Free Press: Internet Too Important to Tie Up in Legal Limbo
Communications Daily (subscription) reported today on the avalanche of lawsuits being filed challenging the FCC’s Comcast “net neutrality” order. Four were filed this week in four different U.S. appeals circuits — the lucky court that will actually decide the case will be decided by lottery.
The story quotes Ben Scott of Free Press, the energizer rabbit of pro-regulation media groups, decrying Comcast’s appeal. “The Internet is too important to let Comcast tie it up in legal limbo,’ he says. “Congress should act now to pass Net Neutrality laws that clear up any uncertainty once and for all.”
Huh? On what planet, exactly, is Free Press based? Put aside for the moment the question of whether Comcast is responsible for the legal chaos that has ensued from the FCC’s decision to regulate the way it manages Internet traffic. Strangely enough, when Free Press petitioned the Commission to get involved, I didn’t hear them decrying the “legal limbo” it would cause.
But even more jaw-dropping is the idea that Congress could “clear up any uncertainty” by adopting its own Internet regulations. The mind boggles. The last major congressional foray into communications policy was the Telecommunications Act of 1996, which spawned over half a decade of litigation. There are still children of telecom lawyers going to college off the fees generated by that one.
And that legislation was a relative piece of chocolate cake compared to the torte of net neutrality. Proponents of mandated neutrality — which Commissioner Robert McDowell has likened to a regulatory Rorschach test — can’t even agree on what it is. Lord know how long it would take the courts to sort it out — if ever they are able to.
Free Press is right, of course, to worry about the endless litigation which will — and already is — being caused by FCC Internet regulation. Rather than even more rules from Congress, however, the solution is for the FCC to reverse course on the regulation it unwisely imposed last month.
Summary of Martin’s ‘War on Cable’
When the definitive history of Kevin Martin’s regulatory reign of terror against the cable industry is finally written, I have a feeling that Ted Hearn of Multichannel News will be the man who pens it. There is no one who has been reporting on these issues longer or with more investigative vigor than Ted. In an absolutely scathing piece today about a former Martin staffer, Ted does a nice job summarizing the major elements of Martin’s war on cable. It reads like the list of grievances against King George found in the Declaration. (Think: “He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.”) Anyway, I just thought I’d throw Ted’s list up here for those keeping score at home:
– He secretly rewrote an FCC study issued in November 2004 that had concluded that cable a la carte was a bad idea.
– He walked away from a handshake agreement with NCTA, Comcast and Time Warner that the rollout of family programming packages would end his a la carte jihad.
– He stripped cable’s control over critical wiring in apartment buildings, affirming the identical policy that a court had previously struck down.
– He voided exclusive contracts between cable operators and apartment building owners just a few years after the FCC gave the green light to such deals.
– He required cable operators to carry must carry TV stations in analog and digital for three years after voting against such a policy in February 2005.
– He extended program access rules for five years, a gift to DirecTV and Dish Network even though the two satellite providers are larger than every cable company in the U.S. except Comcast and Time Warner.
– He imposed expensive set-top box equipment mandates on cable, making it vastly more costly for Comcast and Time Warner to reach the goal of all-digital platforms.
– He capped cable ownership at 30% of pay-TV subscribers nationally—the same limit that a federal court kicked back to the FCC as unlawful—while letting AT&T and Verizon basically divide the country’s phone market.
– He slashed cable leased access rates to zero in an act of bureaucratic malice that a federal appeals court has now blocked and that the Office of Management and Budget has rejected as a violation of the Paperwork Reduction Act.
– He decided to brand Comcast an Internet outlaw when all the company did was occasionally frustrate a tiny minority of customers whose massive consumption of Web porn and pirated Hollywood films was destroying the service for others.
The FCC’s Comcast/Net Neutrality Order & Commissioner McDowell’s Dissent
On Wednesday, the FCC released the decision (PDF, text) it adopted back on August 1 holding that Comcast had violated the FCC’s 2005 net neutrality principles (PDF, text) by “blocking” peer-to-peer file-sharing traffic on its network using the popular program BitTorrent. Paragraphs 3-11 lay out the FCC’s (still-disputed) finding of facts.
Commissioner McDowell’s Scaliaesquely scathing dissent (PDF pp 61-67) provides an accessible summary of the order and should be required reading for everyone on all sides of the issue. Despite having been provided with the final version of the order only the night before its release, McDowell distills the order into six key points, rejecting the Commission’s reasoning on all but one point (jurisdiction):
- Was a complaint properly brought against Comcast under FCC rules? No, FCC rules allow the kind of complaint brought against Comcast to be brought only against common carriers, which cable modem operators are not.
- Does the FCC have jurisdiction over Internet network management? Yes, under the Supreme Court’s 2005 Brand X decision.
