Law and Politics of Broadband

Is Clyburn realizing that the FCC doesn’t give a damn about minorities?

altondrew — Tue, 27 Apr 2010 12:53:55 +0000

FCC commissioner Mignon Clyburn raised concerns last week about the FCC’s failure to put a mechanism in place that would have given minority firms the chance to compete for assets divested by Verizon Wireless. She believes that right now the FCC is just giving lip service to minority entrants in the wireless space.

No. Really? I’m not saying that the FCC should be giving handouts but this FCC hardly knows anything about competition and appears to be shirking its role as a regulator which should primarily be to ensure competition on a level playing field. It may be time for Clyburn to start playing odd-man out and play both sides of the political fence to make some real inroads as opposed to merely touting the liberal pie-in-the-sky rhetoric.

Does the FCC want to risk its credibility on appeal?

altondrew — Fri, 09 Apr 2010 18:49:49 +0000

So, we’re saying that in Brand X Internet Services, the FCC successfully argued before the U.S. Supreme Court that cable modem service is an information service because consumers primarily perceived cable modem service as a way to access the internet versus making phone calls. Now the FCC is prepared to argue that they got it wrong?

With this type of back and forth interpretation of the Communications Act, the FCC runs the risk of not only plunging an ax into its own back but into the backs of consumers its allegedly trying to protect. Sorry Free Press, but the FCC had it right the first time in its 2002 Cable Modem order. The court said it back in 2005 and said it now that cable modem service is not subject to the egregious regulations of net neutrality and that, fortunately, is still the law of the land.

The court’s net neutrality decision was the right one

altondrew — Thu, 08 Apr 2010 02:20:24 +0000

Free Press, as expected, railed against yesterday’s court decision that found the FCC has no authority to regulate Comcast’s network management practices. The decision ultimately means that consumers, especially minorities who have yet to adopt broadband, will not face the tremendous increases in rates a net neutrality policy would have assuredly brought about.

The FCC just might try to reclassify Internet services as a common carrier service. I wonder though. Has anyone bothered to ask why they didn’t take this allegedly reasonable course in the first place?

Net neutrality not dead … yet

altondrew — Wed, 07 Apr 2010 16:45:53 +0000

Analysis and commentary: net neutrality not dead … yet

The United States Court of Appeals-D.C. Circuit yesterday held that the Federal Communications Commission has no regulatory authority over the network management practices of Internet service providers. The FCC, according to the court, relied on congressional statements of policy as a basis for determining that the agency had ancillary authority over the network management practices of a broadband provider, in this case Comcast Corporation.

The court did not buy this argument. The court reasoned that regulation of Comcast’s network management practices was not ancillary to the FCC’s statutorily mandated responsibilities. In other words, ancillary authority has to be based on specifically delegated powers within the Communications Act. As an administrative agency, the FCC has authority to act only according to authority delegated to them by Congress. Congress has not delegated authority to the FCC to regulate a cable company’s network management practices.

For investors in broadband providers such as cable companies and telecommunications companies, this is a win. Net neutrality regulations would result in greater compliance costs and increased network management costs. If the costs are passed on to consumers through higher prices, the price increases may discourage adoption of broadband services offered by these companies. If cable companies are not able to pass on these costs through higher prices, the result may be an erosion in profits.

Net neutrality proponents are not expected to give up their fight. The FCC may appeal the decision to the Supreme Court. This may prove costly in terms of time, especially given the FCC’s intent to incorporate net neutrality into its national broadband plan.

The FCC may also attempt to reclassify Internet service as a Title II or common carrier service, treating Internet service providers like phone companies. The problem with this approach is that the FCC has already declared by its own rules that Internet service is not a telecommunications service but an information service. There will be high statutory and legal hurdles to climb should the FCC attempt to go 180 degrees against its own findings, which were upheld by the Supreme Court in 2002.

The other option is to get Congress to pass legislation specifically delegating to the FCC the authority to regulate an Internet service provider’s network management. I find this unlikely. Congress has always maintained a hands-off approach to the Internet and given the political climate of the country in terms of how it perceives takeovers of private industry by the federal government, Congress may not be supportive of such an action.

