Everyone remember how Clinton was dead after Iowa? Now who remembers two weeks ago, or even last week, when analysts wrote off the 700 MHz auction as doomed due to credit crunch? But, other than D Block's utter failure to move (and regular readers will know my opinion of why that happened), the auction has proven a success by every measure we can obtain so far. Sadly, however, the key measures are not yet in, and won't be until after the auction is over. Which is why, despite C Block exceeding it's reserve price, I caution folks that we are still at the equivalent of just after the New Hampshire primaries and that any speculation about the important points of the outcome remain unresolved.

Here's what we know for sure now:

1) The current take now stands at over $14 b. This not only exceeds the $10 b that the Congressional Budget Office (CBO) estimated, it will exceed the “wildly successful” 2006 AWS auction (which grossed about 13.9 b). A, B, and C blocks have all met their reserve prices, with the most contentious fighting in certain high value markets B block.

2) Because C Block has met its reserve price, it will not be reauctioned and the open device conditions will go into effect.

So the auction is clearly a success from Kevin Martin's perspective (again, with the exception of D Block, which is a special case). While those like Commissioner McDowell can argue that C block might have fetched more without conditions, $4.7 billion is nothing to sneeze at. And it is clear that the aggressive build out conditions did not scare bidders away from A and B block, so (assuming the FCC is serious about enforcement) we should see increased deployment of services into rural regions.

What we still don't know is whether the new auction rules gave new entrants a real chance to win spectrum, or (as the conventional wisdom had it) will incumbents Verizon and AT&T end up capturing the lion's share of the spectrum (albeit at higher prices, owing to the introduction of anonymous bidding). That we cannot know until after the anonymity lifts when the auction ends (which, if the FCC chooses to reauction D Block under the rules proposed for reauctioning the other blocks, might not be for several months yet). Much depends on the identity of the current C Block holder. Is it Google? Verizon? Some other deep pockets like AT&T or Echostar, or perhaps the mysterious Vavasi NexGen Inc.? And is C Block settled? If the package bidder in round 17 knocked off the previous high bidder, then the previous high bidder will need to respond fairly soon or it will start losing its eligibility (bidding chips) and no longer be able to challenge.

If it turns out the incumbents capture most of the spectrum, I will need to eat a huge plate of crow and tip my hat to Commissioner Adelstein and Publius at Obsidian Wings, both of whom fretted that only Verizon could win a huge block like C Block and that we would get more new entrants by slitting the spectrum up. OTOH, if the Great Google Prophecy comes true, I will become insufferably pleased with myself for at least a month.

But, rather than pull a Tweety Bird and start treating my own speculation in the absence of data as fact, I will simply say --

Stay tuned . . . .

With the Protect America Act (aka FISA on 'roids) set to expire at 12:01 a.m. Friday, and the Senate deadlocked on the question of immunity for telcos, the Administration once again tried to employ its favorite strategy. Rather than support any kind of extension the Bush Administration is demanding that the Senate pass telco immunity or risk a veto. The conservative chorus brays how the Democrats are outing national security at risk. And why not play chicken with a vital issue of national security? This strategy has worked for Bush time and again, with no real consequences.

Still, the script did not go quite to schedule this time. When it became clear that the President could not force through the Senate Bill he wanted and get the needed changes in the House (the House Bill does not contain immunity for telcos), the President backed down and grudgingly agreed to a 15-day extension of the existing “Protect America Act.”

The question here is whether or not the Senate Democrats have learned that the temper of the country has changed. We all care about national security. But increasingly, the American people have grown disgusted with the way this Administration plays politics with national security and whittles away at civil liberties. But many Democratic leaders remain traumatized by the 2002 elections, when voters caught up in the post-9/11 scare and the hype in preparation for the invasion of Iraq decided to overlook things like the Enron and Worldcom scandals and voted out war heroes like Max Clealand who expressed even the slightest doubt about supporting our Commander in Chief in “this time of war.” And so, despite the election of anti-war Democrats in 2006, despite the President's abysmal approval ratings, despite the fact that the majority of Americans now consider the Iraq War an enormous mistake and want to see it ended, Senate Minority Leader Mitch McConnell and the President's media cheer leading squad continue to use the same rhetoric as if it were still 2002, and too many Democrats still tremble.

Let us be perfectly clear. The one issue delaying this bill is the question of retroactive immunity for Bush's telco pals. While I understand why Bush would go to the wire for his buddies, why any Democrat would voluntarily so undermine the rule of law baffles me. The one conclusion I can reach is that too many of them remain mired in the belief that if the Democrats are seen as “playing politics with national security” then they will lose in '08.

