Tales of the Sausage Factory

The FCC Never Regulated DSL, Oceania Has Always Been At War With Eastasia, and My Offer To AT&T.

Hank Hulquist over at AT&T writes that the FCC never regulated internet access.
It’s a funny thing, because I distinctly remember going through a process where the FCC reclassified DSL from a Title II telecom service to an information service. Let me rummage for a bit . . . . ah yes. Here is the link to the FCC’s 2005 Order reclassifying DSL as an “information service.”

In fact, come to think of it, I’m old enough to remember when the telephone companies wanted DSL classified as an “interstate telecommunications service.” Can I find that link on line? Why yes! Here it is: GTE’s DSL Tariff and the Bell Atlantic, BellSouth, GTE, and PACBELL DSL Tariff. (The telcos wanted these classed as Title II telecom to preempt state regulation, if you were wondering.)

And what does the first paragraph of the GTE Tariff Order say?

In this Order, we conclude our investigation of a new access offering filed by GTE that GTE calls its DSL Solutions-ADSL Service (“ADSL service”). We find that this offering, which permits Internet Service Providers (ISPs) to provide their end user customers with high-speed access to the Internet, is an interstate service and is properly tariffed at the federal level.

Which is why carriers providing DSL paid Universal Service support (paid only by Title II telecommunications carriers) until the FCC 2005 Reclassification Order.

[Funny story. The 2005 Reclassification Order phased out USF payments over the course of a year, but in 2006, rather than dropping the USF fee, the carriers tried to keep charging customers for a fee they no lnger had to pay. Then Kevin Martin threatened to investigate the Bells for false billing, and they backed off.]

More below . . .

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Tales of the Sausage Factory

Retrans Food Fight! Why This Administration Will Deal With Cable After All.

Remember how once whacky old Kevin Martin the Cable Playa Hatah was gone the FCC was gonna forget all about cable? Because, after all, cable was all vibrant and competitive and stuff and who needs dumb old cable when everyone has Broadband?

Item one in communications land for the new year is the first round of retransmission fights. The biggies at the moment are Sinclair/Mediacom, where Mediacom has tried to get the FCC to weigh in on its side, TWC v. Fox, TWC v. Food Network/Scripps Howard (which no longer includes Scripps broadcasting properties), and Cablevision v. Food Network. Although TWC and Mediacom agreed to extensions with the various programmers to continue to try to sort things out, and TWC ultimately reached an agreement with Fox, Cablevision and Food Network ended up in stalemate.

Result, Cablevision has dropped Food Network and HGTV. In the war for the hearts and minds of customers, the Food Network folks have launched web based outreach with clips and fact sheets. Cablevision’s response is a little harder to find, but digging through their customer service led me to this page which basically says “Scripps wanted to much money for their programming, we hope you enjoy the other cooking shows we have.” Unfortunately for Scripps, the broadcast TV fights have significantly overshadowed them.

Which brings us to the first point of importance for all those folks in policyland who keep insisting that “broadcasting is dead.” You will notice that from the perspective of people reporting news to folks outside policyland, keeping broadcast programming was much bigger news than people actually losing popular cable-only programming. Second point – this is Food Network’s first round of negotiations as a stand alone cable company without also negotiating for broadcast properties. This gives them significantly less leverage.

But all these pale beside the third point — cable (and I mean cable, not “MVPD”) regulatory issues remain important and the market power and consumer protection issue don’t disappear because we now have multiple delivery platforms. Millions of people spend billions of dollars on these services and care a heck of a lot about them. Like it or not, and despite all the coventional wisdom about youtube, twitter, teh inerwebz, blah blah, this medium and these programmers dominate — indeed, arguably define — our common national culture. That means cable policy will continue to be a vital part of the FCC’s focus despite a desire to do sexier things like wireless and broadband.

Which means the folks on the 8th Floor need to wake up, grudgingly admit that whacky old Kevin Martin wasn’t so whacky after all, and reopen the proceedings on wholesale cable programming unbundling, retrans, leased access, Section 616 reform, and the other issues around boring cable programming the FCC hoped it could forget about because broadband and wireless would solve evrything and who watched TV anymore anyway.

Stay tuned . . . .

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Tales of the Sausage Factory

Congrats to Adam Thierer! PFF to Get Needed New Blood and New Ideas (But Don't Worry, We'll Still Disagree On Most Things).

Adam Thierer, long-time friend and opposite number in the Libertarian Camp, has just been named President of the Progress and Freedom Foundation, replacing Ken Ferree. Frankly, I hope Adam will bring a dose of new thinking tp PFF, since Ken Ferree has pretty much spent the last several years explaining at great length why everything the Powell FCC did was wonderful, rational, and the epitome of all that was right in public policy whereas Kevin Martin was a revisionist wanker and traitor to the Neocon Revolution. Much as I’m sure this was amusing for the participants, it did get old after a bit.