While it is too early to declare net neutrality as a dead policy, the court’s ruling has taken considerable sting out of its argument.

Answer to BlacWeb20.com Net Neutrality post, Good or Bad Public Policy

altondrew — Sat, 03 Apr 2010 00:51:15 +0000

First of all, my compliments to Ms. Givens for her attempt at clarifying for the average consumer the issue of net neutrality. Ms. Givens is correct that the Federal Communications Commission wants to put into rule a number of guiding principles that will help the agency determine whether the sentinels of the internet’s onramps are treating everyone equally and fairly when regulating the traffic consumers and producers send up and down our nation’s digital thoroughfares. While I appreciate Ms. Givens’ acknowledgment that we should seek some balance in resolving the issue surrounding an open internet, it is at this fork in the road that Ms. Givens and I must, at least temporarily, part company.

The problems with her argument, ones that are shared by the more ardent proponents of net neutrality, are the generalities used to describe the problem this public policy is supposed to solve, and the tenuous linkages that are used to tie the problems of lack of access with a poor and unneeded public policy solution.

Let’s look at the concept of “policy” itself. If we are talking social policy, then we are referring to a goal that society overall finds agreeable if not noble. When determining the appropriate public policy or government action necessary to bring about this goal, we first ask ourselves whether the participants in the market for internet services, namely consumers and internet access providers need any government help to begin with. My position is no, they do not.

We can all agree that consumers should be able to access the internet because of the well documented existing and future benefits access has to offer. We can also agree that in a free market society where the private sector provides the distribution piece of the information superhighway, we should maintain a system of incentives, i.e. market-based prices, low taxes, etc., that encourages the private sector to manage, monitor, and maintain facilities. Net neutrality proponents at this point will argue the generality that Ms. Givens argues; that “everyone, regardless of wealth, power, or influence, should have the same access to the Internet.“ That generality, without going into an in-depth analytical treatment, is not economically or financially feasible.

For example, I expect to have access to medical facilities; however, depending on my particular mix of economic resources, I will only be able to afford certain levels of actual health care. Economic constraints as determined by the provider will be factored into what the facility will be able to provide me. Part of the provider’s decision to meet my particular need will be based on my ability to pay; the other part based on the expenses they have to cover to remain viable. Based on this time-honored perspective of a private sector provider, to say that everyone will have the same access is not realistic.

In short, the first question any policy maker should ask is, does the market currently allow consumers who are willing and able to pay for internet access to get that access? The answer is yes. Anyone with a phone line ( which is well over 95% of the country) can get digital subscriber line service and be on the internet in a jiffy.

The second question the policy maker must ask is, how will a requirement that internet service providers make available to consumers traffic management and network information increase either the level of internet services to the consumer or reduce the consumer’s price for service? In other words, how will transparency increase consumer welfare?

This question is never answered clearly by net neutrality proponents. Instead, it is at this juncture that net neutrality proponents do a hard left turn and link net neutrality to some circular argument like, “we need net neutrality because we need transparency because we need robustness.“ Not once have net neutrality proponents made a quantitative case for either an increase in services or a decrease in consumer prices. Here also, Ms. Givens’ description of net neutrality and her support of the policy fails.

Ms. Givens never answers her question, net neutrality: bad or good public policy. I’ll answer it. It is bad policy.

Google, Verizon should push back on net neutrality

altondrew — Wed, 31 Mar 2010 12:56:44 +0000

Every time I see the name “Free Press”, I get the urge to smoke and have a drink. Problem is I don’t do either anymore. Its a choice. Just like Verizon has a right to exercise its business judgment. (ouch. Visions of law school swirling in my head.)

In its rant yesterday, Free Press, an advocacy group arguing for the principles of an open internet or net neutrality, insinuated that Google and Verizon were in cahoots to externalize costs of any attempted regulation of broadband by the Federal Communications Commission. Free Press believes that Google and Verizon don’t mind net neutrality as long as any net neutrality rules are not applied to them.

