Tales of the Sausage Factory

Would Tom Wheeler Really Have Approved The AT&T/T-Mo Merger? Why I don’t Think So.

After weeks of speculation, it now appears certain that President Obama will nominate Thomas Wheeler to replace Julius Genachowski as Chair of the Federal Communications Commission (FCC), with Commissioner Mignon Clyburn to serve as acting until Wheeler’s nomination gets confirmed by the Senate. In recent weeks, Wheeler’s background as a lobbyist many years ago for first the cable industry and then the wireless industry have raised concerns that Wheeler remains more sympathetic to business interests than the public interest. As anyone who has read Public Knowledge’s official statement in response to the nomination can see, while we understand those concerns, we agree with many other public interest colleagues who think that Wheeler has an independent perspective and an open mind. Certainly we will have disagreements with the new Chairman (assuming Wheeler is confirmed), but we expect that Wheeler will actively work to promote competition and protect consumers.

 

Yeah, I know, that sounds like either wishful thinking or Washington insider talk. So allow me to explain my line of reasoning (since, unlike a number of other Wheeler supporters, I actually don’t know Wheeler at all). In particular, I want to tackle the current “Tom Wheeler would have approved the AT&T/T-Mobile merger in 2011.” It’s easy to say “oh, all that lobbying for the cable and wireless industry was long ago when they were scrappy upstarts. Why, that was so long ago that the cable industry were battling the broadcasters and the wireless industry were battling the telcos (as opposed to these days when the cable industry battles the telcos and the wireless industry battles the broadcasters)!” But if Wheeler was actually a supporter of AT&T/T-Mo, then it would seem to prove he still has sympathies to his old industry incumbent comrades.

 

I examine the People v. Tom Wheeler in the matter of AT&T/T-Mo below . . .

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Tales of the Sausage Factory

The Last Day of (Full Power) Analog TV And Our Post Transition To Do List.

Well, here it is at last. Finally, more than 13 years after the 1996 Act created a scheme to transfer us to digital television by giving all existing broadcasters $70 billion (at the time) in new spectrum rights, the great day of reckoning is here.

Give the FCC and NTIA, especially mid-season replacements Acting FCC Chairman Michael Copps and Acting NTIA Administrator Anna Gomez, massive applause for seeing this through to the end. You guys rock! As one of your 300 Million taxpayer bosses, I’m telling you to sleep in tomorrow. Oh yeah, it’s Saturday.

Once you’re back on Monday, however, and assuming the world as we know it did not end, we have a few items left on the clean up list: Wireless Microphones, LPTV, the UHF Discount for Ownership, and Public Interest Obligations.

This post is dedicated to the memory of Libby Beaty, Executive Director of NATOA. A tireless advocate for the importance of local government and its power to protect consumer interests. Today, Libby tragically lost her battle with lung cancer. She will be sorely missed.

More below . . . .

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Tales of the Sausage Factory

McCain Tech Policy — A First Reaction

When you show up as the butt of a joke on the Colbert Report, you should know you’re in trouble. And when, by merry coincidence, Stephen Colbert does a piece on your self-professed computer illiteracy the night before you release your long awaited technology policy, you are in real trouble. Especially after your campaign gets repeatedly nailed in debates in tech policy fora (such as my employer’s Innovation ’08) for not even having a tech policy, when Barak Obama had a fully developed tech policy and functioning advisory team way back in the beginning of the primary, and after former FCC Chairman and campaign surrogate Michael Powell goes into virtual seclusion for a month to develop your tech plan, you know it had better be Goddamn Frickin’ Awesome. Even if you have already signaled it is going to be an extension of the same “the market solves all our problems and even thinking about regulation angers the terrible market gods, scares away the happy competition fairies, and brings a plague of liberal command and control locust ‘oer the land” nonsense that marked Powell’s FCC tenure and has plunged our telecommunications sector — nay, our entire economy — into the crapper, it should at least be a well written and engaging song of praise to the gods of the market place.

No such luck. It reads like some crotchety technophobe knocked over the bumper sticker rack at an Ayn Rand Reading Revival and tried to rearrange them so it made a policy. Half of it isn’t even particularly tech specific. For example, I don’t find it a coincidence that the first six bullet points are just variations on McCain’s standard “I hate taxes” theme. They could have easily have applied to his agriculture policy, if you substituted “no new taxes on wireless services” for “no new taxes on sorghum.” Nor am I aware of a serious mass movement to tax wireless services (or sorghum).

As for the rest, well, see below. . . .

