Tales of the Sausage Factory

The Google Non-Story On Network Neutrality — And Once Again Why Citizen Movements Are Citizen Driven.

Both Dave Isenberg and Tim Karr have already cast a rather skeptical eye over the Wall St. Journal story claiming that Google is in secret negotiations to get “fast lane” treatment for its content in violation of Network Neutrality principles. I’ll therefore limit myself to a few additional points. I’ll not along the way that one of the nice things about having a blog is that I can point to stuff I said a long time ago for the inevitable accusation that I am simply an apologist for the Great Google Overlords.

More below . . . .

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Tales of the Sausage Factory

I Go Away for a Week and AT&T Gets Cocky

So I trot off to enjoy my regular vacation from the 21st Century at the annual Pennsic War to discover that AT&T has taken my brief absence as an excuse to get cocky and suck up even more to the Bush Administration by block Pearl Jam’s anti-W lyrics. “Oopsie,” says AT&T. “All an honest mistake! Really!” Except — surprise! — it now appears that AT&T may also have blocked other groups during other live performances when criticizing Bush.

Isn’t it amazing how these “accidents” always seem to go in one direction rather than another? For example, wasn’t it just the most amazing coincidence last year when Comcast “accidently” snipped off an embarassing clip from a video on demand news report?

One may ask why these companies try to get away with such nonesense. The answer is (a) it doesn’t hurt them to try; and (b) they do get away with it. Especially when it comes to time sensitive speech, there is really no penalty for AT&T, Comcast, or any other megacorp with market power to engage in this form of corporate censorship.

On the other hand, as I observed recently, the potential rewards of sucking up to this administration can be quite considerable. AT&T has certainly shown it knows how to suck up to this Administration. And, in return, the Bush Administration Department of Justice let through the AT&T/BellSouth merger with a nod and a wink.

So we can expect to continue to see such “accidents” in the future, while the corporations and their cheerleaders brush off such corporate censorship as inconsequential random events that cannot possibly warrant prophylactic regulation. That we have achieved the worst excess of government censorship through the simple expedient of outsourcing is ignored and disregarded by these Libertarian defenders of the status quo in much the same way they ignore the reality that certain forms of regulation are a necessary prerequisite to genuinely competitive markets. But better the forms of free speech and the trappings of competition then actual free speech and real competition — if the cost of achieving either is to admit a flaw in the sacred dogma of the Gods of the Marketplace.

Stay tuned . . . .

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Tales of the Sausage Factory

The 700 MHz Endgame Part II: Assessing the Martin Offer and Manuevering Room for Replies

In part I, I wrote about Martin’s carefull PR blitz to frame the 700 MHz endgame. But its important to look at the substance of Martin’s draft order itself. Because, as always, Martin is damn clever, and has put stuff in there that is bloody tempting to go for the compromise. To keep this manageable, I will limit my discussion here to just assessing the rumored offer and how I think we could improve it, keeping in mind that this is just press reports and really doesn’t cover the panoply of issues. In Part III, I will provide my Field Guide for the Endgame, reminiscent of my original Impossibly Long Field Guide from April (how much things have changed in 3 months).

Assessment below . . . .

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Tales of the Sausage Factory

AT&T's $10 DSL and the Renomination of Commissioner Tate: What The Senate Confirmation Hearing Should Ask

The Consumerist runs this good but inaccurate report on AT&T’s offering its mandated $10 DSL intro rate for those who have not subscribed to DSL previously. AT&T accepted this as a merger condition when it acquired BellSouth last year. What Consumerist gets wrong is that this condition comes not from the FTC, which did not review the merger (regular readers will recall that it was the Department of Justice Anti-Trust Division that gave the merger a thumbs up with no conditions). The price control aspect came from the FCC, as part of the bucket ‘o concessions AT&T made after it failed to get McDowell unrecused and suddenly had to respond to Democrats rather than blowing them off with bogus concessions.

This matters for two reasons. First, it means that complaining to the Federal Trade Commission, as suggested by Consumerist, is not exactly effective. FTC had nothing to do with the condition and won’t enforce it under their merger authority. If AT&T makes it damn hard for people to order the cheap rate, then there might be a claim as an unfair or deceptive trade practice, but I think that is kind of a stretch.

No, the place to complain is at the Federal Communications Commission. While it doesn’t hurt to file a complaint with the FCC’s Enforcement Bureau, you will also want to make sure that you copy it to the FCC’s record in the AT&T/BellSouth merger via its Electronic Comment Filing System (ECFS). The relevant docket number is 06-74.

