Tales of the Sausage Factory

John Boehner and Conservatives In Exile Make Cakes For The Queen of Heaven; New Generation Dems Prepares To Blow Trumpets and Bring Down Walls.

Recognizing that some professed conservatives in Congress have some trouble remembering all that “Old Testament” stuff, allow me to clarify the reference. At the end of the Book of Jeremiah, the Babylonians come and do everything Jeremiah predicted would happen if the Children of Israel didn’t stop all their idolatry and oppressing the poor and the helpless, i.e., they destroyed the Temple and took King Zedekiah and a greater part of the people into exile. After the assasination of the Jewish Governor Gedaliah, the remaining remnant of the people hit a new low and — against the express command of God as relayed through Jeremiah — flee down to Egypt. Because the people are basically total a–holes, they drag Jeremiah down with them.

Once in Egypt, God sends Jeremiah with a final prophecy in which he reviews all the times God warned the Israelites to turn away from their idolatries — notably the worship of the “Queen of Heaven” — and how each time Israel refused. God patiently moved from warnings to punishments, and still the people stubbornly refused to repent. In fact, they got worse. Now they have come down to Egypt as pathetic refugees suffering a miserable existence, and God is going to give them one last chance to learn their lesson or “He will give unto them the Bitch Slap Of His Wrath so hard they shall not knoweth whether it be Sabbath or the Day of Atonement.” To Jeremiah’s astonishment, the people give him a big “F-you! What the heck do you know anyway? You radical far left prophet you!” Rather than amend their ways and repent, they tell Jeremiah:

“It is only since we have ceased to burn incense and make offerings to the Queen of Heaven that we have known want, and died by the sword and by famine. And when we burned incense, and poured out drink offerings, and made cakes to the Queen of Heaven, were not our men then with us?”
— Jeremiah 44:18-19.

Or, in other words, the lesson the exiled Israelites learn from suffering defeat after defeat, humiliation after humiliation, is that Jeremiah can’t possibly know what he is talking about and the only way to finally win is keep doing exactly the same thing, but even more so. And, if possible, be even more obnoxious about it.

Connection back to today’s politics below . . . .

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My Thoughts Exactly

The Slashdot Manifesto argument and teh future of teh writer on Internets, or, I CAN HAZ UR MONEY?

Steven Poole wrote a blog entry about how the hell us poor writers are supposed to earn a living in this newfangled “information wants to be free” age, characterized by what Poole calls the “Slashdot argument”:

[the Slashdot argument] says that books, music, films, software and so on ought to be freely distributed to anyone who wants them, simply because they can be freely distributed. What is the writer or musician to do, though, if she can’t earn money from her art? Simple, says the Slashdotter: earn your money playing live (if you’re one of those musicians who plays live),4 or selling T-shirts or merchandise, or providing some other kind of “value-added” service.

You may recognize this logic as a variant, or corollary, if you will of the first line of the Toddler’s Manifesto: “if I want it, it’s mine.”

After the jump, a link to a funny cartoon!

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Tales of the Sausage Factory

700 MHz Aftermath: What Does The EchoStar Win Mean?

EchoStar getting a near-national footprint ranks as one of the major successes for the 700 MHz auction. Chased out of the AWS auction, deserted by its former partner DIRECTV, no one gave EchoStar much hope of winning anything significant (with the exception of yr hmbl obdn’t blogger).

But what does it mean? Can EchoStar become the broadband “third pipe” hoped for by Martin and others? Or is the conventional wisdom right that this is just about improving EchoStar’s subscription television service? Or is there something else at work here? According to the Wall St. Journal (subscription required), the same analysts that could not understand why Ergen would play, and did not believe he could win, now wonder what the heck he will do. Nor is the journal alone in asking this question.

My short version is: EchoStar cannot become a serious broadband provider with just E Block spectrum — particularly given the current service rules for E Block. But, as we all know, FCC service rules are fluid — particularly when licensees promise to deliver broadband services (the recent changes to the AWS service rules providing a perfect example). But even with favorable rule changes, EchoStar faces serious capacity issues if it tries to compete head-to-head with DSL or cable modem service.

Still, there are ways EchoStar can pull it out, especially if it focuses on rural markets with relatively poor broadband connectivity. While the E Block licenses don’t have enough terrestrial capacity to go head-to-head with FIOS or even the high-end cable or DSL services, it can provide a better option than dial-up or ridiculously expensive broadband currently available in flyover country and even in the exurbs. And then there are the perpetually swirling rumors of an AT&T/Echostar merger. Could the E Block merely be AT&T bait? More importantly perhaps, does even Charlie Ergen know what the heck his plan is? Or did he simply see an opportunity and grab it?

