Tales of the Sausage Factory

McDowell Forgets He Already Voted That FCC Has Authority To Enforce NN Rules.

I recently complained that no one else ever seems to follow the record on the network neutrality stuff. But Commissioner McDowell took the prize for failure to remember what he had previously voted for in this very proceeding back in March 2007 when the Commission voted out the Notice of Inquiry that started this whole thing. Mind you, McDowell should not feel too bad, given that nobody else at the FCC seems to remember this stuff either. Not when they wrote the Comcast/BitTorrent Order, nor even when they wrote the Notice of Proposed Rulemaking last week. Despite the fact that both items are actually in the same blasted docket. Because good God almighty, how hard is it for the staff at the FCC to actually know the friggin’ docket? It’s just the basis for this entire proceeding. And the entire collective agency cannot remember that it voted as settled law by 5-0 that it has authority to regulate and enforce network neutrality rules. And that McDowell not only voted in favor, he explicitly concurred!

I swear, it’s enough to make a poor obsessed policy wonk tear out what’s left of his hair and beard.

More below . . . .

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Tales of the Sausage Factory

D.C. Circuit Affirms Inside Wiring In Fairly Broad Opinion. Terrestrial Loophole Next? And What About Time Warner's TV Anywhere?

While folks in the suburbs sometimes forget this, a lot of people live in what we call “multiple dwelling units” (MDUs) — which is a fancy way to say things like apartment buildings and condos. One of the problems for people trying to switch from one provider to another for cable (for example, from Comcast to RCN) is that a cable operator may already have an exclusive deal with the landlord to provide cable services to everyone in the building. Competitors asked the FCC to ban such practices. In 2003, under Michael Powell, the FCC refused to ban such exclusive deals because “regulation is always bad, mmmmkayyy.” In 2007, as part of Kevin Martin’s attack on cable market power evil vendetta against the helpless cable industry, the FCC reversed this determination and found that under Section 628(b) of the Communications Act (47 U.S.C. 548) it needed to prohibit cable operators from entering into or enforcing such exclusive deals because Verizon can’t sell FIOS w/out being able to offer triple play. Predictably, this was widely denounced by the cable companies and their cheerleaders as not merely unwarranted, but a violation of law and certain to be overturned on appeal.

Turns out, not so much. In fact, in a rather broadly worded opinion, the D.C. Circuit affirmed the 2007 Order. Indeed, the language affirming the decision opens the door to the FCC tackling other cable issues, such as the terrestrial loophole (which Verizon wasted no time in pointing out to the FCC). Mind you, it remains unclear at this point whether the new FCC will have any interest in cable market power or not.

Still, there are a number of important aspects about this case, especially its implications for the FCC to regulate Time Warner’s TV Anywhere strategy, aka “how cable operators plan to preserve their existing business model and fight off Netflix.” I discuss this in more detail below . . . .

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Tales of the Sausage Factory

CellAntenna Still Plugging Away on Cell Phone Jamming — And Why They Must Not Succeed.

I’ve been following the adventures of CellAntenna, the company that wants to sell cellphone jamming devices in the U.S., for awhile now. As lots of folks would love to jam cell phones — from hotels that hate losing the revenue from charging for use of their phones to theater venues that want customers to enjoy the show to schools trying to tamp down on texting in class — you would think there would be lots of these jammers on the market. The problem, of course, is that Section 333 of the Communications Act (47 U.S.C. 333) makes cell phone jamming illegal. Just in case anyone missed this rather straightforward statutory prohibition, the FCC officially clarified that Section 333 means “no cell phone jammers” in 2005.

Enter CellAnntenna, determined to sell cell phone jammers legally. If you are going to develop a legal on something illegal, you either need something real clever (like magic cellphone blocking nanopaint), or a strategy for changing the law coupled with the sort of stubbornness that does not mind slamming into a brick wall 99 times because you might dent it on the hundreth time. CellAntenna has apparently followed this later strategy — and may be making some headway.

CellAntenna initially tried to get courts to declare Section 333 unconstitutional. So far as I can tell, that’s going nowhere. Next, and far more successfully, CellAntenna has recruited prisons to push the idea that only cellphone jammers can resolve the problem that prison security sucks rocks. This has prompted a bill to create a “prison waiver” exception to Section 333 (House version here) and a raft of credulous stories like this one that prefer to ask “isn’t it awful that we can’t jam cell phones” rather than ask “what the $#@! do you mean we can’t secure our ‘maximum security’ prisons?”

I explore the issues, and why I think creating an exception to Sec. 333 would be a big mistake, below . . . .

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Tales of the Sausage Factory

MLB Network Pays To Play To Get On Cable — Dumb NFL Stupidly Relies on FCC To Enforce Federal Law. Suckers.

On New Year’s Day, Major League Baseball launched its new cable network. Unlike the NFL Network, which has fought numerous battles with Comcast and Time Warner to try to get carriage, the MLB Network will debut in 50 million homes.

