As reported by Christopher Mitchel from the Institute for Local Self-Reliance, Qwest has scored quite the little victory in its efforts to keep itself the world safe from real competition socialism. A state Senator and a state Rep introduced a bill that would have made it easier to for local governments to build municipal networks. Right now, it takes a local referendum vote with 65% to authorize a locality to build a network that offers commercial telephone service (and therefore any “triple play” broadband access service — or so they read it in MN). A State Senator and State Rep offered a bill to reduce the threshold on the referendum to a simply majority. By the time the relevant jurisdictional committee was finished, the revised bill included one of the favorite incumbent roadblocks to localities: a mandatory “feasibility study” designed to be so onerous and expensive to conduct that few local governments will want to even try.

Meanwhile, the good folks of Duluth are so desperate for real broadband that they made this joke video to get citizens to show support for bringing Google Gigabit Fiber project to town.

Question for the good Senators and Representatives of Minnesota: when you've got folks clamoring for real broadband, do you really want to be “protecting” your underperforming incumbent? By “clarifying” that your referendum law applies to any indirect provision of telecom service, and imposing a five year plan on municipalities, you are making it very hard for your local governments to — in the words of Duluth's mock Public Service Announcement — “suck up even harder” than the competition. While I am hardly privy to Google's secrets and innermost workings, I am willing to bet real money that when they weigh where to set up their pilot project, they will consider any possible legal landmines. Would you want to set up shop in a city where Qwest or some other provider might sue to block your use of city assets under the amended state law? Even if Google were to ultimately prevail, it would tie up the deployment in litigation. Who wants that, when the number of communities begging for Google to come and work its fiber magic keeps growing?

Mind you, there's a good argument that even this version of the bill is better than the current law. Dropping the referendum requirement from 65% to a simple majority will do a lot of good even with the feasibility study requirement. But should that really be the choice? Don't the people of MN deserve the better bill, without throwing (yet another) bone to Qwest to reward its failure to provide what people want and need?

So folks in Duluth, and other communities in MN trying to get Google Fiber, you might want to ask Qwest's buddies in the legislature to cut y'all some slack and pass the original bill without the study requirement. that would send a signal that MN is serious about bringing broadband to its citizens and would welcome the sort of public/private partnership that Google appears to be offering. Or perhaps the MN legislature is just rooting for the people of Topeka “Google,” KS instead of the folks in Duluth.

Stay tuned . . . .

Last week, I predicted the FCC would opt to auction the AWs-2/AWS-3 spectrum rather than adopt the M2Z proposal. Yesterday, the FCC issued it's teaser for recommendations to improve broadband adoption. One of these was “[c]onsider use of spectrum for a free or very low cost wireless broadband service.”

That, of course, was M2Z's chief selling point. They would provide a free tier for for everyone supported by adds and by the higher-speed, ad free pay tier. So do I want to revise my prediction on whether the FCC will adopt the M2Z or T-Mobile asymmetric auction proposal?

Not at this point. Sure, this tea leaf looks much more favorable to M2Z than it does to T-Mobile. But I note two things. First, the language says “consider” rather than simply “use.” The question of whether to require free service of some kind as a public interest obligation was teed up in the pending AWS-2/AWS-3 proceeding. If they were going to go with M2Z, they wouldn't say “consider,” they'd say “use spectrum . . . .” Second, there are a number of other ways to use spectrum for free or low cost wireless. These range from expanding the use of unlicensed spectrum to facilitate creation of community wireless networks to mandating “wireless lifeline”-type programs that would require all carriers to offer cheap or free access on a needs basis. It also remains to be seen whether the FCC will actually do anything other than “consider” such an approach, or whether revenue concerns and incumbent resistance will ultimately carry the day.

So while I'm pleased to see the FCC looking at spectrum from a public interest/public welfare perspective, I'm not changing my bet on how the FCC resolves the AWS-2/AWS-3 band fight. The real questions are (a) timetable, and (b) spectrum caps, yes/no? (and no, I haven't forgotten about Fred Campbell's standing invite/challenge for me to justify spectrum caps generally, just haven't gotten time yet). The FCC could conceivably issue an Order with service rules and schedule an auction date. Or it could put out a final set of rules for further notice. My personal bet is thy will move quickly — both to show they are taking action and because OMB would really like to book that revenue. But we'll have to see.