But, more importantly, this raises some serious questions that Congress needs to ask not merely about AT&T’s commitment to honoring the merger conditions, but also about the FCC’s willingness to enforce them — especially in light of statements made by Chairman Martin and Commissioner Tate at the time of the merger. Fortunately, President Bush’s decision to nominate Tate for a second term provides an excellent opprtunity for members of the Senate Commerce Committee to put these questions to Commissioner Tate directly.

Because while $10 DSL is important, this is also important to other AT&T merger conditions, such as network neutrality condition. And while, unlike many of my colleagues, I don’t think Martin or Tate are mindless Bellheads or wholly owned subsidiaries of AT&T, I do think it’s important to get them pinned down on the record that they will vigorously enforce the merger conditions and not allow AT&T to weasel out by “complying” in a way that deprives these conditions of meaning.

More below . . . .

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Tales of the Sausage Factory

Tonight, a Dramatic Conclusion for the AT&T/BellSouth Telenovella!

In the dramatic penultimate episode of the telecom world’s favorite Telenovella Death Star Reborn: The AT&T-BellSouth Merger, the forces of Network Neutrality and competition win a dramatic victory!

AT&T has submitted a new 20-page letter outlining the conditions it will accept for the merger. Unlike the previous concessions in October, which amounted to little more than a joke and a promotional offer, this set of conditions is quite thorough. The breadth and scope of the conditions leaves me positively breatheless. To mangle Woody Gutherie for a moment:
You shall be neutral, in all your networks
From the first tier backbone, to the retail last mile,
from special access, to the U-N-Es
You shall not leverage market power!

I need a couple of different posts to really cover the implications. But here are the headlines:

1) Network neutrality is required in its fullest form. AT&T cannot prioritize or degrade service based on third party payments or affiliation anywhere between the peering point and the residential “last mile.” So not only has the definition of network neutrality been solidified consistent with that advocated by Save Our Internet and others, but it has been extended from the last mile to the vertically integrated backbone.

2) Residential fixed WiMax is included in the definition of “last mile.” This is the first time net neutrality has ever been applied to a wireless network.

3) AT&T must divest the 2.5 GHz spectrum it would acquire from BellSouth. This addresses a concern raised by Media Access Project and others that AT&T/BS would have an overwhelming spectrum advanatage against other wireless players.

4) AT&T has an agressive build out schedule to provide DSL at 768 KBPS for $19.95/month throughout its coverage area.

5) AT&T agrees to numerous conditions that amount to a return to tariffs and price caps for telecom and DSL resellers and special access (commercial) customers. AT&T can no longer lock competing local exchange carriers (CLECs) or DSL resellers in non-disclosure agreements.

Bonus: AT&T agrees to “repatriate” 3,000 jobs BellSouth had shipped overseas and locate at least five hundred of these “repatriated” jobs in New Orleans.

In tomorrow’s concluding episode, expect the FCC to release the final Order on Friday December 29 and the deal to close immediately thereafter.

Roll credits. Special thanks to Commissioners Copps and Adelstein, for their amazing tenacity and skill. Free Press, Consumers Union, CFA, and the rest of the public interest community that fought like Hell. The tens of thousands of people who filled comments. And Commissioner Robert McDowell, for his amazing act of ethical fortitude.

Stay tuned . . . .

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Tales of the Sausage Factory

McDowell: “I Am Not A Pawn; Solve Your Own Damn Merger!”

In a very special Christmas episode of the Telecom worlds favorite Telenovella, Death Star Reborn: The AT&T/BellSouth Merger Commissioner McDowell gives his fellow FCC Commissioners a lesson on ethics, the power of the Christmas spirit to facilitate good will towards all men, faith in negotiations in multibillion dollar mergers, and why it REALLY PISSES HIM OFF when people try to use him as “a pawn.”

You can read McDowell’s written statement (and supporting documentation) here, and watch the archive of the video of McDowell’s press conference here. You can see the statement from my employer, Media Access Project, here.

But for my personal analysis, see below . . .

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Tales of the Sausage Factory

Latest AT&T/BS Merger Twist, and Why Bill Kennard Case is Different from Robert McDowell’s

In the latest chapter of the FCC’s most gripping “telecomnovella” Death Star Reborn: The AT&T/BellSouth Merger, FCC Chairman Kevin Martin has set in motion the process to get 3rd Republican Commissioner Robert McDowell “unrecused”. The FCC has been deadlocked 2-2 because Commissioner McDowell used to represent CompTel, one of the groups opposing the merger, creating a conflict of interest. (You can see my previous coverage explaining all this here.)

