Tales of the Sausage Factory

Cable Industry Flips Off FCC, Fines To Follow? Expect Other Industries to Tell FCC To [Fleeting Expletive] Off Too.

I clearly missed a class in law school. Not once in my Administrative Law class did my professor ever tell me that you could respond to a federal investigation by telling the agency “We know you have authority, but we’d rather not answer these questions because you are a great big meany.” But then, I’m not working for the cable industry, which has repeatedly shown it has trouble with the concept that federal law really applies to them and that the FCC is supposed to be a regulator not a lap dog.

Today’s episode of “I Can’t Believe The Chutzpah” comes from the ongoing investigation by the FCC over whether cable operators are using the confusion around the DTV conversion to push users into buying digital tier service, and rent new digital set-top boxes in violation of the rules on set-top box interoperability, or just generally violating the law by changing channel line ups without notice to either subscribers or local franchise authorities, migrating stuff off basic tier without warning, or charging for additional tiers to get channels required by law to be available on the basic tier. Mind, I’d also like them to explicitly ask whether the cable guys are unfairly migrating unaffiliated channels to digital in violation of Section 616, but that’s just me.

Anyway, after getting a bunch of consumer complaints and reading Consumers Union’s letter to Congress (or at least hearing about it on NPR), the FCC sent out a bunch of letters of inquiry to the named cable companies and Verizon asking them to provide a boatload of information which would allow the FCC to determine if the consumer complaints were, ya know, true. Given that this is lots of people being potentially ripped off big time, the agency told the everyone that got a letter they had two weeks to reply.

Mind you, this is hardly an original process or unique to the cable industry. I should know. The FCC did the same thing in response to my complaint about the wireless microphone guys back in August. The FCC (also under Martin I should add) acted with similar swiftness and intensity back in 2006, when Verizon and BellSouth tried to keep charging USF fees on DSL after they were phased out. The phone companies, apparently under the same misconception that I was that even if you are a big company you actually have to obey the law, backed off. The cable companies have other ideas. And, if they get away with it, I’m sure the Bells, broadcasters, and every one else will follow suit.

So yesterday, NCTA,the trade industry for the cable guys, sent a lengthy letter to the FCC explaining that the FCC is not allowed to investigate the cable industry. They recommend that the FCC rescind the letters of investigation and, instead of having the Enforcement Bureau actually act on consumer complaints, the FCC should hold a nice, quiet Notice of Inquiry instead. Then, if Martin gets all the other Commissioners to agree, and the FCC asks nicely and without any legal compulsion to answer honestly or completely, cable operators might consider responding.

Now I just know, KNOW that there are people out there who hate Kevin Martin so much that they will decide that it is really O.K. for cable to tell the FCC to “fleeting expletive off and die,” because it is the poor helpless widdle cable guys and the evil Kevin Martin (I cannot help but observe that Verizon does not seem to have any problems complying with this request, but of course they are an evil minion of Kevin Martin, or the other way around. Besides, Kevin Martin hates the cable industry, so there!)

As what is often called a “consumer advocate,” I’m a little alarmed that we will now have a new doctrine that says “consumers can complain, but the FCC can’t protect them if we think the FCC Chair might enjoy it.” And while I would flippin’ think that the idea that the cable companies need to obey the law like everyone else would be bloody self-evident, not to mention that the consequences of letting industry dictate to the federal watchdog agency what it will and won’t respect on enforcement go well beyond the poor picked on widdle cable guys to whatever industry you don’t like (in my case, wireless microphone manufacturers — I can hardly wait for Shure to refuse to cooperate with the FCC next), I long ago learned that even bloody obvious things need explaining when it comes to the cable industry and their rabid defenders.

So I address the actual legal issues below . . . .

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Tales of the Sausage Factory

If I Love The FCC's Comcast-BitTorrent Order So Much, Why Did I Appeal It?

So last Friday, Media Access Project filed 3 Petitions for Review asking the federal courts to order the FCC to order Comcast to stop blocking p-2-p immediately. None of this wait until the end of the year crap. We filed on behalf of Vuze.com (in the Ninth Circuit), Consumers Union (Second Circuit), and PennPirg (a member of Consumer Federation of America) (Third Circuit).

Comcast, for its part, filed in the D.C. Circuit. I have not heard of any other filings, but it is possible.

More details, and what comes next, below . . .