But as Chris Dodd and some other Senate Democrats understand, and as the House Democrats understood when they passed a bill without the telco immunity provision, the universe has changed since 2002. Even if political exigencies justified such an abandonment of principle as granting telcos retroactive immunity, too many Senate Democrats have the political calculation wrong. With the Democrats chosing among candidates determined to end the war and both of whom have promised to fight telco immunity, and with Republicans poised to nominate the man who has consistently defied the Administration on torture and other issues where the Administration has played the “national security” card, the message from the people should be clear: The free ride for the Administration to savage our civil liberties is over! The panic is past, and our natural distrust of a government granted unlimited power to “protect us” has returned.

I hope that the members of the Senate, particularly the Democratic members who have supported telco immunity, will take these two weeks to learn this valuable lesson. Because if you act as if it were still 2002, and give the President everything he asks for, you may indeed succeed in setting back the clock. In 2006, the American people proved we had enough of wireless wire tapping, and that enough of us were finally willing to vote out a party that supported an assault on our civil liberties. Must we prove that lesson again in 2008, by once again voting out a party that, to praphrase Benjamin Franklin, seeks to trade liberty for security only to discover it has neither?

All the rights they promise — all the wrongs they bring
Stewards of the Judgment, suffer not this king!

Stay tuned . . . .

Granted for me it would be Chanukah not Christmas, but I think a real kick ass wireless network with oodles of competition and nifty new gadgets would make such a good present for America for Christmas 2009. And, as the reports from the field on the piece of wireless spectrum the FCC opened up last June show us, the FCC can bring it to us by opening the broadcast “white spaces”.

Sascha Meinrath, a serious partner in crime in spectrum reform, has some data from the field on deployment of equipment in the 3.65 GHz band the FCC finally opened for real in June 2007. Now, a mere 6 month later, Sascha reports on wireless ISPs (WISPs) using this band in the field to deliver broadband. As Sascha writes:

WISPs have been leading the charge and people are reporting 15km non-line-of-sight (NLOS) connectivity with 3650-3700 MHz (operating at 10W) — which is a huge boost over 802.11. Meanwhile, capacity seems to be hovering around 15 MB per 7.5 MHz (or 20MB per 10MHz) — so 100MB connections over 15km without line of sight are quite feasible using this band. All in all, that's pretty impressive for first-generation equipment. The equipment vendor Aperto is claiming that their new equipment will get 20MB per 7MHz (so you can see the development curve is already fairly steep).

To give you a feel for the real-world implications, folks testing things out reported, “6mb/s indoor at 2 miles NLOS. The base station was a 1 sector install using diversity at approximately 50ft up on tower using 120 degree sectors” — try to get that with an 802.11 access point.

Allow me to draw a few policy implications from this. The lead time from settling the rules to actual deployment of services took six months. By contrast, we have not yet seen any significant deployment in the AWS spectrum auctioned 18 months ago. Yes, some of that was due to the delay of some government licensees in migration. But much also has to do with the nature of licensed v. unlicensed networks. Licensed networks require huge investment of time, resources, standardization of equipment, etc., etc. By contrast, unlicensed networking equipment can be built, certified and deployed effectively relatively quickly.

Policy makers should take note of this in the debate over the broadcast white spaces, aka the vacant channels on the broadcast dial. Broadcasters and some large carriers (like Sprint and T-Mobile) want to see the white spaces licensed rather than opened to unlicensed use. The current broadcast spectrum auction will not begin to bear broadband fruit until 2010 or 2011 at the earliest. And if the FCC were to decide to license the white spaces, we could expect similar lengthy delays while the FCC devised auction rules, held an auction, then waited for the winners to (hopefully) deploy something useful.

Given the continued laggard pace of our national broadband, shouldn't the FCC learn from its success in the 3.65 GHz band? Licensed and unlicensed networks complement each other, each offering different capabilities. We have taken the first steps toward building the licensed wireless networks in the broadcast spectrum. Why not unleash unlicensed in the white spaces? If the FCC approved rules now, it would practically guarantee that devices could be certified and deployed as soon as we completed the digital transition. Indeed, given the backing of the broadcast white spaces by so many different developers, as compared to the relatively modest backing for 3.65 GHz, the probability of seeing a plethora of wireless networking devices and consumer products available to Americans by Christmas season 2009 rises to almost a certainty. By contrast, we will be lucky if the winners of the 700 MHz licenses will have broken ground on their first towers by then.

Doesn't America deserve a kick ass wireless network for Christmas 2009? I think so. And if the FCC applies the lesson of its 3.65 GHz success to the broadcast white spaces, we can have one.

Stay tuned . . . .

