Comments Off

Question is, why does government have to regulate cable black outs

The Federal Communications Commission is seeking comment on whether it has the authority to eliminate its sports black out rules.  These rules prevent cable companies, satellite companies, and open video network companies (typically local exchange companies) from importing a signal carrying a live sport event from a broadcaster located outside a local viewing area where the very same live sporting event is taking place not being carried by the local station.  The rule was first applied to cable companies forty years ago and has been extended to satellite companies and open video networks over the subsequent three decades.

The NFL initiated black outs of local games to protect the gate receipts of the local team.  In order to not have a local game see a fall off in gate receipts due to another game being broadcast in its local area, local television stations and later cable companies were prohibited from carrying those games.  The FCC decided to supplement the NFL’s policy by instituting the black out rules basing its rationale on a consumer welfare theory that “to ensure to the greatest extent possible the continued availability of sports telecasts to the public.”

That rationale is pretty suspect, in my opinion.  The FCC was concerned that the NFL and other professional sports associations would extend their black outs to all distant broadcasters just to protect the revenues at the gates.  Question is, why should the state, in the form of the FCC, care about viewer access to a sporting event where the viewer is more than 35 miles away from venue where the live game is being played?  If they want to see the game that bad, then pay a premium on the ticket and drive or fly to the city where the game is being played. The FCC will vehemently deny that it ws subsidizing ticket sales at the gate with this supplemental policy but that appears to be the result.

In 2017, a fan of Atlanta Braves baseball living in Douglas County, Georgia will be able to watch a game on her tablet, iPad, lap top, desk top (if she is brave enough to admit she still has one), or smart phone.  She may not want to or be able to afford to drive to Cobb County to watch them play or even be able to afford a ticket, but at a fraction of the cost, can afford to watch via a broadband connection.  Should the Braves and the MLB prevent a transmission of the game to her if the Braves fail to sell out their new stadium?  Yes, they should.  Would it make good business sense?  No, it wouldn’t.  Should the state in the form of the FCC care either way?  No, it shouldn’t.

If anything, given its social policy of encouraging the use of broadband by all Americans, the FCC might be expected to prohibit black outs where viewing a game via a broadband connection would be discouraged, but even in promoting broadband adoption, the FCC would encroach on the business judgment of the Braves and the MLB, robbing them of their economic liberty to make a choice to sell or not to sell viewing time.

In addition, Public Knowledge and the Media Access Project do make a solid point that the FCC’s rules on black outs are anti-consumer.  They do not expand consumer welfare.  They work to diminish the value the consumer has in using alternative means to view content.  This rationale, however, should not be extended to reach to the business judgment of the content provider, in this case professional sports.  Any fall off in viewership should be punishment enough.

Comments Off

Just what in the world is “dynamic net neutrality”

Today Gigi Sohn, special counsel for external affairs for Federal Communications Commission chairman Tom Wheeler, tweeted that regulating broadband providers will be difficult because internet networks are so decentralized.  I’m no engineer and refuse to sleep in a Holiday Inn  just to play one, but it’s no surprise to me what Ms. Sohn has noted.  A decentralized network should be one we find given the open network architecture that drives innovation on the information superhighway.

App developers, content providers, edge providers, and other entrepreneurs have connected their servers, routers, and other devices to the internet incentivized by its lightly regulated nature.   For this reason, a light touch regulation should be maintained so that the billions of dollars that broadband providers have invested in upgrades to serve entrepreneurs and consumers continues to flow.

This is part of the reason Mr. Wheeler’s pronouncement of a “dynamic net neutrality” approach to regulating broadband companies threw me for a little loop.  I understand the regulatory mind set enough to not be surprised if the FCC were to investigate and seek to implement a close alternative to the portion of the net neutrality rules vacated by the court.  Combining the word dynamic with net neutrality signals to me that the FCC will take affirmative, determined action to slow down every proposed piece of innovation on a case-by-case basis using section 706 as the spearhead.  That’s not dynamic, but as painful as being continuously stabbed.

Any dynamism in broadband is driven by the development of new products, services, and content on the one hand, and the demand by consumers for innovative products on the other.  Net neutrality has not been shown to facilitate, excite, or expedite that market exchange.  It has the potential to do the opposite.  The markets negative reaction to dynamic net neutrality should be one of severe caution given the appetite for overzealous market scrutiny the FCC and Mr. Wheeler have just signaled.

Comments Off

Michael Copps starting to sound like George W. Bush

Jon Brodkin posted a piece in Ars Technica.com citing former Federal Communications Commission member Michael Copps’ call for Title II treatment of broadband providers.  Mr Copps reminds me of former president George W. Bush; asking Americans to implement a policy for a problem that doesn’t exist. Net neutrality is, for their advocates, the weapons of mass destruction that the Bushites claimed existed. Comcast v. FCC saw the Commission defeated for almost the same reason they lost in Verizon v. FCC; failure to establish expressed Congressional intent for the broadband regulatory treatment the FCC sought.

The only path the FCC can attempt to use to get a Title II reclassification is by getting there through their current sec. 706 authority to regulate broadband, and only to the extent that they are promoting the deployment of advanced services. The court won’t buy a sec. 706 stairway to Title II regulatory heaven.  Given that investment in broadband deployment is already occurring without Title II treatment, treatment that Congress has not authorized, the courts will send the FCC back home to the Portals with another vacated order.

In addition, the edge providers won’t want to be on the end of the slippery slope when the FCC starts feeling its oats and decides to push its consumer protection mantra on the likes of Google, Facebook, or Twitter. Edge providers are chomping at the bit to increase the strategic partnerships between them and broadband providers and additional regulations that impede those relationships will be frowned on by Silicon Valley.

