Tales of the Sausage Factory

All Over But The Screaming; Assessing the 700 MHz Order: Part I — Putting This In Context

At the end of last week, the FCC released its mammoth 350 page Order on the 700 MHz Auction. As advertised, it resolves most of the major issues, but delegates some details for the Wireless Bureau to resolve so we can continue to have wonky auction fun through the fall. Because the only thing better than Fantasy Football is Fantasy Reserve Prices.

Below, and for the next several posts, I give my patented Sausage Factory long, detailed analysis. Briefly, in my usual contrarian-but-hopefully-sophisticated-and-nuanced-way, I think we did pretty well. In fact I think we totally kicked ass, took names, and got something that — over the long haul — has the potential to seriously revolutionize wireless and broadband policy in the United States.

“Wha?” I hear you cry. “I thought we lost on wholesale. I thought the Order had only wussy half measures that amounts to either a giveaway to the incumbents for crumbs or Google (depending on whom you hate more). Are you just trying to buck us up and make us feel better?”

True, we lost on wholesale and the FCC did not go as far as I would like on the “wireless Carterfone.” But, as with the debate over the AT&T/BS Conditions, we need to assess the results as part of a long-term campaign for reform rather than expecting to achieve a Glorious Revolution in a single stroke. This was our Battle of Britain (or, for those who think of us as a bunch of Socialist enemies of capitalism, our Batte of Stalingrad). We have stood before the united might of the telco, cable and wireless industries, halted the tide of “business as usual,” and extracted some key changes and precedents that we shall leverage for the next phase of the campaign to create a 21st Century information grid worthy of a democracy; an information grid that extends the benefits of modern communications to everyone and eliminates the power of gatekeepers to control what we say and what information we discover.

Which, at the end of the day, is not too shabby — especially when compared to what we expected last April. We got some pretty huge stuff — things that will revolutionize this auction not merely help us for the long term.

Using my “Red Sox scale” of success, this feels to me a lot like the 1975 World Series. Looking back as an adult, I can see that it was one of the finest moments in professional baseball, with the Sox losing by a single run in the 7th game. But at the time, it felt like a Hell of a loss, precisely because we came so close to winning it all.

So I’m not nearly as down as most of my friends in the movement. Part of that has to do with long-term view over short term. Part of that has to do with whether I believe that Martin is acting in good faith or not (again, I’m contrarian in our community by saying “good faith” for reasons I will explain). Part of it has to do with an appreciation of the FCC’s institutional dynamics including, to paraphrase Jon Stewart, the absolute dickishness of the Wireless Bureau staff.

I do see problems and issues in the Order, some of which I hope to get fixed on Recon, some of which reflect rational disagreements on the proper course and what level of risk we should take for political payoff (I’m talking about the reserve price stuff here). And, at the end of the day, we are still facing a host of unknowns that will depend on a future FCC’s willingness to enforce these conditions. But in the end, I’m feeling we at MAP earned our corn and achieved things we can be proud of (I’ll let the other members of PISC speak for themselves on that score, but I hope they feel the same way as well).

Because this is really, really long, and will probably take several days to cover, I am breaking this up into parts. Below, I provide some of the necessary institutional context for understanding the Order and why I think this counts as a big win.

More below . . . .

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Tales of the Sausage Factory

Muniwifi and the Minneapolis Bridge Disaster

While the telco/cable lobbying war to make muniwifi illegal has died out (as demonstrated by the most recent defeat for the telco/cable lobbyists in North Carolina), the debate on the actual merits of munibroadband lives on. And it’s a good debate to have. States, cities and local governments should consider their projects carefully. What works in St. Cloud, Florida or Philadelphia will not necessarily work elsewhere. And, with all the possible goals of a muni system (service to residents, service to muicipalities, public safety, digital inclusion, enhance local media, economic stimulus), it is a sound idea to have figured out your benchmarks for success in advance.

Unsurprisingly, those generally opposed to government providing services (particularly where such services are available or could be available from private companies) have spent much time and effort arguing that municipal broadband projects usually end as costly failures. These analysis generally use the standard economic criteria of a for-profit business. i.e., Does the network pay for itself over expected time?

That’s an important question, particularly if a government has made this a goal of buiding the network or if you are a private business looking at a public/private partnership. But governments often make investments in infrastructure or provide services on a residential or subscription basis for other reasons. Here in DC, for example, no one pretends that the City will directly make back the hundreds of millions of dollars spent to attract a professional baseball team. This cost gets justified on the grounds that it will revitalize the Anacostia waterfront area, serve as a source of civic pride, and offer additional benefits that justify the cost.