You can read a far more brilliant analysis by Greg Rose on why the punditry on the trickle of data from the 700 MHz auction is all wrong here. Briefly, Greg maintains that this slow convergence on the reserve price over several weeks of bidding is what to expect from a serious auction, and that the failure of parties to bid heavily on C or D Block in the early rounds with so much activity going on in the smaller blocks is a sign of a strong auction to come. Little players on the side are active for the specific licenses that they want, while the large bidders slowly stalk each other up to the reserve price on the major block.

For me, having stacked much on the Great Google Prophecy, I will cheerfully admit to being too close to things to judge objectively. But here are two tidbits of food for thought.

1) Google CEO Eric Schmidt made the evolution of the wireless net a centerpiece of his speech at Davos. How likely is it that Google CEO would hype the importance of wireless if they were not planing to win licenses?

2) Most analysts predicted Google would come in, bid the reserve price for C Block, and leave. They haven't. So far, no one has bid the reserve price for C Block. Instead, the price has crept up gradually. Now it could be that Google will only bid high if it must, for fear of getting stuck with licenses it doesn't want. But if that is the case, why show up at all? “To save face with the FCC?” Yes, but we will know after the auction when the identities of bidders and round by round information is revealed if Google never bid. So the “save face” excuse doesn't really hold water. Rather, it seems likely that they are bidding like everyone else, i.e., like bidders that want to win.

Straws in the wind, perhaps. But no worse than the straws of data everyone else is trying to spin into gold.

Stay tuned . . . .

This is a reprint of a piece I just posted on the Public Knowledge Policy Blog. [Read More!]

Apparently, I'm not the only one hearing this. Cory Boles of Dow Jones has this longer story and more detailed story (he being an actual reporter and all).

Stay tuned . . . .

I'm getting a number of folks from different walks of life coming forward with the same story: Morgan O'Brien was the direct cause of Frontline's investors pulling out.

Of course, there is no way I can actually confirm this on the record because the people in the room either can't talk about it (due to the anticollusion rules) or won't. Nevertheless, having confirmed this with sources I find reliable and who could not have coordinated with each other, I feel I need to come forward here and put this on the table. D Block and the public safety partnership are far too important to end up falling victim to the combination of insider baseball, manipulation and greed that appears at play here.

I have absolutely not talked to anyone at the FCC about this. No one at the FCC can legally respond to any of this, and I would not ask them to do so. Similarly, in my discussions, I have been at pains to avoid any conflict with the anticollusion rules. Nevertheless, the sources I have are, I believe, reliable, and I have therefore made a decision to go forward with this story. I must also add that because I am on sabbatical, I have not had any discussions about this with my employer, Media Access Project, or with anyone at Media Access Project while developing this story.

Details below . . . .
[Read More!]

“We have also learned that college students have used university networks to download 40% of all pirated movies, while eating yellow cake (aka ”Twinkies“).”

-- Dan Glickman, CEO of the Motion Picture Association of America (MPAA), Testimony Before the House Wholly Owned Subsidiary Subcommittee on Intellectual Property

As some of you may know, the MPAA ad RIAA have been pushing their wholly owned subsidiaries in Congress to pass rather draconian laws against those vile dens of vice and iniquity, colleges and universities (Or, as RIAA President Mitch Bainwol explained: “never will you find a more wretched hive of scum and villany.” He was promptly sued by ally MPAA CEO Dan Glickman). They have justified this on the basis of a 2005 report Commissioned by the MPAA and created by
LEK Consulting Services that purported to show that an astonishing 40% of industry loses from internet piracy could be traced to file sharing at universities. Because the MPAA refused to share either the methodology used or the underlying data, a number of folks expressed a healthy skepticism about this evidence. Nevertheless, a credulous Congress accepted this as “credible evidence” of a “weapons of mass file sharing” in our nations colleges and universities, and sought to impose heavy sanctions and possible invasion by federal troops.

The MPAA now admits it overstated the numbers a wee bit. According to this story, it turns out that the real number even using the data and methodology approved by the MPAA and LEK was 15%, not 40%. Further, as Mark Luker at EDUCAUSE points out, since the number was based on college students without regard for whether the activity took place on campus, the real number of files traded illegally over college networks is more like 3%. (And again, that's based on the MPAA's numbers and methodology as now disclosed, not confirmed by independent evidence).

Members of Congress — who uncritically accepted the MPAA's previous statistics despite the lack of any corroborating evidence, the refusal of the MPAA to disclose its data or methodology, and the utter ludicrousness of the number to anyone who actually knows anything about file transfers and the amount of bandwidth and computer powering it would take to even come close to the numbers MPAA estimated for college campuses — expressed surprise at the disclosure. “Wow,” said a Spokesman for a Senator from California who has vigorously supported the sanctions against colleges when she can take time away from supporting immunity for telephone companies who secretly spied on Americans based on Administration insistence this was “necessary for national security” and who voted to authorize the war in Iraq based on intelligence reports and statements by the Bush Administration that later proved to be filled with outright lies, questionable data, and utterly ludicrous statements questioned by the vast majority of reputable experts. “Who would think we'd fall for this again?”

