In my last blog post, I explained my working definition for what constitutes a “digital platform.” Today, I focus on another concept that gets thrown around a lot: “dominant.” While many regulations promoting consumer protection and competition apply throughout a sector, some economic regulations apply to “dominant” firms or firms with “market power.” Behavior that is harmless, or potentially even positive when done by smaller companies or in a more competitive marketplace, can be anticompetitive or harmful to consumers when done by dominant firms -- regardless of the firm’s actual intent.
In Part I, I explored the challenges of regulating digital platforms to promote competition, protect consumers, and encourage news production and civic engagement. Today, I plan to dive into the first set of challenges. First, I define what I mean when I talk about digital platforms. I will argue that platforms that (a) provide a two-sided or multi-sided market; (b) are accessed via the internet; and (c) have at least one side that is marketed as a “mass market” service, share a set of characteristics and raise a similar set of concerns so that we should consider them as a distinct set of businesses.
As digital platforms have become increasingly important in our everyday lives, we’ve recognized that the need for some sort of regulatory oversight increases. In the past, we’ve talked about this in the context of privacy and what general sorts of due process rights dominant platforms owe their customers. Today, we make it clear that we have reached the point where we need sector-specific regulation focused on online digital platforms, not just application of existing antitrust or existing consumer protection laws. When platforms have become so central to our lives that a change in algorithm can dramatically crash third-party businesses, when social media plays such an important role in our lives that entire businesses exist to pump up your follower numbers, and when a multi-billion dollar industry exists for the sole purpose of helping businesses game search engine rankings, lawmakers need to stop talking hopefully about self-regulation and start putting in place enforceable rights to protect the public interest.
In my last post, took the four most famous net neutrality violations to see how they would come out under the current rules adopted in 2015 v. how they would come out under the regulatory framework following the Federal Communications Commission vote to repeal net neutrality rules, based on the draft Order. To condense the approximately 5500-word analysis: all four incidents are addressable under the 2015 rules. None of the incidents are addressable under the combined Federal Trade Commission and antitrust regime that remains after the vote to repeal the rules, with the exception of Comcast’s deliberate deception about their blocking peer-2-peer protocols in 2007-08.
According to the official Federal Communications Commission statics (current to August 30), Hurricane Harvey is having a predictably significant impact on telecommunications in the path of its devastation. We won’t actually know the final damage for awhile yet, but it appears that cell sites are pretty much gone in the counties where Harvey made landfall (but service is being steadily restored). Over 265,000 landline phones have been rendered inoperative. No one expects a communications network to come through an epic flood like Harvey without serious disruption. Indeed, from the very surface look of things, it appears that the communications network in the impact area is performing much better than it did during either Hurricane Katrina or Superstorm Sandy.
Last week, the Federal Trade Commission approved the merger between internet-giant Amazon and Whole Foods, the original organic grocer. You may be surprised how quickly the merger passed regulatory muster, especially given the public’s desire for strong antitrust enforcement to promote vigorous competition and equity in our economy, including our digital one. You may be wondering: Is this a case of weak enforcement? Is it proof that today’s antitrust doctrine is useless for digital-age companies? Or are critics of growing digital market concentration simply wrong to express concern? My guess is “none of the above.” Here’s why.
The Supreme Court's recent decision in Packingham v. North Carolina struck down, as unconstitutional under the First Amendment, a state law making it a felony for registered sex offenders to access social media websites. The decision has wide-ranging potential implications for technology law, especially on matters of rights to access the internet, which are particularly important for marginalized and disenfranchised voices in our society. Below, Harold Feld reviews the Packingham decision and explores its implications for one area of law: the Digital Millennium Copyright Act's provisions regarding termination of Internet access for accused copyright infringers. This post was originally posted on Harold's personal blog, "Tales of the Sausage Factory," on wetmachine.com.
Last week, NCTA, the trade association for the industry formerly known as cable, posted this amazing graph and blog post showing that the "virtuous cycle" the Federal Communications Commission predicted would happen when it adopted the Open Internet rules (a.k.a. net neutrality) back in December 2010.
The Ninth Circuit issued a fairly important decision limiting the authority of the Federal Trade Commission (FTC). Unfortunately, articles such as this from CNET, combined with some overwrought commentary, have generated a lot of confusion.
It may seem odd for me to say, and meaning no offense to his replacement Bob Quinn, but I am sorry to see Jim Cicconi retire from AT&T at the end of this month. For those who don’t play in this pond, Cicconi has been AT&T’s Lobbyist in Chief here in D.C. since 2005. It may therefore seem odd that I am sorry to see him go, particularly since Cicconi was so damned good at his job. But, as I have said many times before, I’m not here because companies are evil, nor do I believe the people working for them necessarily delight in crushing consumers, strangling puppies and tossing destitute widows and orphans on the street in rags in the dead of winter. (At least not in telecom. The copyright folks, on the other hand, were ready to screw over the blind a few years back just for giggles. But I digress.)
The two Orders the FCC will vote on today probably have more impact on the future of our communications infrastructure than the Title II reclassification of broadband, but like many technical topics, it hasn’t gotten the attention it deserves.