Verizon never had any intent to make itself omniscient in the broadband space. Around 2003, afraid of the butt whooping it was getting from the cable operators, Verizon decided to go head-to-head with Comcast et al by deploying fiber optic cable to the premises of millions of homes and businesses.

Verizon had to get use to the franchising process, something they were not use to because of their telephony status. Certificates of public convenience and necessity, obtained from state public utilities commissions, and telecommunications easements got Verizon anywhere throughout their telecommunications services territories but to deliver video programming, Verizon had to seek permission from local governments to use public rights-of-way.

Verizon never promised to provide video programming in areas other than those where they got franchise agreements. Franchise agreements are a pain in the butt, taking up to three years if you follow the process in the Communications Act.

By the time Congress completes its review of the FCC’s national broadband plan and the FCC promulgates rules, Verizon would have completed its deployment schedule and be in the middle of addressing what its going to do with Verizon Wireless (they are reevaluating their relationship with Vodafone),

On the one hand, Free Press takes the word “free” too seriously. The FCC shouldn’t feel free to intervene willy-nilly into the deployment choices of a telecommunications company. It’s not in Verizon’s business plan to wire the whole country.

On the other hand, Free Press acts like it doesn’t understand the word “free” when it comes to the markets. Verizon should be free to enter any markets of its choice where economic, regulatory, legal, and financial costs allow.

If I were Verizon, I would take the opportunity to pull a Qwest Communications and ask the Rural Utilities Service and the National Telecommunications and Information Administration for $500 million to $1 billion to deploy broadband to underserved,

unserved, rural, and urban areas. Ironically if Verizon uses that kind of leverage, Free Press will be screaming that the big boys are squelching competition by taking broadband cash from the little guys.

Analysis and Comment: What will be Congress’ priorities on the national broadband plan

altondrew — Tue, 30 Mar 2010 02:58:27 +0000

Representative Henry Waxman, Democrat from California and chairman of the House Energy and Commerce Committee appears to place highest priority on public safety components of the Federal Communications Commission’s national broadband plan. In his opening statements before a hearing held by the House Subcommittee on Communications, Technology, and the Internet on March 25, 2010, Mr. Waxman also appeared to place high priority on spectrum allocation, a priority also shared by the FCC in the plan. Allocation of spectrum, particularly spectrum held by broadcasters, plays an integral role in how the FCC intends to facilitate competition between wire line and wireless broadband providers.

The subcommittee’s chairman, Rick Boucher, Democrat from Virginia, voiced support in his opening statements for the FCC’s recommendation to shift universal service funding from exclusive support for voice services to supporting broadband services. Mr. Boucher stated in his comments that he has drafted legislation that requires shifting universal service support from primarily voice services to broadband services. Mr. Boucher’s bill would require recipients of universal service funds to provide broadband throughout their service territories in five years. Mr. Boucher also commended the FCC for establishing a goal of provide 100 million homes with download speeds of 100 Mbps.

Congress, as part of the American Recovery and Reinvestment Act, required the FCC prepare a national plan for increasing access to broadband services. In order to provide incentives for deploying broadband facilities, Congress has made available $7.2 billion in funding. Large broadband providers were not expected to participate in the plan, however, Qwest Communications recently made application to the U.S. Department of Agriculture’s Rural Utilities Services for $350 million to go toward deploying broadband in rural areas.

Verizon Communications, on the other hand, recently announced that it is winding down the deployment of its fiber-to-the-premises network. Verizon will complete deployment in the areas where it has been granted franchise authority to provide video programming.

The Senate Committee on Commerce, Science, and Transportation will conduct its review of the national broadband plan on April 14, 2010.

Qwest’s requests shows Obama is not too concerned about competition in broadband

altondrew — Fri, 26 Mar 2010 01:30:09 +0000

Qwest announced today that it is seeking $350 million in federal funds to deploy broadband to 500,000 homes in its 14 mid-west and western state territory. The company stated in its press release that due to its expansive territory that seeking the funding was the feasible thing to do.

With $7.2 billion on the table for broadband funding, this appears to be the reasonable thing to do. Qwest hopefully weighed the regulatory costs that attached to taking dinero from Uncle Sam. The conventional wisdom was that the larger broadband providers, including telcos like AT&T and Verizon and cable operators like Comcast, would not be lining up at the trough for any stimulus money.

