Tales of the Sausage Factory

Will The Broadband Stimulus Package Get Strangled In The Craddle? And Why That Would Be A Disaster For Policy.

More and more, I’m feeling like a volunteer for the “Mark Sanford in 2012 Committee” finding out what “hiking the Appalachian Trail” really means. I have been a huge supporter of this program from the beginning. Even though I have had some concerns along the way, I have tried to keep the faith.

But the more I see about how this will get implemented, and the more deeply I delve into the details, the more I worry that a potentially great program capable of fundamentally altering our broadband future for the better to something so ridiculously screwed up that we will actually lose ground on both future funding and future policy.

The thing that finally broke my willingness to believe was this eyewitness report I got from my brother and business partner, Shmuel Feld, who attended the first NOFA Workshop held Tuesday, July 7 here in DC. A representative from RUS was explaining how applicants must fully document “unserved” and “underserved” at the census block level — but without access to any carrier data because carriers regard this as proprietary. Then, assuming the application survives to the NTIA/RUS “due diligence” round, the agency will invite broadband access providers in the area to submit confidential information to demonstrate that the area designated by the Applicant is not underserved or unserved. The applicant will have no opportunity to rebut any evidence submitted against the Application. From my brother’s report, this prompted the following exchange:

From Audience: If we, the people, do not know where the (BB) structures are or what the penetration numbers are and the big companies are not sharing these numbers or can deny them in the second round (when it is convenient) under the due diligence investigation, then how will we find out all of the information necessary for the application?

(Direct quote of RUS guy): Well that’s quite a challenge, isn’t it?

The RUS guy’s next line was a suggestion like “boots on the ground and canvassing a county” I could not hear him clearly because of the (I am serious) laughter.

OK, let me explain something to anyone from RUS or NTIA reading this. Giving Applicants an impossible task is not a “challenge.” It is a recipe for failure and a sign that you — NTIA and RUS — have screwed up big time.

I explore what I think is happening, and how it might still get fixed in time to save both the broadband stimulus package and the future of BB policy for the rest of the Obama Administration, below . . . .

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Tales of the Sausage Factory

Fragmentation Games: Playstation Gets “Boxeed,” TV Anywhere Gets More Content.

In the latest twist in the broadband fragmentation games driven the overlap of MVPDs and broadband access providers, users of PlayStation 3 can no longer access Hulu. As some may recall, Hulu tried a similar trick with Boxee.tv, resulting in a good old fashioned tech arms race wherein Boxee camouflaged itself as browser and Hulu responded by encrypting html.

Now Hulu has shut off the spigot to Playstation 3. Why? As I noted when Hulu pulled this on Boxee in the spring, the people who make money off the existing video subscription model (both the cable operators like Comcast and the content holders like NBC Universal) really dislike the thought of streaming media actually competing with them. As long as video stayed on the laptop and occasionally stopped to buffer, it didn’t really threaten the established business models. But make it possible to watch streaming media on your regular TV, with a quality practically equal to what you get on cable, and it becomes a very disruptive technology.

Playstation 3 and other game consoles are obvious candidates to disrupt the existing business model. They already plug into your television set, you are very familiar with the controls, and the manufacturers are always expanding the capabilities of the units to make them more “media centers” and less “game centers.” Like Boxee, they represent a real threat by making it possible for me to stream online content effortlessly on my TV and watch in exactly the same way I watch anything else.

Meanwhile, Time Warner and Comcast have found lots of other content networks eager to join the “Entitlement Program.” This initiative appears to be gathering critical mass very rapidly, which is not too surprising. While some of the bigger folks like Disney may hold out to see how they can maximize their return, the midsized players anxious about possible changes to the business model are likely to want to get in while the getting is good.

To conclude, what we have here is not anything obvious or dramatic. It is a few more ripples in the pond, indicating where the big fish swim. Any one of the “fragmentation games” incidents I’ve discussed, for example the ESPN360.com business which has been slowly ratcheting up to include more ISPs, is not necessarily significant on its own. Taken together, however, I see a pattern emerging that tells me where the fun and games will happen over the next few years. Heck, at this point, I’m not even sure what policy prescription I would offer. I just know that I’m seeing a bunch of ripples that might be nothing. Or it might be bunch of salmon and a great place to cast a line. Or it might be a school of piranha and I need to be very careful before wading in.

Stay tuned . . . .

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Tales of the Sausage Factory

Comcast & AT&T Apparently Smart Enough To Resist RIAA Invitation to Slit Own Throats.

As I’ve observed before, the IP Mafia have absolutely the worst judgment imaginable when it comes to their agenda. Now, the people who tried to kill the VCR, have just about killed internet radio, and who have sued dead people and sick children, have hit on another winning plan — using ISPs as enforcers.