Gee, I wonder if it has anything to do with MLB giving Comcast, DIRECTV (now run by the guy who engineered this strategy, John Malone), and a bunch of other big cable boys an equity share?

Oh if only we had a federal law to prevent such extortionist use of market power, and a federal agency to enforce it! Oh wait, we do. Well why hasn’t the NFL filed a complaint? Oh wait, they did. Well then, why do Comcast, DIRECTV, and the rest of the cable cartel think they can get away with it? Oh right, because the FCC has done absolutely jack on this. Why? Because, as we all know, everything is perfectly wonderful and competitive in cable-land and trying to address the NFL’s complaint is just all part of Evil Kevin Martin’s wicked vendetta against this customer-oriented highly-competitive industry.

A bit more below . . . .

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Tales of the Sausage Factory

Waxman Gets It Right On USF Reform –Use Subsidies To Open Networks.

Although it doesn’t have a chance of passing this Congress, particularly with the utter gridlock over the bail out, but I gotta give a shout out to Rep. Henry Waxman (D-CA) for his targeted approach to solving the roaming problem in wireless. The proposed bill, H.R. 7000, says that any wireless provider that takes Universal Service Fund (USF) money needs to provide roaming to all other carriers “at just and reasonable rates, consistent with Sections 201 and 202” of the Communications Act. It does not require tariffing or rate regulation. It refers disputes over whether the terms are reasonable or the technology technologically compatible to the FCC, to handle under its well developed wireline procedures.

An entity can opt out of the program at any time by saying it no longer wants high-cost USF subsidy. But if you take government money, you need to provide roaming at just and reasonable rates.

And here is the kicker that makes it effective. The obligation to provide roaming applies to the entity accepting the USF, and any affiliates. In other words, if you have a rural subsidiary of one of the major carriers, then that carrier has to enter roaming agreements for its entire network. So if AT&T or Verizon are getting subsidies for “rural affiliate co.,” taking the money would require them to do roaming agreements on reasonable rates throughout their systems nationally. Don’t like it? Either stop taking public money or sell the rural carrier off to someone else who will do reasonable roaming.

I expect critics to say that this will mean wireless rural carriers will go under and the only thing to do is give wireless carriers money with no strings attached. I am dubious myself. Yes, the larger carriers may value their control over roaming to divest rural carriers. But there are plenty of mid-size carriers or small carriers willing to absorb these companies in exchange for federal subsidies who won’t mind making roaming agreements. Nor am I so convinced that the major carriers will actually decide they’d rather forgo the considerable subsidies they get now simply to preserve their control over roaming. Besides, if excluding parties from commercially reasonable roaming agreements is such an important element of the business model of major carriers, we have a bigger problem that needs to be more broadly addressed.

For too long, we’ve succumbed to the twin arguments that we must subsidize business to get policy goals, but we cannot actually demand anything in return because that would scare away the shy little beasties we are trying to coax, cajole and outright bribe into good behavior. I think it’s time to test that theory a bit. Although I’m doubtful the Waxman bill goes anywhere in the current Congress, I can hope that when Congress reconvenes in 2009 it will be reintroduced and given serious consideration.

Or instead, perhaps carriers will see the writing on the wall and try to solve this problem at the FCC before Congress reconvenes. Either way, its a good bill that nudges us closer to a more pro-competitive roaming policy.

Stay tuned . . . .

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Tales of the Sausage Factory

Leveraging Law & Order For Cell Phone Jamming.

Ever since the FCC explicitly banned cell phone jammers back in 2005, a company called Cellantenna has been working its little heart out to get Section 333 of the Communications Act declared unconstitutional or otherwise get the FCC to legalize cell phone jammers. (Not surprisingly, CellAntenna hopes to sell cell phone jammers, among other equipment.)

CellAntenna’s latest scheme is to focus on the issue of unauthorized cell phone use by prisoners. I’ll confess, I think the bigger problem is stopping the smuggling in the first place or keeping prisoners under observation so they cannot use cell phones. Or — if I wanted to be real daring — set up detectors and tap into cell phone calls made from prison cells (guards should so not be using their cell phones on duty, so they don’t worry me — set up secure areas where prisoners are not permitted if there is a real issue).

But even assuming a real problem, I don’t see that this gets CellAntenna where it wants to go. If state and federal penitentiaries want to petition the FCC for special permission for a waiver of Section 333, that should not be too difficult. But that’s a rather small market in the grand scheme of things.

Folks hoping for legal cell phone jammers anytime soon should not hold their breath.

Stay tuned . . . .

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Tales of the Sausage Factory

So Much For All That “We Are A Nation of Laws” Stuff . . . .

