Ends Justifying Means: Inconsistencies Between FCC Special Access and Verizon-SpectrumCo Orders

by on August 27, 2012 · 1 comment

To summarize, on August 22, the FCC found it was appropriate to re-impose monopoly price cap regulations developed over twenty years ago because the FCC lacked “reliable” evidence that cable operators are competing in the special access market. On August 23, the very next day, the FCC found cable companies are “well-positioned” to compete in the special access market and are “increasingly successful” competing in that market. . . . It is impossible to reconcile these inconsistent findings.

Last week, the FCC issued two significant orders. Late Wednesday evening, the FCC issued an order suspending its pricing flexibility rules for special access services (“Special Access Order”), and on Thursday afternoon, it issued an order approving multiple transactions between Verizon Wireless and several cable companies (Comcast, Time Warner, Bright House Networks, and Cox) as well as mobile providers T-Mobile and Leap (“Verizon-Cable Order”).

The FCC addressed special access competition in both orders. One would assume two FCC findings regarding special access issued within a single 24-hour period would be consistent with one another, but that would be assuming too much. The findings in these two orders relied on evidence submitted by the same companies to reach contradictory conclusions. Continue reading →

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FCC Relies on Fallacies, Not Evidence, in Special Access Order

by on August 23, 2012 · 0 comments

How does the FCC justify taking action without an adequate evidentiary basis? By relying on a series of fallacies to provide an aura of evidence without actually having any. That’s a problem for an agency that wants to be seen as fact-based and data driven. Fallacies are like zeros: No matter how many you have, you still have nothing.


Yesterday the Federal Communications Commission (FCC), our government’s communications industry experts, issued an order that would flunk an introductory college course in logic. Despite issuing multiple data requests, in October 2011, the FCC told the DC Circuit Court of Appeals that it “lacked a sufficient evidentiary record” to document claims that its “pricing flexibility rules” governing special access were flawed. The FCC’s evidentiary record hasn’t improved, but it suspended its pricing flexibility rules on a so-called “interim” basis anyway while it tries to figure out how to obtain the data it needs to do a transparent, data based analysis. Continue reading →

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The Troubling Persistence of Policy Clichés

by on August 21, 2012 · 1 comment

A cable TV monopoly is imminent and high prices loom, at least as far as the Associated Press is concerned.

That was the angle of a widely syndicated AP story last week reporting that in the second quarter of this year, landline phone companies lost broadband subscribers while cable companies gained market share.

Beneath the lead, Peter Svensson, AP technology reporter, wrote:

The flow of subscribers from phone companies to cable providers could lead to a de facto monopoly on broadband in many areas of the U.S., say industry watchers. That could mean a lack of choice and higher prices.

In the news business, the second graph is usually referred to as the “nut” graph. It encapsulates the significance of the story, that is, why it’s news.

It’s interesting that Svensson, with either support or input from his editors, jumped on the “de facto” monopoly angle. There could be any number of reasons why cable broadband is outpacing telco DSL, beginning with superior speed (to be fair, an aspect noted in the lead).

However, AP defaulted to the clichéd narrative that the telecom, Internet and media technology markets inevitably bend toward monopoly (see here, here, here and here for just as a sample). Moreover, that the money quote came from Susan Crawford, President Obama’s former special assistant for science, technology and innovation policy, and a vocal advocate of broad industry regulation, was all the more reason it should have been countered with some acknowledgement of the growing data on how consumer behavior is changing when it comes to TV viewing. Arguably, at least, the cable companies, far from heading toward monopoly, are sailing into competitive headwinds stirred up by video on demand services such as Netflix, Hulu and iTunes.

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Fred Campbell on broadband deployment

by on August 21, 2012

Fred Campbell, director of the Competitive Enterprise Institute’s Communications Liberty and Innovation Project and adjunct professor of Law at the University of Nebraska, discusses the deployment of broadband in the United States. ISPs such as Verizon and AT&T; have had difficulty rolling out their fiber networks due to regulatory barriers that are legacies from past technological eras, says Campbell. The natural contrast to the difficulties of these companies is the recent entrance of Google into the broadband market with its own fiber network service in Kansas City. Rather than going to municipalities and asking for the right to install their network, Google turned the tables by holding a contest for their service and selecting the most accommodating city. Campbell talks about pros and cons to these and various other strategies to deploy broadband, including as open access.