In advance of tomorrow’s lifting of the anti-collusion rules, when winning bidders will finally start talking about their plans, I offer my own speculations.

More below….

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Tales of the Sausage Factory

700 MHz Auction: Whither The D Block?

With even Chairman Martin publically agreeing that D Block is unlikely to attract any new bids, the question logically arises — what now? Needless to say, folks have not been shy about voicing their suggestions — especially those who think we ought to focus on maximizing revenue. Instead, I have a novel suggestion. Why don’t we actually investigate what the heck happened first?

More below . . . .

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Tales of the Sausage Factory

700 MHz PreGame Show: Cable Cos Largely Pass — No Surprise And A Win for Public

Yesterday was the day for companies interested in bidding in the 700 MHz auction to file their “Short Form” applications with the FCC. While it will still take a few days for the FCC to process the forms and for companies that made errors to correct the forms and give companies a chance to correct possible errors, we are seeing a few interesting developments already — notably in cable land. It is also interesting to see that MetroPCS and Leap never did get together before the auction.

On the cable side, no real surprise that most cable cos are sitting this one out. (Back in August, I already doubtful they’d want to play.) Actually, the mild surprise is that Cox is going it alone. I have not expected Spectrum Co. (the Comcast/Time Warner/other cable co joint venture) to bid, despite winning big in the 2006 and AWS auction and participating in the rulemaking for the 700 MHz auction. For one thing, thanks to the introduction of anonymous bidding, the cable cos cannot effectively target their industry rivals (like the telcos or the DBS guys) to drive up prices or block them altogether, as they did in the 2006 AWS auction. So a big motivator for the cable companies to participate, i.e. strategic blocking outside the value of the spectrum itself, is gone.

In addition, Sprint divorced itself from the partnership and shacked up with Google, leaving the cable cos with an ugly alimony settlement for the AWS auction and no wireless partner to help them build the network. And, finally, the cable guys haven’t figured out what the heck to do with the AWS spectrum they acquired last summer. While that went relatively cheap (45 cents/mhz pop), it still cost $2.5 Billion with nothing to show and a danger that if the cable cos don’t start building out a network they will lose the licenses at the end of the license term for failure to meet the mandatory performance metrics. (Licensees are required to meet build out and service requirements. The aren’t terribly onerous for the AWS band, but they do require you to build something and push a signal through it.) Given that the 700 MHz licenses have the most rigorous build out requirements ever (in no small part to ensure that folks like Spectrum Co. don’t win the spectrum and then “warehouse” it), the cable cos are very unlikely to buy spectrum on the off chance they’ll figure out something to do with it.

Finally, there is the big reason every is pointing to — the cable stock valuations. Cable stocks have declined significantly this year, both as a function of the general decline in the market and because it looks like Verizon bet right on fiber to the home. Competing against FIOS means that cable operators (particularly Comcast, Cablevision, and Time Warner) are in for another round of expensive capital investment to maintain their competitive footing or risk losing customers to FIOS. In this sort of situation, the last thing investors want to see is cable companies spending billions for licenses they can’t use unless they spend billions more to build networks from scratch.

This last is probably why Cablevision is sitting it out, despite vigorously playing in the AWS auction in ’06, and why Cox, which recently went private, has decided to toss its hat in the ring and play. Cox also has the advantage that licenses that overlap its territories (assuming it does not go for C Block or D Block) also have significant overlap with the area covered by AT&T with its purchase of Aloha. This potentially removes a major competitor for the A and B Block licenses, giving Cox a chance to get coverage of it’s network and offer a package of wireless and wireline services down the road. So Cox can ante up for a chance to catch a bargain without taking a stock hit. By contrast, Cablevision directly overlaps with Verizon for the licenses that cover its region and the adjacent markets into which Cablevision would want to expand. Verizon will fight like a tiger because it wants the spectrum, so the inability to block due to anonymous bidding does not help Cablevision. And, because Cablevision is publicly traded, even anteing for a chance to play will cost it big time.

UPDATE Apparently, Cablevision did file a short form. A Cablevision spokescritter said that Cablevision was reserving the right to bid, but declined to say if Cablevision would bid. Earlier stories I had seen said they wouldn’t bid. Well, I give them credit for trying. Good luck trying to break out of NYC.

All in all, I consider the elimination of Comcast and Time Warner as potential bidders to be a real win for the public interest. As I have written before, allowing cable companies to bid for this spectrum raises extremely serious competition problems and would make it virtually impossible to see a new, independent broadband provider emerge. Given that the 700 MHz auction creates a potential “transformative moment” for wireless broadband, and therefore potentially for broadband generally (especially the much hoped for “third pipe”), I breathe a huge sigh of relief to see the cable boys out of it.

Stay tuned . . . .