- Does the FCC have rules governing Internet network management to enforce? No, “the Commission did not intend for the [2005] Internet Policy Statement to serve as enforceable rules but, rather, as a statement of general policy guidelines,” nor can the Commission “adjudicate this matter solely pursuant to ancillary authority.”
- What standard of review should apply? No, even assuming this case had been properly brought under enforceable rules, the Commission applied what amounts to a “strict scrutiny” standard–something unprecedented for reviewing private, rather than governmental, action.
- Was the evidence sufficient to justify the Commission’s decision? No, the “FCC does not know what Comcast did or did not do” and should have “conduct[ed] its own factual investigation” rather than relying on “apparently unsigned declarations of three individuals representing the complainant’s view, some press reports, and the conflicting declaration of a Comcast employee.” The evidence did not suggest any discriminatory motive behind Comcast’s network management techniques
- Is the decision in the public interest? No. “By depriving engineers of the freedom to manage these surges of information flow by having to treat all traffic equally as the result of today’s order, the Information Superhighway could quickly become the Information Parking Lot.” Comcast had already resolved its dispute with BitTorrent through outside arbitration. The FCC should “allow the longstanding and time-tested collaborative Internet governance groups [already working to establish processes for resolving such disputes] to continue to produce the fine work they have successfully put forth for years.”
More on M2Z / AWS spectrum fight
Several of us here have outlined our reservations about the proposal to allocate a block of the Advanced Wireless Services (AWS) spectrum for a free, nationwide wireless service. (Here’s a filing I signed on to that critiques the portion of the plan that requires censorship of the entire band once allocated).
But, strictly from an economic perspective, this is the best overview and critique of the plan I have seen so far: “The Static and Dynamic Inefficiency of Abandoning Unrestricted Auctions for Spectrum,” by Bob Hahn, Allan Ingraham, Greg Sidak, and Hal Singer. It’s a response to a paper favoring the M2Z plan that was penned by Simon Wilkie of USC, who also formerly served as the Chief Economist of the FCC. (Wilkie’s work on behalf of M2Z can be found on the M2Z site here). It’s a good debate and I encourage you to look at both papers if you are interested in this issue.
Media Deconsolidation (Part 23): Cox Selling Most of its Newspapers
My ongoing media DE-consolidation series represents an effort to set the record straight regarding one of the leading myths about the media marketplace today: the notion that rampant consolidation is taking place and that operators are only growing larger and devouring more and more companies.
Nothing could be further from the truth. Over the past 3 to 5 years, traditional media operators and sectors have been coming apart at the seams in the face of unprecedented innovation and competition. The volume of divestiture activity has been quite intense, and most traditional media operators have been getting smaller, not bigger. “Traditional media’s numbers are shrinking,” argued FCC Commissioner Robert McDowell in a recent speech. “The ironic truth is,” McDowell continued, that “in many cases, media consolidation has actually become media divestiture. Companies… have been shedding properties to raise capital for new ventures.”
And so that trend continues today with the announcement from Cox Enterprises that it will be selling almost all its newspapers. According to the The Atlanta Journal-Constitution:
Continue reading this post »
FCC v. Fox Television: All the Supreme Court briefs are in
Lately I’ve been writing about potentially historic upcoming First Amendment case of FCC v. Fox Television Stations. The Supreme Court will hear the case on Tuesday, November 4th. All the briefs in the case are in and can be found on the ABA website here. But I’ve pasted the links for all of them below as well. In coming days and weeks I might be highlighting some of the comments from the briefs. [The docket number for the case is 07-582]. The amicus brief I filed with my friends at CDT can be found here, and I wrote about it last week here on the TLF.
The FCC v. Fox case is the indecency case involving the FCC’s new policy for “fleeting expletives.” I wrote about the Second Circuit Court of Appeals decision here. The full decision is here. The FCC v. Fox case could become the most important First Amendment-related Supreme Court case since FCC v. Pacifica Foundation, which just turned 30 years old last month. Anyway, here are all the briefs in the case, starting with the merit briefs by the lead parties:
Get Ready for Internet Advertising Regulation “for the Children”
Catherine Holahan of Business Week points out that consumer and children’s advocacy groups are looking to expand their efforts to regulate fatty and sugary food advertising in the name of “protecting the children”:
Having successfully lobbied the government to place limits on junk food ads on TV, they now target marketing to kids via the Web. “While there are some rules for TV, there are no rules when you move online,” says Patti Miller, vice-president of children’s advocacy group Children Now and a member of the Federal Communications Commission’s Task Force on Media & Childhood Obesity. “We don’t want to reduce junk food advertising to kids [on TV] and then find that it has just moved to another platform.”
