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

Speakeasy now blocks calls — this is getting serious.

In the wake of reports that Google Voice is blocking calls to “traffic stimulator” sites (like free conference calling and free porn sites), Speakeasy has now changed its terms of service to explicitly block calls to these sites with its VOIP product. To its credit, Speakeasy directly informed its users (a friend forwarded me the email reproduced below). But this now elevates the question of VOIP providers and calls to a new level.

The FCC has danced around the regulatory status of “interconnected VOIP providers” (meaning VOIP providers that connect to the regular public switched voice network (or PSTN)). It has required regular phone companies to interconnect with VOIP providers in the famous Madison River case, and subjected VOIP providers to Enhanced 911 rules and CALEA, but has shied away from calling them telecommunications services. So the ability of VOIP providers to engage in the kind of “self-help” the FCC said was off-limits when the traditional Title II phone companies tried it. (Actual Order here for us legal buffs).

I’m not making a specific recommendation here because I’m still trying to gather info. As a general rule, I despise regulatory chameleons who shift regulatory treatment based on what their best interest. If you want to be a Title I information service and be able to refuse to connect calls, don’t complain when you get blocked because you are not eligible for mandatory interconnection under Title II. But I’m also well aware that reality matters and its intrinsic messiness means that these inclinations need to be guides rather than hard and fast rules. I am aware of my ignorance of the factual situation enough to know that I’d like to have a lot more information about the nature of the services and the regulatory environment (about which I know only enough to make my usual uninformed guesses).

But the one thing I can say definitively is that the longer this goes on without any FCC response, the more VOIP providers are going to look to save themselves money by blocking these “free conference call” sites.

Stay tuned . . . .

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Tales of the Sausage Factory

The Economics of Telco Deregulation: Califronia Dreaming, Economic Realities, and the “Reverse Ramsey” Pricing Model

This article in the LA Times on the impact of telco price deregulation in California is a good illustration of the complex nature of the economics of competition and deregulation, and why it’s so friggin’ important for regulators and the public to understand this stuff. In 2006, the California PUC decided that voice service faced sufficient competition to phase out price regulation. In theory, competition would lead to lower costs and increased services and would remove the invariably stultifying impacts of regulation.

The result has been an increase in the availability of services and an overall decrease in the cost of service, but not in the way that ordinary folks understand or that regulators professed to expect from deregulation. Most customers have, in fact, increased the amount they pay for telecommunications services overall. But because they buy larger bundles of services that profess to discount the price of each element in the bundle, the average cost per service is lower although the amount of money paid has gone up. That might seem a good value trade if it were driven strictly by consumer choice. But consumer choice is driven by the decision of telcos to increase the cost of stand alone services. So people not looking to bundle do so because it is “cheaper” while poor people who cannot afford the higher price for the bundle get a real price hike with no value added.

Example: Feldco the Telco raises the price of basic local voice from $10 to $20, and raises the price of additional services taken a la carte from $5 to $10, but I offer a package of basic voice and five additional services for $30 (which I tell you charging $5 for voice and $ 5 for each additional feature). Any customer that can afford to upgrade to my bundled package will do so, because the “value” of the bundle (at my new prices) is $70 and you are getting it for $30. So even though you upgraded and are paying me more, the cost of basic voice (calculated as part of the package) just dropped by $5. What a savings! of course, the customers who cannot afford the additional $10 a month for the bundle experience a real price increase of $10.

Basically, the problem of wealth inequity that we have seen in every other sector of the economy — where the highest earners have enjoyed the greatest increases — is now mirrored in California’s telecommunication service market. How did this happen? Do we care? And what does this tell us about the future of the metered internet, wireless competition, and the ever popular video competition?

Answers below . . . .

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Tales of the Sausage Factory

FCC Responds With Fear and Trembling to My Scolding on Tardiness and Releases Two Additional Items

[Assume aspect of guiding light, hero, and all around object of devotion, Stephen Colbert]

Obviously stung by my scathing critique of the FCC’s failure to release the promised Notice of Inquiry on broadband industry practices, the FCC has now issued the promised NOI (technically, it issued a few hours before my post went live, but I know Stephen would want me to count it as a “kill”).