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Tales of the Sausage Factory

Iowa Broadcasters to FCC: “We Do Localism! All It took Was A 500 Year Flood.”

One has to admire the utterly ruthless and meticulous way in which broadcasters will move swiftly to exploit absolutely any possible set of circumstances for their regulatory advantage. Case in point, this letter from Sue Toma, Executive Director of the Iowa Broadcaster’s Association to FCC Chairman Kevin Martin, touting their involvement in their communities during the recent terrible flooding.

Mind you, I am glad that Iowa broadcasters can get it together to do their job during a 500 year flood. And it is the job of trade associations to tout the good its members do — even when it is the sort of thing we expect them to do. And certainly Iowa broadcasters should be praised for stepping up to the plate when needed and recognized for playing their part — along with the other community businesses and volunteers from around the country who, unlike the broadccasters, are not under a legal obligation to provide service to the local community. But of course, for the broadcasters, that is not enough. As usual, the broadcasters behave rather like spoiled 6 year old children who expect bribes to do their homework or their chores. Hence inclusion of this little zinger at the end:

I can’t help but note that the Iowa floods come at a time when well meaning but misguided activists are questioning broadcasters’ commitment to localism. My response: Spend time in Iowa, and see first-hand how local and radio and TV stations are serving our communities during the worst flooding in a century. Iowa broadcasters have once again proven their exemplary commitment to the communities that we serve, without the need for more mandates, paperwork and unnecessary regulation.

In other words, that stations actually do their jobs in a once in a century crisis gets them off the hook for the remaining 99 years, 11 months. To which I can only say, giving proper credit and appreciate to stations doing the work they are supposed to do, “get real.” The real test of localism isn’t just how you do in a crisis and that somehow gives you a free pass on the rest of the license period. The real test of localism is how you serve your local community on a daily basis. That broadcasters refuse even to list what programming they show and what they think their viewers get out of the programming choices — whether news, or entertainment, or exposure to local culture and matters of local interest — should raise serious questions about whether broadcasters take their role as stewards of a public license held in trust for the local community seriously.

I recognize that leveraging responses to natural disasters for regulatory goodies is a hallowed tradition among broadcasters, so I’m not offended at the Iowa Broadcaster’s Association rushing to send this letter as soon as their laptops dried out. But because broadcasters get a lot of mileage out of their so called commitment to localism — such as cable must carry, the right to play music without paying performance royalties, and a rule against satellite radio providing local content that might compete — someone needs to call them on this. You can’t get the benefits of being a licensee with a duty to serve your local community without shouldering the responsibilities as well. So just as my son doesn’t get out of doing his chores just because he did his homework — even if he got an A — broadcasters don’t get excused from serving their community every regular day just because they came through during a flood or some other epic crisis. Kudos for doing a good job on this one, but it’s still your job and you’re supposed to do it well.

And, given that nearly 1 million people took the time to tell the FCC during its localism proceeding that they thought local broadcasters were doing a lousy job serving their local community (I make no claims as to Iowa, that’s national), it doesn’t seem out of line for the FCC to require you to actually tell the FCC how your programming serves the local community as required by your license and to make that documentation publicly available, a requirement broadcasters have gone to court to resist.

Finally, I can’t help but note that low power FM stations (that full power broadcasters fight tooth and nail to keep off the air) have likewise done amazing coverage of the flood and heroic service to their local communities — while still managing to produce local content and serve their communities on a regular basis. If they can pull their weight while still more than complying withe the “mandates, paperwork, and unnecessary regulations” that ensure they serve their local communities, I think the rest of the broadcast community in Iowa can do so as well. And ought to.

Stay tuned . . . .

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Econoklastic

Lies, Damned Lies, and Understatements

The cable industry is running scared in the face of FCC Chairman Kevin Martin demanding a vote certifying that the cable industry has met the 70/70 test.  This test gives the FCC greater regulatory authority once cable is available to seventy percent of American households and seventy percent of those households subscribe to cable.  This is clear from the way the cable industry has pulled out all stops to avoid the finding, even persuading Warren Communications News to discredit its own Television and Cable Factbook, claiming that there are technical reasons for regarding it as unreliable.

It’s worth quoting the remarks of the managing editor of Warren Communications News’ Television and Cable Factbook to Communications Daily (also owned by Warren) on the subject:

‘The figures from the Television and Cable Factbook aren’t well suited to determining whether the threshold has been met, said Managing Editor Michael Taliaferro.  Taliaferro said Factbook figures understate the number of homes passed by cable systems — and the number of subscribers — because not all operators  participate in its survey.  “More and operators are just not giving up” those numbers, he said.  “We could go with two dozen footnotes when we start to report this data.”  Cable operators participating in the Factbook survey said they passed 94.2 million homes and had 67.2 million subscribers.