Given the recent release of the Federal Communications Commission’s national broadband plan and its desire to encourage competition between wireless and wire line broadband providers, Qwest probably figures that it needs to reduce the pain and suffering on the financial end while enduring the ramped up intrusiveness on the back-end that the national broadband plan and the Department of Agriculture’s compliance requirements will bring about.

Qwest’s actions raises three questions. First, how much belly aching will the smaller wannabe providers of broadband raise? I can hear the screams of how unfair it is that Qwest will be able to avoid 75% of the estimated costs of deploying broadband to 500,000 homes. Last time I checked, President Obama’s American Recovery and Reinvestment Act did not preclude the big boys from applying for money.

Besides, given their size and expertise combined with FCC Chairman Genachowski’s exuberance for providing Americans with 100 Mbps of high-speed Internet access, Qwest and the other large broadband providers are the logical companies to be first in line as far as I am concerned.

This leads to the second question. When will the larger players roll up to the trough for their share? They have until September 30, 2010 to take their cut. With the FCC recommending to Congress that television broadcasters forfeit some spectrum so that wireless broadband players can enter the market, Verizon and AT&T may as well get all the help it can. Besides, there is no shame in it. The banks took money from the U.S. Treasury and the Federal Reserve. At least for the phone companies and cable operators they are not being forced.

Finally, what does this say about the administration’s commitment to competition from the little guy? Not much. If AT&T, Comcast, and Verizon were to ask for equal amounts, they would virtually suck the air out of the room. Again, I don’t think this should be a concern if they do. These companies have the scale to implement the plan and they should get the spoils.

We don’t create competition with more regulation

altondrew — Wed, 17 Mar 2010 20:29:06 +0000

Free Press continues to defy the principles of free market enterprise and good old fashion capitalism with its recent response to the national broadband plan that was released yesterday by the Federal Communications Commission.

After acknowledging some good things in the plan, Free Press waded into its usual left-wing diatribe claiming that the plan “punts on the thorniest problems that Internet users face in America: astronomical prices, slow speeds and no real choices among providers.” The group then suggests that in order to reduce prices, increase speeds, and increase the number of choices in Internet providers, the FCC should (drum roll please) intervene and do what the FCC does best:regulate.

Quite frankly I think that the FCC’s plan wreaks of too much potential regulation as it is. Its no wonder that large broadband providers with the scale to deliver services to an additional 100 million Americans are ignoring the plan. Ironically, alternative broadband providers such as broadband over power line firms believe that the plan ignores them. Go figure.

No, Free Press. If you want additional competition and lower prices, you need to put your energies toward lowering regulatory barriers to entry, researching innovative ways of providing broadband, and use your resources and connections to finance entry into the broadband market yourselves.

Where I’m from, we call it …. capitalism.

Cablevision, Disney evidence that content should flow to highest bidder

altondrew — Mon, 08 Mar 2010 14:12:16 +0000

CNBC’s Joe Kernan had it right this morning while referencing yesterday’s battle between Disney and Cablevision. To paraphrase him, content is like water. It flows to the highest bidder.

This is something that the left wingers at Free Press and Color of Change cannot grasp. Free Press argues that without open network regulations, the policy also known as net neutrality, media content providers will face discrimination by broadband gatekeepers like Cablevision. What Free Press fails to mention is that what gets you past gatekeeper discrimination, if there is even such a thing, is content that brings value. If enough consumers show demand for the content, internet service providers will make sure they get it.

To ensure that consumers are aware of their content, the Free Press posse will have to get out of the ivory tower and start doing some good old fashioned pavement pounding. You know, knock on doors, buy radio ads, tell their friends and neighbors, etc. Drive traffic the old fashioned way to their online content.

Instead of treating the big bad media companies like … well, big bad media companies, maybe its time that Free Press put some of its misplaced energy into buidling strategic partnerships with these guys. Show the gatekeeper how valuable your content can be to their distribution pipes.

We have a phrase for that where I’m from. Its called good business.