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Is the FCC Seeking to Help Internet Consumers or Preserve Its Own Jurisdiction?

by on May 13, 2013 · 0 comments

As the “real-world” continues its inexorable march toward our all-IP future, the FCC remains stuck in the mud fighting the regulatory wars of yesteryear, wielding its traditional weapon of bureaucratic delay to mask its own agenda.

Late last Friday the Technology Transitions Policy Task Force at the Federal Communications Commission (FCC) issued a Public Notice proposing to trial three narrow issues related to the IP transition (the transition of 20th Century telephone systems to the native Internet networks of the 21stCentury). Outgoing FCC Chairman Julius Genachowski says these “real-world trials [would] help accelerate the ongoing technology transitions moving us to modern broadband networks.” Though the proposed trials could prove useful, in the “real-world”, the Public Notice is more likely to discourage future investment in Internet infrastructure than to accelerate it. Continue reading →

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DOJ Files Political Screed Asking FCC to Rig Spectrum Incentive Auction

by on April 23, 2013 · 1 comment

The DOJ’s recommendation would likely reduce the amount of revenue produced by the incentive auction and risk leaving the public safety network unfunded (as the economist who led the design of the most successful auction in FCC history will explain in this webinar on Thursday). The unsubstantiated, speculative increase in commercial competition the DOJ says could occur if the FCC picks winners and losers in the incentive auction is a poor justification for continuing to deny our nation’s first responders the network they need to protect the safety of every American.

Beyond enforcing the antitrust laws, the Antitrust Division of the Department of Justice (DOJ) advocates for competition policy in regulatory proceedings initiated by Executive Branch and independent agencies, including the Federal Communications Commission (FCC). In this role, the DOJ works with the FCC on mergers involving communications companies and occasionally provides input in other FCC proceedings. The historical reputation of the DOJ in this area has been one of impartial engagement and deliberate analysis based on empirical data. The DOJ’s recent filing (DOJ filing) on mobile spectrum aggregation jeopardizes that reputation, however, by recommending that the FCC “ensure” Sprint Nextel and T-Mobile obtain a nationwide block of mobile spectrum in the upcoming broadcast incentive auction.

The new “findings” in the  DOJ filing fail to cite any factual record and are inconsistent with the DOJ’s factual findings in recent merger proceedings that contain extensive factual records. The DOJ filing blithely relies on a discriminatory evidentiary presumption to insinuate that Verizon and AT&T are “warehousing” spectrum, and then uses that presumption to support a proposed remedy that bears no rational relationship to factual findings that the DOJ has actually made. The absence of any empirical evidence supporting the relevant conclusions in the DOJ filing gives it the appearance of a political document rather than a deliberative work product crafted with the traditionally substantive and impartial standards of the Justice Department. The FCC, the independent agency that prides itself on being fact-based and data-driven, should give this screed no weight. Continue reading →

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Broadband and Competition Conference at GMU Law tomorrow

by on April 18, 2013 · 0 comments

The Information Economy Project at the George Mason University School of Law is hosting a conference tomorrow, Friday, April 19. The conference title is From Monopoly to Competition or Competition to Monopoly? U.S. Broadband Markets in 2013. There will be two morning panels featuring discussion of competition in the broadband marketplace and the social value of “ultra-fast” broadband speeds.

We have a great lineup, including keynote addresses from Commissioner Joshua Wright, Federal Trade Commission and from Dr. Robert Crandall, Brookings Institution.

The panelists include:

Eli Noam, Columbia Business School

Marius Schwartz, Georgetown University, former FCC Chief Economist

Babette Boliek, Pepperdine University School of Law

Robert Kenny, Communications Chambers (U.K.)

Scott Wallsten, Technology Policy Institute

The panels will be moderated by Kenneth Heyer, Federal Trade Commission and Gus Hurwitz, University of Pennsylvania, respectively. A continental breakfast will be served at 8:00 am and a buffet lunch is provided. We expect to adjourn at 1:30 pm. You can find an agenda here and can RSVP here. Space is limited and we expect a full house, so those interested are encouraged to register as soon as possible.

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Internet Analogies: Remember When the Internet Was the Information Superhighway? (Part 2)

by on April 18, 2013 · 6 comments

Why did the government impose a completely different funding mechanism on the Internet than on the Interstate Highway System? There is no substantive distinction between the shared use of local infrastructure by commercial “edge” providers on the Internet and shared use of the local infrastructure by commercial “edge” providers (e.g., FedEx) on the highways.