Which brings us to the performance of Minneapolis muniwifi network in the recent bridge collapse diaster. The presence of the network proved an enormous boon to public safety and the citizens of Minneapolis. Because the city had deployed the network for residential service, it was there when they needed it for public safety. That’s difficult to capture in a balance sheet, but there’s no doubt you’re damn glad to have it when you need it.

Of course, local governments can always build public safety muni networks. And many do. But multiple use networks (like the Minneapolis one) are a good way to fund such networks, make sure they get fully deployed, and make sure they stay upgraded and operational. A town reluctant to spend money on public safety communications (and many are) may feel better if the public safety network will also provide low-cost connectivity to poorer neighborhoods. Alternatively, a town might feel better about providing residential services at a possible financial loss if they look on the network as also providing critical infrastructure for emergencies.

At the end of the day, every local or state government looking at municipal broadband needs to do a careful evaluation and figure out what it wants and how it will pay for it. The business case is an important piece of that, especially if local governments promise their citizens the network will end up paying for itself with subscriber fees. But the tragedy in Minneapolis provides an important reminder that local governments have other measures of success besides turning a profit.

Stay tuned . . . .

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Tales of the Sausage Factory

Much Better Senate Draft from Democrats

The Democrats of the Senate Commerce Committee have begun circulating this draft revision of the wretched Communications, Consumer Choice, and Broadband Deployment Act of 2006 (aka “The Stevens Bill). Not only is the Democrat draft a lot shorter (a big plus), it:

(a) Eliminates the really bad munibroadband provision in the Stevens Bill with good language similar to the McCain-Lautenberg Community Broadband Act.

(b) Eliminates the excruciatingly awful net neutrality provision in the Stevens Bill and replaces it with the good language from the Internet Freedom Preservation Act sponsored by Snowe, Dorgan, and Inouye.

Happily, the Democratic Draft also contains the good stuff from the Stevens Bill: opening up the broadcast spectrum ”white spaces” and limiting cable market power over regional sports programming. (Although the Democratic draft is not quite as strong there as in the Stevens bill. Ah well.) Sadly, the Democratic draft also contains a broadcast flag provision.

It’s still a draft, of course. But it shows how the momentum on critical issues continues to shift in the right direction now that the public has started tuning in and speaking up. Last month, the telcos and the cable cos were enjoying a victory march reminiscent of Sherman’s march to the sea. Now, the telco/cable push to get Net Neutrality eliminated by Congress is looking a lot more like Napoleon’s march on, and subsequent retreat from, Moscow.

Stay tuned . . . .

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Tales of the Sausage Factory

Election Day Results for Muni Broadband

As part of the off year elections, 32 communities in Iowa voted on referenda on whether to explore having a muni broadband system. 17 of the 32 voted to go forward, with 15 voting not to explore the option. Given that Mediacom and Qwest, the incumbent cable and telco companies spent about $1.4 million to defeat the measures, while proponents of the measure spent only a few thousand dollars, that’s pretty good.

Meanwhile, developments in Michigan and Pennsylvania below.

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Tales of the Sausage Factory

My Muni Report

Well, not mine exclusively, but I did write a good deal of it. Connecting the Public: The Truth About Municipal Broadband Takes on the telco/cable noise machine and explains why municipal broadband systems are a good thing and why states should not buy into the anti-muni argument.

It’s one of three papers a bunch of us released today. Ben Scott and Frannie Welling at Free Press also did a paper directly taking on the telco “fact sheets” that claim muni systems failed. And the Florida Municipal Electric Association released a study showing that municipal broadband systems really do increase economic development as compared to similarly situated towns in Florida (remember, Florida is one of the states considering an anti-muni bill). You can read all those reports here. And, if you feel like writing something to your state or federal legislator about this, you can print out the letter we did back in February, put your own name on it, and mail it off.

Stay tuned . . .

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Tales of the Sausage Factory

Tales of the Sauasage Factory: My editorial on Muniwireless

I’ve written an op ed that whether or not munies actually deploy systems, they need the option to keep the telco/cable duopoly from misbehaving. Available at:

http://www.muniwireless.com/archives/000601.html

stay tuned . . . .

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