Tales of the Sausage Factory

A Quick Addendum To My AWS-2/AWS-3 Prediction

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 . . . .

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Tales of the Sausage Factory

Comcast Reacts To FCC Probe By Changing Fine Print

Well, it appears that Comcast has learned a valuable lesson from our complaint about blocking BitTorrent and subsequent FCC investigation. Sadly, but unsurprisingly, the lesson appears to be “make our policies more explicitly outrageous.”

My thanks to Marvin Amouri at Free Press for this excellent analysis of Comcast’s new terms of service. As Marvin notes, Comcast released this puppy quietly on its website, taking advantage of the pre-existing fine print to alter terms unilaterally. (Question for Comcast, if I don’t like the new terms, can I cancel without tirggering an early termination fee?)

Marvin really says everything that needs to be said on his excellent post, so I shall limit myself with simply rolling my eyes and wondering when we will have a Congress and an FCC genuinely interested in promoting broadband adoption and competition rather than providing cover for lazy duopolists squeezing locked in customers unwilling to invest in network upgrades. Oh yeah, I forgot. According to this Administration, we already solved the broadband problem.

Stay tuned . . . .

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Tales of the Sausage Factory

David Weinberger's Excellent Piece On Structural Separation

Despite the efforts to make common carriage and structural separation of wholesale and retail services a forbidden topic of discussion (go read the piece Greg Rose and I wrote last year on how industry rationalizes policy by controlling the debate), the old and highly successful idea of structural separation for carriers continues to undergo a significant revival. For starters, the Europeans have recently embraced structural separation as a policy goal, and have consequently begun kicking our rear ends in broadband speed, price and overall adoption. For another, some of us do not forget that structural separation used to be the law under the Computer Proceedings, and that this old form of open access is what gave us the internet in the first place. Finally, the argument advanced that simply because we have more providers in the market, the underlying rationale for structural separation goes away, as always struck me as poor policy driven by ideology.

I am pleased to see that David Weinberg has now written this excellent piece on structural separation. This marks the second internet “thought leader” to offer well-written and challenging pieces pleading the case of structural separation, the first being David Isenberg’s Making Network Neutrality Sustainable. Both these authors make the case for the next logical step in the Network Neutrality fight — going back to a set of rules that will prevent the network operators from interfering with the content that flows over the network by altering the economic incentives of the carriers.

Not surprisingly, we can anticipate two responses, the standard antiregulatory response (“Regulation is bad, hmmmmmmKay….Cause, if you do the regulation, then, that’d be government, and big government is bad, hmmmmmmKay….so regulation is bad, hmmmmmKay……”) and the economic response about how such a scheme destroys producer incentives so networks don’t get built. The chief problem with the producer incentive argument, however, is that the empirical evidence in Europe and Asia appears to prove the opposite case: a combination of structural separation and government subsidy facilitates deployment and maximizes incentives and revenue throughout the value chain, while focusing strictly on incentives for core network providers (e.g., the AT&T’s and Comcasts of the world) produces inferior results by every metric other than network operator profits.

My key takeaway here is that we continue to see a revitalized public policy debate that moves beyond the timid counsels of the edge-based industry players who define their “ask” in terms of what the incumbents have defined as possible, and despite every effort by the incumbents and their supporters to convince the broader public that “network neutrality” is dead and lawmakers should not worry their pretty little heads about it. Yes, we are in a legislative lull at the moment, as the public policy pendulum swings away from the incumbents and towards a more aggressive public policy more in line with the broadband success stories of Europe and Asia. But as Weinberg and Isenberg have shown, the public education and public debate remains quiet lively and continues to advance.

Stay tuned . . . .

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Tales of the Sausage Factory

Tim Wu Writes Incredibly Important Paper on Wireless Networks

Tim Wu, a brilliant scholar who combines an understanding of law, technology and economics to his writing, has written an incredibly important paper on wireless networks for the New America Wireless Future Program. You can download it here.

But Tim has done more than write a brilliant paper about why we need network attachment rules and network neutrality rules for wireless networks. He has — by accident or design — put his finger on the critical issue of public policy of our time. Do we regulate to increase public welfare, or do we only regulate to cure “market failure”?

What the paper is about, why it’s important, and what the opposition to it tells about the state of public policy these days, below….

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Inventing the Future

Making a Living in Languages (Redux) part 7: Give ‘Em What They Want

Last time: “Can’t Make a Killing From Platforms Without Killing the Community,” in which I said that those who develop a platform rarely recoup their cost directly, and so they might look to reduce their cost through open-source efforts.
Now: How do you create demand for a platform?

[This is an excerpt from a Lisp conference talk I gave in 2002.]

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Tales of the Sausage Factory

Tales of the Sausage Factory: It's Not Just About Sitefinder

A year and a half ago, I spoke at an event sponsored by the CATO Institute warning that ICANN was on track for a “magnificent trainwreck.” The trainwreck may well have arrived in the form of Verisign’s lawsuit against ICANN.

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