Tales of the Sausage Factory

The FCC Releases the Comcast Complaint Order Part I — Why This Is A Huge Win.

The FCC just released the text of the Order adopted on August 1 finding for Free Press on the Comcast Complaint and Declaratory ruling and denying Vuze’s Petition for Rulemaking. You can get the pdf here.

Larry Lessig pretty much says it all with his letter commending the FCC on its decision. For myself, I see this as another in a series of important wins, building on previous wins. Read it, particularly the footnotes, and you will find reference to the C Block openness conditions, the Adelphia Transaction Order, and every other baby step along the road that proved absolutely critical to getting us this far.

And, just as with those victories, we did not imagine for one moment that we had finished our task or that we had solved our problems. The danger to an open internet that remains a platform “as diverse as human thought” in the face of broadband providers trying to convert it into a combination shopping mall, movieplex and theme park continues. But we prevented Comcast from creating an “industry standard” around blocking or degrading peer-2-peer applications and put every ISP on notice that they will need to make real disclosure of their “network management practices” when those practices block or degrade subscriber choices. That the market would not respond on its own — at least not in a positive way — is evidenced by the fact that Comcast, despite all the negative publicity, promises to change, etc., is still targeting bittorrent. To the contrary, had we not acted, I do not doubt that other broadband ISPs would, over time, have adopted this and similar techniques, and without notifying their subscribers in any meaningful way.

We have also created another positive precedent for the day when a future FCC or Congress will adopt rules that provide the level of protection we need to maintain an open and competitive internet. This FCC opinion establishes the jurisdictional basis for any future rulemaking and, while declining to adopt rules now, explicitly states that the FCC retains the jurisdiction to create rules in the future — noting that the Carterfone network attachment rules began as an adjudication and ultimately culminated in Part 68 of the Commission’s rules. Despite a raft of theories (conspiracy or otherwise) to the contrary, this Order does not weaken our efforts to get general rules or get legislation passed. To the contrary, by recognizing that rules protecting the openness of the Internet further the important interests of the First Amendment (Par. 43 n. 203), this Order strengthens our ability to get rules or legislation in the future.

While it leaves certain critical questions — such as whether a third party can pay a broadband access provider for “premium” treatment regardless of user preferences — unresolved, it does so in a way that leaves us free to come back without any bad precedent or presumption. Copps and Adelstein can continue to press for adoption of a fifth principle on non-discrimination without fear that voting for this Order somehow put them in a box.

More below . . . .

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Posted in Cable, Censorship Public and Private, Series of Tubes, Tales of the Sausage Factory | Also tagged , , , , , , , , | 2 Comments (Comments closed)

Econoklastic

The 77% Solution, or Even with Three Different Methods You Still Get a Take Rate Greater than 70%

There has long been reason to suspect the data which the cable industry provides to various reporting services like Warren Communications News, Kagan Research, and Nielsen Media Research for U.S. cable coverage and subscribers precisely because the cable industry has considerable incentive to lie about it. Specifically they have incentive to under-report both coverage and subscribers so as to avoid a finding that the 70/70 limit – that seventy percent of American homes are passed by cable and that seventy percent of homes subscribe to cable – has been reached, thus triggering additional FCC regulation of the industry. The numbers have danced around the mid- to upper-60% range reported in these sources since 2004, only tipping over in Warren Communications News’ Television and Cable Factbook, which recently reported a 71.4% take rate to the FCC.1 When it became clear that the FCC was prepared to take action to invoke the 70/70 rule on the basis of the Warren data, the managing editor of Warren Communications News’ Television and Cable Factbook immediately called its own data into question in an interview in Communications Daily:

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.”2

More below…

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Posted in Econoklastic, General | Also tagged , , , , , | Comments closed

Tales of the Sausage Factory

Assessing the 700 MHz Order Part III — Anonymous Bidding Alone Makes This a Big Win

Regular readers will know that, as far as I am concerned, getting anonymous bidding automatically makes this Order a big win. I pushed hard on this in the lead up to the AWS auction a year and a half ago. Sadly, I lost. As a result, the cable companies were able to block the DBS guys from winning any new licenses, and the incumbents generally succeeded in keeping out any potentially disruptive new entrants (the cable guys having made it clear they would not compete with the cellular guys).