Once upon a time and long ago, ISPs understood why it was important to be a common carrier and have no liability for this. That was why Congress included Section 230 and the “Good Samaritan” provision in the 1996 Telecom Act. It boils down to “when you act like a dumb pipe and just pass stuff from one place to another, we will not hold you liable for what happens.” For the same reason (as Bob Cannon explains over here on Cybertelecom), Congress generally immunized ISPs and created the whole “notice and take down” scheme in the Digital Millenium Copyright Act.

But all that was before our ISP industry boiled down to a handful of companies that were also either big content producers or video distributors dependent on the good will of big content producers. Suddenly, from the perspective of the IP Mafia, a whole new world of possible backroom dealings opened up. A world in which a few companies could make policies that would cover nearly the entire high-speed access market, and where they either shared common interest with the IP Mafia or could be “persuaded” to do so by threatening to withhold needed video content.

And so, the MPAA and RIAA walked right into my cunning trap, the fools! Alas, turns out Comcast and AT&T were too clever for me.

More below . . . .

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Tales of the Sausage Factory

Martin Gets the Ball Rolling On “Blocking” Investigation: What Does It Mean And What Happens Next?

As always, I am impressed with the ability of so many people to hate whatever Kevin Martin does, and for so many different reasons! At CES, Martin announced that the FCC would investigate allegations of blocking content and determine whether they violated the FCC’s four broadband principles. Comcast pledged to cooperate in any investigation (although, unsurprisingly, Comcast representatives — along with supposed object of Martin’s affection AT&T and other big telcos and cablecos — said at CES they would restructure or eliminate FCC altogether).

As I said in my PK blog post, while details remain unclear, I am “cautiously optimistic” that this will be a good thing. But it did not take long for the folks in the “Martin is a bastard 24/7 crwd” to express themselves. DSL reports doubted this would go anywhere, while the “why ya gotta hate on cable” crowd at Techdirt opined that Martin would never investigate if it were a telco rather than a cable co.

So we flash forward to yesterday, when new developments began to percolate out of the FCC. Of significance:

1) The FCC issued a public notice asking for comment on our Petition for Declaratory Ruling that Comcast’s “network management practice” of messing with BitTorrent uploads violated the FCC’s “Broadband Policy Statement,” which includes a principle that network operators may not block or degrade content or applications. In a separate public notice (but as part of the same proceeding), the FCC also seeks comment on the Vuze Petition for Rulemaking on how broadband access providers handle and shape IP traffic generally. (Copy of Vuze Petition here, copy of our Petition here).

2) Separately, the FCC issued a separate public notice seeking comment on a Petition filed by Public Knowledge and the usual suspects asking the FCC to declare that wireless carriers cannot deny short codes or block text messaging. This goes after Verizon’s high profile “oopsie” of denying a request by NARAL for a short code. Although, as we pointed out in the Petition, the more likely and pernicious problem is with plain old anticompetitive blocking, such as denying a short code to VOIP provider Rebtel.com and denying applications to major banks offering competing services.

3) Comcast confirmed that the FCC has lanched a formal inquiry into whether it violated the FCC’s broadband policy statement. Comcast reiterated that it will fully cooperate with the FCC, and expects any investigation to show that Comcast did not block content and has engaged in legitimate network management practices.

Not bad for a commitment made a week ago. But what does it mean and where will it go from here? Analysis below . . . .

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Tales of the Sausage Factory

Look! My Solution Found A Problem! Comcast Degrades BitTorrent Traffic Without Telling Users.

O.K., free speech issues are always sexier. Nothing gets the public (or me) wound up like blocking NARAL or censoring Pearl Jam. But, as Ecclesiastes tells us: “Money answers all.” (10:19) At the very least, it tends to rivet people’s attention without the distraction of whether or not you like the speaker or the message.

So I was quite pleased to see the Associated Press run this story on how Comcast degrades BitTorrent traffic in the name of quality of service (QoS), especially after Comcast had denied such rumors as vicious lies last August. (Where is Mona “the Hammer” Shaw when we need her?) While my friend Greg Rose on Econoclastic gives his (to my mind quite plausible) theory as to why Comcast would engage in such blocking on a large enough scale to be worth getting caught, I would like to play out the public policy implications of Comcast’s actions.

As I discuss below, this recent episode underscores several of the critical points I have made in the past about the economics of access, but without all the sexy free speech stuff clouding things up. In particular, I hope all those idjit content producers like Viacom that oppose Net Neutrality they think it will help police content for infringement and give them an advantage over rivals who can’t afford to pay the “fast lane fees.” Because, as Comcast’s little tepid step toward “How to Monetize Monopsony Power and Make the World Your Bee-Yatch” shows, making a deal with the broadband access devil to police your content guarantees that broadband access providers will end up owning you the way Microsoft ended up owning IBM and everyone else who thought that they could leverage another parties control of a bottleneck facility to its own advantage.

Given the amazing track record the IP mafia has for making bad decision in this regard, I’m not exactly holding my breath they will see reason. But I can at least secure myself the bitter pleasure of saying “toldja so” after it’s too late.

More below….