Not to mention any jurisdictional battles in the privacy or consumer protection arena that may heat up between the FCC and the Federal Trade Commission. The FTC has asserted in the past that its expertise in privacy and consumer protection should give it primary jurisdiction in matters where internet companies are accused of wrong doing.

The FCC has a bad habit of opening up these doors and finding itself not in a position to best handle the onrush ….

Comments Off

Open data sounds like a big library

Posted January 23rd, 2014 in net neutrality, Network Compact, open data and tagged , by Alton Drew

I dropped by the Data Innovation Day festivities via cyberspace a couple hours ago and as always it’s good to learn about what’s happening in the information and knowledge space.  Poor buffering of the webcast has me blurring the individual panels, but I noted one panelist’s description of data as an asset.

Assets bring tangible and intangible benefits and while I agree that data and its side kicks, information and knowledge, are assets, I prefer the term working capital.  No matter how you phrase it, data, knowledge,and information should be allowed to generate tangible residuals for the producers.  This means how the data, information, and knowledge are managed is very important.

Herein lies a conflict or dilemma for open data.  Open data has a three-prong definition.  The first part has to do with availability and access.  According to the website, OpenDataHandbook.org, “the data must be available as a whole and at no more than a reasonable reproduction cost, preferably by downloading over the internet. The data must also be available in a convenient and modifiable form.”

The second part of the definition is premised on reuse and redistribution.  ”The data must be provided under terms that permit reuse and redistribution including the intermixing with other datasets.”

Third, there is universal participation.  Again, according to OpenDataHandbook.org, “everyone must be able to use, reuse and redistribute – there should be no discrimination against fields of endeavor or against persons or groups. For example, ‘non-commercial’ restrictions that would prevent ‘commercial’ use, or restrictions of use for certain purposes (e.g. only in education), are not allowed.”

When you add in the notion of interoperability of datasets, open data sounds like a big library system that combines inter-branch book exchanges and a steroid infused Wikipedia-esque ability to update information. Interoperability would be defined here as the capability to inter-mix datasets.  The problem, according to some of the panelists, would be where would you store this information matrix and who would pay for it?

The likely natural place, in my opinion, would be at one state university in each of the fifty states and the U.S. territories.  When I think of open data I think of what the internet was meant to provide; an exchange of information, and not the social interaction nonsense on Facebook, but knowledge and information that can help improve economies and societies.  Individuals accessing the information would pay an annual nominal fee for a digital library card with proceeds from the subscriptions and contributions from governments and corporations used for purchasing data from content providers.

To make these hyped-up libraries marketable, they should be able to purchase super fast access to subscribers via internet cyber lanes, especially given the huge amounts of data that could be stored at these super-libraries.  Deploying this type of information service could only be best promoted if the Federal Communications Commission decided to not apply any of the available section 706 tools for exercising jurisdiction over broadband providers and by default edge providers.

As capital, data, information, and knowledge increase in value the faster and further they can be redistributed and converted into productive activities.

Comments Off

The uncertainty behind applying sec. 706 of the Telecom Act

Federal Communications Commission Chairman Tom Wheeler in the wake of the decision in Verizon v. FCC published a blog post discussing how the FCC will apply section 706 of the Telecommunications Act of 1996 to ensure an open internet.  The U.S. Court of Appeals-District of Columbia vacated the portion of the FCC’s net neutrality order that implemented anti-discrimination and anti-blocking rules.  The court left in place the FCC’s jurisdiction over broadband, much to Verizon’s disappointment, allowing the FCC to reach broadband regulation through section 706.

Mr. Wheeler, reiterating his support for an open internet, sought to assure the broadband market that his focus will be on keeping the internet vital to free speech and electronic commerce.

“I am not advocating intervention unless there is an unmistakable warrant for it”, Mr. Wheeler said. “I am not interested in protecting competitors from competition, nor am I interested in presiding over a festival of rent seeking. But I am committed to maintaining our networks as conduits for commerce large and small, as factors of production for innovative services and products, and for channels of all of the forms of speech protected by the First Amendment.”

How would the FCC intervene in broadband via section 706?  In promoting broadband deployment, the FCC could use price cap regulation; regulatory forbearance; measures that promote competition in the local telecommunications markets; and other regulating methods that remove barriers to infrastructure investment.

Price cap regulation was actually considered a regulatory alternative back in my pre-Grecian hair formula days when I would actually dive unto concrete to hit a splat shot in racquetball.  Those days are over, both for hitting the concrete on an outdoor court and for price cap regulation.  Price cap regulation was meant for incumbent local exchange carriers that could show that they were no longer dominating markets for local phone service.  In this 21st century era of true convergence, applying that method to AT&T or Verizon would reverse innovation back to the days of ISDN.  Shudder the thought.

Regulatory forbearance always sounds good on the surface, but all that would amount to is the FCC telling broadband providers that they have their fingers off the trigger but the saftety is still off.  I’d rather they straight up repeal a regulation than give a broadband provider a false sense of relief.

As for measures promoting competition in local markets … are you kidding me?  That ship has left the harbor and the pasengers all hold one way tickets.  Not only do we have local competition via a wired and wireline service, we have much choice for accessing the internet via broadband.  Here in Atlanta I can access the internet via a Verizon hotspot; my Comcast wired boradband service, and if I really let my inner geek loose, an AT&T wireline.  Talk about the need for a Communications Act re-write.

And although the FCC has rules about opening up pole attachments to communications providers, infrastructure deployment is a local matter so unless to a unitary system of national government versus our current three tiers, I expect infrastructure deployment to remain contingent on how well behaved local governments are and how long before tapering at the Federal Reserve actually comes to a halt.

Section 706 was put in place in 1996.  As an avenue for FCC jurisdiction over broadband, it creates a lot of uncertainty and will disincentivize investment in broadband platforms.