The Federal Communications Commission has an ongoing proceeding to apply Section 222 (47 U.S.C. 222) to broadband. For those unfamiliar with the statute, Section 222 prohibits a provider of a “telecommunications service” from either disclosing information collected from a customer without a customer’s consent, or from using the information for something other than providing the telecom service. While most of us think this generally means advertising, it means a heck of a lot more than that — as illustrated by this tidbit from Cable One.
Earlier this year, the Federal Communications Commission adopted new rules to ensure the Internet remains an open platform for consumers and innovators. The new rules (adopted as part of the Open Internet Order) are a capstone to over a decade of policy battles and litigation over how the FCC regulates broadband Internet service. For close observers of the net neutrality saga, this Friday brings a sense of déjà vu, as the agency again heads to Court to defend net neutrality rules at oral argument. The FCC’s relevance in the broadband era, along with how consumers, content creators, entrepreneurs, and network providers interact with each other, hangs in the balance.
As reported by Brian Fung in the Washington Post and others, a company called Commercial Network Services (CNS) has filed the first network neutrality complaint under the FCC’s new rules — which went into effect June 12 after the D.C. Circuit denied a stay request. You can read the complaint here. While I probably should not prejudge things, I expect the FCC to deny the complaint for the excellent reason that — accepting all the facts alleged as true — Time Warner Cable did absolutely nothing wrong.
Good news! Late last week, the D.C. Circuit denied the request by the carriers suing the Federal Communications Commission (FCC) to prevent the FCC’s net neutrality rules and reclassification of broadband as a Title II telecom service. As of last Friday, the Net Neutrality rules are in effect, and broadband access is once again a Title II telecommunications service — pending the final outcome of the lawsuit challenging the the FCC’s actions.
Yesterday, the U.S. Telecom Association (USTA), the trade association for incumbent telecoms like Verizon and AT&T, and a Texas Wireless Internet Service Provider called Alamo Broadband, filed separate appeals from the FCC’s Order reclassifying broadband as Title II and applying net neutrality rules. (This Ars piece links to both Petitions). USTA filed in the D.C. Circuit, while Alamo filed in the 5th Circuit - a court that is typically more hostile to the FCC.
Today is my birthday. Happy birthday to me. Tomorrow, the FCC will vote on whether or not to classify broadband as a Title II service and adopt strong rules for network neutrality. Or, in other words, the FCC is getting me an open Internet for my birthday, which is the best…birthday…present…EVAR!!
Depending on where you live, certain migration patterns mark the turn of the seasons. In New England, the distinct V shape of Canadian geese migrating south marks the return of fall. In California, the return of the swallows to their home at San Juan Mission in Capistrano marks the return of spring. And, in Washington D.C., the return of former FCC Commissioner Robert McDowell and friends to tell us that the U.N. will take over the Internet marks a debate around network neutrality and Title II.
Commissioner Ajit Pai is outraged! This in itself would not be news. Sadly, Commissioner Pai seems to spend most of his time these days outraged -- usually while denouncing his Democratic colleagues on the supposed death of collegiality at the Federal Communications Commission (FCC) (we will pause to savor the irony). What is news is that Commissioner Pai has actually picked up an issue I've championed since 2006 -- reform of the "designated entity" (DE) bidding credit. Unfortunately, as is too often the case IMO, Pai directs his outrage at the wrong target. Rather than seeking constructive solutions to the tension between auction theory (which favors the largest incumbents) and competition theory (which holds the need to make sure someone wins licenses other than the largest incumbents), Pai has decided to direct his wrath at DISH for finding a loophole in the auction structure stacked against them.
For all us telecom geeks out there, the big deal was the President’s rather brief shout out on network neutrality and municipal broadband (munibroadband). You can see the full text of the speech here. The key paragraph was almost literally a blink and you miss it:
In the last two days, Federal Communications Commission (FCC) Chairman Tom Wheeler has made back-to-back speeches that on their surface appear as dissimilar as could be. First, he gave this speech at the Fall 2014 COMPTEL PLUS show. The next day, he gave this speech at the 32nd Annual Everett Parker Lecture. Dig a little deeper, however (and keep in mind what I have previously said about Tom Wheeler signaling what he wants to do), you notice some startling commonalities between these two speeches.
As the groundswell for reclassifying broadband as a Title II telecommunications service and creating strong net neutrality rules grows, the arguments against reclassification have grown increasingly shrill and desperate. Most recently they have focused on “forbearance.” For those of you not living all of your lives in the world of telecom law, forbearance is the process the FCC could use to decide that some pieces of Title II should not apply to broadband. As illustrated below, these arguments do not stand up to scrutiny.
Earlier this week, the Federal Communications Commission (FCC) published a blog post describing the “rainbow of policy and legal options” available to protect the open Internet, contrasting them to other “monochromatic options.”
The last few months have brought us a spate of Comcast horror stories and Comcast-hate. Most recently, a recording of a subscriber spending 20 minutes trying to disconnect his Comcast service has prompted some investigating into Comcast’s service and employment practices. What does this have to do with the FCC's decision about the Comcast/Time Warner Cable merger?
We’ve argued for a long time at Public Knowledge that the extremely aggressive bandwidth caps that most mobile providers impose – particularly AT&T and Verizon – don’t make any sense as a way to manage congestion and that they seriously undermine the value of mobile broadband to consumers. The wireless carriers -- particularly AT&T and Verizon -- argue that they need to use caps to manage congestion and stop “bandwidth hogs” from destroying our national wireless networks with their cat videos.
