We've already talked about how the FCC was going to approve heavily watered down (and written in conjunction with AT&T) "net neutrality" rules today -- which it did. However, one aspect of all this that is particularly ridiculous is the fact that the FCC voted on rules which it has not released, and which it claims may be adjusted before they are released. Considering that these rules are supposed to be about internet openness it seems pretty ironic that the rules are secret. Jeff Jarvis noted this irony in asking if he needed to file a Freedom of Information Act request just to find out what was voted on. He followed it up by filing just such a request that seeks not just the rules, but also details of correspondences and meeting notes leading up to the creation of the rules. We'll see what the FCC comes back with.
For years, we've been pointing out that while the concept of net neutrality is important, any attempt by the government to put it into law would inevitably involve lobbyists twisting it to be quite favorable to the telcos and others. So, really, it should come as no surprise that the FCC is planning to approve a "net neutrality" plan that was heavily influenced by AT&T and from which long term supporters of "net neutrality" rules are distancing themselves. In other words, pretty much exactly what many folks had warned early on. We shouldn't confuse the concept of the end-to-end principle of the internet with the need for laws that start to regulate parts of the internet, because we've seen time and time again how the telco lobbyists will shape anything along those lines to their own advantage, and it appears this was no exception.
Way back in 2005, we pointed out that all of these fights and discussions about "network neutrality" were missing the point. They were fighting a symptom, not a disease. The real problem in the US is the lack of competition in the marketplace for broadband. Despite the twists and turns industry lobbyists will claim, true competition just isn't there, and the FCC has done nothing to address that (even though, its own "reclassification" plans earlier this decade in large part created the problem). The current flare up about net neutrality has again been a silly fight that we've barely even covered, because none of it addresses that lack of competition.
Finally, some are noticing. Scientific American has an article pointing out that other countries have a lot faster speeds, at a lot lower costs -- and the key point is that they have a lot more competition:
Phone companies have to compete for your business. Even though there may be just one telephone jack in your home, you can purchase service from any one of a number of different long-distance providers. Not so for broadband Internet. Here consumers generally have just two choices: the cable company, which sends data through the same lines used to deliver television signals, and the phone company, which uses older telephone lines and hence can only offer slower service.
The same is not true in Japan, Britain and the rest of the rich world. In such countries, the company that owns the physical infrastructure must sell access to independent providers on a wholesale market. Want high-speed Internet? You can choose from multiple companies, each of which has to compete on price and service. The only exceptions to this policy in the whole of the 32-nation Organization for Economic Co-operation and Development are the U.S., Mexico and the Slovak Republic, although the Slovaks have recently begun to open up their lines.
The article's authors complain that in the fight over net neutrality, the FCC has carefully avoided tackling this issue, and suggests it may be because of the political power of AT&T and Comcast. Thankfully, Broadband Reports drives home the point of why politicians won't take on AT&T:
This is really disappointing. The whole net neutrality battle has been a silly side show while the rest of our broadband infrastructure has suffered. It's time we had real leadership in our government that got past the interests of one big company -- but that seems unlikely to happen any time soon.
We recently wrote about the Second Circuit appeals court ruling that the FCC's policy against "fleeting expletives" on broadcast TV was ruled unconstitutional, and that's now raising some other questions as well. A separate case, also in the same circuit, involves the question of whether or not a similar policy over "fleeting nudity" is equally problematic. As you may recall, the show NYPD Blue got a ton of attention back in 2003, for showing 7-seconds of a bare backside (which apparently was once the top rated clip on YouTube, despite it happening a few years before YouTube even existed). The FCC used a similar "fleeting nudity" policy to threaten to fine ABC affiliates for airing the show. However, the court in that case is now asking whether or not the recent ruling over expletives has any bearing on the question over nudity. Of course, you could question how "fleeting" it is for a filmed drama (as compared to the expletives, which were live events). But, at the same time, the wide availability of that same video (and, um, a ton of other much more graphic videos) to anyone with a computer might raise questions about why it even matters?
