Items tagged "Broadband"


Chicago Digital Access Alliance proposes Digital Inclusion Principles

February 20, 2007 Broadband , Municipal Wi-Fi , Network Neutrality , Policy Blog

From Sascha Meinrath at MuniWireless, we learn that the Chicago Digital Access Alliance have developed a 10-point set of principles for every locale to consider when tackling the issue of municipal WiFi and digital inclusion in general.

Here's a quick rundown (remember, drafted specifically for Chicago):

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An Opportunity for Open Source and Open Standards At the FCC

February 15, 2007 Broadband , FCC , Policy Blog , Spectrum Reform

As some readers may know the FCC has launched a proceeding on a national public safety band. You can find the Notice of Proposed Rulemaking here. I believe this provides an opportunity to push for greater use of open source and open standards in the public safety world — a move which could significantly lower costs and enhance interoperability.

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PKInTheKnow Podcast #22

January 25, 2007 Broadband , FCC , Network Neutrality , Policy Blog , WIPO Broadcasters Treaty

If, like me, podcasts have spoiled you for reading, you can listen to our latest episode of In The Know, now available in your favorite RSS reader.

Some of the topics were:

  • Net Neutrality in the 110th Congress

  • PERFORM ACT gets reintroduced

  • FCC CableCARD decision

  • PK at CES

  • Update on the WIPO Broadcast Treaty

That last segment includes a chat with PK's Sherwin Siy on his trip to Geneva last week, and a rundown on all things WIPO Broadcast Treaty. If you like this kind conversational segment, please let me know–I think it went well and have already conducted another interview which will be posted soon.


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Huge Victory For NN in AT&T/BS Merger

December 29, 2006 Broadband , FCC , Network Neutrality , Policy Blog

Last night, AT&T submitted a 20-page letter with new concessions. Unlike the previous letter, this one fully acknowledges network neutrality and implements a fairly serious definition.

How serious? It extends from the "last mile" connection to the residential subscriber up to the Tier 1 backbone peering point. No degredation or prioritization of packets based on source, ownership or destination. In other words, I can't prioritize just based on who sent it, where it's going to, or whether or not AT&T owns a piece of it.

Bonus round: AT&T includes in its definition of "residential last mile" any WiMax fixed point-to-point offering. This marks an important milestone. Until now, net neutrality has not applied to wireless services. Now, net neutrality has broken the wireless barrier!

We did not get everything we wanted. For example, my employer Media Access Project, on behalf of the Center for Digital Democracy, had urged the Commission to apply network neutrality to Cingular's mobile internet offerings. That won't happen. But, with the wireless barrier broken, we are a step closer to making it happen in the future.

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Week Recap and Interesting Links:

December 15, 2006 Broadband , Fair Use , FCC , Patent , Policy Blog

From PK:

From elsewhere:

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AWS Auction Success Kills DBS As Viable Competitor to Cable

September 19, 2006 Broadband , FCC , Network Neutrality , Policy Blog , Spectrum Reform

Although the results were pretty clear a month ago, the FCC officially declared the AWS Auction (aka Auction No. 66) over. The auction raised about $14 billion dollars and, unsurprisingly, the folks are rushing to declare success. FCC Chairman Martin observed that 104 companies won licenses in the auction and that he fully expects to see mobile tv and other advanced services deployed. Scott Clealand, shill for telco anti-net neutrality group, declares once again that the auction will produce even more competition into the already super competitive market of broadband. Even the usually sensible Blair Levin of Legg Mason is quoted in this Washington Post story saying "there's no bad news in this auction for consumers."

Well, I suppose, in the sense that we will continue to have exactly the same players locking up the wireless and broadband markets, the auction wasn't bad. We could look at it as the incumbent telcos and the cable cos paying $14 Billion to keep competitors out. I guess that's something.

Confused? I argued awhile back that letting incumbent cable operators win wireless licenses was a huge, anticompetitive mistake. If we wanted to create competition in video and broadband services, we needed to prevent the dominant incumbents from blocking new entrants by outbidding them on licenses. (A recommendation echoed by Free Press in their recent Broadband Reality II Report). For similar pro-competitive reasons, I pushed for anonymous bidding in spectrum auctions to keep incumbents from blocking potentially disruptive new entrants.