As I noted in my first post-Verizon v. FCC blog
post, the Net
Neutrality decision both dramatically expanded and dramatically limited the
FCC’s authority. This has a large number of immediate implications for the
FCC’s ability to conduct its work. While this ripples across just about every
area of FCC jurisdiction, it has its most immediate impact on the transition of
the phone system to all IP.
At a glance, the biggest losers are cable operators (except
Comcast), CLECs, and anyone else that wants mandatory interconnection or cares
about call completion. That means resolving the rural call completion problem
just became harder, since VOIP providers cannot, now, be subject to the duty to
complete calls. The most recent FCC Order, which imposes reporting
requirements is still OK. But the original declaratory ruling requiring
IP-based providers to actually complete calls is probably a dead letter.
On the other hand, the decision potentially empowers the state
Public Utility Commissions (“PUCs”), or gives the FCC power to delegate to
state PUCs, the ability to override the laws passed in 27 states that prohibit
any regulation of IP based services, and to override limits on municipal
Sometimes the conventional wisdom turns
out to be correct. As we observed
after the oral argument in September, the Court seemed likely to approve
the FCC’s general assertion of authority over broadband providers under one provision of the
Communications Act, while reversing the no blocking and non-discrimination
rules – the actual important part of Network Neutrality – as contradicting
other statutory language. As it turned out, that’s what happened.
Yesterday we recapped the transition of the phone network thus far and touched on what to expect. Today we discuss the technical trials and what happens next.
For those unfamiliar with the terminology, a “wire center”
is the place where all the wires for telecommunications service in a specific
area come together. That’s not just all the residential subscribers on the
AT&T system. It’s the place where AT&T exchanges traffic with the other
providers (such as the local cable operator and whoever offers cell service),
the 9-1-1 access point, and the source of “special
access” circuits for enterprise customers and other carriers.
Commission Chair Tom Wheeler’s blog post announcing his intent to have the FCC issue
an Order on the process to transition the phone system in January kicks things
into high gear.
For those just joining us, the “Future of the Phone System,”
refers to the massive and wide ranging project of phasing out traditional phone
technology for Internet protocol (IP) based systems and wireless systems. This
sometimes gets called the “PSTN Transition” (PSTN stands for “public switched
telephone network,” a fancy way of saying things with phone numbers that use
the phone system) or the “IP Transition” (because we are moving the phone
system to IP).
This transition has
been going on quietly in the background for years. About a year ago,
it up a notch by asking the FCC to “begin a dialog” on how to phase out the
old phone technology and to rethink what rules we ought to have for the phone
network going forward. AT&T also suggested doing two “technical trials,” by
which it meant ‘please let us start playing with this without any regulatory
oversight – it’ll be awesome cool!’ This promptly caused a major freak out in
telecom land, with folks on one side accusing AT&T of trying to get out of
its regulatory responsibilities, rip off consumers, crush competition, etc.,
and others saying that wholesale elimination of all those pesky legacy rules
was just the thing to unleash the engines of innovation, encourage investment,
bring us to the dawn of a new golden age, etc.
Back when former Federal Communications Commission Chairman Julius Genachowski announced his departure, we at Public Knowledge had a few things we said we wanted to see in his replacement. While it’s obviously way too early to judge incoming Chairman Tom Wheeler, it’s worth noting that the initial signs look favorable – and give us some clues as to where Wheeler will want to go in his first few months.
It’s like getting Al Capone for tax evasion. The CIA and AT&T figured out how to get around legal restrictions on giving the CIA access to domestic phone call information, but in doing so they violated a Federal Communications Commission (FCC) rule that protects you against telemarketing.
According to this story in the New York Times, the CIA paid AT&T to provide them with information on calls passing through its international telephone system. Because federal law prevents the CIA from spying inside the United States, the CIA could not legally get info on calls terminating in the U.S. But, of course, calls from suspected foreign terrorists (aka “anyone outside the United States”) that terminate in the United States are the most interesting to the CIA.
After facing massive
customer pushback and sharp regulatory scrutiny on its plan to force Fire
Island residents to take Voice Link as a substitute for the copper network
destroyed by Superstorm Sandy, Verizon agrees to bring FIOS to Fire Island.
Back in May, Verizon announced it would replace the copper
phone network on Fire Island destroyed by Hurricane Sandy with their new “Voice
Link” service. From the beginning,we
expressed grave concerns with forcing storm victims to take an unproven
technology in place of the traditional copper-line phone and DSL broadband they
had before Sandy struck. Worse, Verizon
warned Voice Link callers might not reliably reach 9-1-1, that fax
machines, medical devices, and security systems might not work with Voice Link,
and that customers would have to switch to much higher-priced mobile broadband
plans to keep their Internet access.
Some quick take-aways from today's net neutrality oral arguments. For background on the hearing, start here, and for a timeline of net neutrality, click here.
Today, Verizon and the Federal Communications Commission
(FCC) had an oral argument before the D.C. Circuit Court debating the network neutrality rules. The argument
took place before Judge Rogers, Judge Tatel, and Senior Judge Silberman
(“senior” means “technically retired but still hearing cases when I feel like
it”). You can listen to the 2+ hour oral argument I sat through this morning here.
