FCC Responds With Fear and Trembling to My Scolding on Tardiness and Releases Two Additional Items

[Assume aspect of guiding light, hero, and all around object of devotion, Stephen Colbert]

Obviously stung by my scathing critique of the FCC’s failure to release the promised Notice of Inquiry on broadband industry practices, the FCC has now issued the promised NOI (technically, it issued a few hours before my post went live, but I know Stephen would want me to count it as a “kill”).

As an obvious additional attempt to curry my favor, the FCC has released two additional items that address long standing criticisms by myself and others, that the FCC’s annual “Broadband is Bustin’ Out All Over!” Report (aka the Section 706 Report on Deployment of Advanced Telecommunications Services to All Americans) dramaticly overstates the status of broadband competition in the country. In addition to the annual Notice of Inquiry, the FCC has also released this Notice of Proposed Rulemaking on how to improve the data collection and reporting process.

[End Colbert channeling]
More details below . . .

The Broadband Practices NOI

As expected, the NOI asks basic questions about pricing, industry investment, and so forth, and el zippo about the freedom of expression concerns I raised in yesterday’s post. It is entirely market centric, and most of the information sits in the hands of the incumbents. Still, I expect we can muster a few juicy items. For example, in addition to the Cringley piece, Consumers Union reports that broadband providers increasingly use high early termination fees to discourage folks from switching. You would think, between the lack of choice and high-switching costs, that providers had enough going for them to prevent churn. But a good greedy incumbent leaves nothing to chance! It’s this kind of consumer-screwing behavior that seperates the Alpha-Oligarch from the broadband wannabees.

Because this is a Notice of Inquiry that does not require publication in the Federal Register, the FCC can set the deadline for comments and replies on release. Comments are due June 15, with replies due July 16.

The Section 706 Inquiry and Rulemaking

Section 706 of the 1996 Telecommunications Act requires the FCC to make sure that deployment of “advanced telecommunications capabilities” are deployed to “all Americans” in a “timely fashion.” If not, Congress orders the FCC to take “immediate action” to “accelerate deployment.”

When the FCC did its first Section 706 Inquiry in 1998, it defined “advanced telecommuniations capabilities” and broadband networks capable of 200 kbps in either direction. It has stuck to that definition, with the occassional minor tweak to make sure the answer keeps coming out positive, ever since. To further stack the deck, the FCC only looks to whether a broadband provider has a customer in a zip code. If a provider serves one customer in a zip code, that entire zip code is considered served. Using this definition, the FCC continues to find a happy world of robust broadband competition available to all Americans, and it should therefore continue its highly sucesfull policy of giving incumbents everything they ask for.

Unsurprisingly, people who care about the impact of crappy broadband on our economic viability as a country, or who for other reasons like the idea of all Americans getting high-speed internet access, find the FCC’s speed criteria and use of zip code to measure availability of competition inaccurate. When you throw in that the data comes from unverified self-reporting, it becomes hard to find a difference in reliability between the FCC’s Annual “State of the Broadband” report and “Making Stuff Up Based on Industry Press Releases.”

For years, folks have pushed the FCC to change their criteria and methodology. For a start, Democratic Commissioners Copps and Adelstein routinely — and with increasing sharpness — criticized the reports for their lax methodology and bad definitions. The list of additional critics includes the Government Accountability Office, my buddies at Free Press, and Mesh God and all around Hoopy Frood Sascha Meinwrath. [Reminder: don’t forget to plug the International Summit for Community Wireless]

As you might imagine, I too have had the occassional critical comment, particularly since the rather bogus “competition is everywhere” conclusion gets tossed around by the anti-NN crowd. They like to argue that we don’t need regulation since competition solves all potential problems and the FCC report proves that we have competition. So no NN is needed. Q.E.D. Except that even if you accept the basic premise, the FCC data (and therefore its conclusion) suck rocks. And it is an axiom of logic that if your underlying premise sucks rocks, then you have not demonstratumed any quids.

So my compliments to Kevin Martin and the rest of the folks on the Commission for moving these two items out. From my brief scan of both of them, I think they ask the right questions. They get at industry structure, speeds, methodology, usage patterns, and also solicit information on whether specific demographic communities (e.g., Native Americans) or geographic communities (e.g., rural) are not getting served. They ask about the inter-relation of price, services and adoption. They ask whether inclusion of cellphones where subscribers do not purchase an additional internet plan should count. They ask about auctions, about unlicensed, and generally ask about what policies to adopt as well as how to measure adoption and how to track the success of policies.

My one complaint is that Kevin Martin continues to underestimate how much time it takes to put together good comments for something this complex. On the Notice of Inquiry, the FCC wants comments by May 16 (30 days from release) and replies May 31. The Notice of Proposed Rulemaking must appear in the Federal Register first, so comments in the NPRM are due 30 days after Fed Reg and replies 30 days after that. Given the complexity of the problem posed by the FCC, determining how to acquire the information for a sophisticated model of the broadband market — within the realm of options the FCC can reasonably implement — 30 days is way, way, waaaaay not enough time.

At least not for us poor folks in the public interest community interested in the right answer. If I had tons of money and a clear outcome I wanted based on my financial interest, I could get it done in 30 days.

So what prompted Kevin Martin to see the light and release these items? Personally, I credit the oversight of the Democratic Congress. Checks and balances works, people! And, as I observed previously, Kevin Martin has proven himself the prize pupil in all of the Bush Class of ’07 in learning how to cooperate with the Dems while still advancing the President’s agenda (I suppose it helps that this Administration’s one policy priority in telecom policy is domestic spying). So when Chairman Martin received some very pointed questions about this subject from members of Congress, backed by folks in the tech community that understand that we need real broadband, not happy talk and crappy service, Martin wisely decided to put something out on the subject that took all the criticism the FCC has received over the last several years seriously.

This is also classic Martin strategy of forcing his critics to put up or shut up while not committing himself to anything. When you get down to it, the FCC has not proposed anything really drastic in the way of changes. It has not actually committed to changing its methodology or otherwise coming up with results that would upset the incumbents or force the FCC to change course. So Martin can say quite honestly that he he listened to critics and took appropriate action in response, while holding off any significant change in policy. Meanwhile, all those critical of the FCC’s broadband policy now need to get their act together in 30 days and submit mammoth filings — which the FCC can then study at its liesure before deciding whether to make signifcant changes in methodology, which is itself a prelude to signifcant changes in policy. Played right, this can easily stay pending (while providing the appearance of furious activity and responsiveness) until January 22, 2009.

Finally, there is the likelihood that Martin actually does care about the merits. It’s not as if Kevin Martin is possesed by aliens who wish to cripple our nation in preparation for their assault on us with giant ants (and I, for one, welcome our new Giant Ant overlords . . . ) Even incumbents who like the universe the way it is want to know what is actually going on in the market, if only to be better able to forestall competitors. And pretty much everyone agrees that the FCC’s current methodology sucks.

Ultimately, however, the reason doesn’t matter. The two Section 706 items present a major opportunity to get something right in an area of critical importance. Hopefully, we can manage to do that for a change.

Because if we can’t, then you’ll be on notice Mister!

Stay tuned . . .

One Comment

  1. Keep it up! You have them on the run.

    Or, as basketball fans say, “numbers!”

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