Tales of the Sausage Factory

Benchmarks and the Broadband Ecology.

As folks in broadband policy land know, thanks to the American Recovery and Reinvestment Act (ARRA), the FCC needs to present a National Broadband Plan to Congress by February 2010. The FCC has been holdng a bunch of workshops on various aspects of the plan as part of the inputs. I spoke last week at the Benchmarks Workshop. As I remarked to the sparse crowd, you can tell this is the deep uber-wonk stuff that only a handful of us find terribly interesting and vitally important while the rest of the world zones out and watches videos in their minds. For the short version, I include my latest “Five Minutes With Harold Feld.” Those more interested can watch the entire panel or read my written statement here. My more snarky comments (including my assessment of the panel) below.

More below . . .

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Tales of the Sausage Factory

FCC Announces 2.5 GHz Broadband Radio Service Auction. Who Will Show Up to Fight Over Rules? Or Bid?

One might think from the press coverage that all spectrum auctions are multi-billion dollar affairs like the AWS-1 Auction in ’06 or the 700 MHz Auction in ’08. But these auctions are the exception rather than the rule. More typical are the steady stream of small auctions like Auction 78, which auctioned remaining licenses in the AWS-1 band.

Which brings us to the Wireless Bureau’s Public Notice of the Broadband Radio Service (BRS) auction. Some of us have followed the adventures of the 2.5 GHz band back when it was “Wireless Cable” and the non-commercial licensees used it to offer closed circuit television for what we now call distance learning. These days of course, we know this as the “Broadband Radio Service” (BRS) and the “Educational Broadband Radio Service” (EBRS), and we care about the 2.5 GHz band as the home of Clearwire and the great hope of WiMax.

You might think that the “WiMax” auction would be a big deal — but only if you don’t know the band, its history, and the inventory up for auction. If you know that, you know why this auction is likely to prove as boring but ploddingly necessary as a run for office supplies.

So why do I consider this worth blogging about, other than my sentimental fondness for the band and my general obsession about things spectrum? Because (a) my cause celebre, anonymous bidding, faces its first post-700 MHz challenge, and (b) 2.5 GHz is the home of the major WiMax plays, and what happens in the auction has the potential to shape the field going forward and influence whether deployment goes more smoothly or gets all bollixed up.

More detail below . . . .

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Tales of the Sausage Factory

McCain Invented the Blackberry? Maybe Not, But It May Make A Good Symbol.

I know that staffers often feel intense loyalty to their bosses, but can we please try to keep the hero worship to a minimum? Otherwise, you end up accidentally making the other side’s argument.

According to this story, Douglas Holtz-Eakin, a top McCain policy adviser, held up his Blackberry and told folks: “You’re looking at the miracle that John McCain helped create.” Mind you, Reasearch In Motion is a Canadian company. When sold in the United States, it requires a contract with a wireless carrier. Each carrier controls which models it will permit on its system and what applications it will permit to run.

Or, in other words, the “miracle” is that we not only limit the development of technology in this country and force our hi-tech jobs to other countries, we actually allow a handful of wireless carriers to break the technology, limit it further, and jack up the price. This was probably not the miracle that Holtz-Eakin had in mind.

Still, the voter interested in tech policy and following up on the “McCain Miracle” for wireless would do well to visit the Blackberry Website. Notice how many models Blackberry makes? What applications it can run? Now select country U.S. and compare carrier by carrier. The carriers you can connect to at all each have a limited set of models and applications they permit you to use. Want one of the other Blackberries? Tough. Want to run an application the carrier doesn’t like? Too damn bad. Want to bring your own device so you don’t have to pay an early termination fee justified by an “equipment subsidy?” Dream on.