I expect Adam and I (and PFF) will continue to disagree on most things regulatory. But I have found in the past that Adam is an intelligent and engaging person willing to actually listen to what other people have to say before responding — and generally sticking to substance rather than the ad hominem or mindless talking points favored by too many here in DC. In other words, he is the sort of Free Market enthusiast/anti-regulatory advocate who makes me work for a living and is a necessary counterpoint to make any system work.

I wish him luck, but (if you will excuse me) not too much success.

Stay tuned . . . .

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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

A Quick Note On The Departure of Kevin Martin

I will, hopefully, have time in the near future to write up my farewell to Kevin Martin and assessment of his term as Chairman of the FCC. In the meantime, I think Commissioner Copps gives a good assessment and farewell.

As I say, I hope to have more to say later. For now, I will simply say that I have enormous respect for Kevin Martin and for what he tried to accomplish, even when I disagreed with him.

More below . . .

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Tales of the Sausage Factory

MLB Network Pays To Play To Get On Cable — Dumb NFL Stupidly Relies on FCC To Enforce Federal Law. Suckers.

On New Year’s Day, Major League Baseball launched its new cable network. Unlike the NFL Network, which has fought numerous battles with Comcast and Time Warner to try to get carriage, the MLB Network will debut in 50 million homes.

Gee, I wonder if it has anything to do with MLB giving Comcast, DIRECTV (now run by the guy who engineered this strategy, John Malone), and a bunch of other big cable boys an equity share?

Oh if only we had a federal law to prevent such extortionist use of market power, and a federal agency to enforce it! Oh wait, we do. Well why hasn’t the NFL filed a complaint? Oh wait, they did. Well then, why do Comcast, DIRECTV, and the rest of the cable cartel think they can get away with it? Oh right, because the FCC has done absolutely jack on this. Why? Because, as we all know, everything is perfectly wonderful and competitive in cable-land and trying to address the NFL’s complaint is just all part of Evil Kevin Martin’s wicked vendetta against this customer-oriented highly-competitive industry.

A bit more below . . . .

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Tales of the Sausage Factory

Why Did AT&T Get Left Off The Cable Investigation List — A Very Boring Answer.

While killing time waiting for the Nov 4 meeting to start FCC Chair Kevin Martin discussed the recently opened investigation into cable pricing. To the surprise of those who conceive of Martin as simply having a “vendetta” against cable, the list of companies getting notices about the investigation included Verizon. OTOH, it did not include AT&T. Needless to say, the “Martin can do no good because he is EEEEVVVVVIIIIIIIIIIILLLLLL!!!!!!!!!!!” crowd hit on this as proof that Martin is merely doing the bidding of his telco masters (Verizon having been added to the investigation merely for protective coloring).

Well, I’ve given my views on Kevin Martin repeatedly. As I have said time and again, I may disagree with him a lot, but I don’t think he is an industry shill. He does what he thinks is right and the devil with the consequences. While this has its disadvantages, notably his managing to piss off the other four Commissioners and thus secure for himself a series of policy set backs and rack up a record of number of votes actually lost by the Chairman, it does mean I tend to look for an explanation that goes beyond “Martin is a bastard 24/7 and therefore this is part of an evil plot.”

Here, I think the non-AT&T conspiracy theory answer is fairly straightforward. It has to do with the particular practice the FCC is investigating — forcing customers to migrate to digital. As AT&T does not seem to be behaving in the same way as the named cable operators that got letters from the Enforcement Bureau, they are not being investigated.

OTOH, even if the FCC does find evidence of deceptive advertising practices or anticompetitive conduct, it may lack authority to act.

Thoughts below . . . .

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Tales of the Sausage Factory

Will The FCC Create An ICANN for White Spaces?

Mind you, I am generally pleased with the announcement by FCC Chair Kevin Martin that the exhaustive study of possible white spaces devices by the Office of Engineering and Technology (OET) proves that the FCC can go to the next step and authorize both fixed and mobile unlicensed devices. I shall, God and the Jewish holiday schedule permitting, eventually have more to say on the subject. But I can’t help but focus on one aspect of Martin’s generally outlined proposed rules that raises questions for me.

See, I spent a lot of time back in the day working on domain name policy with the Internet Corporation for Assigned Names and Numbers (ICANN). ICANN derives its authority through control of the authoritative list of top-level domain servers (“the root zone file”). Or, put another way, the entire structure of ICANN, which now has a budget in the tens of millions and an entire cottage industry that surrounds it, is based on the fact that ICANN controls access to a list that you must have in order to get internet access.