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Tales of the Sausage Factory

700 MHz Final Tweaks: Limited Relief for Frontline, Google Looks to Bid

So with the December 3 date for the filing of short forms to participate in the 700 MHz auction looming ever closer, we see some last minute shifting about and settling of a few lingering details. First, in the I called it category (as did my friend and fellow Wetmachiner Greg Rose, various news outlets report that Google seems increasingly likely to bid in the 700 MHz auction. Further support for the idea that Google really intends to bid comes from their filing a request for clarification from the FCC that when the FCC said “no discrimination,” they meant the usual statutory version that allows discounts for volume customers and such what (the usual statutory language prohibits “unreasonable discrimination,” which allows for things like bulk discounts provided everyone that meets the criteria gets the same deal).

Mind, it isn’t a sure thing Google will bid until it files a short form, and folks can file to bid without being willing to put up the money. But given the number of folks who said Greg and I were on crack for expecting Google to actually put up its own money to go against the likes of Verizon, we can perhaps be forgiven for patting ourselves on the back for being so far out ahead of the curve on this.

More importantly, perhaps, is the FCC’s decision last week to provide limited help to Frontline Wireless by allowing a designated entity (DE) that wins the D Block auction to wholesale its spectrum without losing its DE credit. (You can read the FCC Press release here and the full text of the Order here.) Now how does this help? And why limit it to D Block? And what the heck is a “DE” anyway?

Answers and speculations below . . . .

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Tales of the Sausage Factory

Put Up Or Shut Up At the FCC on Net Neutrality “Principles”

When the FCC deregulated broadband by declaring it an “information service,” it also adopted four principles that purported to give broadband subscribers a right to “access lawful content of their choice,” “run applications and services of their choice,” “connect their choice of legal devices that do not harm the network,” and enjoy “competition among network providers, application and service providers.” All subject to “reasonable network management,” of course. So when a bunch of us in 2006 pressed Congress to pass a network neutrality law, a lot of folks claimed we didn’t need one because the FCC already had the authority to deal with any problems that might arise. And, when questioned on this very subject at his confirmation hearing for a second term, FCC Chairman Martin said the FCC had ample authority to deal with any violations of the four principles that might arise.

Thanks to Comcast and their decision to “manage” their network load by degrading BitTorrent,it’s put up or shut up time at the FCC. My employer, Media Access Project, along with Free Press and Public Knowledge, just filed a formal complaint against Comcast and a general Petition for Declaratory Ruling asking that the FCC hold that deliberately messing with a customer’s application while refusing to admit doing it when asked pint blank violates the FCC’s “four principles” and does not constitute a “reasonable network management practice.” This will also press the FCC to find out exactly what the heck Comcast is actually doing (since some folk remain uncertain). Given that Comcast initially denied the very idea as “internet gossip,”, instructed their line staff to lie to customers about it, and are still maintaining that nothing of interest is going on, it looks like the only way will actually find out what the heck is going on and why is to have the FCC pry it out of them.

Hey, maybe they are telling the truth. But the FCC is in a much better position to know whether Comcast is deliberately lying to its customers and, if so, why. Because while my friend and opposite number Jim Harper at Technology Liberation Front may be content to see if the market punishes Comcast for its “lack of transparency”, I see a lot of bad consequences in letting Comcast throttle traffic as a network management tool and then lie (or, at best, mislead) about it when asked about it point-blank by their customers.

At any rate, whether folks think we should regulate this kind of behavior or not (and I recognize that a number of smart folks not employed by cable operators feel we shouldn’t regulate this even if everything bad said about Comcast is true), we deserve to know whether the FCC has the authority to regulate this behavior, and the willingness to do so on an enforcement basis. Because if the cable and telco companies that swore up and down that we didn’t need new rules now come in and say the FCC has no authority to take complaints about their behavior after the fact or no authority to order any remedies, then we should know that. And if the FCC is going to leave us high and dry when broadband providers start degrading applications, then we should know that. Because while some folks may think that lying to your customers is an acceptable network management technique, or even an acceptable technique for managing elected members of Congress, I think most Americans would disagree. And I certainly want to know that by November ’08.

Stay tuned . . . .

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Tales of the Sausage Factory

700 MHz Endgame: AT&T Reverses Course So Fast It Gets Whiplash

AT&T did a full reverse thrust on Martin’s proposed open access plan. According to this USA Today piece, Jim Cicconi, Senior Executive Vice President for Public Policy at AT&T, has nothing but praise for the genius of Kevin Martin and the utter perfection of his proposed 700 MHz band plan with “open access-lite”. No, seriously, that Solomon Guy was a moron compared to Kevin Martin and the clever way he has cut this spectrum baby in half. Further, to hear Cicconi sing it, he cannot imagine why anyone would think that AT&T was threatening to sue the Commission if it implemented this wonderful, perfect, glorious plan that the genius that is Kevin Martin has brought down from Heaven after spending 40 days and 40 nights reading the docket.