Before next week's oral argument on the FCC’s Open Internet rules we discuss why the FCC has the Authority to Make Network Neutrality Rules and what could get in the way.
On Tuesday, Michael Weinberg wrote about why we at PK think network
neutrality is important, and Sherwin Siy explained the actual net neutrality
rules the Federal Communications Commission (FCC) adopted. None of this,
however, will get debated in the courtroom on Monday September 9 when the oral
argument finally happens – at least not officially.
In theory, the reviewing court will focus on two things. Did
the FCC have the authority to make the net neutrality rules? And, even if the
FCC does have the authority, does something else prohibit the FCC from
exercising that authority here?
I say in theory because judges have their own opinions and
the D.C. Circuit is particularly famous for its high level of judicial
activism. But judges can’t come out and say “well, even though the FCC has
authority to do this, we think it’s a bad rule so too damn bad!” That wins you
a quick trip to the Supreme Court, which just last term reminded lower
courts they are supposed to respect the FCC’s authority and defer to its
expert judgment. So while policy
arguments may lurk in the background, here’s what everyone will actually be
talking about in the courtroom.
TWC and CBS blackout debacle is showing once again that we need to reform our
video market. For this to happen, the people have to be vocal and call for
reform. The McCain/Blumenthal Cable Bill – S.912 is the first step on
that path and it needs more co-sponsors.
started with the market distorting gift of free
broadcast licenses to use the public airwaves to broadcasters like CBS by the
government. In exchange for this and other regulatory goodies, they have one
responsibility – provide free programming to the public in their local
market. For reasons I won’t get into (but you can read about at length here),
Congress in 1992 gave broadcasters the right to demand cable operators pay to
retransmit this free broadcasting signal, thus spawning the current
consumer-abuse machine known as “retransmission consent.”
CBS crossed a line
from permissible hardball tactics to unfair consumer abuse when it blocked TWC
broadband subscribers from accessing content on CBS.com. The FCC needs to
enforce rules on consumer protection, and Congress needs to fix the broken
system of retransmission consent.
Time Warner Cable (TWC) subscribers find themselves
suffering through no fault of their own in what has become an all too familiar
scenario for cable and satellite TV subscribers. After months of negotiation,
CBS and Time Warner Cable could not come to terms for carriage of CBS’
broadcast programming or its Showtime premium cable network. As a result, Time
Warner Cable video subscribers can
no longer watch CBS or Showtime in several major markets.
In a few weeks, the nations of
the world will gather in Morocco to finalize a treaty that could help the millions
of blind and visually impaired have affordable access to books, but lobbyists
from Hollywood and the publishing industry are making a last minute push to
fatally weaken the Treaty – despite getting all their previous demands.
In a few weeks, the 186 governments that are members of the
World Intellectual Property Organization (WIPO) will gather in Morocco with the
goal of crafting a Treaty For The Blind. The agreement would facilitate global production and lending
of audio books, Braille translations, and otherwise enable the visually
impaired and those with certain learning disabilities to have affordable access
This will most benefit the millions of blind people in the developing
world who live in poverty, by adopting many of the rights to translate works into
braille or other forms accessible to the visually impaired that are already law
in the United States.
FCC Commissioner Ajit
Pai calls the agreement between the biggest wireless companies and the
broadcast incumbents over the Incentive Auction band plan a ‘consensus,’ ignoring
objections from consumers and competitors. But an auction designed by the
biggest incumbents will be a disaster for everyone, and a ‘consensus’ of
incumbents that ignores consumers is no consensus for an FCC Commissioner.
This could also be called “that incredibly crazy,
complicated deal Congress came up with last year where broadcasters sell back spectrum licenses to the FCC so the FCC can sell them to wireless companies.”
Since public comment makes it clear that the various
proposals present a lot of challenges (see my incredibly long and wonky
it shouldn’t surprise anyone that the Wireless Bureau asked for further comment
after holding a band plan
workshop a few weeks ago.
Verizon wants to
replace copper landlines destroyed by Hurricane Sandy with a new fixed wireless
service called Voice Link. But should victims of natural disaster be guinea
pigs when fundamental basic services are at stake? Especially when it means
losing access to broadband?
Ever since Hurricane Sandy destroyed huge pieces of its
landline network last October, Verizon made
it clear it did not want to rebuild its traditional copper network. Most
folks assumed that meant replacing damaged copper with fiber. While some
consumers have grumbled
about being upgraded to a more expensive service, no one doubts fiber to
the home represents a step up – especially on the broadband side.
But what about those communities where Verizon does not want
to spend the money upgrading to FIOS? Turns out, rather than an upgrade to
fiber, these communities will play guinea pig for Verizon’s new, cheaper, more
limited wireless alternative called “Voice Link.”
The Associated Press reported that cell phone
service had been shut down in Boston in the aftermath of today’s tragic
Boston Marathon bombing. Happily, this report — sourced to an anonymous
official — appears to be mistaken. Verizon and Sprint report that their
networks are overwhelmed by the sudden spike in volume (common after
a sudden disaster) but they have not been asked to suspend service and are in
fact looking to increase capacity.
made a passing reference to the rural call completion problem in a post about 2 months ago. I've now written a much longer
piece explaining the problem of rural call completion, and the nature of the
problem, for the Daily Yonder. You can find the article, and the
very nice illustrations they added, over here.