McCain was quick to dismiss this fulsome praise as a “boneheaded joke.” Still, it is worth noting that I am aware of no major leadership or initiatives by McCain on tech or media issue comparable with, for example, his efforts on campaign finance reform. This is not to say McCain has been devoid of accomplishments. He deserves credit for a strong stance in promoting low-power FM and for twice sponsoring the Community Broadband Act, designed to eliminate restrictions on the ability of local governments to provide broadband services. But by and large, as reflected in his tech policy, McCain’s chief accomplishment for tech — and his plan going forward — is to not do anything and let the private sector work its magic.

If you are satisfied with the “King Log” approach to tech policy and don’t mind that AT&T, Verizon, and other carriers get to call the shots over what Blackberry and other companies can do on wireless networks, then McCain is absolutely your man. If Holtz-Eakin was trying to make the point that McCain will let wireless carriers continue to “own the customer” and control how Blackberry and other devices evolve, and we peons should be content with whatever technological “miracles” the carriers graciously allow us, then he has a point. But if Holt-Eakin was trying to say that McCain got out there, showed real leadership in the face of political presure, and established lasting policies that even his political rivals now try to embrace as their own, sorry. I lived through it, and that ain’t how it happened.

Stay tuned . . . .

Posted in How Democracy Works, Or Doesn't, Tales of the Sausage Factory | Also tagged , , | Comments closed

Tales of the Sausage Factory

Rural Carriers File “Skype-Lite,” or “Wireless Carterfone, it's not just for developers and other parasites anymore.”

Today, the FCC will most likely dismiss the the Skype Petition. I’ve already written why I think this is a phenomenally bad idea and, while I continue to respect Kevin Martin and understand why he is doing this, he is totally wrong here. Once again, those worried about “unintended consequences,” “first do no harm,” etc., etc. fail to appreciate that a refusal to take action and granting permission to carriers to control the sorts of devices, applications and therefore what innovation and what free speech, go on over their networks is as much an action as granting the Skype Petition. There is no evading responsibility or avoiding unforseen consequences.

Which brings me to the Petition for Rulemaking filed by the Rural Carriers Association (RCA) to prevent exclusive deals on equipment, aka “Skype Lite.” Mind you, the rural carriers opposed the Skype Petition as much as any other carrier, arguing that it would be awful for their limited capacity rural networks if they could not control what equipment attached to their networks and what applications ran on that equipment. Nevertheless, they too are unsatisified in a world where market size and raw capitalism dominate. So, without ever once raising the same arguments as Skype or referencing the Commission’s information policy statement, the rural carriers argue for what amounts to the same relief as Skype, only tailored differently. Rather than regulate all carriers to require open networks, they ask the Commission to limit the market power of the major carriers by prohibitting exclusives. Otherwise, they argu, rural America will never know the joy of the iPhone or any other significant innovation — since the major carriers will tie up the most valuable applications and equipment in exclusive deals.

Nor are the rural carriers alone in finding the world according to Coase and Friedman less than they desire. The Commission has before it a good handful of petitions from carriers asking for mandatory roaming reform, access charge reform, and other limits on the ability of the dominant, vertically integrated providers from exercising their market power. Of course, all of these carriers asking for regulatory intervention are simultaneously celebrating the dismissal of the Skype Petition, piously telling Skype and the rest of the non-carrier industry that they are a bunch of parasites and that if they want access to a network they need to get their own licenses and build one.

I do not write to underscore the hypocrisy of these contradictory positions. That would be a waste of bits. Companies make whatever arguments they need to make in order to survive and thrive. No, my warning to the rural carriers and the rest of the Skype-lite crowd is simply one of practicality. You cannot win your request for special regulation while simultaneously singing the praises of the fiercely competitive broadband market and arguing that there is no place for regulation in this great free market success story. By contrast, if you simply admit that the industry now suffers from excessive concentration and the cure for this requires a comprehensive approach, you will find yourselves much more likely to prevail.

Martin indicated that he would dismiss the Skype Petition “without prejudice,” meaning that Skype or others will be free to try again — say, in six months or so when the FCC changes hands. In the mean time, I suggest the rural carriers and the other industry players anxious for regulatory relief — whether in the form of spectrum caps in auctions, mandatory roaming, or access charge reform — rethink their strategy.