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Tales of the Sausage Factory

FCC Responds With Fear and Trembling to My Scolding on Tardiness and Releases Two Additional Items

[Assume aspect of guiding light, hero, and all around object of devotion, Stephen Colbert]

Obviously stung by my scathing critique of the FCC’s failure to release the promised Notice of Inquiry on broadband industry practices, the FCC has now issued the promised NOI (technically, it issued a few hours before my post went live, but I know Stephen would want me to count it as a “kill”).

As an obvious additional attempt to curry my favor, the FCC has released two additional items that address long standing criticisms by myself and others, that the FCC’s annual “Broadband is Bustin’ Out All Over!” Report (aka the Section 706 Report on Deployment of Advanced Telecommunications Services to All Americans) dramaticly overstates the status of broadband competition in the country. In addition to the annual Notice of Inquiry, the FCC has also released this Notice of Proposed Rulemaking on how to improve the data collection and reporting process.

[End Colbert channeling]
More details below . . .

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Tales of the Sausage Factory

Great Paper on NN Out of University of Florida

I’m back from a vacation in Israel to discover an amazing economic analysis of network neutrality posted by my good buddies at Consumers Union on hearusnow.org. Written by University of Florida Economists Hsing Cheng, Subhajoyti Bhandyopadhya and Hong Guo, Net Neutrality: A Policy Perspective applies game theory to the network neutrality debate. They conclude that abandoning network neutrality would create a disincentive for broadband network providers to build fatter pipes.

If this analysis seems familiar, it’s because I wrote something similar (but without the fancy math) about a year ago. As always, I get warm fuzzies whenever economists confirm my Econ 101 “gut check.”

Of course, these guys being real economists (as opposed to undergrad posseurs like yours truly) have a bit more to say on the subject and use lots of fancy math that I will not try to reproduce. But I offer some brief plain language explanation (including what I think are the brilliant points in the analysis) below….

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Tales of the Sausage Factory

NAB Turkey of A Report

As reported at Consumers Union Hearusnow.org blog The National Association of Broadcasters has done its best to show that owning broadcast stations loses money. Unsurprisingly, they recommend relaxing local ownership rules to allow owners to chase the happy, mythical synergy rainbow that has proven such a winner for Clear Channel, Tribune, Viacom and growing list of companies that absorbed profitable businesses and turned them into failing operations ladden with debt.

We shall leave aside the absurdity of the NAB’s arguments for the moment to get to something even sillier, the absurdity of the NAB’s math. Not since fictional Fundamentalists supposedly redefined Pi as 3 has ideology so distorted the basic precepts of mathematics. Worse, these are not accidents or “fudging.” I count no fewer than two major errors in methodology or presentation per page as well as many major methodological errors that impact the paper overall.

How bad is this paper? It is so bad that you would expect it to appear in the “April Fools” edition of Econometrica. It is so bad that I would expect its author, Theresa J Ottina, to be banned for life from meetings of the American Economic Association. It is so bad that every professor of economics and statistical analysis should download it and give it to their class as a final exam question to see if the class can spot all the errors as a kind of economics “Where’s Waldo” of mistakes, gaffes, and deceits. It is such a botched attempt at a lie by statistical analysis that I have half a mind to file a complaint with the FCC requesting they sanction NAB and Ms. Ottina for violating the FCC’s requirement that submissions reflect an honest effort to provide true information (a certification NAB made in its filing).

What makes it so bad? And why does the NAB submit such a piece of obvious crap?

See below . . . .

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Tales of the Sausage Factory

Fighting Big Cable (and why it matters)

Most of my time the last few weeks has been taken up with cable ownership issues. If you want the short version and the immediate, easy action to take, click through to my friends at Free Press. For those interested in a little more detail and what else you can do, read on . . .

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Tales of the Sausage Factory

Consumers Union Gets Active on Muni Broadband

My friends at Consumers Union have set up a page on community internet on their HearUsNow.org.
They also have a take action page. I urge folks to check ’em out.

I really will get some more stuff posted soon. Just been real busy.

Stay tuned . . .

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Inventing the Future

consumers union telecom lobbying website

‘Consumers Union launched a web site (www.hearusnow.org [love the title! -H]) that is

designed to provide consumers with information on telecom and media

industry developments, help them shop for products and services, and

make it easier to lobby lawmakers and policy-makers on issues. “This

web site addresses the explosion of activist groups and energized

consumers who are frustrated by the government’s hands-off approach

when it comes to dealing with their concerns over higher bills, poorer

service, and the fact a handful of companies control their

communications,” said Gene Kimmelman, senior director-public policy

for Consumers Union.’

SOURCE: TR Daily, AUTHOR: Paul Kirby pkirby@tr.com

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