In Part 1 of this post, I described the history of government intervention in the funding of the Internet, which has been used to exempt commercial users from paying for the use of local Internet infrastructure. The most recent intervention, known as “net neutrality”, was ostensibly intended to protect consumers, but in practice, requires that consumers bear all the costs of maintaining and upgrading local Internet infrastructure while content and application providers pay nothing. This consumer-funded commercial subsidy model is the opposite of the approach the government took when funding the Interstate Highway System: The federal government makes commercial users pay more for their use of the highways than consumers. This fundamental difference in approach is why net neutrality advocates abandoned the “information superhighway” analogy promoted by the Clinton Administration during the 1990s. Continue reading →

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Internet Analogies: Remember When the Internet Was the Information Superhighway? (Part 1)

by on April 17, 2013 · 4 comments

Many net neutrality advocates would prefer that the FCC return to the regulatory regime that existed during the dial-up era of the Internet. They have fond memories of the artificially low prices charged by the dial-up ISPs of that era, but have forgotten that those artificially low prices were funded by consumers through implied subsidies embedded in their monthly telephone bills.

Remember when the Internet was the “information superhighway”? As recently as 2009, the Federal Communications Commission (FCC) still referred to the broadband Internet as, “the interstate highway of the 21st century.” Highways remain a close analogy to the Internet, yet by 2010, net neutrality advocates had replaced Internet highway analogies with analogies to waterworks and the electrical grid. They stopped analogizing the Internet to highways when they realized their approach to Internet regulation is inconsistent with government management of the National Highway System, which has always required commercial users of the highways to pay more for their use than ordinary consumers. In contrast, net neutrality is only the latest in a series of government interventions that have exempted commercial users from paying for the use of local Internet infrastructure. Continue reading →

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17 Free-Market Tributes to Robert McDowell on His FCC Tenure

by on March 23, 2013 · 0 comments

Robert McDowell, one of the two Republican Commissioners on the Federal Communications Commission, announced on Wednesday that he would soon resign. In his seven years on the FCC, Commissioner McDowell has been a consistent critic of over-regulation and a champion of both Internet freedom and the rule of law. He’s earned a uniquely loyal following among policymakers and thought leaders alike in the free market tech policy community, not only in the U.S. but around the world.  Here are just a few tributes to this remarkably humble and personable regulator—the regulator who, again and again, cried, in the most mild-mannered-but-firm way possible: “Hold on a minute, have we really thought this one through?”

  • Sen. John Thune (R-SD): “As we have seen with his recent leadership on efforts to prevent foreign government intervention in the operation and use of the Internet, Rob has been a consistent voice cautioning against unnecessary governmental regulations. I hope the president’s nominee to replace him will approach the job with the same passion and energy that Rob exhibited and will be similarly committed to finding market-based solutions to our nation’s communications challenges whenever possible.”

  • Rep. Fred Upton (R-MI): “At a time when broadband and wireless technology are transforming voice, video, audio and data communications, we could not have asked for a better steward than Commissioner McDowell. With every decision, he has fought to ensure we are creating an environment for investment, innovation, and growth. And he has done so with both eloquence and good humor. No question that he has left the communications landscape better than he found it. We thank him for his service.”

  • Rep. Greg Walden (R-OR): “For more than a half decade, Robert McDowell has embodied the consummate FCC commissioner. He has kept a steadfast eye on how to foster a vibrant communications marketplace for the American people and the American economy. He has always stood up to protect the freedom of the Internet for all, and at every turn he has made sure to respect good process, good policy, and the rule of law. The country is all the better for his service. With much gratitude, we wish him all the best wherever his path may take him.” Continue reading →

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Robert McDowell: Champion of Liberty

by on March 20, 2013 · 6 comments

Robert_M_McDowellWe learned today that Robert M. McDowell, who has served as a Commissioner at the Federal Communications Commission for almost seven years, will be leaving the agency shortly. I’m sad to hear it. Commissioner McDowell has been a great champion of freedom across the board, from traditional communications and media reform to cutting-edge Internet policy issues. On one issue after another, fans of liberty could count on Rob McDowell to perfectly articulate and defend the pro-freedom position on high-tech policy matters whenever and wherever he wrote or spoke.