Nevertheless, both California Senators and a majority of the California delegation to the House issued a joint statement that while the MPAA and RIAA evidence continues to turn out to be total self-serving bunk, support for a raft of bills that would curtail fundamental freedoms and cost tax payers billions in both direct costs and lost productivity remained strong. “We will continue to support whatever means prove necessary to end the scourge of piracy that do not impact the monopoly profits of the entertainment industry for as long as the threat against this industry — which produces more of our home state's jobs and revenues than you could possibly imagine — persists,” said the statement. “Sticking it to colleges and universities seems like a good way to do that even without any real evidence that it will help.” The statement was pointedly not joined by Rep. Zoe Lofgren (D-CA), who, in a separate statement, pleaded with her colleagues to “please get a Goddamn clue already” And to “stop embarrassing me, the State of California, and the Democratic Party.”

The MPAA blames the gross overstatement of internet piracy on college and university campuses — which it pushed aggressively for the last two years — on “human error.” The MPAA has promised a thorough investigation to determine what has went wrong. “We take this error very seriously and have taken strong and immediate action to both investigate the root cause of this problem as well as substantiate the accuracy of the latest report,” the group said in a statement.

In an unrelated item, the MPAA announced it would give LEK Consulting, which created the 2005 Report, the coveted “Oscar of Freedom” at this year's Academy Awards.

Stay tuned . . . .

After so much pre-game hype, it's hard to believe we have actually gotten down to the 700 MHz Auction week. The fun and games will start January 24, although we won't know (much) about the auction until it is all over sometime in late February or early March.

Not surprisingly, the news that Frontline Wireless , the company that did so much to shape the rulemaking around the “D Block” public/private partnership, went belly up before the auction even started has triggered a round of hand-wringing about the fate of D Block and finger-wagging by those who always thought it was a bad idea to impose any kind of conditions on licenses. As a result, we see a slew of stories questioning whether anyone will bid for D Block (or, at least, meet it's $1.3 billion reserve price), with some spillover questioning about the future of the auction itself.

While I agree with GigaOm that wireless auctions aren't for wimps, I do think the panic over Frontline's failure to scrounge up capital to make the necessary up front payment (the “ante” required to buy “bidding credits” to participate in the auction) is exaggerated. Nor am I as pessimistic that the auction will produce some groundbreaking changes as others, although it could well happen that we get through this auction with no new “disruptive third-pipe providers.” I think we will certainly see the auction hit the $10 billion Congress estimated (and the FCC set as aggreagte reserve price), and we will see C Block meet its $4.6 billion reserve price.

On the other hand, if things start to go poorly in the auction, we may see some panic moves by the FCC, particularly with regard to D Block. The possibility that the FCC may retroactively drop the reserve price on D Block (possibly without holding a reauction) may introduce strategic behavior into the auction. Of course, since no one (including the FCC) can actually talk about this possibility makes the speculation even more insubstantial than usual. Still, since the possibility does exist, and because I think such a course would create real problems with the auction, I briefly discuss it below.

Analysis below . . . . [Read More!]

“You keep saying that word. I don't think it means what you think it means.”
--Inigo Montoya, The Princess Bride

I suppose it's just overkill for me to pounce on Cleland's over-the-top (even for him) blog post purporting to make the “common sense case” against our complaint against Comcast and Petition for Declaratory Ruling. After all, Dave Isenberg and others have already taken this on. But (a) it helps to restate the facts and focus on the issues, and (b) it gives me a chance to quote Angels by Within Temptation, and I ABSOLUTELY LOVE THAT SONG (In fact, if y'all haven't done so, scurry to your favorite place to buy music online and download this and their other stuff. I'll wait . . . .)

Cleland's claims can be divided into two: whether Comcast's behavior was “reasonable network management” and whether the FCC Policy statement is enforceable. I shall address each (and get to the music quote) below . . . . [Read More!]

As reported by Broadband Reports and now confirmed elsewhere, a Time Warner internal memo indicates Time Warner will pilot a program where it has an explicit bandwidth cap, and users that exceed the cap will pay additional explicit fees — rather like what happens now with your standard cell phone package where you buy a bundle of minutes and then pay for any overages. The pilot will include a website to allow customers to track their usage, moderate their behavior, or buy additional capacity if they wish.

I agree with Dave Isenberg that this is the best way for Time Warner to handle its network capacity constraints and address the supposed 5% of users gobbling 50% of the bandwidth. We can expect some heavy users to move to other networks without caps, but also expect that users that use much less capacity and frustrated by congestion caused by heavy use by others to prefer plans like Time Warner's because it should produce a less congested pipe overall.