Heck, I could be entirely wrong in my prediction and they could go with M2Z, or some variant thereof. Stranger things have been known to occur.

Stay tuned . . . .

I've been rather pressed for time, hence have not had much chance to blog on the FCC's recent spectrum policy announcements for D-Block and the broadcast migration offer. Combine these two speeches with Genachowski's recent statement in an interview that the NBP will finance the $25 billion via existing programs and it is clear that the FCC will adopt the T-Mobile's “asymmetric auction” proposal for the AWS-2 and AWS-3 band, leaving M2Z high and dry. The only question is whether or not there will be spectrum caps to keep AT&T and Verizon from snarfing the good stuff, but do not expect the NBP to touch something as “controversial” as spectrum caps even by veiled implication the way the DoJ did in its comments.

Mind, this is another example of the “spectrum auctions are the crack cocaine of public policy” problem. The thirst for revenue pushes all other considerations out the window. I'm not convinced the T-Mobile approach is wrong (especially if subject to spectrum caps), and I think the D-Block finesse was extremely clever. But when revenue sits in the driver's seat, policy invariably takes a wrong turn somewhere along the road. But it is difficult to imagine how Genachowski could resist a $15 bn secret cash cow to fend off accusations that Democrats are once again writing checks against our children's future blah blah blah.

I unpack all this below. . . . [Read More!]

I have a fondness for the 3.65 GHz band for a number of reasons. In the first place, I was heavily involved in the the fight over the rules. For another, it seems to be filing an important niche in the wireless broadband ecosystem. So I was pleased when the FCC's Wireless Bureau resisted the invitation to get involved in interference disputes in the band. OTOH, it also highlights the value of having a referee with jurisdiction in case something does go wrong.

I know I'm getting to this late, as the decision came out at the end of December, but it's been a busy time. More below . . . [Read More!]

Time to clear up a little piece of unfinished business for which I and this humble blog can claim some modest responsibility. The FCC finally issued it's long awaited Order on wireless microphones stemming from this blog post and the subsequent complaint/Petition for Rulemaking by the Public Interest Spectrum Coalition (to which a special shout out to the folks at New America Wireless Future is due, given the fantastic amount of work they did on assembling evidence and helping draft the document).

As one can tell from this FCC press release describing the details, we pretty much got what we wanted — although not entirely and not in the way we expected. But, as I noted in this press statement in my role as Legal Director of Public Knowledge, we're very happy with how things turned out. Briefly:
(a) all wireless mic users are now granted legal status, this is done pursuant to the FCC's Part 15 rules for unlicensed rather than the “license by rule” that we suggested, but my only regret about that is I didn't think of it when we filed.
(b) Everyone using wireless microphones needs to clear out of the 700 MHz band by Jun 12, 2010 — one year after the DTV transition and 15 months after the original date proposed by the FCC. Given how the Broadway people have been telling the FCC for months how they are off the 700 MHz band, this should not be too much of a hardship — especially for those who had no right to be there in the first place.
(c) The FCC will invest a boatload of its own resources, and gin up the FCC 2.0 machinery, to get the word out to folks and help consumers, churches, etc. handle the transition.
(d) The FCC will require that wireless microphones have signs and labels going forward to make sure that people understand the difference between licensed users and unlicensed users.

In addition, the FCC is having a further notice of proposed rulemaking that will:
1) Set the rules for the new Part 15 unlicensed wireless microphones.
2) Will examine whether to expand the class of Part 74 Subpart H eligible licensees to see if they should expand the class to give interference protection to some set of users — which would include who gets to be in the database of licensed services protected from operation of TV white spaces devices.

Yeah, that kicks the can down the road rather than saying flat out “anyone who was using a wireless microphone illegally is not entitled to protection against the TV white spaces devices, which went through the legal process and got approved.” But I can most definitely live with that. For one thing, I am confident that in an evidence-driven FCC which places consumer interests first, as demonstrated by this Order with its unprecedented investment of FCC resources for outreach (which we had not even dreamed of requesting except in the most general way of offering to help), will focus on the real question of whether or not there is interference and if so how to strike the appropriate balance between allowing new technologies and protecting existing users. Hopefully, this will inspire white spaces opponents to focus on engineering rather than trying to use scare tactics and celebrity “star power”.

More below . . .
[Read More!]