Fortunately, Greg Rose spent a year crunching the data and demonstrated that if the incumbents hadn’t rigged the auction, it sure looked like it from a statistical analysis/game theory perspective. With this “smoking gun” evidence in hand (utterly dickish footnotes by the Wireless Bureau staff to the contrary), we were able to persuade the Commission that adopting anonymous bidding rules would make the auction more competitive, give new entrants a better chance, and as a result probably increase the auction revenue overall.

So, having lost this last time around, I consider it a real coup to get it now. As both Google and Frontline supported anonymous bidding as necessary to encourage new entrants, I am hopeful that we may still get our “third pipe” provider even without wholesale open access.

Analysis below . . . .

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Posted in Spectrum, Tales of the Sausage Factory | Also tagged , , , , , , , , , | 3 Comments (Comments closed)

Tales of the Sausage Factory

My Academic Article on Unlicensed Spectrum Gets Published

Every now and then, I take a break from the delightful and snarky world of blogging to dash off the odd researched piece for an academic journal. This is always an annoying and painstaking process, because academic journals want footnotes not just the occassional link. They also dislike articles that use terms like “incumbent whankers.”

Still, the effort (when I can find the time for it) is usually worth it — at least from my perspective. You can judge for yourself by following the link to the Commlaw Conspectus website and downloading From Third Class Citizen to First Among Equals: Rethinking the Place of Unlicensed Spectrum in the FCC Hierarchy.

For those unsure if its worth slogging through 39 pages of lawyer writing, here’s a summary. The FCC has a basic hierarchy of licensed spectrum, licensed by rule (family radio service and a few other things), and unlicensed spectrum. From a wireless perspective, the FCC exists for licensed spectrum, has a few oddball things licensed by rule, and has a few slivers of space open for unlicensed spectrum. Unlicensed spectrum is the “third class citizen,” required to shut off if it causes the least interference to licensed services while accepting any interference that comes its way. When the FCC allocates spectrum rights, it does everything possible for licensed services while looking with askance at the free-wheeling unlicensed poor relation. As a result, licensed services get choice spectrum and unlicensed services get the leavings — and that on sufferance.

In my article, I argue that the First Amendment calls for standing this on its head. Licensing of spectrum came about because old technology couldn’t handle everyone using this all at once we call this the “scarcity rationale,” because the need to license spectrum to avoid interference made licenses ‘scarce’). But because the FCC must give the approval for any new technologies, the technology to eliminate scarcity (and thus eliminate the need for exclusive licensing) will never come about. This circular reasoning offends the First Amendment. Accordingly, when the FCC considers whether to permit unlicensed uses, it should need to justify its decisions under a higher Constitutional standard than it does in other licensing cases (“intermediate scrutiny” rather than “rational basis” for all you legal types out there).

Besides, I argue, it’s also better policy.

While I hardly expect the FCC and the federal courts to read my piece and exclaim: “At last! What perfect wisdom! What fools we have been!” I do hope this helps advance the debate some. As with everyone else who publishes in a field where the debate has simmered for a few years, I argue for a “third way” between licensing and commons. Rather than eliminating exclusive licensing altogether, or proposing we split the spectrum down the middle, I propose allowing a gradual evolution in technology and until exclusive licensing will gradually wither away, with perhaps a handful of truly sensitive services still licensed exclusively.

Of course, if that happened, your cell phone bill would drop like a rock, ubiquitous wireless broadband would become too cheap to meter, and television and radio conglomerates would lose their precious monopolies on the airwaves. So don’t hold your breath.

Stay tuned . . .

Posted in Spectrum, Tales of the Sausage Factory | Also tagged , , , , , | 1 Comment (Comments closed)
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