I would be remiss if I failed to note that I was just musing about this the other day, giving me a chance to do another Stephen Colbert I CALLED IT!!! dance.

O.K., shameless gloating over. Analysis below . . . . [Read More!]

Someone tell me why Canadians seem to be so much smarter than we are, at least on the public policy fronts that I cover. Maybe we should try to convince Michael Geist to take a position at one of the local law schools here in DC?

Whatever it is, two recent developments in Canadian media and information policy highlight that a does of common sense and a willingness by government ministers to (a) actually listen to what people have to say, and (b) learn something from our mistakes.

First, the Candian Radio-Television Commission (CRTC) just announced it will impose new national ownership limits and cross ownership limits on its broadcast media. Why? As stated in the CRTC release:

The trend toward greater consolidation in the broadcasting industry has raised concerns that a large ownership group could achieve a dominant position through acquisitions, which could bring about a reduction in the diversity of local, regional and national content. To address these concerns, the Commission has decided to:

* impose limits on the ownership of broadcasting licences to ensure that one party does not control more than 45 per cent of the total television audience share as a result of a transaction; and
* not approve transactions between companies that distribute television services (such as cable or satellite companies) that would result in one person effectively controlling the delivery of programming in a market.

While I think their national cap is too high, I applaud CRTC for recognizing the need for regulation staring them in the face as consolidation continues to grow. What a far cry from the debate we have in public policy circles in this country, in which regulators vie with each other for who can do more favors for their industry patrons, discuss how to raise ownership limits to permit more consolidation, and argue over whether to deregulate just a little more or a whole lot more.

The second “Canada is smarter than we are” example comes from last month's succesfull citizen campaign to delay introduction of a “Canadian DMCA”. When Canada's Conservative government seemed quite willing to acquiesce to industry demand to produce — in a fair use parody of Simpson's Comic Book Guy — the worsht copyright ever, a grass roots movement organized that apparently shocked the government with its vehemence and popularity with mainstream Canadians. The government delayed introduction of the proposed Copyright Bill until at least the end of this month, where hopefully Canadian common sense will once again send it packing.

Meanwhile, in the United States, Democrats and Republicans join together for bipartisan legislation designed to turn the Department of Justice into the enforcement arm of the entertainment industry, and judges weigh whether the act of copying a legally obtained CD onto your computer for your own personal use constitutes a copyright violation for which you can be fined and/or do jail time.

Oh Canada, why can't you teach my native land a thing or two?

Stay tuned . . . .

My friend “Dave” recently moved from San Francisco to Sacramento. Being of the modern mobile generation that has “cut the cord” and lives by the cell phone, Dave wanted to get “naked DSL.” i.e., DSL (or other broadband) without any kind of telephone or video contract (Dave also refuses to pay for cable TV, on the grounds that 99% of the programming “sucks”). To his surprise and disappointment, Dave couldn't find any naked broadband available in his neighborhood. So he wrote to me, as the known expert on all things broadband. “Isn't there any way I can just get broadband without a telephone contract?” Dave wrote me in an email.

So I thought about it, and I said: “Is Sacramento AT&T territory?”

“Yeah.”

“Well AT&T has to offer $20 naked DSL, as a merger condition from when they bought BellSouth. Why don't you try for that.”

So Dave dug around until he found the offer for AT&T DSL until he found the AT&T Yahoo! High Speed Internet Package With No Voice Contract:

Basic 768 kbps $19.95
Express 1.5 mbps $23.99
Pro 3.0 mbps $28.99

We talked, and I recommended the “Express” package as probably the best suited to his needs. Dave went to order it. His reactions below (warning, contains frank language and highly suggestive ASCII).... [Read More!]

So the judge heard the motion for a restraining order by Dearborn and Meridian to keep Comcast from migrating PEG channels to digital. The court issued the restraining order, finding that the towns were more likely than not to prevail on several of their issues, that Comcast would suffer no harm from the delay, but that the cities would potentially suffer irreparable harm if Comcast migrated the PEG channels to where most citizens couldn't see them. (You can find the opinion, the pleadings, and other useful information here.)

On the question of the definition of “basic tier” I raised in yesterday's post, the court found:

1) Nothing requires a cable operator to offer the basic package as all digital or all analog, so it is more likely than not that Comcast can migrate PEG to digital while keeping broadcast channels analog.

2) However, cable operators must offer the basic tier on equal terms. Requiring rental of additional equipment to get part of the basic tier therefore is more likely than not a violation of law.

A preliminary restraining order is not a final judgment. The court must make a determination on what arguments are “likely to prevail.” But the court may rule otherwise once the questions are fully briefed and argued. Hence, the “more likely than not” language.