It is extremely easy to let the disappointment and bitterness over
the high hopes I (and others) had back when Genachowski started in 2009 color
his sins (whether of commission or omission) blacker than they should be. By
the same token, it is easy to allow the lowered expectations we all had after
2010 to make his accomplishments seem better than they where. But far more
important than any attempt to summarize Genachowski’s putative legacy in a few
paragraphs is determining who will succeed him. Anyone interested in reflecting
on the last 4 years can see Public Knowledge’s official statement here. But
for us here at PK, it’s time to look forward.
I’ve been sorting through the various filings at the FCC in
the Phone Network to IP transition docket. I single out the 7-page filing by
Comcast as the filing that scares the absolute bejeebers out of me.
Why? Because everyone else – no matter what their financial
interest or political alignment – paid lip service to the idea that we ought to
have at least some kind of
regulation. Whether it’s a general nod to a “minimal and light touch regulatory
regime” or a specific shopping list, the vast majority of commenters recognized
that when you have something as big, complicated and utterly essential to
people’s lives as the phone system, you need some kind of basic backstop for
people to feel comfortable and to address problems that will invariably come
This past week, we’ve had quite the discussion around Cecilia
Kang’s WashPo piece describing a plan by the FCC to
create a national WiFi network by making the right decisions on the “TV whitespaces” (TVWS), the unused,
high-quality frequencies between broadcast TV stations. As Kang describes, the
FCC’s opening of sufficient spectrum for TVWS could lead to “super WiFi networks (emphasis
added) around the nation so powerful and broad in reach that consumers could
use them to make calls or surf the internet without paying a cell phone bill
As regular readers know, I regard the upgrade of the phone
system (aka the "public switched telephone network" or
"PSTN") to an all-IP based network as
a majorly huge deal. As I’ve explained at
length before, this is a huge deal because of a bunch of decisions the
Federal Communications Commission (FCC) has made over the years that have
fragmented our various policies and regulations about phones into a crazy-quilt
of different rules tied sometimes to the technology (IP v. traditional phone (TDM))
and sometimes to the actual medium of transmission (copper v. fiber v. cable v.
As we wrote back in November, AT&T’s decision to
upgrade its network from tradition phone technology (called “TDM”) to an all
Internet protocol (IP) system has enormous implications for every aspect of our
voice communication system in the country. To provide the right framework for
the transition, Public Knowledge submitted to the Federal Communications
Commission (FCC) our proposed “Five Fundamentals” Framework: Service to All
Americans, Interconnection and Competition, Consumer Protection, Network
Reliability, and Public Safety.
Rarely do you see companies double-dare the FCC to back up
their brave talk about promoting competition. That is, however, what AT&T
has just decided to do – with a little help from Verizon. After gobbling a ton
of spectrum last year in a series of
small transactions, AT&T announced earlier this week it would buy up
ATNI, which holds the last shreds of the old Alltel Spectrum. To top this off,
Verizon just announced it has selected the purchaser for the 700 MHz spectrum
it promised to sell off to get permission to buy the SpectrumCo spectrum. And
The FCC released a fairly thorough report on the
widespread 9-1-1 failure that followed the June 2012 “derecho” windstorm. For
those who don’t remember, the derecho differs from most weather events by
coming up almost without warning. According to the report, carriers had
approximately two hours of warning from the time the derecho started in the
Ohio Valley to when it hit the D.C. Metro region.
As a consequence of the damage done by the derecho, Northern
Virginia experienced a massive failure of its 9-1-1 network, leaving over 1
million people with working phones (at least in some places) but no access to
9-1-1. West Virginia experienced
systemic problems as well, as a did a scattering of locations in other states
impacted by the derecho. Verizon maintains the network in Northern Virginia,
while West Virginia is managed by Frontier.
Greetings from Dubai! As an advisory member of the U.S.
Delegation, I am not really able to comment on the substance of what is going
on since there is only one spokesperson for the delegation. That said, I can provide some basic
guidance for those trying to follow this at home. Because, for the first time,
you can (sort of) follow along at home through the ITU webcast of the Plennary
and Committee 5 of WCIT and the transcription of captioning. (I get to what Plenary and “Com5” are below). There is also an official ITU
I believe AT&T’s announcement last week about its
plans to upgrade its network and replace its rural copper lines with wireless
is the single most important development in telecom since passage of the
Telecommunications Act of 1996. It impacts just about every aspect of wireline
and wireless policy.
Pointing out that the United States Trade Representative (USTR) does not
understand the concept of “transparency” hardly qualifies as news. It’s kinda
like “Jerusalem Chief Rabbi Places Last In Pulled Pork Bar-B-Q Contest.” But every now
and then, USTR’s generalized failure to understand why increasing public
participation, sharing more information with the public, and generally bringing
the standard of transparency up to what we would actually consider vaguely
transparent actually threatens U.S. interests in other areas.
Very few people ever heard of
the International Telecommunications Union (ITU) until recently – and with good
reason. For more than 100 years, the ITU managed quite nicely serving as the
forum for countries and telecom carriers to coordinate insanely-technical-mind-numbingly-boring-but-really-really-important
stuff related to making the phone network work internationally, distributing
satellite slots, and trying to harmonize what frequencies countries allocate to
what services. But now the ITU has suddenly become very interesting. Why?