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Tales of the Sausage Factory

Of Bandwidth Hogs, QoS, and Regulatory Chameleons

I can live with the internet as a best efforts network. I can live with the internet as a regulated utility. What I absolutely cannot stand is the idiocy of the current regulatory scheme that allows broadband access providers to justify the deregulated state of a competitive best efforts environment because they need to provide a public utility.

Case in point, Comcast’s recent actions of cutting off “bandwidth hogs” and purportedly throttling BitTorrent traffic to its subscribers (Comcast denies it targets BitTorrent traffic). Comcast in its user agreement explicitly reserves the right to cut off users using “too much bandwidth” — although Comcast refuses to say how much bandwidth is “too much.” Comcast defends its actions (including the secrecy of the bandwidth limit) on the grounds that “bandwidth hogs” overload the system capacity and thus slow down everyone’s use of the system.

As I discuss below, Comcast and the other broadband providers are speaking out of both sides of their mouths. They claim they have no liability for anything and should not be regulated because they are providing “best efforts” services and everyone knows it. But when they want to cut off users, tier traffic, or indulge in other behavior that sticks it to subscribers they haul out the “Quality of Service (QoS)” and “critical infrastructure” arguments. “What about voice?” They cry. “What about poor crippled Tiny Tim and his medical monitoring unit, cut off by some bandwidth hog downloading pirated child pornography and Al Qeda instructional videos (which, we will admit, makes a very interesting mash up when viewed via deep packet inspection)? You have to let us do whatever we want and charge whatever we want because people are relying on us for critical services.”

Of course, historically, companies that provided critical services were “public utilities.” At which point, the telcos and cable cos amazingly morph back into laissez faire “best efforts” providers and subscribers need to know there are no guarantees and that which we tell you three times may or may not be true.

My further analysis of the amazing regulatory chameleon, the private public utility, below….

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Tales of the Sausage Factory

Tiering, It's Not Just For Telcos Anymore

Years ago, I used to spend a lot of time in ICANN-land. Happily, my contacts these days are pretty much limited to the occassional post-cards from friends.

But a recent contretemps caught my eye. Apparently new registry contracts will now allow price-tiering for names. As Milton Mueller at ICANNWatch observes, this raises similar worries as tiered internet access.

This is why Sascha Meinrath’s & Victor Pickard’s new paper on redefining net neutrality is important. Meinrath and Pickard make the very good point that the openess of the Internet rests on more than just residential access providers. Those concerned with the current fight to maintain net neutrality — as narrowly defined as preventing the last-mile access provider from defining the internet experience — should be aware of the need to protect other potential bottlenecks from emerging.

And, for us old timers, there is a certainly irony. Back in ye ancient days, when the “destroy the evil tld monopolist Network Solutions” [now Verisign the registry, not NetSol the registrar] crowd were backing ICANN, one of their great boogeyman arguments for ICANN regulation of registries was it would prevent tiered pricing of names. Some of us tried to explain how things like “agency capture” work, and that therefore such policies could change unless we inserted suitable checks and balances in ICANN to maintain accountability, but we were just lawyers and other useless policy types and they were the engineers who built the domain name system, so what did we know? (Bitter? Me? Why do you think I no longer spend time in ICANN-land?)

What I love most about reality, is how it will always turn around and bite you in the rear end if you decide to ignore it. Reality soooo does not care that you chose to be ignorant of things like economics and political science, any more than it cares when idiots in poli-sci decide they can dictate technology and try to make idiotic rules about blocking net gambling or blocking indecency or outlawing peer-2-peer. Reality doesn’t care. It just is.

Gotta love something that democratic.

Stay tuned . . . .

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Tales of the Sausage Factory

Susan Crawford's Five Good Question

Susan Crawford, a law Professor at Cardozo and a Board Member of ICANN supportive of Net Neutrality, asks and answers five good questions about Network Neutrality. Chris Yoo, a law professor at Vanderbilt and opposed to Net Neutrality, gives his answers (along with Susan’s) here. Harold Feld, not a law professor anywhere, gives his answers below.

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Tales of the Sausage Factory

Last week in CALEA

(And you thought I’d given up on anything but Net Neutrality, didn’t you?)

So last week proved a busy one for the Communications Assistance to Law Enforcement Act (CALEA). CALEA requires that anyone building a “communications network” build it in such a way that law enforcement agencies (acting pursuant to a proper warrant, of course), can monitor individual sbscribers/users. Last fall, the FCC extended CALEA to include broadband access providers and voice over IP (VOIP) providers. For various reasons, this pissed me off. Meanwhile, a group of folks including the Center for Democracy and Technology and EFF Petitioned the DC Circuit to declare that the FCC had overstepped its statutory bounds in extending CALEA in this way.

Last Wednesday, the FCC issued its Second Order on CALEA, basically affirming the First Order and giving some new details (or at least it will when the text of the Second Order is released). Friday, the FCC defended its First Order in court. Reflections of yr hmbl obdnt below.

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