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?

This is nice to see, especially given his recent comments about Internet use…

An ex parte letter submitted to the FCC in the Comcast Kerfuffle – subject of strong criticism by TLF-friend and friendly sparring partner Harold Feld – got me thinking on another level about the FCC’s recent action against Comcast.

Among the accusations against Comcast is that it throttled a P2P conduit for movies because it’s also in the busines of delivering movies. The letter points out that colleges and universities, which have no similar interests, do the same things or take far blunter actions against P2P. It’s not a bad point, and it helps dispell the idea that Comcast was doing anything other than trying to provide good Internet service to the bulk of its customers.

Now, given that the letter summarizes the practices of many top universities, it throws in a provocative line: “If there is to be regulation, therefore, it must apply equally to all providers.” This suggests that the same regulation must apply to universities, which got Harold, Ars Technica, and a few others foaming.

The point of the letter was that network managers who don’t sell video services also degrade P2P. Point made. And from what I’ve seen of the reaction: point conceded. Comcast’s network management wasn’t motivated by an anti-competitive impulse.

But still, Feld seemed to argue, Comcast doesn’t get to do that because . . . it’s Comcast. Or something. It’s this blindness to a real legal justification or a real distinction between Comcast and other Internet service providers that I think has him walking hand-in-hand with the FCC into the NCTA’s trap.

The paragraph prior to the provocative line suggesting regulation of universities contains this sentence: “Allowing some Internet service providers to manage P2P traffic – much less to engage in complete blocking of P2P traffic – while prohibiting others from doing so would be arbitrary and capricious.” This is an administrative-law term of art – “arbitrary and capricious.” The use of it tells us that NCTA or Comcast will challenge the FCC’s decision to regulate only one provider of Internet access without regulating all similarly situated.

But Comcast is under a different regulatory regime!, says Harold and the others. Not in an enforcement of this “broad policy statement” thing-y. The FCC is claming free rein to regulate – not authority based firmly in statute – and if it can throw that rein over cable ISPs, it can throw that rein over universities, over Starbucks, and over the open wi-fi node in Harold’s house.

Now, given the free rein that the FCC is asserting, there is a darn good argument that it’s arbitrary (and “capricious”) to regulate only cable ISPs or commercial ISPs in this way. The FCC has to regulate the whole damn Internet this way if it’s going to regulate Comcast.

Is it the best argument ever? Nope. But it’s good enough for what FCC Chairman Kevin Martin wants to do.

Wait. What Kevin Martin wants to do? No, Jim, it’s the NCTA that’s setting the trap.

Au contraire, my inner voice. It’s Kevin Martin. He’s crafty.

By instituting this weird, weak, and barely legal regulation, Kevin Martin will get ‘net neutrality regulation bottled up in the courts for – what – the next five years? By that time, there’s a decent chance of there being more competition among ISPs. Projects like Broadband Census and NNSquad may have changed the product and market landscape. The political landscape will have shifted in exciting new ways. And when the FCC loses in the D.C. Circuit (yet again), the issue returns to a Congress where advocates of Internet regulation have moved to new issues and gotten rusty on net neutrality regulation. It’ll be another three or four years after the FCC loses before their net neutrality regulation efforts can get a head of steam.

So, has Kevin Martin deftly disposed of the ‘net neutrality issue for the next decade? My theory is plausible, though I know some would dispute it. Adam Thierer would undoubtedly call it “absurd” – but he puts that adjective on just about everything.

Net neutrality regulation wasn’t even close to getting through Congress, Adam argued to me recently, and Martin is motivated by his hatred of Comcast and the cable industry, along with his political aspirations. The former point is the strongest, but it’s a matter of perception. What I know of Chairman Martin is not a wild-eyed zealot or a hater, but a planner and careful thinker. Regulating Comcast doesn’t really redound to his political benefit in any meaningful way, and his political aspirations are doomed if he thinks it does.

So that’s my theory, and I’m stickin’ to it: Kevin Martin has set back net neutrality regulaton by a decade – by letting the camel’s nose under the tent.

Ryan does a great job of laying out the issues with the MPAA’s SOC waiver request. He makes two key points—that the FCC shouldn’t be telling cable companies what to do with their networks, and copyright law shouldn’t give the MPAA veto power over the design of technological devices. Ryan spends most of his time arguing the first point, but I think the second point is the really important one.

The thing to understand about DRM is that it’s less a encryption technology than (as Ed Felten puts it) a hook on which to hang lawsuits. Every DRM standard of any significance has been broken within months of its release. Without the DMCA on the books, many consumer electronics manufacturers would simply ignore DRM, reverse-engineering the relevant standards and producing devices that accept DRMed content and convert it to open formats. Knowing that this would happen, Hollywood would long since have given up trying to produce the kind of end-to-end DRM that’s at issue in these proceedings.

Which means that the existence of the cable industry’s Selectable Output Control powers is almost entirely a consequence of bad government policy. In a free market, I’d be able to go down to my local Best Buy and purchase $50 box that would take an HDCP input and output the content in a variety of non-encrypted formats. Such a box is unavailable only because Congress—at the behest of the MPAA—made producing it a felony. That, not anything the FCC has done, is the fundamental issue in this controversy.