Progress and Freedom Foundation has recently published this piece by Adam Theirer and Barbara Esbin on how encouraging a deal between broadcasters and wireless providers to reduce the spectrum used by broadcasters and auction more spectrum for wireless use would serve the public interest. The piece raises some good points. For one thing, it is happily free of the “broadcasters are obsolete and we ought to take their spectrum back” rhetoric that often accompanies these proposals (not from PFF, I should add, but from a number of others). But the paper is woefully short on specifics. It touts the value of such a deal (freeing up spectrum for wireless) and lays out some general approaches, then urges the FCC and Congress to broker a deal between the broadcasters and the wireless industry through a number of possible auction mechanisms.

And now, the FCC has issued a public notice in the National Broadband Plan soliciting input on what they should think about using broadcast spectrum as part of the national broadband plan.

This got me thinking. Is there a mechanism the FCC could use, consistent with existing law, which would allow for the sort of broadcast band clearance the FCC would like to see? And, as a bonus, could this also clear some space for white space use? After some consideration, I hatched the scheme below. It is somewhat slower than than the wireless industry would like. I expect it would take about 5 years to finish the transition. But that is not bad given that it took 4 years to manage the DTV transition and auction from the time Congress set the hard date in 2005 to the end of analog broadcasting in June 2009. Also, my plan would allow continuing gradual build out, and combines some sticks to go with the carrots.

I'll add that I'm not convinced this is worth doing. I think the current obsession with broadcast spectrum as the solution for the upcoming spectrum crisis suffers the same myopia as focusing on offshore drilling to cure the energy crisis — it defers the crunch but doesn't solve the underlying problem. Wireless demand is going to continue, and we need to fundamentally change how we manage spectrum access (rather than spectrum allocation) to remain on a sustainable path for growth. I also point out, as we discovered while doing the broadcast white spaces proceeding, that there are a lot of non-broadcast uses in the existing television bands that are not broadcast users. These secondary services are going to get awfully squeezed if we crunch the broadcast bands further.

All that said, a well constructed auction could free up a nice chunk of spectrum in the short term that could promote wireless services and competition — especially if it came with a spectrum cap so VZ and AT&T didn't hog all the good stuff again.

More below . . . . . [Read More!]

Over a year ago, the FCC took a major leap forward on deployment of broadband and rethinking our national spectrum policy by voting to open the unused broadcast channels for unlicensed use (aka the “broadcast white spaces”). The Order left a bunch of questions unanswered, such as who would run the proposed database of available frequencies for white space use. Petitions for Recon got filed, lots of requests for revision and modification of the rules got made, and then nothing happened.

In fairness to OET, it's been a busy year. First there was a change in administration, then it was “all DTV all the time” until the magic June 12 deadline. Then it was bringing on a new FCC Chair and two additional new Commissioners. Then it was “National Broadband Plan all the time.” But still, it was with a tremendous sense of relief that the process had not utterly vanish off the FCC's radar screen that I saw the FCC's Office of Engineering and Technology release a Public Notice on the database. At last! We can get moving on this again, and hopefully move forward on the most promising 'disruptive' technology currently in the hopper.

And move we are, in a very peculiar fashion. Rather than resolve the outstanding questions about how the database provider will collect money, operate the database, or whether the database will be exclusive or non-exclusive, the Public Notice asks would-be database managers to submit proposals that would cover these issues. Further, parties have until January 4, 2010 to submit proposals. The FCC will take comment from members of the public on the proposals a month later.

I label this approach “good, but weird.” On the one hand, this seems to my non-engineering and well ordered mind to be totally backwards. How the heck can anyone tell if they want to manage the database when they don't even know what the requirements are. On the other hand, this basically accomplishes the same thing by having would-be operators that have been pestering the FCC to resolve the matter and trying to get the FCC to adopt rules that favor their own technology/business model a chance to stop pretending that these rules are neutral and the opportunity to make their pitch directly to the FCC. It also cuts down on the number of steps until we actually have a functioning database and can start deploying the technology. Finally, having just gone back and looked at the 2008 Order, the FCC was fairly explicit (Par. 221) that this was always the plan.

And, as usual, I really wish the FCC would not sit around taking months to decide things and then want an immediate response out of us poor public interest folks with our limited resources.

But on the whole, I'm very happy indeed.

More below . . . [Read More!]

