Tales of the Sausage Factory

Cleveland and the Return Of Broadband Redlining.

I am the last person to deny anyone a good snarky gloat. So while I don’t agree entirely with AT&T’s policy blog post taking a jab at reports of Google Fiber stumbling in deployment, I don’t deny they’re entitled to a good snarky blog post. (Google, I point out, denies any disappointment or plans to slow down.) “Broadband investment is not for the feint hearted,”

 

But the irony faeries love to make sport. The following week National Digital Inclusion Alliance (NDIA) had a blog post of their own. Using the publicly available data from the FCC’s Form 477 Report, NDIA showed that in Cleveland’s poorest neighborhoods (which are also predominantly African American), AT&T does not offer wireline broadband better than 1.5 mbps DSL – about the same speed and quality since they first deployed DSL in the neighborhood. This contrasts with AT&T’s announcement last month that it will now make its gigabit broadband service available in downtown Cleveland and certain other neighborhoods.

 

Put more clearly, if you live in the right neighborhood in Cleveland, AT&T will offer you broadband access literally 1,000 times faster than what is available in other neighborhoods in Cleveland. Unsurprisingly for anyone familiar with the history of redlining, the neighborhoods with crappy broadband availability are primarily poor and primarily African American. Mind you, I don’t think AT&T is deliberately trying to be racist about this. They are participating in the HUD program to bring broadband to low-income housing, for example.

 

There are two important, but rather different issues here — one immediate to AT&T, one much more broadly with regard to policy. NDIA created the maps to demonstrate that a significant number of people who qualify for the $5 broadband for those on SNAP support that AT&T committed to provide as a condition of its acquisition of DIRECTV can’t get it because the advertised broadband in their neighborhood is soooo crappy that they fall outside the merger condition (the merger requires AT&T to make it available in areas where they advertise availability of 3 mbps). Based on this article from CNN Money, it looks like AT&T is doing the smart thing and voluntarily offering the discount to those on SNAP who don’t have access to even 3 mbps AT&T DSL.

 

The more important issue is the return of redlining on a massive scale. Thanks to improvements the FCC has made over the years in the annual mandatory broadband provider reporting form (Form 477), we can now construct maps like this for neighborhoods all over the country, and not just from AT&T. As I argued repeatedly when telcos, cable cos and Silicon Valley joined forces to enact “franchise reform” deregulation in 2005-07 that eliminated pre-existing anti-redlining requirements – profit maximizing firms are gonna act to maximize profit. They are not going to spend money upgrading facilities if they don’t consider it a good investment.

 

Again, I want to make clear that there is nothing intrinsically bad or good about AT&T. Getting mad at companies for behaving in highly predictable ways based on market incentives is like getting mad at cats for eating birds in your backyard. And while I have no doubt we will see the usual deflections that range from “but Google-“ to “mobile gives these neighborhoods what they need” (although has anyone done any actual, systemic surveys of whether we have sufficient towers and backhaul in these neighborhoods to provide speed and quality comparable to VDSL or cable?) to “just wait for 5G,” the digital inequality continues. I humbly suggest that, after 10 years of waiting and blaming others, perhaps we need a new policy approach.

 

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

Update on Cablevision Free Wi-Fi, and What It Means for VZ (and everyone else).

Awhile ago, I wrote about Cablevision’s decision to offer free wi-fi to its subscribers throughout its footprint. As I explained then, this amounted to a “Plan B” after the failure to win usable spectrum in either the AWS-1 auction in August 2006 or in the 700 MHz Auction in the winter of ’08. Now, according to this story at DSL Reports, Cablevision is massively expanding and improving its wi-fi service for customers. This represents a real challenge for VZ, more so IMO than Time Warner’s participation in New Clearwire.

Why? See below . . . .

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Tales of the Sausage Factory

Broadcast Flag Through The Back Door — Yet Another Episode of “Outsourcing Big Brother.”

The Motion Picture Association of America has asked the FCC to give it a waiver of something called the “selectable output control” rules for cable boxes. As usual, this apparently minor request for a waiver of an obscure FCC regulation of unknown origin, governing a highly-technical and mind numbingly boring set of rules about cable set-top boxes, hides a bold power grab designed to rip off every owner of a Tivo, VCR, or other perfectly legal recording device available to consumers to engage in the legal practice of recording television programs to watch them later (“time shifting”).