So I’m very curious about who will control the database that will work to supplement sensing as a way to protect over-the-air broadcasting and operation of (legal?) wireless microphones. If the FCC administers this database, and makes it freely available online, then things will work fine. The FCC is already supposed to maintain such a database, because it supposedly keeps track of every license and licensees have a responsibility to keep their license information current. In practical terms, it would cost some money and effort to upgrade the existing database to something easily accessed and updated on a dynamic basis, because the FCC has let this lapse rather badly. (Not their fault, really. No one likes to pay for “back office” or “infrastructure” and it has never really risen to anyone’s priority level.) OTOH, it means that actually upgrading the FCC’s existing database, and giving broadcasters and wireless microphone licensees incentive to keep their information current, will yield benefits beyond making geo-location possible.

OTOH, if the FCC outsources this function, it will be an invitation to disaster. A database manager –particularly an unregulated one — will have every incentive to charge for access to the database. While I don’t expect anything on the scale of ICANN, the possibility for real bad results goes up exponentially if no one pays attention to this kind of detail. Will the database manager get exclusive control? Will the database manager be able to set its own fees for access to the database? How will the database manager be held accountable to the broader community? These are questions that need to be answered — either in the Report and Order or in a Further Notice of Proposed Rulemaking.

My great fear is that the FCC will treat this as the equivalent of a frequency coordination committee. But it isn’t anything like a frequency coordination committee, since the whole point (from my perspective) is to open up access for everyone and not just for a handful of industry folks who can work the process and pay the fees. Worse, if the FCC delegates this to the broadcasters themselves, it will create an incredible opportunity to hamstring the process at the critical access point.

On the plus side, perhaps we can get Susan Crawford to go from an ICANN Director to an FCC Commissioner.

Stay tuned . . . . .

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Tales of the Sausage Factory

What Will Comcast Do Today? First Compliance Check On Comcast/BitTorrent Order.

Back on August 20, the FCC released its Order resolving the complaint against Comcast for blocking P2P protocols. As part of the remedy, the FCC ordered Comcast to provide a full report on its current “network management practices” within 30 days, along with a transition plan for how it intended to manage traffic after it discontinued its current practices. The FCC then invited Free Press and anyone else interested to keep a sharp eye on Comcast.

Comcast has sworn up and down that it will comply with the FCC’s Order and it is only appealing in the D.C. Circuit as a matter of principle. I, nasty cynical public interest dude that I am, so doubt this noble intention that i have filed a law suit of my own to get the FCC to clamp down on Comcast now. So, here we are at last on September 19. What does Comcast do?

Comcast has a range of options. Comcast could refuse to comply, forcing the FCC to take action and potentially giving Comcast grounds to go to the D.C. Circuit for an emergency stay. I think that pretty unlikely, given what a big deal Comcast has made about complying.

Comcast could fully comply. But, to paraphrase Arlo Gutherie, that isn’t very likely and I don’t really expect it.

What I expect is for Comcast to file something incomplete, possibly with a request for the FCC to protect its proprietary data. But more likely they will file something that will be just enough compliance to present Kevin Martin with a nasty political choice: Does he enforce the letter of Order and go in guns blazing against Comcast, knowing that Comcast will make great political hay of his supposed “vendetta” against them? Or does he let Comcast thumb their noses at him and — in addition to the humiliation factor — have public interest groups question whether he really intend to enforce that end of the year deadline and thus call his hard-won consumer protection credentials into question? The situation is further complicated by the internal politics of the Commission. Whichever choice Martin makes (and he gets to make it himself, since it is an enforcement action and not subject to a vote of the full Commission), it is almost certain that two Commissioners will call him on it publicly. McDowell and Tate are almost certain to regard whatever fig leaf Comcast files as sufficient, whereas Copps and Adelstein will likely raise a hue and cry if Martin lets Comcast get away with filing an incomplete report.

As an aside, I also expect Comcast to file after close of business and to do so by hand rather than electronically, so that the content is not immediately accessible. I also do not expect to get a service copy, despite being counsel to complainants. That’s perfectly legal of Comcast, as it can take the position that this is a report to the FCC and not a pleading that needs to be served on the complainant or complainant’s counsel. But it does mean I don’t expect to see what Comcast actually filed until sometime next week.

Happily, I put my trust in the advice of the Bible and do not put my trust in princes — or FCC Commissioners. In this case, the pending Petition for Review gives us a certain leverage, and Comcast will have to consider that it will have a tough time arguing my Petition is moot and pointless when they are not actually in compliance with the FCC’s Order.

Perhaps I misjudge Comcast. It would certainly make my life easier if they just complied and filed something open that detailed their past practices and explained how they planned to go forward (including details of he 250 GB cap). In particular, I very much want to know if Comcast intends to exempt its own content from the 250 GB cap. That would be rather anticompetitive, and without any actual rational connection to the stated need to reduce last-mile congestion. Comcast originated packets running from the head-end to the subscriber take up as much capacity as non-Comcast originated packets.

See, there goes that nasty and suspicious mind of mine again. Still, I hope I’m wrong and Comcast comes clean.

Stay tuned . . . .

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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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