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Will the Republican Platform Address Internet Freedom?

by on August 16, 2012 · 1 comment

Yesterday POLITICO Pro said both political parties are on the verge of declaring support for some version of Internet freedom in their 2012 platforms. The Democratic platform contained a lengthy statement in 2008, but according to Politico, its 2012 platform will consist of a simple sentence about protecting the open Internet. Politico also noted that, though Republicans hardly mentioned the Internet in 2008, they are expected to consider several Internet proposals during their platform meeting early next week. Will the new Republican platform address Internet freedom? If so, what is the platform likely to say? Continue reading →

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Obama’s Flawed Cybersecurity Strategy

by on August 15, 2012 · 0 comments

President Obama seems to be poised once again to use executive powers to get what Congress won’t give him.

In this case, it’s the imposition of a sweeping set of cybersecurity mandates and regulations on the private sector. My latest commentary at Reason.org addresses the problems of the original Cybersecurity Act, which did not muster enough support in the Senate to get to a vote, and why a White House decision to implement it by executive order simply expands the government’s surveillance and datagathering power while doing little to secure the nation’s information infrastrucuture.

Find the commentary here.

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Donald Harris on copyright law and alcohol prohibition

by on August 14, 2012

Donald P. Harris, associate professor of law at Temple University discusses the regulation of file sharing. Harris explains that Alcohol Prohibition of the 1920s and 1930s as an historical example of laws that were inconsistent with the vast majority of society’s morals and norms. Looking back, one can see many similarities between the Alcohol and Filesharing Prohibitions. Harris suggests, then, that lessons learned from the failed “noble experiment” of Alcohol Prohibition should be applied to the current filesharing controversy. Doing so, he advocates legalizing certain noncommercial filesharing. A scheme along those lines would better comport with societal norms, he argues, and would force new business models to replace outdated and ineffective business models.


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No More Backscratching Between Phone Companies

by on August 13, 2012 · 0 comments

An ad campaign urged residents of Butler, GA to “Stop AT&T From Raising Your Rates” by planning to attend a public hearing earlier this month at the Taylor County Courthouse to provide testimony in Docket #35068, Rate Cases on the Track 2 Companies.

The Georgia Public Service Commission sets the phone rates in Butler, but politics are politics, and AT&T is a better scapegoat for an ad campaign. AT&T doesn’t even provide the town’s phone service, although the telecom giant does help finance it. That’s because Georgia consumers pay a hidden tax on their phone bills that subsidizes the phone service provided by Public Service Telephone Co. in Butler. You guessed it, PST paid for the ads. Continue reading →

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The White House Didn’t Pull the TSA Petition Early

by on August 13, 2012 · 0 comments

In the worlds of technology and government, I’m fond of joking, paranoia is just having a long time-horizon. Advances in data processing will make identifiable what is now anonymous. That “voluntary” pilot program will become full-fledged and mandatory.

But we need not apply the paranoid principle to the White House’s handling of the petition I started a few weeks ago asking the White House to have TSA follow the law. The petition ended on time. There’s no good evidence that its ending was hastened to cut off a late run at getting to 25,000 signatures.

Some folks had gotten the idea that we would have until midnight last Thursday, but it expired around mid-day. That’s about the same time that I created the petition weeks earlier, which is consistent with my assumption that the system is designed to expire petitions automatically when the time allowed for them to run has elapsed.

We could kvetch about losing some momentum when the petition function went down for a few hours around the time a great story came out on Wired’s Threat Level blog. But the folks at Whitehouse.gov added a full day to all petitions to make up for the maintenance outage. The time to complain was then, and I didn’t, so that complaint has expired.

There’s lots of other stuff that is interesting about all this. Continue reading →

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Why Has Creative Destruction Sped Up in Recent Times?

by on August 9, 2012 · 1 comment

A reporter recently interviewed me for a story and asked a terrific question: Why is it that business model disruption and creative destruction seem to have sped up in recent times?  My guess — and excuse me if this seems too obvious — is that it must have something to do with the very nature of intangible, digital technologies of the new economy versus the tangible, analog technologies of the old economy. That is, in markets built largely upon binary code, the pace and nature of change becomes relentlessly hyper-Schumpeterian precisely because digital technologies and platforms are more easily disintermediated and leap-frogged than earlier tangible technologies and platforms were.  And so we get creative destruction on steroids.

Consider, for example, what constituted a “social networking site” in the old days versus today. Our old social networking sites and services in the past were town squares, parks, school parking lots, shopping malls, as well as media like newspapers, magazines, and even the mail. When we socially networked in those environments, we were creatures of our fixed, “real-space” environments as well as their many natural constraints. Disrupting, replacing, or even replicating those environments, technologies, or platforms was a monumental undertaking precisely because of the enormous costs associated with doing so. Continue reading →

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