In a case that has been going on for many years now, it looks like the FCC's indecency policy has been smacked down yet again, with the Second Circuit appeals court ruling it an unconstitutional violation of the First Amendment. If you haven't been following the case, it involved FCC fines against various TV networks for "indecency," over "fleeting expletives" -- such as when Bono was quoted at an awards showing saying "this is really, really, fucking brilliant," or when Paris Hilton, also at an awards show, was quoted saying "Have
you ever tried to get cow shit out of a Prada purse? It's not so fucking simple."
Initially the same appeals court found that the FCC's rules were "arbitrary and capricious," but chose not to tackle the First Amendment questions. The Supreme Court actually reversed that ruling, saying that the FCC has the right to make its own rules -- arbitrary and capricious or not. However, it also did not investigate the First Amendment questions.
So, the case went back to the Second Circuit, which has once again smacked down the FCC, saying that even if the rules aren't arbitrary and capricious, they do violate the First Amendment and create a real "chilling effect."
The ruling is pretty thorough, going through the history of the FCC's attempts to regulate indecency on the public airwaves, and how the courts have made sure that the FCC was quite limited in what it could do. It remains troubled by the fact that the FCC just sort of randomly changed its policies about a decade ago, and began more aggressively fining broadcasters for such "fleeting expletives," but with the Supreme Court saying that "change" wasn't a problem, the court still says that the First Amendment prevails here.
The decision is quite interesting, in that it notes that one of the reasons why the FCC was allowed to fine indecency on TV and radio was the "pervasiveness" of those media, but that in today's internet-connected world, it makes less and less sense, since people who don't hear cursing on TV will almost certainly hear it online or elsewhere. On top of that, it notes that technology has given new power to parents to block access to "mature" content, such that the FCC might not have to watch over everything so carefully anymore.
Furthermore, it focuses on the "vagueness doctrine," in noting that if a rule against certain types of speech is too vague, it can create a real chilling effect on speech, as people don't know where the boundaries are located. And here's where it gets fun. The decision explores how the FCC decided that some words were indecent and others weren't without explaining why:
The first problem arises in the FCC's determination as to which words or expressions are patently
offensive. For instance, while the FCC concluded that "bullshit" in a "NYPD Blue" episode was
patently offensive, it concluded that "dick" and "dickhead" were not.... Other expletives such as "pissed off," "up yours," "kiss my ass," and "wiping his ass" were also not found to be patently offensive. ... The Commission
argues that its three-factor "patently offensive" test gives broadcasters fair notice of what it will
find indecent. However, in each of these cases, the Commission's reasoning consisted of
repetition of one or more of the factors without any discussion of how it applied them. Thus, the
word "bullshit" is indecent because it is "vulgar, graphic and explicit" while the words
"dickhead" was not indecent because it was "not sufficiently vulgar, explicit, or graphic." This
hardly gives broadcasters notice of how the Commission will apply the factors in the future.
The English language is rife with creative ways of depicting sexual or excretory organs
or activities, and even if the FCC were able to provide a complete list of all such expressions,
new offensive and indecent words are invented every day.
The court also notes that back when the FCC's enforcement focused on George Carlin's famous "seven dirty words," no indecency actions were brought, because everyone knew what was and was not allowed -- even if other terms were used instead:
This strategy had its
limitations -- it meant that some indecent speech that did not employ these seven words slipped
through the cracks. However, it had the advantage of providing broadcasters with a clear list of
words that were prohibited. Not surprisingly, in the nine years between Pacifica and the FCC's
abandonment of this policy, not a single enforcement action was brought. This could be because
we lived in a simpler time before such foul language was common. Or, it could be that the
FCC's policy was sufficiently clear that broadcasters knew what was prohibited.
The court doesn't buy the FCC's argument that because broadcasters used other words instead, it had to make it's policy more vague, and notes that this shows "a certain futility" in the FCC's quixotic campaign against indecency. And then it adds that if things are always changing, it's not fair for broadcasters:
The
observation that people will always find a way to subvert censorship laws may expose a certain
futility in the FCC's crusade against indecent speech, but it does not provide a justification for
implementing a vague, indiscernible standard. If the FCC cannot anticipate what will be
considered indecent under its policy, then it can hardly expect broadcasters to do so. And while
the FCC characterizes all broadcasters as consciously trying to push the envelope on what is
permitted, much like a petulant teenager angling for a later curfew, the Networks have expressed
a good faith desire to comply with the FCC's indecency regime. They simply want to know with
some degree of certainty what the policy is so that they can comply with it. The First
Amendment requires nothing less.