And so another classic case study in regulatory creep is born and the Net gets a little more regulated in the process as Uncle Sam becomes our Super Nanny. What’s that you say? Parents should take more responsibility for what their kids watch and eat? Silly you. Don’t you know that it takes a village to raise a village idiot? Or something like that.
FCC’s Comcast decision was political failure
There’s been a fair amount of chatter on this blog (here, here, and here) about how to properly view the FCC’s recent Comcast decision. My take is that while everyone is focused on questions of market failure, we are in the midst of a huge government failure. Read my full explanation here.
CDT-PFF Supreme Court Brief in FCC v. Fox Case
Along with my friends John Morris and Sophia Cope of the Center for Democracy & Technology, I have just submitted an amicus brief to the Supreme Court in the potentially historic free speech case FCC v. Fox, which will be heard in November.
[Reminder: The FCC v. Fox case is the indecency case involving the FCC’s new policy for "fleeting expletives." I wrote about the Second Circuit Court of Appeals decision here. The full decision is here. By contrast, the so-called "Janet Jackson case" -- CBS v. FCC -- took place in the Third Circuit Court of Appeals and that court recently handed down a decision that also went against the FCC. I wrote about the Third Circuit's decision here.]
The FCC v. Fox case could become the most important First Amendment-related Supreme Court case since FCC v. Pacifica Foundation, which just turned 30 years old last month. Of course, it could be that the Supreme Court simply sticks to the procedural questions regarding whether the FCC moved too far, too fast in reversing it’s long-standing policy of restraint regarding “fleeting expletives.” That’s essentially what the Second Circuit did. On the other hand, the Supremes might reach the substantive First Amendment issues tied up in the Pacifica case. We just won’t know for sure until the case is handed down.
Regardless, in the joint CDT-PFF amicus brief filed today, we argue that the FCC has both gone too far procedurally and that “the time is rapidly approaching for this Court to find that broadcast, like the Internet and other means of mass communication, ‘is entitled to the highest protection from government intrusion’ and that there is no longer a factual ‘basis for qualifying the level of First Amendment scrutiny that should be applied to this medium.’” Citing Reno v. ACLU, 521 U.S. at 863, 870.”
A more detailed summary of our argument follows below.
Continue reading this post »
Day 505: The XM-Sirius Circus Is Finally Over
It’s over. The FCC, which voted to approve the merger between satellite radio firms XM and Sirius two weeks ago, finally released its formal report on the case on Tuesday, ending the drama 505 days after the firms submitted their application to the Commission.
The episode was not the FCC’s finest hour. The agencies once-vaunted “shot clock” — by which the FCC pledged to decide on mergers within 180 was left in shreds, with the counter going around almost three times before the circus finally ended. Even at that, XM and Sirius managed to claw their way to approval only by making an (ever-longer) series of “voluntary” commitments: including offering “a la carte” programming, capping prices for 36 months, making 8% of its capacity available to others to non-commercial and other entities, and extending service to Puerto Rico. Even more was being considered when the music stopped, including a proposal to require all satellite radio receivers to have built-in HD broadcast tuners as well. (Apparently, there was concern that broadcasters would be frozen out of the audio market, in which they hold a market share of about 96 percent).
This regulatory free-for-all contrasts with the approach taken by the Department of Justice, which — after a fact-specific inquiry, approved the merger - without conditions - five months ago. Continue reading this post »
Regulate the Internet? FCC.gov Has It Right
The FCC last Friday may have jumped with both feet into the business of regulating the Internet, but someone forgot to tell the folks that run the Commission’s website. “The FCC Does Not Regulate the Internet or Internet Service Providers (ISP)” the “consumer publications” page of FCC.gov is still proudly telling visitors, referring them over to their state consumer protection office or to the Federal Trade Commission as the proper agencies for such things.
In the past, I’ve been critical of the shambolic way in which the FCC’s website is run. But in this case, the problem isn’t with the web folks - they have the policy exactly right. It’s the FCC, not FCC.gov, that’s bungled the job.
Someone at the Commission will eventually tell the website folks to fix the error. But who will get the Commissioners to fix theirs?
FCC’s DRM ban may derail distribution of new-release films on cable TV
There’s been a lot of FUD floating around about the MPAA’s plan to offer new release films for cable subscribers to watch at home on pay-per-view channels. Currently, movies come out on DVD about four months after their theatrical release, and are typically available on pay-per-view a month or two thereafter. As box office receipts have waned, Hollywood has warmed to the idea of letting consumers watch movies at home just a few weeks after being released in theaters.
Due to piracy concerns, new movies would be subject to an extra layer of copy protection. The movie studios want to use a technology called Selectable Output Control (SOC) to prevent new release films from being viewed on analog outputs. SOC makes it possible to seal the “analog hole” by disabling all unprotected paths.