But the courts findings produce some oddball results. By implication, at least so far, the court accepts that the obligation to offer a “basic tier” persists even after the FCC finds “effective competition.” But despite what I would think is fairly straightforward legislative language and strong legislative language, the court thinks it more likely than not that cable operators can treat the elements of the basic package in a different way from each other.

I expect fights over the basic package and the meaning of Section 623(b)(8) to become much more common, as cable operators try to migrate more popular programming to digital and look to stop carrying analog after the digital transition. For me, the real question is: “Will the FCC weigh in?” If so, when, and how? Under NCTA v. Brand X (yes, that Brand X), the FCC can weigh in at any time, since a decision by a court deciding the issue does not alter the deference due to the agency. So there's no rush for the FCC to assert jurisdiction on its own. Cable operators are rather unlikely to rush in and ask the FCC to start a rulemaking to preempt the states on this issue. So will someone else go to the FCC and ask them to resolve the issue? PEG supporters or local governments would be a logical choice, but they don't exactly have warm fuzzy feelings about this FCC Chairman given his willingness to preempt local franchise authorities to the detriment of PEG and local consumer protection. Especially given the outcome in Michigan (which buys time) and the possibility of Congressional help, I expect the PEG folks to wait and see what the new FCC looks like before going to the FCC.

Broadcasters might also look to get the FCC involved early, rather than wait for a situation to develop. But that seems unlikely. Still, if folks at PBS or folks representing the independent affiliates get spooked, or if problems develop in the field, we may see the broadcasters come in.

Finally, the FCC itself could wake up and notice the issue. But that also strikes me as unlikely.

Stay tuned . . . .

As always, I am impressed with the ability of so many people to hate whatever Kevin Martin does, and for so many different reasons! At CES, Martin announced that the FCC would investigate allegations of blocking content and determine whether they violated the FCC's four broadband principles. Comcast pledged to cooperate in any investigation (although, unsurprisingly, Comcast representatives — along with supposed object of Martin's affection AT&T and other big telcos and cablecos — said at CES they would restructure or eliminate FCC altogether).

As I said in my PK blog post, while details remain unclear, I am “cautiously optimistic” that this will be a good thing. But it did not take long for the folks in the “Martin is a bastard 24/7 crwd” to express themselves. DSL reports doubted this would go anywhere, while the “why ya gotta hate on cable” crowd at Techdirt opined that Martin would never investigate if it were a telco rather than a cable co.

So we flash forward to yesterday, when new developments began to percolate out of the FCC. Of significance:

1) The FCC issued a public notice asking for comment on our Petition for Declaratory Ruling that Comcast's “network management practice” of messing with BitTorrent uploads violated the FCC's “Broadband Policy Statement,” which includes a principle that network operators may not block or degrade content or applications. In a separate public notice (but as part of the same proceeding), the FCC also seeks comment on the Vuze Petition for Rulemaking on how broadband access providers handle and shape IP traffic generally. (Copy of Vuze Petition here, copy of our Petition here).

2) Separately, the FCC issued a separate public notice seeking comment on a Petition filed by Public Knowledge and the usual suspects asking the FCC to declare that wireless carriers cannot deny short codes or block text messaging. This goes after Verizon's high profile “oopsie” of denying a request by NARAL for a short code. Although, as we pointed out in the Petition, the more likely and pernicious problem is with plain old anticompetitive blocking, such as denying a short code to VOIP provider Rebtel.com and denying applications to major banks offering competing services.

3) Comcast confirmed that the FCC has lanched a formal inquiry into whether it violated the FCC's broadband policy statement. Comcast reiterated that it will fully cooperate with the FCC, and expects any investigation to show that Comcast did not block content and has engaged in legitimate network management practices.

Not bad for a commitment made a week ago. But what does it mean and where will it go from here? Analysis below . . . . [Read More!]

Compared to the primary battles in Michigan, the fight between Comcast and local governments about Comcast's decision to migrate Public Educational and Government (PEG) channels to digital seems like small potatoes. But potentially, the lawsuit filed by the cities of Dearborn and Meridian in local federal court could have huge impact on how cable operators carry broadcast television and even how they bundle video services with their voice and broadband offerings.

For those just tuning in: Comcast has decided take advantage of Michigan's franchise reform law and forcibly migrate PEG channels to digital tier, which will require anyone who wants to see PEG channels to get a digital box and will put the PEG channels waaaay up the dial where channel surfers rarely tread. This has prompted angry protests by city officials, and even a reprimand from House Commerce Chair Rep. John Dingell (D-MI). While other cable operators have used such tactics in the past, Comcast appears to be the first operator to do this for an entire state at once.