So, in the last two weeks, we have seen: AT&T hint that it will bid even if there is a wholesale open access condition, followed by AT&T bactracking without actually denying they would bid, followed by AT&T breathing fire and threatening lawsuits if the FCC adopts the “Google plan” of full wholesale open access. Now, a mere week later, AT&T loves the Martin plan and can’t imagine how anyone could have thought otherwise.

I hope the AT&T Deathstar has good shock absorbers, or they are going to have serious whiplash from all these radical course reversals.

But I know y’all don’t come here just to see me mock incumbents (although I like to think of that as an added service). The big question that everyone wants to know is WHAT THE HECK IS GOING ON AT AT&T? Sadly, short of sneaking some veritaserum into Jim Ciconni’s coffee, there is no way to tell for sure. But I provide some guesses, theories, and speculations on the implications for the 700 MHz Endgame below…..

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Tales of the Sausage Factory

So What The Heck Is M2Z? And Why Do I Support It?

So recently, with all the spectrum stuff going on, I hear a lot of people asking about something called “M2Z,” usually like this: “So, what the heck is M2Z? And why should I care?”

Two very good questions. Briefly, M2Z is yet-another-plan to solve our national broadband woes through exclusive licensing. Specifically, it is about giving this one company a free, exclusive, national license for the 20 MHz of spectrum left over from the federal spectrum cleared for last summer’s AWS auction. While M2Z filed its application in May ’06, it took the FCC awhile to figure out what to do with it, since it doesn’t have any rules or pending proceedings that cover what M2Z wants. Finally, back in February ’07, the FCC issued a generic public notice of the application as required under the Communications Act and asked for piublic comment on what the heck to do about it.

Given my rather low opinion of Cyren Call’s efforts to get a free, national license, one might expect me to take a similar dim view of M2Z. Nor has M2Z helped its case much with some rather ham-handed “outreach” to the public interest community, by spamming the attendee list of the National Conference on Media Reform and creating a “Coalition for Free Broadband” website that looks all the world like an off-the-shelf Astroturf project.

Finally, Sascha Meinrath, who I look to for wisdom and advice on all matters spectrum, has written this blog entry on why he opposes the M2Z proposal.

Despite all this, I still think that M2Z deserves support. My employer Media Access Project filed a letter in support of M2Z. At the least, it deserves a good hard look before writing it off as yet another theft of spectrum via privatization.

Why? See below . . . .

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Tales of the Sausage Factory

How is the OECD Different From the FCC? OECD Takes Its Number Seriously.

I must laugh at the recent back and forth on the recent national broadband rankings by the Organization for Economic Cooperation and Development (OECD). Back in December, OECD released its latest set of statistics for broadband penetration for its 30 member states. While the U.S. had the greatest number of broadband subscribers (defined as speed in excess of 256 KBPS one way), we still ranked 14th overall on number of subscribers as a percentage of population (the traditional way of measuring phone penetration).

What these figures do or do not mean I leave to others to debate. OTOH, if we had this kind of crappy penetration in plain old telephone (POTS) or power, we’d be a developing country. OTOH, broadband deployment is still relatively new and the other countries that have pulled ahead of us all have different circumstances that arguably distinguish it from us. No, my point here is merely to highlight the amusing battle of words between the OECD and a consulting firm called Market Clarity. Market Clarity recently issued a report challenging the validity OECD stats.

So far pretty ho hum. Then the fun begins with this OECD Response. It appears that, unlike our FCC, which can run silent for years about possible funny business in its numbers (until prodded by a change in Congress, it decides to ask for advice on how to suck less), the OECD takes its reporting rather seriously. As a consequence, they wasted no time in explaining to Market Clarity, with all the snark that serious researchers reserve for telling hired guns they are ignorant wankers, that Market Clarity didn’t know what the heck it was talking about.

Not to be outdone, Market Clarity quickly issued its own delightfully snarky response to the OECD response.

I have no idea where this ends up, as it rapidly devolves into a series of exchanges like: “While we welcome serious interest and robust public debate, you couldn’t regress your way out of a paper bag!” “Oh yeah, well for an organization with the 30 most powerfull economies as members, you’d think they’d hire some folks who can do basic math!” All I can say is that the Aussies seem to be having more fun with their public policy. And at that I wish our FCC took as much professional pride in their work product as the OECD.

Of course, the FCC would have to do work to be proud of rather than outcome-driven “research” first. But maybe someday . . .

Stay tuned . . . .

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