As an obvious additional attempt to curry my favor, the FCC has released two additional items that address long standing criticisms by myself and others, that the FCC’s annual “Broadband is Bustin’ Out All Over!” Report (aka the Section 706 Report on Deployment of Advanced Telecommunications Services to All Americans) dramaticly overstates the status of broadband competition in the country. In addition to the annual Notice of Inquiry, the FCC has also released this Notice of Proposed Rulemaking on how to improve the data collection and reporting process.

[End Colbert channeling]
More details below . . .

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Tales of the Sausage Factory

Wireless Broadband As Information Service: Brand X Is Not Enough

According to this story, FCC Chairman Kevin Martin told the Senate he has circulated a Notice of Proposed Rulemaking to classify broadband via wireless as an “information service.”

This might at first seem no big deal. After all, in the wake of the Brand X decision, the FCC has moved to declare broadband an “information service” for DSL and cable and, more recently, for broadband over power lines (BPL). So, while I may not be happy with using regulatory classifications to achieve back-door deregulation, what makes wireless services different?

The answer has to do with the peculiar way the Communiations Act works, and the physical reality that use of the electromagnetic spectrum really is different than laying a fiber line. True, “technological neutrality” is one of the great regulatory shibboleths these days, even if it does to reality what Yiphtach (Jeptha) did to the people of Ephriam. But the law and reality do matter sometimes. Like here.

I must give fair warning that the analysis below hinges on what will appear to non-lawyers an incredibly bizzare and artificial distinction with no apparent difference in immediate outcome. But among lawyers, this is like mistaking a Satmar Chassid for a Hesder bachur.

Some analysis below.

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Tales of the Sausage Factory

Will CALEA kill CWNs? (Community Wireless Networks)

I hadn’t intended to do much in response to the FCC’s Order extending the Communications Assistance to Law Enforcement Act to broadband providers and VOIP providers. I was just gonna kibbitz my buddies at EFF and CDT. But then I reread the Order, got mad, and filed this Petition for Reconsideration. As it was due November 21, I ended up pulling a late night right before Thanksgiving.

What pissed me off? See below.

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Tales of the Sausage Factory

Bad News From Colorado

I’m reprinting (with permission) a post from Dave Hughes about yesterday’s (4/5) Colorado House Committee Hearing on their anti-muni bill. For those unfamiliar with Dave Hughes, he is one of the true pioneers of unlicensed spectrum as a way of bringing broadband cheaply and easily to the masses.

It’s grim reading. But unlike Dave, I refuse to give up until a bill is passed and signed. There is still time for the people of Colorado to remind their elected officials that at the end of the day, they work for them, not Qwest or Comcast.

Stay tuned . . .

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Tales of the Sausage Factory

A Big Win in TX, But It's Just Round One

SaveMuniWireles.org, a group opposed to the anti-muni bill in TX, reports that the anti-muni provisions of the legislature’s gift package to SBC (the local baby Bell) has been stripped. But hang on to your seats folks, because it goes to the floor next week and SBC is fighting hard.

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Tales of the Sausage Factory

Tales of the Sausage Factory: Ohio the New PA? I don't think so.

It appears to be my day to pick on poor Esme at the truly amazing and wonderful Muniwireless website. Recently, she published this article on Ohio House Bill 591. Esme and others think it is the next in a series of bills like the recent HB 30 signed into law by Governor Rendell. Me, I’m not so sure. My analysis of Ohio’s 591 (and why, even if stupid, it is not evil) below.

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Tales of the Sausage Factory

Tales of the Sausage Factory: MAP Summer Fun Kit

Whose up for a summer of social activism on media and telecom policy? A show of hands please? What if I told you it would only take about 15 minutes using the equipment you are using to read this webpage?

I’ve pegged four FCC proceedings that will benefit enormously from an injection of real world information. My pitch letter for why you should care, along with links to summaries of the proceedings and instructions on how to file, given below.

Stay tuned . . .

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