In the lead up to the auction, I predicted that DBS providers absolutely needed to win licenses to stay competitive with cable companies, and that the cable cos would therefore block (or drive up the price) of licenses the DBS providers wanted. Sure enough, "Spectrum Co." and the large incumbent wireless providers knocked out the Echostar-DIRECTV partnership in the first two weeks.

The result? DIRECTV owner Rupert Murdoch has taken to referring to DIRECTV as a "turd bird" and has reportedly offered his controlling interest in DIRECTV to Liberty Media owner John Malone in exchange for Malone's 17% interest in Murdoch's News Corp. Why is Murdoch looking to sell after he spent so much effort to block Echostar from acquiring DIRECTV and acquire it himself only 3 years ago? Because DIRECTV has no viable broadband strategy. And without a viable broadband strategy, DIRECTV cannot take customers away from incumbent cable operators.

The DBS companies hoped to stay in the game with the AWS auction. They were blocked by Spectrum Co., aka Comcast and Time Warner (the dominant cable companies). This is the wonderful world of competition that the AWS auction has given us?

Checking out the rest of the "104 companies" that one shows similar disappointments from a competition standpoint. The biggest winners in addition to Spectrum Co. were Verizon and T-Mobile, followed by a list of regional wireless companies looking to expand their footprints. The only potentially disruptive bidder was Alen Salmesi's AWS Wireless partnership. Salmesi gained fame as the man who bid outrageously in the 1994 PCS auction to get licenses for Nextwave Communiations, declared bankruptcy to avoid payment, then — thanks to a Supreme Court decision that the bankruptcy code outranked the Communications Act — sold out at a tidy profit to Nextel. This history does not inspire me to believe that Salmesi intends to rock the wireless boat.

And don't look to Spectrum Co. to get agressive in wireless by offering their own cellular service. Comcast has already made it clear they have no intention of competing in the cellular market.

On the network neutrality front, I have observed before that the incumbent wireless providers are even worse on blocking and otehrwise controlling the user's online experience than the wireline incumbents. And, given that the biggest wireless incumbents are either owned by wireline incumbents (Verizon, AT&T) or have partnerships with them to jointly provide services (Sprint/Nextel with Comcast & TW), I don't see cellular wireless/wireline competition as impacting either price or user control. EVDO and the like will provide a good supplement in the form of mobile services, or areas that can't otherwise get wireline broadband. But the idea that Verizon Wireless provides enough competition to Verizon DSL that Verizon DSL won't dare degrade rival content because I will switch seems rather ludicrous.

Again, given the rush to declare the AWS auction a success, I doubt we will see any real change in the rules governing the upcomming 800 MHz auction for the returned analog tv spectrum. Given the huge political push-back against anonymous bidding in the AWS auction, I expect the "success" of the AWS auction will provide sufficient justification to keep open bidding and allow wireline incumbents to compete. I also predict much lower bids in the 800 MHz auction, because the potentially disruptive players (like the DBS folks) will not waste their time and resources to come play in a rigged game, even if it is the only game in town.

Of course, that assumes the survival of potentially competitive bidders until the 800 MHz auction in 2008. Given our great "success" with developing a "highly competitive" broadband market and a "highly competitive" wireless market, wherein the chief cable competitor is a turd bird and the chief overbuilder competitor is looking hard at exiting the business, I'm not that confident that we will have competitive bidders left by the time the 800 MHz auction rolls around.

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TV gets Sweeps, IPTV gets Sheeps

September 13, 2006 Broadband , DTV , Network Neutrality , Policy Blog

There have been some great announcements in online video distribution this week, which I think Gigi plans to cover in a later post. However, if you haven't been paying attention to all your news feeds this week, you might think that all these announcements were agreements made between large distributers and large studios (and their affiliates), but not much for the little guy. Not true, not true!

The gang over at the Participatory Culture Foundation / Downhill Battle / Democracy / VideoBomb group (whew, they're keeping busy!), has been having a "sheeps week." A what? Traditional TV has "sweeps week" when they pull out all the stops to attract larger audiences in attempt to get higher ratings (and presumably higher ad revenues). These guys do IPTV, so they decided to call it "sheeps week." Why? Hey, it's the wild-west of the Internet, they can do what they want. Whatever, I thought it was a clever play on words.

