martin for a well-executed first strike in the PR department. For those of us that care about substance, here’s the difference between “Martin open access” and “real open access.”

Redefining “Open Access”
As regular readers here know, Frontline and PISC have used the term open access in this proceeding as a requirement to sell capacity wholesale to rival service providers. It is a species of structural separation such as that urged by folks like Weinberg and Isenberg. We argue that opening the capacity to rivals will increase competition in wireless services by an order of magnitude, similar to what the old FCC rules did for ISPs in dial up and what open access structural separation has done for wireline competition in Europe.

But this is not what Martin proposes. What Martin calls “open access” means allowing any device to connect to the network. This is what most of us have called “wireless Cartefone or ”wireless network attachment rules. Tim Wu has popularized this issue, most recently in this Slate piece about why the iPhone is not really revolutionary.

To illustrate, lets pretend Martin’s proposal applied to the existing wireless world. Under the “Martin Open Access,” you could take your iPhone from AT&T to Verzion or T-Mobile or Sprint or some other wireless PCS carrier. That carrier could not prevent you from downloading applications to the iPhone using WiFi (or installed by other means), and you could carry all your music and any other software that runs on the iPhone or over its wifi connection with you. Clearly that’s an improvement over the current situation, in which you can’t run an iPhone on any other network and AT&T can still dictate what you run on the iPhone.

But, your iPhone would still have real limitations. If you weren’t near a hotspot, and were connecting through Verizon’s network, you would still have to pay the rates set by Verizon and the rules dictated by Verizon for its own network. If Verizon says “no streaming and no VOIP on our network,” than you couldn’t use those applications when connecting via Verizon’s network. Since it would be Verizon (or whoever else) that gives the device its mobility and potential for “always on” wireless connectivity, your iPhone would still have severe limits. And, because you only have a choice of three or four providers (sometimes even fewer), you will still be paying outrageously high fees and still rely primarily on a limited access wireles network.

So while under the Martin rule you could actually install Jajah or some similar service to get cheap long-distance or internation calling when near a hot spot, you couldn’t use that application on the wireless network you subscribe to if they don’t allow it. That rather limits the utility of the Martin open access condition.

I hasten to add this does absolutely nothing to solve the broadband competition or “third pipe” problem, especially if (as Google predicts in their recent filing), even well funded new entrants don’t stand a chance against incumbents under the existing rules. Given that several of the largest incumbents are also vertically integrated wireless and wireline broadband providers (e.g., the telcos and the cablecos), adopting “Martin open access” means saying good bye to the last chance to get real broadband competition in this country.

By contrast, real open access (such as that proposed by the Public Interest Spectrum Coalition) in the form of making up to 30 MHz of wireless capacity available wholesale, directly addresses the broadband competition problem and solves the problem of closed networks the same way open access on wireline networks did in the 1990s. When AOL tried to lock up subscribers in dial up, subscribers simply left for one of the 6,000 other ISPs providing dial up.

So to illustrate again with real open access: If AT&T tries to keep the iPhone locked up, I can lease capacity from licensees and start “Feld Wireless” Feld Wireless will offer a very cheap plain vanilla broadband connection with no restrictions. You can buy an iPhone from Apple the way you buy a laptop from Apple and plug it into Feld Wireless the way you plug an Apple Laptop into any wireline connection. If history is any judge, you’ll see dozens of folks like me in just about every market leasing access and providing all kinds of services from plain vanilla connections cheap to pricier connections with lots of customer service hand holding, bells and whistles. It’s what happened in the dial up world, it’s what happened when we imposed “open access” on the long distance market, and it’s what is happening in countries like the UK where they have open access/structural separation on broadband.

So there’s a huge difference between “Martin open access” and real open access. It’s a tribute to the success of our efforts to change the debate that Martin feels the need to make this kind of an effort to reframe the debate as the opening move in the end game. But as long as we remain unfooled and unfazed, we can press on to the next stage.

Next up: 700 MHz Endgame Part II: Evaluating Martin’s opening offer and maneuvering room for reply.

Stay tuned . . . . .