Because the ITU members will hold a rare meeting -- the World Conference on
International Communications (WCIT) – where the 193 member countries will vote
on whether to amend the current ITU rules ("ITRs") that set the framework for all this
extremely important boringness.
The sad truth is that those who oppose Network Neutrality and claim to oppose the ITU are hypocrites of the worst kind. Why would I say that? What makes me say folks like Representative Lee Terry (R-Neb), and other staunch opponents of network neutrality are hypocrites when they claim to oppose the ITU? Because -- as anyone who is paying the least attention to the actual proposals at the ITU will tell you -- all the proposals in front of the ITU to date are ANTI-net neutrality proposals. So obviously, if you hate net neutrality as much as Representative Terry says he does, you must totally love the ITU or be a flaming hypocrite, right?
Good news, the FCC has decides to one again reboot its seven year old proceeding on “special access.” Given that I have been flogging the FCC since 2006 to do something about this, with occasional reminders since then, I am obviously pleased. For those new to this, “special access” is the rate businesses and competitors to telcos pay to telcos for wholesale access to their telecommunications capacity. When you place a call over your Sprint or Cricket cell phone, the call goes to the tower.
A few weeks ago I went to a fascinating gathering of a few dozen academics, policy wonks, and others from the U.S. and elsewhere to talk about the end of the phone system. While by no means a unanimous consensus, a very solid majority considered the phone system obsolete and ready for the scrap heap. This will come as a surprise to those of you who called home on Mother’s Day or who thanked God for a call center number when your broadband connection went down. But in fact, most of you are probably not using a phone service but a “phone service,” so we are half-way to shutting down the actual phone system anyway.
What is the PSTN and Why Should Anyone Care if We End It?
Every now and then, somebody responds to something we did or said with such an inappropriate bullet point that we can only laugh. These often read like someone tried to use some application for picking key words and matching to bullet points, but the App is clearly still in Beta.
The response of CTIA-The Wireless Association to our White Paper on Usage Based Pricing, aka bandwidth caps, surpases even these usual whacko responses. It ought to win some kind of prize. Perhaps the "Please Check your Magic Eight Ball Again" Award, given for a response that not only demonstrates that you failed to look at the executive summary and conclusion, but actually confuses people who did.
So, since Comcast has seen fit to once again raise net neutrality questions, it's probably a good time to check in and find out what is going on with the court challenge and when we might get a resolution on whether the FCC Open Internet rules are actually enforceable.
Last summer, with the Anti-Counterfeiting Trade Agreement (ACTA) negotiations stalled for two years because of Hollywood insistence adding all kinds of regulate-the-internet crazy stuff, we gave the US Trade Representative and the industries pushing for ACTA some friendly advice: "Drop the crazy stuff."
Officially, the U.S. government wanted ACTA to stop people from bringing actual counterfeit goods into the country, or marketing actual counterfeit goods abroad. Thats why a lot of industry groups and companies wanted ACTA. Not because of they wanted to regulate the Internet and prop up the traditional business models of the movie and music industries, but to deal with the folks making wharehouses full of fake Louis Vitton bags and knock-off Omega watches.
I am always impressed with the utter unwillingness of the Entertainment industry to acknowledge the world as it actually is, rather than the world as they want it to be. Perhaps it is a side effect of being in the business of ‘selling dreams.’ In any event, I could not help but marvel at Carey Sherman’s recent New York Times Op Ed “What Wikipedia Won’t Tell You.” Mr. Sherman, the CEO of the Recording Industry Association of America (RIAA) and one of the chief lobbyists behind the push for PIPA and SOPA, just cannot believe that anyone could find flaws in the most perfect bill he and his fellow Hollywood lobbyists wrote – especially when they tried so hard to keep balanced and respect the opinions of others! Happily, Mr. Sherman knows who is really responsible for this travesty – that wicked pair of Internet troublemakers Google and Wikipedia!
It doesn’t take much to excite the Twitterverse. President Obama
in his State of the Union speech made a passing reference to intellectual
property enforcement, perhaps to try to appease the Motion Picture Association
of America (MPAA). It was
relatively benign, as he said only that foreign piracy hurts trade, but my
reader exploded with “Obama’s flipping on PIPA/SOPA! Betrayal!” While I have no
reason to believe that the Administration is backing away from its current
hard-line position against PIPA/SOPA, it doesn’t have to in order to show MPAA
Yesterday was absolutely one of those days that reminds me why I stay in public advocacy. I’m a democracy junkie. Yes, I admit it. The sight of literally millions of people remembering that they are citizens and not just consumers gets me juiced.
The good news is that by every possible metric, SOPAStrike was an enormous success. We absolutely shocked the poop out of members of Congress and broke through the infamous “Washington bubble” that separates our elected officials from what is actually going on in the real world. As a result, we forced more than 20 Senators to come out publicly against PIPA/SOPA, including a number of co-sponsors withdrawing support. Fantastic!
Thomas Friedman writes in his column yesterday that none of the Republican candidates has focused much on technological innovation, then proceeds to focus on the matter of “smart cities.” Friedman’s thesis is fairly straightforward: to maintain our competitive edge, we will need to keep pumping up our bandwidth, particularly in cities and towns which historically act as the incubators for The Next Big Thing and all its associated, Highly Useful Little Things. Blair Levin’s Gig U gets favorable mention, and Blair gets quoted a lot on why we want huge bandwidth in urban areas as well as making sure everyone gets access to functional broadband.