I'll talk about the announcements we have so far from sheeps week in a second, but first I want to give these guys some deserved praise. We focus a lot on the YouTubes and MySpaces of the world…

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Are gaming consoles the new backdoor for IPTV?

August 30, 2006 Broadband , DTV , HDTV , Network Neutrality , Policy Blog

If you're an XBOX Live online subscriber, did you receive your download of Battlestar Galactica? NBC Universal thought out-of-the-box (no pun intended) to focus on the gaming community, and worked a deal with Microsoft to distribute a catch-up episode to a target audience before season three of BSG begins (btw: I can't wait!).

To me, stories like this are what net neutrality is all about–opening up new distribution and business models.

Yes, the video may have been transmitted over cable's wires and onto your TV, but not through cable's traditional, walled-garden network. It was distributed to a device that was allowed (but wasn't always in the ISP's eyes) to freely connect to the network to receive data-bits that were likewise allowed to freely flow. That's what real IPTV is supposed to be about, and here's a live (or Live) test of a working model for it. Very exciting.

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Mesh Tech gets Funding

July 19, 2006 Broadband , Municipal Wi-Fi , Policy Blog

Mesh networking today got a boost from the NSF, reports Om Malik. It comes in the form of a grant to Sasha Meinrath and the Champaign-Urbana Community Wireless Network.

A mesh network can be different than the usual Muni WiFi setup–it's true peer-to-peer networking, where nodes on the network can talk to each other in an ad-hoc fashion as opposed to going thru a central server (unlike a typical WiFi setup which uses a hub and spoke {h&s} network). Why does this matter? Well for one, it minimizes the single point failure in an h&s, because there isn't necessarily a "central" resource. Instead, if a resource becomes unavailable, just connect via another node.

What Sasha does a great job at presenting is how current broadband business models make absolutely no sense, when you realize what a community can do with inexpensive off-the-shelf parts and some brilliant open-source software.

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Should the FCC Let Cable Companies Buy Spectrum Licenses?

July 18, 2006 Broadband , FCC , Policy Blog

On August 9, the FCC will auction prime spectrum cleared of government users last year by act of Congress. This "advanced wireless services" (AWS) auction will distribute licenses in the much coveted range below 3 GHz (two paired bands, 1.710-1.755 and 2.110-2.155) and, as the name implies, the FCC will permit licensees to offer any advanced service over wireless. Mobile broadband, fixed point-to-point broadband, enhanced "4G" mobile cellular services, and just about anything else.

The auction has generated a lot of interest. It's been about 10 years since the FCC made such a good chunk of spectrum available, and it won't come up again until the FCC gets ahold of the returned television spectrum after the DTV conversion. Over 200 bidders have applied (although about 170 applications were somehow incomplete and need to be redone ASAP) and the FCC estimates the auction could make as much as $15 Billion.

I'll skip the rather dramatic and bumpy road it has taken for the FCC to get to this point. Media Access Project got heavily involved in some of the issues. You can read about them on my professional blog here and here, but they don't impact much what I want to say here.

I should also add that while normally a proponent of unlicensed over licensed (and a read through of this report from the Center for American Progress will provide some enlightenment as to why), I do think that if we must have auctions (and we are stuck with them for the foreseeable future), we should at least make every effort to hold them in a way that promotes competition and discourages collusion and manipulation of the rules.

Hence my concern with the news that, in addition to the usual wireless operators like T-Mobile, the major cable operators have also applied to bid for licenses.

Why concern? Isn't this good? After all, the Center for American Progress Report linked to above points out that the mobile phone industry has become increasingly consolidated and that incumbent wireless companies use auctions to keep out competitors. Isn't getting giant companies like Comcast that can go toe-to-toe with the T-Mobile's of the world a good thing? Other than Microsoft or some other tech company, who else can outbid the incumbents on licenses?

That's the traditional FCC analysis. You look at a specific market and don't worry about any related markets. Cable companies don't offer mobile phone service. They would be a new entrant in mobile telephony. Sure, they have total dominance in pay video services (what the FCC calls "multichannel video programming distributors," or MVPDS) and are the largest residential broadband providers, but so what? This isn't a competing video service, it's a spectrum license.