The decision also notes that the FCC seems to randomly enforce its own rules:
Even the risk of such subjective, content-based
decision-making raises grave concerns under the First Amendment. Take, for example, the disparate treatment of "Saving Private Ryan" and the documentary, "The Blues." The FCC
decided that the words "fuck" and "shit" were integral to the "realism and immediacy of the film
experience for viewers" in "Saving Private Ryan," but not in "The Blues." ....
We query how fleeting expletives could be more essential to the "realism" of a fictional movie
than to the "realism" of interviews with real people about real life events, and it is hard not to
speculate that the FCC was simply more comfortable with the themes in "Saving Private Ryan,"
a mainstream movie with a familiar cultural milieu, than it was with "The Blues," which largely
profiled an outsider genre of musical experience. But even if there were a perfectly benign way
of explaining these particular outcomes, nothing would prevent the FCC from applying its
indecency policy in a discriminatory manner in the future.
Finally, the court notes that these chilling effects are very, very real and can already be seen:
For instance, several CBS affiliates declined to air the Peabody Award-winning "9/11"
documentary, which contains real audio footage -- including occasional expletives -- of
firefighters in the World Trade Center on September 11th. Although the documentary had
previously aired twice without complaint, following the Golden Globes Order affiliates could no
longer be sure whether the expletives contained in the documentary could be found indecent.
The court says it's possible the FCC could create a policy that is acceptable under the First Amendment, but this one does not qualify. I'm sure this will be appealed to the Supreme Court as well, but in the meantime, it's a pretty big smackdown for the FCC's attempt to fine indecency.
slacker525600 was the first of a whole bunch of you pointing us to Ars Technica's writeup up of a so-called "study" of potential job losses from the FCC's decision to reclassify broadband. The writeup is done by Matthew Lasar, who's usually pretty good to cut through ridiculous claims, but doesn't seem to challenge this one at all. The report is officially from New York Law School's Advanced Communications Law & Policy Institute, but it was written by Bret Swanson. Remember him? He's a well known propagandist for the telco industry. He's not a "researcher." He's the guy who coined the concept of the "exaflood" and when that was totally debunked, renamed it the "exacloud." He's been AT&T's go to guy for pure anti-net neutrality propaganda, and he seems to relish in totally making stuff up.
A few months back, he made some similar news by claiming numbers for "job losses" if net neutrality were legislated, but his methodology wasn't just suspect, it was stupid. He literally looked at the number of people employed by companies who filed anti-net neutrality filings with the FCC and compared it to the number of people employed by companies who filed pro-net neutrality filings with the FCC. I'm not joking;
To gauge the possible fallout of new Net Neutrality regulation, we looked at what Internet industry companies were saying. The FCC received an astonishing 100,000 individual comments on its Net Neutrality proposal and some 15,000 official filings from companies, trade associations, academics, and think tanks. Excluding the associations, academics, and individuals, we analyzed the company comments and discerned support for or opposition to Net Neutrality. We then tabulated the number of workers employed by these Supporters and Skeptics and found a huge disparity.
Net Neutrality Supporters directly employ 148,936 workers. But Net Neutrality Skeptics employ 1,440,021, almost 10 times as many.
So, just knowing the report was written by him pretty much tosses all credibility out the window. However, we can hope and pray that perhaps he's changed and actually has done some real research. Let's look at the actual report (pdf).
It starts off with a nice whopper of an assumption:
Indeed, many estimate that, in the absence of the FCC's network
neutrality proposals, investment and job growth will continue apace across the sector. This
paper supports estimates that broadband service providers will commit at least $30 billion
annually in capital expenditures on broadband alone between 2010 and 2015, resulting in
the creation or sustainment of 509,000 jobs.