‘The FCC official who asked him for the cumulative figure didn’t say how it would be used, Taliaferro said.  If he had known, he would have provided a list of caveats, he said.  “It would have been a very lengthy email,” he said.  Taliaferro said he did point out the shortcomings in a phone conversation with the FCC official but didn’t put it in writing because he wasn’t asked to.  “I had no idea what they were doing with it.”’

Taliaferro, who relies on cable industry data to put out the Factbook, clearly came under a lot of pressure from the industry to badmouth his own data, but even then he didn’t get the job done.  If the problem is understating number of households passed and number of subscribers because cable operators refuse to provide the data, as Taliaferro suggests, then Warren’s Television and Cable Factbook must understate the number of households passed and subscribers.  This means that the real numbers — the numbers we’d have if all the cable providers coughed up the data — have as a matter of mathematical certainty to be greater than 70% coverage and 70% subscription.  Taliaferro, attempting to please the cablecos, has in fact given evidence that the Warren figure of 71.4 percent of homes having gotten cable as of October 10, 2007 has to be an understatement of the reality.

The only way the Warren data could fail to support invoking the 70/70 rule would be if cable providers systematically over-reported the number of households covered and number of subscribers.  And they’d have to be crazy to do that, since they want to avoid regulation at all costs.  I know from personal experience that the cablecos lie to avoid regulation.  It was patent from data submitted by Comcast and Time Warner in connection with the Comcast-Time Warner-Adelphia transaction that Comcast tried to circumvent the 30% cable ownership cap by submitting year-old data for some affected DMAs while Time Warner submitted current data. (You can see where I called them out on this in my expert submission on MAP’s Petition to Deny.)

This is why Warren is so desperate to sow confusion about its own data.  The Nielsen and Kagan numbers (which are lower than the Warren numbers) are estimates.  The cablecos don’t share nearly as much proprietary data with Nielsen and Kagan as they do with Warren, which is regarded as a safe, cable-friendly trade press outlet.  When Warren shared the data with the FCC, the footnote they neglected to provide with it should have read: “Don’t use this data for regulatory purposes because it will make the people who gave it to us very cranky.”  Hence the attempt on Warren’s part to cover up the embarrassing bits like a stripper at a police raid — by misdirection.

It’s also significant that two Republican FCC Commissioners, Deborah Tate and Robert McDowell, have made a huge  deal out of this non-story by writing to Taliaferro that “We wanted to take this opportunity to ensure that at least these two Commissioners are indeed seeking the trustworthiness, truthfulness, and viability of the data in question.”  Either they don’t understand what the mathematical meaning of the understatement by cable operators is, or they’ve decided to play cableco sock-puppets.  I’m hoping for the former, but I’m betting on the latter, athough I’d like to give them the benefit of the doubt.

In addition to voting the 70/70 finding on a 3-2 with Chairman Martin and the two Democrats forming a majority for real regulation of the cable industry, Chairman Martin should put forward a regulation requiring that the cablecos provide detailed coverage and subscription data publicly to the FCC on an annual basis, certified by the CEOs of the cablecos under penalty of perjury.  If Tate and McDowell vote for a rule like that with real teeth to keep the cablecos honest and provide the necessary data to the American people, then they really are concerned with the accuracy of data.

If they don’t, we need to ask whose hand is up the puppets’ arses.

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Tales of the Sausage Factory

Put Up Or Shut Up At the FCC on Net Neutrality “Principles”

When the FCC deregulated broadband by declaring it an “information service,” it also adopted four principles that purported to give broadband subscribers a right to “access lawful content of their choice,” “run applications and services of their choice,” “connect their choice of legal devices that do not harm the network,” and enjoy “competition among network providers, application and service providers.” All subject to “reasonable network management,” of course. So when a bunch of us in 2006 pressed Congress to pass a network neutrality law, a lot of folks claimed we didn’t need one because the FCC already had the authority to deal with any problems that might arise. And, when questioned on this very subject at his confirmation hearing for a second term, FCC Chairman Martin said the FCC had ample authority to deal with any violations of the four principles that might arise.