The problem with this analysis is that it ignores the dark side of convergence. The Commission expects AWS licensees to potentially compete in broadband and video as well as (mobile) voice, the same markets that, thanks to convergence, cable now occupies as either the dominant incumbent (video), the largest provider in an emerging duopoly (residential broadband) or the top competitor (voice, where cable has about 50% of the total VOIP market). Even on a simple level, every license acquired by an incumbent cable operator (in its franchise areas) is one less potential competitor in video, broadband and voice.

The situation is somewhat reminiscent of when the FCC distributed the first cellular licenses in the 1980s. Every region had two licenses, one of which went to the incumbent local telephone company on a theory that this would ensure survival of the cellular service. The FCC reasoned that if the new entrant failed, the "expert" telco incumbent would still be around and keep cellular going (the notion that telcos might want to throttle the potentially competing service being dismissed as mere speculation). Instead, in no small part because there were only two competitors and one was the incumbent voice provider with every incentive to undercut a market that cannabilized its main business, mobile telephony remained stunted as a luxury service until the Commission sold off more licenses to create competition in the mid-1990s.

On this basis alone — fear of eliminating a potential MVPD, broadband and voice competititor — allowing cable operators to bid on spectrum that provides competing services should give the FCC pause. But it gets worse. Allowing cable operators to get into mobile telephony could have serious bad consequences for competition in video services (and possibly the related markets of residential broadband and voice).

This part gets a bit complicated. If you want the theoretical basis, I recommend an excellent paper by Paul Klemperer and Joseph Farrell called Coordination and Lock In: Competition With Switching Costs and Network Effects.

Briefly, the more cost and hassle it takes for a subscriber to switch services, the less likely it becomes the subscriber will switch. Economists call this a switching cost. In addition, network environments create disincentives to switch through a phenomena called network effect — where the value of the network grows because of the number of people connected to it.

These phenomena create "lock in." A user can theoretically switch to a competing service, but the cost is so high, and loss of utility due to exclusion from the more popular network so severe, that it is practically impossible to switch. The triumph of the Windows operating system is often sited as a classic example of user lock-in from a combination of switching costs and network effects.

As I have written elsewhere, incumbent cable operators enjoy significant switching cost advantages already, making it very hard to get customers away from them in the video market. They can also leverage this market power to make it harder for competitors, further eliminating the the threat of potential competition.

Allowing incumbent cable operators to layer additional wireless and mobile services on top of their existing video, voice, and broadband offerings may introduce competition to mobile wireless, but it dramatically increases the lock in to subscribers and thus aggravates the cable incumbent dominance in video and residential broadband (and gives it a huge advantage on VOIP against competing VOIP providers). Any subscriber that opts for bundled cable "quadrupple play" service will almost never switch — particularly if the cable operator creates network synergies between the products.

Policymakers and regulators keep thinking of convergence and integration as an unqualified good thing. They imagine deregulation and cross ownership of facilities producing a cornucopia of competition in which consumers gaily hop from service to service among facilities based providers, neatly casting aside inferior offerings, until downright Darwinian competition ensues to the benefit of all.

Sadly, this happy world has as much to do with reality as the physics problems you get in high school that begin "assume a world of zero friction, now calculate the speed of a rocket with X thrust over Y time." It's a nice basic problem that teaches some important principles. But no rocket scientist would ever assume that he or she lives in a "world with no friction" when designing a rocket to go from Earth to space, no matter how much that would simplify design. Nor would they propose launching a few rockets until we determined if friction was "a real problem" or just "conjectural" on the grounds that since we can measure a variance in friction between what we find at the bottom of Death Valley and what we find at the top of Pike's Peak, the friction at Cape Canaveral may be different, or not exist at all.

Here too, policymakers ignore switching cost, network effects and the resulting lock in at their (and our) peril. Whatever benefits incumbent cable companies bring to the mobile telephone market, we should not assume they offset the harms to competition in related video, voice and residential broadband markets. At the very least, it would be nice to imagine that the FCC thought about it before holding the auction.

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