This past month saw, practically unmarked, the anniversary of the Saturday Night Massacre, in which Richard Nixon’s refusal to turn over the secret tapes sought by Special Prosecutor Archibald Cox for information relevant to the Watergate break-in. Nixon offered instead to turn the tapes over to a trusted Senator, who would provide the Special Prosecutor and interested members of Congress with summaries. The “massacre” involved firing the Attorney General and the Deputy Attorney General before Nixon found someone (Robert Bork) willing to fire Cox, because Cox refused to drop his subpoena for the tapes and accept Nixon’s compromise after D.C. district court Judge John Sirica denied Nixon’s claims of executive privilege.

Congress then had a choice. Whether to back down and accept the Nixon compromise on a theory that it would avoid a Constitutional crisis while maintaining a fig-leaf of Congressional oversight, or to appoint a new special prosecutor who would continue to demand the President honor the Congressional demand for the tapes. Congress chose the later, and the case went all the way to the Supreme Court, which ordered the President to respect the subpoena and turn over the tapes. A week later, Nixon resigned. At the time, many commentators and scholars saw it as a signature moment in the triumph of the rule of law and a vindication of the principle that the United States is a country of “laws, not men.”

Sadly, we now face another such signature moment. President demands not merely approval of his domestic surveillance program, but wants retroactive immunity for the phone companies that provided the Administration with customer information, lest a court determine that the telcos thereby violated Section 222 of the Communications Act and other provisions of law. Again, scholars and civil rights activists raise grave concerns about how allowing the President to defy the law creates serious concerns about maintaining the Rule of Law and respect for the Rule of Law. Again, we the people look to our elected representatives in Congress to stand firm and protect the rule of law against the encroachment of a Chief Executive convinced that he should have the freedom to act for the greater good. Unfortunately, this time, it looks like the Democratic leadership may prove a weak reed upon which civil liberties cannot trust to lean. Unless, of course, the people rise up clearly in one voice to say, in the words of Rudyard Kipling:

All the right they promise -— all the wrong they bring.
Stewards of the Judgment, suffer not this King!

More below . . . .

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Tales of the Sausage Factory

So What The Heck Is M2Z? And Why Do I Support It?

So recently, with all the spectrum stuff going on, I hear a lot of people asking about something called “M2Z,” usually like this: “So, what the heck is M2Z? And why should I care?”

Two very good questions. Briefly, M2Z is yet-another-plan to solve our national broadband woes through exclusive licensing. Specifically, it is about giving this one company a free, exclusive, national license for the 20 MHz of spectrum left over from the federal spectrum cleared for last summer’s AWS auction. While M2Z filed its application in May ’06, it took the FCC awhile to figure out what to do with it, since it doesn’t have any rules or pending proceedings that cover what M2Z wants. Finally, back in February ’07, the FCC issued a generic public notice of the application as required under the Communications Act and asked for piublic comment on what the heck to do about it.

Given my rather low opinion of Cyren Call’s efforts to get a free, national license, one might expect me to take a similar dim view of M2Z. Nor has M2Z helped its case much with some rather ham-handed “outreach” to the public interest community, by spamming the attendee list of the National Conference on Media Reform and creating a “Coalition for Free Broadband” website that looks all the world like an off-the-shelf Astroturf project.

Finally, Sascha Meinrath, who I look to for wisdom and advice on all matters spectrum, has written this blog entry on why he opposes the M2Z proposal.

Despite all this, I still think that M2Z deserves support. My employer Media Access Project filed a letter in support of M2Z. At the least, it deserves a good hard look before writing it off as yet another theft of spectrum via privatization.

Why? See below . . . .

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Tales of the Sausage Factory

Wireless Broadband As Information Service: Brand X Is Not Enough

According to this story, FCC Chairman Kevin Martin told the Senate he has circulated a Notice of Proposed Rulemaking to classify broadband via wireless as an “information service.”

This might at first seem no big deal. After all, in the wake of the Brand X decision, the FCC has moved to declare broadband an “information service” for DSL and cable and, more recently, for broadband over power lines (BPL). So, while I may not be happy with using regulatory classifications to achieve back-door deregulation, what makes wireless services different?

The answer has to do with the peculiar way the Communiations Act works, and the physical reality that use of the electromagnetic spectrum really is different than laying a fiber line. True, “technological neutrality” is one of the great regulatory shibboleths these days, even if it does to reality what Yiphtach (Jeptha) did to the people of Ephriam. But the law and reality do matter sometimes. Like here.

I must give fair warning that the analysis below hinges on what will appear to non-lawyers an incredibly bizzare and artificial distinction with no apparent difference in immediate outcome. But among lawyers, this is like mistaking a Satmar Chassid for a Hesder bachur.

Some analysis below.

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Tales of the Sausage Factory

FCC Last Call — Part I: Cable

The FCC sure had a busy day a its last open meeting on December 20, 2006. In addition to the oral argument for the indecency cases in the 2nd Cir., the FCC also had its last open meeting of 2006. While it is impossible to provide a thorough analysis until the FCC releases the full text of the orders it adopted, below find some brief impressions based on the what we know so far about the FCC’s cable franchising order, cable rates report. Later, a post on the surprise Return of the Incredibly Awful Cyren Call Proposal.

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