McDowell, while not champing at the bit to be unrecused, has announced he’s ready to serve if the FCC’s General Counsel tells him he has to vote to break the deadlock. So it becomes possible to get this done before the new Congress takes over. Although why this should be such a big deal is beyond me, since it’s not like Congress can directly interfere with FCC merger review, and the indirect threats for payback are already on the table.

Martin, conscious of the controversial nature of the move, wrote a letter to the Chairs and ranking members of the Senate and House Commerce Committees explaining the need for such extraordinary action. In doing so, Martin observed that the FCC General Counsel had previously authorized former FCC Chairman William E. Kennard to break a 2-2 deadlock despite Kennard’s previous recusal.

Now some months back, when folks first started wondering about the “McDowell Option,” I opined that while the FCC General Counsel could force McDowell to vote, such a move would be “extraordinary” and “To the best of my knowledge, it has never happened.” So what’s all this about Kennard then?

Art Brodsky does an excellent job explaining why the Kennard situation was radically different. But, my honor being involved and all, I decided to dig a bit deeper. As explained below, the facts on the Kennard case were so bizzare and different (starting with the fact that Kennard had not been legally required to recuse himself in the first place but had done so, in his own words “out of an abundance of caution”), that I still think my original statement stands and that, if the FCC unrecuses McDowell, and requires him to vote, it’s really breaking new ground.

More detail than you could possibly want (including a timeline and relevant quotes from Kennard’s public statement in 2000 on unrecusing himself) below….

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Tales of the Sausage Factory

The AT&T Merger Saga Continues . . .

No one could mistake last week’s twists and turns in the proposed AT&T/BellSouth merger for the excitement, titilation and hijinks of the Foley Follies. But by the staid standards of telecom policy, last week’s swirl of activity constituted a veritable Telanovella of intrigue and power politics. Duelling Congressional Committees! Kevin Martin pushes for a showdown, but Dems Michael Copps and Jonathon Adelstein hang tough! Martin stages a “strategic withdrawal,” but schedules a new vote for November 3 after he returns from his long-planned trip to Asia. AT&T offers new concessions, kicking off a fresh round of public comment and criticism of the merger. And what will happen to the Notice of Inquiry on network neutrality that Martin offered the Dems as an incentive to approve the merger? Is it still on the table?

I’m all aflutter, I tells ya. For my continued speculation, as well as my thoughts on the proposed AT&T conditions and how you can still make a difference, see below….

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Tales of the Sausage Factory

And Suddenly, the Universe Changed

Well, it’s been busy in the Senate today. While all the Senators were locked down by police on a mistaken report of gunfire, they took the time to confirm Robert McDowell for the FCC. For the first time since Michael Powell left in March 2005, the FCC is now back to 3 Republicans and 2 Democrats.

Over the last year, several controversial items have accumulated that the 2-2 Commission could not agree upon. For example, the long-awaited proceeding on media ownership rules, wherein the FCC will again try to relax or eliminate most ownership limits.

Critically, McDowell’s appointment strengthens Martin’s hand to approve the Comcast/Time Warner/Adelphia merger without significant conditions (whereas just yesterday I was hoping Martin would have to persuade the Democrats to agree to an order). The critical question — does Martin want to approve the merger without conditions? As I have written before, Martin has shown himself willing to stand up to the cable industry in the name of competition. For example, Martin co-authored an Op Ed with Senator McCain supporting imposing a la carte on cable.

So, what will Kevin Martin do? He has a free hand for the first time in his history as Chairman. Once again, I urge you all to help Martin make the right decision by following this link to file a comment urging the FCC to deny the Adelphia Transaction, or impose significant conditions.

As for the rest of the media ownership rules, the AT&T/BellSouth merger, and everything else in the media & telecom world

Stay tuned . . . .

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Tales of the Sausage Factory

Help Stop The Merger Madness

My friends at Free Press have set up this page to file comments opposing the AT&T/BellSouth Merger and the Comcast/Time Warner/Adelphia deal.

I won’t go over old ground again in detail here. You can read why I think the FCC should stop Comcast and Time Warner from dividing up the bankrupt Adelphia cable, the disappointing go ahead from the Federal Trade Commission, and my growing hope that the FCC will impose strong conditions or kill the deal. With a deadline for the companies to walk away from the deal fast approaching, you can help push the FCC to do the right thing.

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