Category Archives: Regulation

FCC’s Martin Wireless Auction Plan

The Post has some interesting analysis of which FCC commissioners said what when they approved Chairman Kevin Martin’s 700Mhz wireless auction plan:

The “open-access” provision was endorsed last month by FCC Chairman Kevin J. Martin, a Republican, and gained support from the two Democratic commissioners, Jonathan S. Adelstein and Michael J. Copps. Deborah Taylor Tate, a Republican commissioner, also voted in favor of the deal. Martin said he hoped the proposal would encourage a new entrant to compete with the cable and phone companies that provide broadband service.
Republican Commissioner Robert M. McDowell voted against the proposal, arguing that placing any conditions on the sale of airwaves would hurt smaller carriers by making smaller licenses without any requirements appealing to larger bidders.
“Smaller players, especially rural companies, will be unable to match the higher bids of the well-funded giants,” he said.
— FCC Approves Airwave Use For All Phones, Wireless Network Opened To Options if Not Firms, By Kim Hart, Washington Post Staff Writer, Wednesday, August 1, 2007; Page D01

It’s not clear to me where the bigger players will find enough smaller licenses without any requirements to be worth their while. Unless those licenses are also attractive because of the Universal Service Fund.

What did the corporate players say? Continue reading →

AT&T U-Verse Considered as Cable TV

In case it wasn’t obvious why the telcos want local TV franchise laws repealed:

A federal judge has thrown up a roadblock in front of AT&T as it attempts to roll out its new U-Verse IPTV service in the state of Connecticut. In an opinion issued yesterday, Judge Janet Bond Arterton ruled that AT&T’s U-Verse IPTV service is a cable television service like any other and is therefore subject to local franchising agreements.
— Federal judge: AT&T U-Verse == cable TV, By Eric Bangeman, ars technica, Published: July 27, 2007 – 10:44AM CT

But isn’t it different from cable if it’s carried over IP? Continue reading →

Universal Slush Fund

The regulatorium in action:

A decade-old telephone tax intended to help bring affordable service to rural areas has instead turned into something quite different: a bottomless and politically protected well of cash for cell phone companies that do big business in rural America.
Over the past four years, there’s been nearly a tenfold increase in government subsidies paid to a handful of so-called “competitive” providers — cellular phone companies paid by the fund to offer service in rural areas where an existing carrier already receives a subsidy.
The Universal Service Fund has collected $44 billion over its 10-year lifetime from a surcharge on the phone bills of nearly every American.
Regulators and lawmakers have long viewed the fund as inherently flawed. Even a member of the federalstate board that runs the program calls it “bizarre.” But efforts to change it have been derailed repeatedly by companies that benefit from the largess, and by supporters in Congress who represent sparsely populated states.
— Federal fee on phones is windfall for cell firms, By John Dunbar, ASSOCIATED PRESS, Updated: 07/29/07 6:37 AM

The article goes on to say wireless telephone companies benefit the most because they can connect rural customers at much less cost than landline telcos can. But that’s not all. Continue reading →

Crack Google?

Cringely gets anxious over Google’s floor bid for 700Mhz. After pointing out that Verizon and AT&T coming around to Kevin Martin’s leaked counterproposal of watered down “open access” rules, he says:

Look who Google is up against — all the largest Internet service providers in the U.S. Google will not win this even if they win the auction, because the telcos and cable companies are far more skilled and cunning when it comes to lobbying and controlling politicians than Google can ever hope to be. The telcos have spent more than a century at this game and Google hasn’t even been in it for a decade. And Google’s pockets are no deeper than those of the other potential bidders.
— Is Google on Crack?: Eric Schmidt bets the ranch on wireless spectrum, Robert X. Cringely, Pulpit, 27 July 2007

Cringely is missing the point about who Google is up against. These outfits have not been the largest ISPs for more than a century. They’ve been telephone companies for more than a century. And being around for a long time isn’t necessarily a sure win. Look at the Vatican; it’s been around for two thousand years, and it’s managed to lose most of its traditional heartland of Europe. Sure, Google is fragile, in some senses even more fragile than Microsoft, as Cringely points out. But even Microsoft is losing market share from IE to an open source browser, Firefox. Google, as a proponent of open source that actually understands it, has a fair chance here. The incumbent duopoly telcos aren’t really in the Internet business; Google is.

Maybe Cringely’s right that Google alone couldn’t win the auction. But Google and Sprint possibly could. Sure, Sprint is a phone company, too. But that doesn’t mean it’s going to side with the rest if it scents profit. Maybe with a little help from Apple.

Let’s hope that’s what Google is really up to, rather than expecting to get Martin to change the rules and then wait for AT&T to deliver another striped bass.