Thanks to Comcast and their decision to “manage” their network load by degrading BitTorrent,it’s put up or shut up time at the FCC. My employer, Media Access Project, along with Free Press and Public Knowledge, just filed a formal complaint against Comcast and a general Petition for Declaratory Ruling asking that the FCC hold that deliberately messing with a customer’s application while refusing to admit doing it when asked pint blank violates the FCC’s “four principles” and does not constitute a “reasonable network management practice.” This will also press the FCC to find out exactly what the heck Comcast is actually doing (since some folk remain uncertain). Given that Comcast initially denied the very idea as “internet gossip,”, instructed their line staff to lie to customers about it, and are still maintaining that nothing of interest is going on, it looks like the only way will actually find out what the heck is going on and why is to have the FCC pry it out of them.

Hey, maybe they are telling the truth. But the FCC is in a much better position to know whether Comcast is deliberately lying to its customers and, if so, why. Because while my friend and opposite number Jim Harper at Technology Liberation Front may be content to see if the market punishes Comcast for its “lack of transparency”, I see a lot of bad consequences in letting Comcast throttle traffic as a network management tool and then lie (or, at best, mislead) about it when asked about it point-blank by their customers.

At any rate, whether folks think we should regulate this kind of behavior or not (and I recognize that a number of smart folks not employed by cable operators feel we shouldn’t regulate this even if everything bad said about Comcast is true), we deserve to know whether the FCC has the authority to regulate this behavior, and the willingness to do so on an enforcement basis. Because if the cable and telco companies that swore up and down that we didn’t need new rules now come in and say the FCC has no authority to take complaints about their behavior after the fact or no authority to order any remedies, then we should know that. And if the FCC is going to leave us high and dry when broadband providers start degrading applications, then we should know that. Because while some folks may think that lying to your customers is an acceptable network management technique, or even an acceptable technique for managing elected members of Congress, I think most Americans would disagree. And I certainly want to know that by November ’08.

Stay tuned . . . .

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Tales of the Sausage Factory

Look Who's Talking 700 MHz: Edwards, Bloggers, and Moveon, Oh my!

[Channeling Our Great Master, Stephen Colbert]
In an obvious attempt to curry favor and win the valuable “Tales of the Sausage Factory” endorsement, John Edwards released a letter to FCC Chairman Kevin Martin the day after I announced I was scoping out his campaign. The Edwards letter endorsed three key policy positions of the Public Interest Spectrum Coalition: open access, network neutrality, and — my all time favorite and beloved of intensly geeky issues no one else gets — anonymous bidding.

That’s right! The Edwards campaign is actually cluefull enough and willing enough to get “into the weeds” to the point of endorsing anonymous bidding. Of course, the Edwards letter does not actually mention “ToTSF” or even PISC by name, but I’m sure that was just an oversight from the amazing speed with which they rushed to endorse the PISC positions after hearing that I was “checking them out.”

So, for all you folks from the Edwards campaign no doubt hanging on these words, all I can say is — well done! A tremendous Tip of the Hat to all of you. Still, in fairness to the other candidates (both Republicans and Democrats), I will need to wait to see whether they chose to endorse the PISC proposals before giving an official ToTSF endorsement.

[End Colbert]

Of course, Edwards isn’t the only one to start talking about the 700 MHz auction and what it means to our broadband future. For who else is talking about PISC proposals and the impact it appears to be having on Washington, 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

Look what the FCC Found in the Basement!

In response to a Freedom of Information Act Request filed by the Georgetown Institute for Public Representation Communications Law Projects and my employer Media Access Project, the FCC has now posted a collection of 42 final and draft reports relating to media ownership (no Hitchker’s Guide jokes please. Anyone who thinks these studies are definitive answers to anything needs to find their towel and get a life).

A very preliminary bit of analysis below….

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Tales of the Sausage Factory

“Updating” Media Ownership Rules — Is That Like Boiling a Frog?

It’s an old cliche that it’s easy to boil a frog. Don’t drop the frog in the boiling water — he’ll just climb out. Drop him in the pot and raise the temperature a little at a time. Before he knows it, he’ll be dead.

We have that with media consolidation and the non-stop relaxation of the rules. But instead of calling it “boiling,” proponents of consolidation call it “updating.” This attempt to describe relaxing the ownership rules to allow more consolidation as “updating,” when the evidence shows that the last round of consolidation kicked off by the 1996 deregulation has been a disaster for the industry and a disaster for democracy, came up again at yesterday’s media ownership hearings.

Powell tried to frame it as a debate about evidence v. “emotionalism.” He lost because the evidence did not justify his efforts to relax the rules. Now FCC Chairman Martin is trying to frame this as “updating” the rules, when a real “update” would mean forcing the biggest companies to sell off assets to scale back to a healthier size.

My analysis below . . .

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