As a result, Dearborn and Meridian challenged Comcast's right to move the PEG channels without consent by the localities in federal court. But while this focus remains on PEG, it goes much further. In 1992, Congress mandated that cable operators must offer subscribers a “basic tier” that consists of the broadcast channels and PEG channels. Congress also prevented cable operators from bundling this “basic tier” with any other service or “buy through.”

For reasons having to do with the Telecommunications Act of 1996, cable operators may no longer need to offer a “basic tier.” But if that's true, what does that mean for broadcasters? Can cable operators forcibly migrate broadcast channels in the same way they claim they can forcibly migrate PEG? And — looking ahead — does that mean that cable operators will have the freedom to change how they bundle packages? Right now, cable operators generally offer their basic video product and then offer all manner of additional services. But what happens if the “basic tier” requirement is really dead? Will we see cable operators get more aggressive, forcing customers to take additional services if they want video programming?

From where I sit (which is really just looking at the plain language of the statutes), it's a real muddle. I'm glad I'm not litigating. But if I were the NAB and PBS, I'd start paying real close attention here. Otherwise, they may wake up and discover that they are also going on a forced march migration to digital, even if they can keep their channel position and not end up in the 900s.

Analysis below . . . . [Read More!]

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 . . . [Read More!]

Like many, I have been both appalled at the federal domestic spying program and the subsequent the effort to undermine the Rule of Law by granting the telcos retroactive immunity. Which is why I don't know whether to laugh or cry at this USA today story reporting that the telcos shut down wiretaps legally authorized under FISA because the FBI failed to make the requisite billing payments.

But, but, but.....I thought the telcos were noble friends and patriots, who only violated our civil liberties because the government asked them to “do the right thing” and “step up to the plate” to help our national security. You don't mean to tell me that these noble, brave, patriotic telcos — that, in the words of Rep. Lamar Smith (R-TX) “deserve our thanks, not a flurry of lawsuits” — these true Amerian heroes who so bravely, gladly, and swiftly, and without a moment's hesitation, broke the law to spy on their customers like you and me, would let a matter of mere money stop them from doing their patriotic duty? You don't mean to say that when a wiretap is actually legally authorized under the existing law, that the telcos would stop their monitoring of genuinely proven security threats over a trivial matter of a late bill, would they?

Not that I or anyone else should be surprised. “To thine own self be true,” says the Bard of Stratford on Avon, and corporations are profit maximizing firms. Small wonder they will break the law and sell us out in a heartbeat to suck up to the government in the hope of future favors (like, say, subsequent approval of mergers without conditions) while suddenly not giving a rat's patootie about “national security” or “stopping the next 9/11” when the FBI misses a payment. After all, it's OK to break the law and abet violations of the constitution to screw your customers, but you wouldn't want to violate your fiduciary duty to your shareholders.

Even patriotism and national security have their limits, apparently. At least where corporations are concerned.

Explain to me again, Rep. Smith, why these companies “deserve our thanks, not a flurry of lawsuits?” Ah yes, because unlike the FBI, AT&T is NEVER late with the PAC donation check.

Stay tuned . . . .

I like this because it makes so many useful points about so many important things in this election season. In particularly, I think there are valuable take aways about the importance of asking questions without pre-judging, the value of a paper trail in voting to everyone, and the power of the blogosphere to raise and answer serious concerns.

Yesterday, the progressive bologosphere began to buzz with rumors that Hilary Clinton had “stolen” the NH primary from Barack Obama because of errors by the Diebold optical scanning machines used by some NH polling places. The allegation rests on an observed swing in results between precincts using the Diebold optical scanners and hand count districts. Notably, the Brad Blog posted this piece which stated that “informal statistics” indicated that precincts counted by hand generally favored Obama by 2%, whereas precincts using the Diebold optical scanners generally favored Clinton by 4.5%, creating a 7% swing.

Few circumstantial evidence items appeared to lend credence to the rumor. Ron Paul supporters claimed Diebold shorted him 31 votes in one NH town. Diebold is not generally trusted by progressives, Clinton is not generally trusted by a number of progressives, and the pattern of wild variance between polling data and actual vote turn outs is similar to that seen in 2004, including the apparent consistency of the error. A general failure of the technology should produce a spread of errors, why would the same machine favor one candidate consistently?

This had the capacity to turn quite ugly (and I suppose still could). But the internet breeds the ability to check facts and analysis and discover more plausible explanations. This analysis from “DHinMI” on Daily Kos Diary, for example, shows why these accusations don't hold up. Most importantly, NH requires a paper trail, so that it is easy to double check results. The variations are not consistent at 4.5% and only for Diebold optical scanners, but follow a geographic variation that more accurately accounts for the differences. The Ron Paul missing votes likewise appears to be a human error on the part of the town clerk certifying the results rather than the count itself.