Now, it makes me uncomfortable to have the FCC dictate how the cable industry runs its network. But I think the fundamental point that needs to be emphasized is that regulation begets regulation. That is, given that the DMCA has screwed up the consumer electronics industry, it’s not surprising that a lot of people want the FCC to step in to minimize the damage. The solution is to repeal the DMCA and let the free market work. But until that happens, I’m not going to get too outraged at Public Knowledge for asking the FCC to prevent the MPAA from abusing its government-granted veto power over the design of consumer electronics devices. I don’t agree with their solution, but I think their heart is in the right place.

The strange bedfellows in the Accountability Now PAC are organizing a money bomb for August 8th, and are asking bloggers to post things like this:

Become a StrangeBedfellow!

If you were outraged by the FISA “compromise” that immunized law-breaking on the part of telecommunications companies – and if your outrage lasts – you might want to join in the fun.

In my July essay on “Understanding The True Cost of Video Game Censorship Efforts,” I pointed out how outrageous it was that politicians continue to burn money on fruitless regulatory measures that are destined to be struck down as unconstitutional. I argued that the nearly $2 million in legal fees and expenses recovered by the video game industry after winning its legal cases against various governments could have been spent much better by public policy makers:

That $2 million in recovered legal fees could have been plowed into educational efforts to help explain to parents how to use the excellent voluntary ratings systems or console-based parental control tools that are at their disposal. Moreover, that $2 million in recovered industry legal fees does not account for the resources that state and local officials put into these regulatory efforts. So, we are talking about a much greater deadweight loss for society and taxpayers.

Well, that opportunity cost / deadweight loss grew even higher today when the state of California reimbursed the Entertainment Software Association (ESA) $282,794 for attorney’s fees after losing a recent legal battle in the case Video Software Dealers Association v. Schwarzenegger. The ESA sent out a press release about the case today that dramatically points out the opportunity cost of such regulation:

The ESA noted that this payment comes at an especially troubling time for the state, calling to mind other pressing budgetary and legislative priorities and issues, including:

* California is currently facing a $15-billion budget gap
* More than 10,000 California state employees were laid off last week in light of the budget crisis
* Governor Schwarzenegger is seeking to cut wages for nearly 200,000 state employees
* The state already cut 10 percent to its Medicaid reimbursement rate and deferred payments to vendors

“Caregivers are not well-served by court battles and legal fees. Rather, they would have been far better off if state officials worked together with our industry to raise awareness about video game ratings and the parental controls available on all new game consoles — both of which help ensure that the games children play are parent-approved.”

Indeed. And yet, the video game censorship bandwagon rolls on. Will it never end?

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.

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This interesting post on The 463 reminds us that the opening of society in China may not lead to a blossoming of freedom and tolerance, but to a nationalist frenzy like we saw in the Balkans after the fall of communism there.

I don’t know whether the Chinese people have separate ethnic identities that would lead them to fight each other, or whether China as a whole would turn against the world (and especially the United States) in a fit of nationalist anger. Anyone?

If it’s not already happening, I can certainly see Chinese party officials whipping up nationalism seeking to hold power on the cheap.

Something to think about when you go to decide whether tech companies should engage with China. I still think they should, but soberly, and not so much like a neocon expecting to be met with flowers in Iraq.

Very useful chart over on the Verizon policy blog put together by Link Hoewing and Larry Plumb. Link uses it illustrate the changes we have seen over the past three decades in terms of Internet access platforms and speeds. It’s too small to read here, so make sure to go there to see it more clearly and also see Link’s interesting discussion.

access platforms and speeds over 3 decades

Early one morning, the Civil War crashed into my bedroom. A loud popping noise crackled just outside our window . . . I went to the window and saw men in gray uniforms firing muskets on the road in front of our house.

These men in grey uniforms weren’t soldiers, not even actors playing soldiers—these men were reenactors. They had found their way into the front yard of writer Tony Horwitz, inspiring him to write the bestselling Confederates in Attic.

For a new generation of civil war buffs there’s a way to reenact without the smell of bacon grease, gunpowder, and coffee grounds hanging in the air. Buffs old and young have many things in common—namely, abundant free time and obsessive attention to detail—but the younger breed prefers keyboards to Colt revolvers.

Sid Meier’s Gettysburg, released in 1997, marked a significant step toward satisfying generation X reenactors, but it still didn’t quite scratch the itch. More recent releases, like the History Channel’s cleverly named History Channel: Civil War was decried by gamers as boring while buffs were annoyed at its inaccuracy.

Because of all of this, a new community was born—or at least a sub-community.

Since the early days of video games, hobbyists have modified commercial video games—creating their own specialized versions with unique attributes and themes. “Modding,” as it’s often called, naturally appeals to the meticulous nature of the reenactor. Obsessions with detail and historical accuracy can now be expressed not only in recreating clothing and weaponry, but entire battlefield landscapes.

Electronic Arts’ Battlefield 1942 has been reworked to produce Battlefield 1861. Microsoft’s Rise of Nations as well as its Age of Empires series have also been re-worked to produce incredibly detailed Civil War games. Some of these efforts are the result of one lonely man’s hobby, but more often they are the result of a team of a dozen or more developers coordinating their efforts using online forums and email lists.

This kind of community of obsessive hobbyists is part of the reason why I don’t believe the PC gaming industry is anywhere near its death.  There is such a huge amount of dark data out there—data that exists, but that hasn’t been aggregated into a useful form just yet. Much of the PC gaming community is non-commercial, unmeasured, but likely terrifically huge.
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