For details on this latest effort to circumvent limits on government by outsourcing the process to an industry cartel, aka “outsourcing Big Brother,” see below . . . .

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Tales of the Sausage Factory

700 MHz Aftermath: What Does The EchoStar Win Mean?

EchoStar getting a near-national footprint ranks as one of the major successes for the 700 MHz auction. Chased out of the AWS auction, deserted by its former partner DIRECTV, no one gave EchoStar much hope of winning anything significant (with the exception of yr hmbl obdn’t blogger).

But what does it mean? Can EchoStar become the broadband “third pipe” hoped for by Martin and others? Or is the conventional wisdom right that this is just about improving EchoStar’s subscription television service? Or is there something else at work here? According to the Wall St. Journal (subscription required), the same analysts that could not understand why Ergen would play, and did not believe he could win, now wonder what the heck he will do. Nor is the journal alone in asking this question.

My short version is: EchoStar cannot become a serious broadband provider with just E Block spectrum — particularly given the current service rules for E Block. But, as we all know, FCC service rules are fluid — particularly when licensees promise to deliver broadband services (the recent changes to the AWS service rules providing a perfect example). But even with favorable rule changes, EchoStar faces serious capacity issues if it tries to compete head-to-head with DSL or cable modem service.

Still, there are ways EchoStar can pull it out, especially if it focuses on rural markets with relatively poor broadband connectivity. While the E Block licenses don’t have enough terrestrial capacity to go head-to-head with FIOS or even the high-end cable or DSL services, it can provide a better option than dial-up or ridiculously expensive broadband currently available in flyover country and even in the exurbs. And then there are the perpetually swirling rumors of an AT&T/Echostar merger. Could the E Block merely be AT&T bait? More importantly perhaps, does even Charlie Ergen know what the heck his plan is? Or did he simply see an opportunity and grab it?

In advance of tomorrow’s lifting of the anti-collusion rules, when winning bidders will finally start talking about their plans, I offer my own speculations.

More below….

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Tales of the Sausage Factory

Verizon's “Sitefinder-lite,” Cox Traffic Shaping (Without Lying), And The Shape of Things To Come

Jim Harper at Technology Liberation Front pinged me (sort of) to comment on reports that anyone who subscribes to Verizon’s FIOS broadband service who mistypes a domain name will now land on a Verizon search page. So, for example, trying to get to i-want-sprint-cell-phones.com will land you on a a page like this (my thanks to ace domain name practitioner John Berryhill for capturing this in a screen shot and putting it up on his web page). Meanwhile, reports have surfaced that Cox cable is also interfering with BitTorrent uploads, although at least Cox has the intelligence to admit from the start that it actively manages traffic, rather than go through several rounds of idiotic denials like Comcast (which is probably why the Cox issue is getting a lot less notice).

Briefly:

1) I ain’t that excited about the Verizon DNS redirection in the grand scheme of things. Yes, it breaks end-to-end, and I’m not happy about it. But unlike traffic shaping, this development was foreseen and approved of by the FCC and the Supreme Court in the Brand X case when both pegged DNS as the thing that made broadband access an “information service” and therefore free from pesky regulation. At least Verizon’s redirection doesn’t actually hurt the average user.

2) OTOH, it does raise serious privacy issues and highlights the general problems of letting the ISPs control all of this. There was, after all, a reason we regulated telcos and cable cos to keep user information private. It also starts to raise a very troubling question — what happens when network operators and application developers learn to distrust all the basic protocols under which the ‘net operates? It works fine for the first few guys. But what holds this together is everyone agreeing on a set of basic protocols. Eliminate the trust in those protocols, and things start to break down.

3) Some folks that gave a great big yawn to Comcast’s traffic shaping have gone ballistic over messing with DNS lookup. But both are natural consequences of turning this stuff over to ISPs. Folks who hate the thought of even limited government regulation of network management but also hate the thought ISPs messing with DNS and other protocols have some tough choices ahead.

Thoughts below . . . .

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