We remember the surrender of General Robert E. Lee
at the Battle of Appomattox Courthouse as the end of the Civil War, despite the
fact that Confederate forces remained in the field for several weeks thereafter.
The announcement by AT&T and Deutsche Telekom (DT) that they have told the Federal Communications Commission (FCC) to dismiss their
application to transfer T-Mo to AT&T “without prejudice” is rather similar.
Any tactician knows that battles can be won or
lost by defining the battlefield. Skirmishes like the fight over whether Sprint
and C. Spire (formerly Cell South) can go ahead with their private lawsuits
against AT&T’s acquisition of T-Mobile help define the terrain for the
bigger fights to come (order here). By ruling on what constitutes a recognizable injury
under the antitrust rules and making preliminary determinations about the
nature of the market, the Order sets the boundaries of what arguments DoJ can
make and what it will need to do to prove its case. Where AT&T manages to
have certain market definitions locked in and certain potential injuries
excluded as not cognizable under antitrust in these early rounds, it gains an
The Department of Justice Antitrust Division (DoJ) just won
its lawsuit to block H&R Block from acquiring its smaller, “maverick”
competitor Tax Act. Even with the actual Order sealed for a month to let
parties scrub out the trade secrets, a few important things stand out for why
this is good news for DoJ in its lawsuit to block AT&T taking over T-Mo. In
sports terms, this is like DoJ having a super strong exhibition season going
into the regular season of play. While you still need to play the games to see
who wins, anyone facing them ought to be worried.
Here are my major takeaways from what we know so far:
The White House finally confirmed what everyone in the D.C. telecom world has expected for months. Obama officially nominated Jessica Rosenworcel to replace outgoing FCC Democratic Commissioner Michael Copps, whose term expires when Congress adjourns, and Ajit Pai to replace Republican Commissioner Meredith Baker, who stepped down last March.
something about the messed up world of telecom today that the “Connect America
Fund” the FCC will vote on tomorrow has become the “what the heck are we going to do about
IP-based interconnection” proceeding. In particular, the rather high-profile spat between AT&T and Comcast (and other cable companies) over access charges illustrates exactly the kind of cosmic cluster#@$! we predicted would happen if the FCC failed to classify broadband as a Title II telecom service.
Much like the great and powerful Wizard Oz, AT&T’s
spin machine relies on smoke and illusion combined with a powerful voice and a
chorus of believers to maintain the belief in its awesome power and infallibility.
But the fact that the “Great and Powerful Oz” is merely an old fraud with a
handful of tricks and a magnificent PR campaign is increasingly clear to anyone
who, like the intrepid little dog Toto, ignores the illusion and pulls back the
Two weeks ago, Deutsche Telekom (DT) Chief Technology Officer Olivier Baujard accidentallyspoke truthabout T-Mobile to an audience of German investment analysts. After running through the usual company talking points about the effort to sell T-Mobile to AT&T (e.g., it will happen, DoJ is just playing hardball with negotiations, etc.), Baujard said at a public presentation at a Paris broadband conference that: "any rational company had a Plan B and that Deutsche Telekom had other opportunities for its U.S. operations should the U.S. Department of Justice succeed in terminating the deal."
"It's not as if we have no other opportunity than to close T-Mobile USA if the deal doesn't work.We have other opportunities.(T-Mobile USA ) may not be an economical jewel, but it isa true asset that has many ways to be valued," Baujard said. (Emphasis added.)
This truth was so terrible and potentially damaging that it promptedan immediate retraction from DT, apparently on the theory that it is better to look like an irrational company with no plan than to admit that T-Mobile is a valuable company with a lot of options about the future. Mind you, because of laws that make it illegal to outright lie to investors, DT could not simply say Mr. Baujard was lying or mistaken. Instead, they stated that Mr. Baujard "is not involved in the decisionmaking process" and generally "unfamiliar" with the details of the future of T-Mobile and that DT still believes AT&T acquiring T-Mo is the "best" outcome. But DT did not (and, indeed, could not) say Mr. Baujard was wrong and that DT does not have other options in mind for T-Mobile.
In other words, DT's "denial" of Baujard's statement that the company has other options and the T-Mobile has a strong future even without AT&T acquiring it translates as follows: "Please ignore everything our silly CTO said. He is an engineer and lies poorly. Keep believing that T-Mobile is a sickly gazelle that the mighty AT&T lion must devour as part of a pagan ritual to bring jobs and prosperity back to the world. All part of circle of life. Hakuna mattata. These aren't the droids you're looking for."
The latest AT&T ploy to convince the gullible that it's planned acquisition of T-Mobile remains TOTALLY AND COMPLETELY ON TRACK and that everyone should just ignore the minor little tiff it has with the Department of Justice (and 7 State Attorneys General) involves pretending to pick potential rivals as recipients of any divestiture agreement. I say "pretending" because AT&T has either conveniently forgotten that such transfers need FCC approval or has reassured everyone involved that the FCC will rubberrstamp any settment AT&T negotiates.