Consumers are willing to pay to watch new movies at home, and content producers are willing to transmit them, but government is standing in the way. FCC regulations forbid multi-channel video programming distributors from activating SOC, but firms may apply for a waiver from these rules if they can demonstrate that consumers stand to benefit. The MPAA has applied for a waiver, arguing that “These new Services are exactly the type of ‘new business models’ that the Commission contemplated when it adopted the encoding rules.”
Under Section 304 of the Telecommunications Act of 1996, the FCC is tasked with “assuring commercial consumer availability of equipment used to access services provided by multichannel video programming distributors.” FCC regulations, therefore, mandate that all video transmitted on cable TV must be viewable on all outputs, including legacy analog connectors like RCA and S-Video. In a 2003 Notice of Proposed Rulemaking, the FCC stated that, “we are concerned that selectable output control would harm those ‘early adopters’ whose DTV equipment only has component analog inputs for high definition display, placing these consumers at risk of being completely shut off from the high-definition content they expect to receive.”
But it’s expected that early adopters will sometimes encounter technical hurdles. Why should Selective Output Control be any different? Just as HD-DVD players are effectively obsolete, and K56flex modems are no longer supported by most dial-up ISPs, people who bought HDTVs several years ago prior to the adoption of HDCP might have to live without the ability to watch new release movies at home.
Cerf on managing networks & the need for industry discussion
Google’s Chief Internet Evangelist Vint Cerf, one of the fathers of the Net, has a very thoughtful post up on the Google Public Policy Blog today asking “What’s a Reasonable Approach for Managing Broadband Networks?” He runs through a variety of theoretical approaches to network load management. There’s much there to ponder, but I just wanted to comment briefly on the very last thing he says in the piece:
Over the past few months, I have been talking with engineers at Comcast about some of these network management issues. I’ve been pleased so far with the tone and substance of these conversations, which have helped me to better understand the underlying motivation and rationale for the network management decisions facing Comcast, and the unique characteristics of cable broadband architecture. And as we said a few weeks ago, their commitment to a protocol-agnostic approach to network management is a step in the right direction.
I found this of great interest because for the last few months I have been wondering: (a) why isn’t there more of that sort of inter- and intra-industry dialogue going on, and (b) what could be done to encourage more of it? With the exception of those folks at the extreme fringe of the Net neutrality movement, most rational people involved in this debate accept the fact that there will be legitimate network management issues that industry must deal with from time to time. So, how can we get people in industry — from all quarters of it — to sit down at a negotiating table and hammer things out voluntarily before calling in the regulators to impose ham-handed, inflexible solutions? What we are talking about here is the need for a technical dispute resolution process that doesn’t involve the FCC.
Continue reading this post »
Tim Wu’s “Mother-May-I” World of Net Neutrality Regulation
Tim Wu has an absurd piece in today’s New York Times comparing America’s broadband marketplace to OPEC. This really is quite outrageous, beginning with the fact that OPEC is a GOVERNMENT-RUN cartel. Wu also had a comment in the Washington Post today saying that he didn’t think broadband metering was an outrage. Well, that’s nice. I’m happy that we have Tim’s permission to experiment with new business models for financing broadband networks going forward!
This is indicative of what we can expect in the future once Net neutrality laws get on the books: A world of incessant “Mother may I?” permission-based forms of preemptive Internet regulation. Tim and his radical band of regulatory advocates over at Free Press will incessantly petition the FCC to review each and every business model decision and encourage the unelected bureaucrats at the agency to manage the Internet to their heart’s content.
And what does Tim offer for an alternative vision of the way the world should work since he doesn’t believe private markets can handle the job? Well, it’s back to the Big Government drawing board for more tax-spend-and-subsidize solutions! “Amsterdam and some cities in Utah have deployed their own fiber to carry bandwidth as a public utility,” he says. Yeah, that’s the promised land. After all, it’s working out soooooo well at the municipal level. Please.
NPR spot on Third Circuit decision in Janet Jackson case
I was on NPR’s “On the Media” program this weekend discussing the recent Third Circuit Court of Appeals decision striking down the FCC’s fines in the “Janet Jackson case.” As I noted in this lengthy analysis of the decision, the court said that the agency’s recent efforts to expand the parameters of “indecency” enforcement for broadcast programming went too far, too fast. “[T]he FCC’s new policy sanctioning ‘fleeting expletives’ is arbitrary and capricious under the Administrative Procedure Act for failing to articulate a reasoned basis for its change in policy,” the Court held.
“On the Media” host Bob Garfield interviewed me for 5 minutes about the decision and its ramifications. The show can be heard here or you can just read the transcript there. Or you can just listen to it by clicking the button below…
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