Back in February, I bought a Samsung Omnia and regretted it almost immediately thereafter. So when my touch screen finally died, I resolved to get a BlackBerry Curve 8330, as my wife has one and recommended it. Yes, she is on Sprint and I am on Verizon, but you can get the same model on both networks.

I was totally unprepared for the sticker shock. $450. Why? Because I was not eligible to buy new equipment. Did I want a replacement Omnia? No, I decided I really did hate my Omnia $450 worth. Out of curiosity, I asked how much it would cost if I were getting a new contract. Answer: $150, plus a $100 rebate.

Verizon claims here in policy land that this represents a subsidy, which they can only do if they have handset exclusivity. Mind you, this model is not actually exclusive, but let that go. Could it really be that Verizon subsidizes my phone $400? That seems an awful lot. So I decided I would look on Best Buy, assuming that it would represent the actual unsubsidized retail price. So I went to bestbuy.com and plugged in Blackberry Curve 8330. Sure enough, the price for the Verizon phone was $499, close enough to $450 to make Verizon's subsidy claim feasible.

Then I noticed something odd. The same model phone, but for Alltel, cost $680, for Sprint, $750, and for MetroPCS, $400. Why should the same model phone, purchased at the same place, have such a wild swing in price? Remember, these are the prices without the subsidies for buying a new contract, so it can't be the difference in what the companies chose to provide. The Best Buy price should reflect the unsubsidized retail price. The only difference, in theory, is the plan, (unless we are pretending to make the same model available to every provider and really aren't). How could the wireless plan make such a difference?

Then it occurred to me where else I've seen this dynamic. Go to the drug store and you can see three people getting exactly the same prescription. But one pays $10, another pays $120, and the third pays $500. How is that possible?

Before elaborating below, I will first make it clear that I am rather short on critical data because most of the critical data is proprietary. So what I've got is a tentative hypothesis based on observed facts rather than something I can say with certainty. But it is enough for me to say: “Hey! FCC! Go and use your regulatory powers to get the providers to fork over the necessary data to see if I'm right.”

More below . . . [Read More!]

Some of you may recall that last month fellower Wetmachiner Greg Rose and I published our first industry report on the FCC's Auction 86. We dubbed this the “WIMAX Auction” because the band at issue, the 2.5 GHz band, is the focus of major WIMAX activity in the U.S. and the report described the current state of the industry (including coverage maps for Clearwire and Sprint and the most extensive private database yet of who holds what in the band), likely outcomes in the auction, and what the behavior of bidders in the auction would tell us.

One prediction we made, that the auction itself would attract very little interest because it was an “ash and trash” auction of the leaving in the band, held up pretty well. The auction opened on October 27, and closed Friday, November 6. In other words, the entire auction lasted a week (4 bidding days) — which in FCC terms is greased lightning (the 700 MHz auction last year, for example, went on for 38 bidding days covering over 2 months). Total haul was $20 million, which will hopefully serve as a reminder to folks that spectrum auctions are not all multi-billion dollar gold mines.

As promised, we will release a post auction analysis available with the spectrum maps and databases for $799 within the next few months, once we (meaning Greg) have a chance to crunch the numbers and the round by round results. (Those who pre-ordered at the reduced rate when they bought the earlier report do not need to re-order). If you order now (the report is available through Muniwreless.com and through BroadbandCensus.com), you will not only pre-order the post-auction updates, but will get a copy of the original report with its industry analysis and coverage maps.

Stay tuned . . . .

Can't help but take a brief break from the Net Neutrality craziness to be mildly amused at Adam Thierer over at Tech Liberation Front. We have an increasing number of reports that Blair Levin wants to bribe broadcasters to get off their spectrum as part of the national broadband plan. Adam is very excited by this and, of course, brings up the usual Libertarian argument that because property solves all problems, we should just make the broadcast licenses property of the broadcasters and let the endless innovation begin.

The problem with argument is that broadcasters could already do this. Under 47 USC 336(b), broadcasters can use their digital spectrum to provide “ancillary and supplementary services.” In a series of orders, the FCC has said that as long as full-power broadcasters provide one free over the air digital channel, they can do whatever they want with the remaining spectrum — including lease it out in the secondary markets to someone else. Under the statute, broadcasters need to pay a fee for any such ancillary services that would be the functional equivalent of what the broadcasters would have paid for the spectrum at auction (47 USC 336(e)), which the FCC has fixed at 5% of any annual revenue from the ancillary services.

[Read More!]