The Department of Justice (DoJ) Antitrust Division challenge to the AT&T/T-Mo deal, United States v. AT&T, Inc., in addition to being a huge deal for us in the telecom world, is probably the single most important merger review case for the next ten years. In two ways, this has become a battle about the future of antitrust enforcement and the soul of the Antitrust Division.
In what is undoubtedly the best Labor Day present the Department of Justice ever gave America, DOJ has filed to block the AT&T/T-Mobile Merger in court. One should not, however, expect AT&T to give up easily. AT&T can, and almost certainly will, decide to fight rather than simply abandon the deal. If nothing else, it has $6 billion in break up fees to pay if the merger does not go through. On the plus side, the odds definitely favor the DoJ, which is why so many companies simply abandon the merger once DoJ has filed.
I suppose I am really a telecom lawyer at heart. My reaction to the news that the Bay Area Rapid Transit (BART) police shut down cellphone networks in a number of stations on August 11 had nothing to do with democracy, the First Amendment, Tahrir Square, etc. With all deference to the importance of these concerns, my reaction was WHAT DO YOU MEAN THESE IDIOTS MESSED WITH THE PHONE SYSTEM? From my perspective, and the perspective of traditional telecom law, BART could just as well have turned off the local central office and all this chatter about whether or not BART is a public forum is just a distraction.
No sooner had I posted my wonkish critique of the Congressional Budget Office (CBO) score for S.911, the Rockefeller Public Safety/Spectrum Bill over on my Wetmachine blog ("Where snark meets wonk and the sparks fly!") when Senator Harry Reid (D-NV) turns around and drops a new version of the plan as part of his debt ceiling bill (Best version of Debt Ceiling bill I could find here).
Yesterday, I posted why the proposal in the House Republican Spectrum Reform discussion draft makes no sense economically. For those who would argue that it does, I reply: then it ought to run both ways. In every auction, the FCC ought to be required to present two options: the licensed option for individuals and the unlicensed option for "collective" bidding.
I've written quite a bit recently about the fight of would-be new entrant Lightsquared to build a wholesale LTE service over the objections of the GPS industry. For those looking for an incredibly lengthy and rather opinionated history and the issues, I recommend my Insanely Long Field Guide To Lightsquared v. the GPS Guys. For something much shorter and to the point, you can find my op ed piece on GigaOm here. The short version is that Lightsquared does, in fact, cause interference with GPS, even though it is operating under rules the FCC approved in 2003. This brings us to the question of who bears the cost of trying to make Lightsquared, or any new system, work.
Actually, there are several ways AT&T’s attempted purchase of T-Mobile could be illegal, the most obvious of which is if the Department of Justice (DoJ) concludes that the deal is “substantially likely to lessen competition” in violation of the antitrust laws. The next most likely way would be for the FCC to find that transfer of the licenses would be contrary to “the public interest, convenience, and necessity” under Section 310(d).
"Special Access" is one of those fun telecom terms that makes no sense to those outside of telecom. Briefly, it's the rate that a regulated incumbent local exchange carrier (ILEC), like AT&T, charges for certain non-residential telecom services. As you can see, even my attempt to describe in one sentence without jargon failed, that's how complicated this is. However, like many very complicated things, Special Access is one of the important ingredients that goes into how much people pay for phone and broadband service. You can find a five minute video of me explaining Special Access and why everyone needs to care about it here.
Yesterday I attended the White House event on incentive auctions. It was probably the most sensible public event on the pro-incentive auction side I’ve attended to date. While I have had several discussions with Federal Communications Commission (FCC) staff that persuade me that, if Congress gave the FCC generic authority to do voluntary incentive auctions (subject to limitations to protect broadcasters – including low-power broadcasters – that want to stay in the broadcasting business), they could design a pretty good auction that would get more spectrum out for both licensed and unlicensed broadband access.
Federal Communications Commission (FCC) Chairman Julius Genachowski has a spectrum politics problem problem. On the one hand, he learned from last year’s D Block battle that he needs to stay aggressively on message to sell his spectrum reforms. His every speech on spectrum therefore reads like a campaign speech for incentive auctions. ‘We have a looming spectrum crisis, we need bold action, Congress must act now to pass incentive auctions.’ But, as Genachowski has discovered, this approach can have unintended consequences. Recently, Commissioner Robert McDowell reported that this focus on incentive auctions created uncertainty in Silicon Valley over the FCC’s commitment to the TV white spaces (TVWS).
The problem with fighting extremely bad corporate-sponsored legislation is that it has a distressing tendency to re-emerge time and again long after a human being would have gotten a clue and gone away. So it is with the fight by corporate carriers against local governments providing any sort of broadband. Most of us thought this fight over about 5 years ago, when the majority of carriers realized that municipal networks not only were not a threat, but were potential customers.
Yesterday, we joined with a number of our friends in the Public Interest Spectrum Coalition to, among other things, oppose this Petition for Reconsideration filed by the National Cable & Telecommunications Association (NCTA) in the white spaces docket. It numbers among the silliest things I have read in nearly 15 years of practice -- which takes much. NCTA believes that if its members must put the geographic coordinates of their cable headends into the publicly accessible database, we will create a veritable shopping list for terrorists eager to strike at our vital internet hubs and greatest source of OnDemand soft-core porn (God bless the First Amendment and US v. Playboy Enterprises, Inc.).