I can’t even begin to list all the things we’ve written here over the years at the TLF about McDowell and his excellent body of work while he served at the FCC, but a quick custom search of this blog yields dozens of columns all gushing with praise for the seemingly endless string of outstanding speeches and statements that he made since joining the agency in 2006.  But I just want to highlight two of McDowell’s most eloquent speeches and strongly encourage you to go read or re-read them because they will inspire you to keep up the good fight to expand the sphere of liberty in this field:

Here a few choice passages from these amazing speeches: Continue reading →

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Super Wifi and Unlicensed Spectrum: “Spectrum Condos”

by on March 19, 2013 · 614 comments

There is renewed interest in unlicensed spectrum as the FCC approaches the TV white space issue (again). Tim B. Lee reports on some of the unlicensed supporters,

Activists at the South by Southwest Interactive festival in Austin, TX, built a free wireless network to help publicize the power of unlicensed “white spaces” technology. The project is part of a broader campaign to persuade the FCC not to auction off this spectrum for the exclusive use of wireless carriers.

Unlicensed spectrum for high-powered devices has been called Super Wifi (“wifi” in this context is used loosely; Super Wifi is a PR term and has nothing to do with the wifi technical standard). Frankly, there are many reasons to be cautious about assigning more unlicensed spectrum, especially given the confusing information out there about the technology. (For instance, despite a popular rumor, Super Wifi would not provide free Internet access to everyone with a device, as Matt Yglesias and Jon Brodkin point out.) Continue reading →

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3 Cell Phone Unlocking Bills Introduced—What Would They Accomplish?

by on March 16, 2013 · 0 comments

In the past couple weeks, three bills addressing the legality of cell phone unlocking have been introduced in the Senate:

  • Sens. Leahy, Grassley, Franken, and Hatch’s “Unlocking Consumer Choice and Wireless Competition Act” (S.517)
  • Sen. Ron Wyden’s “Wireless Device Independence Act” (S.467)
  • Sen. Amy Klobuchar’s “Wireless Consumer Choice Act” (S.481)

This essay will explain how these bills would affect users’ ability to lawfully unlock their cell phones.

Background

If you buy a new cell phone from a U.S. wireless carrier and sign a multi-year service contract, chances are your phone is “locked” to your carrier. This means if you want to switch carriers, you’ll first need to unlock your phone. Your original carrier may well be happy to lend you a helping hand—but, if not, unlocking your phone may violate federal law.4s-unlock

The last few months have seen an explosion of public outcry over this issue, with a recent White House “We the People” petition calling for the legalization of cell phone unlocking garnering over 114,000 signatures—and a favorable response from the Obama administration. The controversy was sparked in October 2012, when a governmental ruling (PDF) announced that unlocking cell phones purchased after January 26, 2013 would violate a 1998 federal law known as the Digital Millennium Copyright Act (the “DMCA”).

Under this law’s “anti-circumvention” provisions (17 U.S.C. §§ 1201-05), it is generally illegal to “circumvent a technological measure” that protects a copyrighted work. Violators are subject to civil penalties and, in serious cases, criminal prosecution.

However, the law includes an escape valve: it empowers the Librarian of Congress, in consultation with the Register of Copyrights, to periodically determine if any users’ “ability to make noninfringing uses . . . of a particular class of copyrighted works” is adversely affected by the DMCA’s prohibition of tools that circumvent access controls. Based on these determinations, the Librarian may promulgate rules exempting categories of circumvention tools from the DMCA’s ban.

One such exemption, originally granted in 2006 and renewed in 2010, permits users to unlock their cell phones without their carrier’s permission. (You may be wondering why phone unlocking is considered an access control circumvention—it’s because unlocking requires the circumvention of limits on user access to a mobile phone’s bootloader or operating system, both of which are usually copyrighted.)

But late last year (2012), when the phone unlocking exemption came up for its triennial review, the landscape had evolved regarding a crucial legal question: do cell phone owners  own a copy of the operating system software installed on their phone, or are they merely licensees of the software?

Continue reading →

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The FCC at the Crossroads

by on March 14, 2013 · 0 comments

crossroadsTuesday was a big day for the FCC.  The Senate Commerce, Science and Transportation Committee held an oversight hearing with all five Commissioners, the same day that reply comments were due on the design of eventual “incentive auctions” for over-the-air broadcast spectrum.  And the proposed merger of T-Mobile USA and MetroPCS was approved.

All this activity reflects the stark reality that the Commission stands at a crossroads.  As once-separate wired and wireless communications networks for voice, video, and data converge on the single IP standard, and as mobile users continue to demonstrate insatiable demand for bandwidth for new apps, the FCC can serve as midwife in the transition to next-generation networks.  Or, the agency can put on the blinkers and mechanically apply rules and regulations designed for a by-gone era. Continue reading →

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