To this I will add that we need to remember that we are dealing with relatively modest sample sizes. Quite good by the standards of modern statistical analysis but still relatively small so that a few thousand people changing their minds for different reasons out of over a hundred thousand votes cast can produce a statistically significant change.

But I must disagree with DHinMI that “ultimately, there's tremendous arrogance and/or ignorance at play when people assume that Hillary Clinton's victory in Tuesday's New Hampshire primary is or might be explained by election fraud.” It is a responsibility of citizens to hold their elected leaders accountable, to question results that raise legitimate questions, but — ultimately — to accept answers supported by the evidence. Certainly anyone leaping to the conclusion that Clinton conspired with Diebold on the basis of an initial question went way too far, and should accept the lesson in caution. But the investigation and retention of paper ballots will hopefully do what such investigations do when the subject is innocent: provide a definitive answer that lays the matter to rest and proves once again the integrity of the process, providing needed legitimacy.

I expect many people will shake their heads at those irresponsible internet nuts and their vile rumors, and will take the wrong message that the internet is full of whacko progressives who degenerate to conspiracy theories rather than face unpleasant realities. But I prefer to see this as an excellent example of the system working, just as a mild cold is a symptom of my functioning immune system driving out a virus. It emphasizes the need for paper ballots and mechanisms for confirming results, the importance of getting questions about legitimacy answered rather than having them fester, and the importance of the internet in letting people debate the facts and squash “whisper campaigns” one way or the other.

In Kenya, we have seen what happens when an election loses legitimacy because of widespread mistrust and efforts to suppress inquiry. I rejoice to live in a country where citizens feel free to exercise their responsibility to investigate and question election circumstances that raise questions, and equally rejoice that NH and the internet provide the means to answer those questions. It is neither arrogance nor lunacy to want to double check elections — especially in light of the suspicions raised in the past. Nor is it conspiracy or arrogance to provide answers that sustain the result. Indeed, if there is one lesson we can all take from this, it is the value of treating all those who take their duties as citizens seriously enough to participate with the respect due to a fellow and comrade rather than the hostility of an enemy combatant.

Stay tuned . . . .

I'm out here at the Consumer electronic Show with actual blogger credentials (primarily so I can get the free back pack and use the blogger lounge). So, of course, we get major 700 MHz Auction news today before I can even start to do CES blogging.

As reported by my fellow PISC-ER Gregory Rose and elsewhere, Frontline Wireless has dropped out of the bidding. That's kind of a surprise, given how Frontline fought to get a designated entity credit and still pursue wholesale as a real business model. It's also impossible to say (at the moment at least) why Frontline self-destructed at the last minute.

Leaving aside the Frontline specifics, the big question is “how will this impact the auction” and “will we see wholesale emerge at all as a model.” Unsurprisingly, most analysts are going conventional and saying (a) D block (which Frontline had targeted) may not attract bids to meet the reserve price, and (c) This makes it even less likely we will see a new entrant, let alone a wholesale new entrant.

Also as usual, I will play the contrarian here. D Block is still very attractive to the conventional carriers looking to get national footprint or others looking for national footprint and willing to work with public safety. If AT&T and Verizon are both serious about this auction (and indications are that they are), both may push hard for D Block — especially if C Block is competitive.

On the new entrant side, it still remains to be seen what Vulcan and Google will do. Even if — as I suspect — Google wants to win the network but not build out, it may find D Block attractive. As holder of D Block, Google could still negotiate with third pary carriers (such as Alltel, US Cellular or even Sprint or T-Mobile) to build the network on its terms and to the satisfaction of public safety. The much lower price of D Block would offset the the aggravation of working with public safety and ensuring that their needs come first.

Finally, there's Towerstream and the other wild cards like Qualcom. Who knows what they intend, especially given the likely competitiveness for C Block.

So while I'm sorry to see Frontline go, I don't think it hurts the odds for a very competitive auction or a new entrant. It does potentially make a wholesale network more of a stretch, because Frontline was really the only bidder gung-ho on the model (Google being traditionally in favor of wholesale but making no promises at this point beyond “open”). That's a shame, but not devestating or fatal to a new entrant.

Stay tuned . . . .

I can't be the only Dar Williams fan out there, especially on the day after the caucuses. Especially after Iowans appear to have gone through the screen door of discretion while some candidates wake up to a nightmare/that I could not bear to see/They were out caucusing/A freezing night in Iowa/But they were not voting for me.

I'm actually on sabbatical for the next two months trying (among other things) to actually get the stupid blog book done (talk about New Year's resolutions), so I've been trying to cut back on other work and focus. But what political junkie can resist the urge to comment on last night's Iowa result? I will, however, try to keep it to TotSF appropriate topics and bipartisan snarkiness.

My take, as aways, below . . . . [Read More!]