I also don’t think Cringely is taking into account the stakes here. Continue reading →

Internet Robber Barons

Paul Krugman examines how far behind the U.S. is in every metric of Internet speed and broadband uptake, and why:

What happened to America’s Internet lead? Bad policy. Specifically, the United States made the same mistake in Internet policy that California made in energy policy: it forgot — or was persuaded by special interests to ignore — the reality that sometimes you can’t have effective market competition without effective regulation.
You see, the world may look flat once you’re in cyberspace — but to get there you need to go through a narrow passageway, down your phone line or down your TV cable. And if the companies controlling these passageways can behave like the robber barons of yore, levying whatever tolls they like on those who pass by, commerce suffers.
— The French Connections, Paul Krugman, New York Times, 22 July 2007

Krugman reminds us that as recently as 2001 the U.S. was far ahead. And then he gets specific. Continue reading →

The Internet As a Market: Al Gore and Reasoned Discourse

So I’ve been wondering what to say about Al Gore’s book, The Assault on Reason. A story in The Economist helped me out. After lauding Gore for calling Mr. Bush’s risky schemes well before most people, for denouncing the invasion of Iraq back in 2002, for his Oscar, and for being “the man who changed the climate of opinion climate change”, it then ridicules the book’s core thesis:

But he does not stop there. He worries about America’s money-saturated politics. He lambasts television for infantilising the electorate.
…
He sometimes comes across as eccentric—as when he lambasts television for killing public discourse, then celebrates the internet as its potential saviour. A few minutes online, reading the zealots on either the right or the left, should have been enough to explode that illusion.
— Gore in the balance, From The Economist print edition, May 31st 2007

That last would appear to be the sort of trivialized, perhaps even infantilized, reaction Gore is lamenting. The big advantage of the Internet is you get not just a few zealots at extreme ends of an arbitrary spectrum: you get all the shadings and colors and depth you can absorb. And you can weave your own strands in this home-made tapestry. Continue reading →

Education Entertainment

EDUCAUSE is up in arms about a proposed amendment to the Higher Education Reauthorization Act that the Senate is supposed to be considering today. It basically makes the Secretary of Education an arm of the MPAA and requires institutions of higher education to police file sharing. I think this is the most interesting part of the amendment, where it’s saying it will:

(1) the 25 institutions of higher education participating in programs under this title, which have received during the previous calendar year the highest number of written notices fromm copyright owners, or persons authorized to act on behalf of copyright holders, alleging infringement of copyright by users of the institution’s information technology systems, where such notices identify with specificity the works alleged to the infringed, or a representative list of works alleged to be infringed, the date and time of the alleged infringing conduct together with information sufficient to identify the infringing user, and information sufficient to contact the copyright owner or its authorized representative; and
— Text of Amendments, SA 2314, Congressional Record — Senate, 17 July 2007

So universities are supposed to keep lists of allegations against their students (or staff or faculty) and those lists can be used to determine their funding. Allegations, mind you, not convictions. This is once again the entertainment industry tail wagging the dog, in this case higher education. Hm, I suppose that’s a bad analogy, since the entertainment industry seems to only understand the big head, not the long tail….

And as if to demonstrate Republicans have no monopoly on horribly bad ideas, this amendment is proposed by the Senate Majority Leader, Democrat Harry Reid. Is the Internet really that hard to understand?

-jsq

Google FCC Wireless Auction

Google CEO Eric Schmidt wrote to FCC Chair Kevin Martin Friday saying Google will commit the reserve price of $4.6 billion to the 700Mhz wireless spectrum auction if it goes forward with four open access conditions Google proposed in a July 9 letter. The four conditions are:

Open applications: Consumers should be able to download and utilize any software applications, content, or services they desire;
Open devices: Consumers should be able to utilize a handheld communications device with whatever wireless network they prefer;
Open services: Third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms; and
Open networks: Third parties (like internet service providers) should be able to interconnect at any technically feasible point in a 700 MHz licensee’s wireless network.

— Google Intends to Bid in Spectrum Auction If FCC Adopts Consumer Choice and Competition Requirements, Press Release, Google, 20 July 2007 The Google 20 July letter actually says a minimum of $4.6 billion, so it will be interesting to see if Google bids up from there, not to mention who tries to outbid Google. Continue reading →

Internet Radio: DRM Air

Previously we saw a last-minute reprieve for Internet Radio. I read SoundExchange’s press release, but I didn’t catch this:

Under the new proposal, to be implemented by remand to the CRJs, SoundExchange has offered to cap the $500 per channel minimum fee at $50,000 per year for webcasters who agree to provide more detailed reporting of the music that they play and work to stop users from engaging in “streamripping” turning Internet radio performances into a digital music library.
— SoundExchange Confirms Minimum Fee Offer: Reminds Commercial Webcasters of Obligations to Pay New Royalty Rates, Press Release, SoundExchange, 13 July 2007

Alan Wexelblat explains that part about “streamripping”:

So it’s that simple. Become our agents in preventing people from recording Web radio streams or face the financial axe.
— When is a Reprieve Not a Reprieve, by Alan Wexelblat , Copyfight, July 19, 2007

Continue reading →

700Mhz and Competition

Positions on future uses of the 700Mhz spectrum formerly occupied by analog TV aren’t just for presidential candidates anymore. Congress is hearing arguments:

Rep. Edward J. Markey (D-Mass.), who chairs the subcommittee that handles telecommunications and Internet issues, urged the FCC to “seize this opportunity to create an open-access opportunity for wireless service in this auction.” He added that wireless carriers are “exerting far too much control over the features, functions and applications that wireless gadget makers and content entrepreneurs can offer directly to consumers.”
— FCC Auction Should Allow for Open Wireless Network, Say Lawmakers, By Kim Hart, Washington Post Staff Writer, Thursday, July 12, 2007; Page D08

Some search, VoIP, and computer companies say auctioning off some of that spectrum with open access requirements would promote competition, while telcos claim it would hurt their investments, stifle competition, and reduce revenues to the government from the auction. I think it may well reduce direct government auction revenues, but the economic benefits of real competition should be worth it. You’d think the nominally free market supporting telcos would agree with that. Continue reading →

Peerflow

Open participation through a fast Internet