Or, to put it another way, “regulation, it’s not just for developers and other parasites any more.”

Stay tuned . . . .

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

Tales of the Sausage Factory

Can users shape traffic better than ISPs? Some Lessons From The Electric Industry.

A dialog between David Weinberg and Seth Finkelstein on David’s blog raises an interesting question. Dave W argues (as do I) that a network provider is the last person who should engage in such practices, because of the inherent potentials for mischief and the possible conflicts of interest. Seth Finkelstein argues that, as a practical matter in the real world, only the ISP can effectively make a determination on traffic shaping that maximizes the use of the network for everyone, protects time sensitive applications, and prevents a “tragedy of the commons” from a handful of users absorbing all the bandwidth.

David Isenberg (in the comments and in this blog entry) makes the case that we don’t need traffic shaping, just more capacity or, in the alternative, neutral means to reduce packet flow such as throttling all traffic equally or going to metered pricing. Others (including myself) have argued that the problems of “bandwidth hogs” are exaggerated, or that users dissatisfied with the “best efforts” environment of the internet should stick with the network optimized for voice (the phone network) or the network optimized for video (cable, broadcast television) rather than “break” the internet to better accommodate these applications. Neither of these answers, however, is popular in regulatory circles. Further, it is a legitimate argument that we should allow ISPs to choose what product to offer customers. If an ISP wants to offer services optimized for VOIP by retaining the power to shape traffic, why shouldn’t it bring that service to market? This inevitably leads to a debate on market power, availability of choice, switching costs, captive customers etc., etc.

So lets shake things up with something new. I will — for the sake of argument here — accept the proposition that we “need” traffic shaping (like I “need” “scare quotes” so that people will not “quote” me out of context or argue on trivialities). But accepting the need for traffic shaping does not mean ceding all power to the broadband access provider. To the contrary, I argue that we will achieve far better results by giving subscribers the ability to shape their own traffic.

Madness you say? “Tragedy Of The Commons” and all that. Maybe, but the electric industry tells a somewhat different tale. As described in this NYT story, a fair number of folks are taking advantage of pilot projects that allow people to shape their power usage in the same way I propose allowing them to shape their Internet use. Such programs may save $70 Billion in the next few years. Why not see if they can have serious impact on the supposed exaflood of internet traffic that supposedly justifies traffic shaping? Especially when contrasted with the pur privatization model, that gave us the Enron scandal and the California black outs in 2001?

More below . . .

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

Tales of the Sausage Factory

Tribute to Becky Lentz

I occasionally grouse that no one in mass movements ever remembers the lawyers, or why else does my employer Media Access Project keep needing to check behind the couch cushions for loose change, given our track record? But I live in the bloody spotlight compared to some of the others that have made the modern media reform movement possible. Which is why I want to take a moment to give Becky Lentz, formerly of the Ford Foundation, a big shout out.

For the last 6 years, Becky worked at the Ford Foundation as program officer for their media policy and technology portfolio. In her own way, Becky had as much to do with the victories of the last few years in resisting – and in some cases rolling back – media concentration and promoting positive change. Last month, Becky’s term ended and she returned to Academia.

What makes Becky Lentz an exceptional figure when they write the history of the media reform movement? See below . . . .

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Posted in General, Tales of the Sausage Factory | Also tagged , , , , | 2 Comments (Comments closed)

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

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

Tales of the Sausage Factory

TotSF: Industry Mobilizes to Stop Philly WiFi

Surprise! Surprise! Surprise! As recorded in this article about last night’s community meeting in Philly, Verizon has mobilized to squash municipal wifi in Pennsylvania. This little gem, called House Bill 30, is a classic: it provides huge new public subsidies for Verizon while squeezing out competitors. My analysis below.

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Posted in How Democracy Works, Or Doesn't, Series of Tubes, Spectrum, Tales of the Sausage Factory | Also tagged , , , , , , , | 6 Comments (Comments closed)
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