Bad assumption, Bret. First of all, there hasn't been a "light regulatory regime." There's been a very heavy one: involving all sorts of subsidies to the telcos and efforts to keep competitors out of the market. And, because of that lack of competition, the big telcos Verizon and AT&T have already slowed their investment, and it happened well before any attempt by the FCC to reclassify broadband. They slowed it because they're not facing any serious competition in many regions, so there's little reason to upgrade the network. Oh, and as for that claim about how this would create or sustain 500,000 new jobs. Tell that to folks the telcos are laying off.
Conversely, decreased investments by broadband service providers will hinder capital
expenditures by others in the ecosystem, particularly those at the edge. The analyses in this paper
indicate that the imposition of network neutrality rules could have devastating impacts across the
ecosystem between 2010 and 2015.
Actually, it appears the lack of competition, driven in part by propaganda from the likes of Swanson, has already created that "devastating" situation, with the telcos cutting back their investment, since they don't have to worry about losing customers.
Okay, so here's the fun section:
A 10 percent decrease in investment by wireline and wireless broadband
service providers, coupled with likely spillover effects, could result in the loss
of 502,000 jobs across the entire ecosystem and would have a negative
impact on U.S. GDP on the order of approximately $62 billion per year.
A 20 percent decrease in investment by wireline and wireless broadband
service providers, coupled with likely spillover effects, could result in the loss
of 553,000 jobs across the entire ecosystem and nearly $72 billion in GDP
losses per year.
A 30 percent decrease in investment by wireline and wireless broadband
service providers, coupled with likely spillover effects, could result in the loss
of 604,000 jobs across the entire ecosystem and over $80 billion in GDP
losses per year.
Because the FCC's network neutrality proposals could foreclose even larger
investments than presumed in the paper's baseline scenario, the number of
jobs lost or foregone in the ecosystem could be even greater, stretching
toward 700,000.
Remember, the telcos have already been cutting back their investment and it has absolutely nothing to do with net neutrality, but with the fact that they don't need to invest as much in certain areas because there's no serious competition in those areas. They did spend a lot on upgrades in competitive markets, even though there was all of the "uncertainty" around net neutrality that remains today.
Also, notice the language choices in the numbers above, specifically 'likely spillover effects." This is a favorite trick of industry propagandists looking to make "loss" numbers look good. These "spillover effects" are what we usually call ripple effects. They're a form of double, triple or quadruple counting the same "losses" as they ripple through the economy. And, they only look at the ripple going in one direction.
So, for example, Swanson and others friends of AT&T and Verizon like to claim that net neutrality will cause them to cut back on investment due to "uncertainty." But, if that were actually true (and I don't for a second believe it is), then wouldn't it also mean that this new "certainty" in a free and open internet that can't have certain services discriminated against or double charged, will also feel a lot more free to invest themselves? I can't see how Swanson can argue that the impact only goes in one direction, and totally ignore the economic impacts in the other direction.
Oh, and "uncertainty" is really just a code word for "competition" of course, which most of us in the capitalist world tend to think of as a good thing for innovation.
Then you look at the actual methodology for how Bret calculates his numbers of job losses, and it's hard not to hold back serious laughter. He takes wild guesses about massive potential job growth based on absolutely nothing, and then similarly takes a wild guess on what the job growth would be if the telcos didn't invest as much as in his already ridiculous extrapolation. And he blames it all on net neutrality. In other words, it's a made up number, derived from a made up number, built off of a laughable premise, ignoring the reality of what's happening today.
For a couple years now, the MPAA has been asking the FCC to break your TV/DVR, and let them effectively put a type of DRM (by enabling "Selectable Output Control" or SOC) on video content, such that you will not be able to access the content via third party devices, such as your DVR or your Slingbox. Effectively, they want to break the ability of your equipment to work. You wouldn't be able to legally record the movie that was playing on your TV. The MPAA's argument here makes absolutely no sense at all -- and when they're called on it, the doubletalk comes out.
The MPAA's argument is that if it could block people from recording movies, they could release the movies on things like PPV before they release them on DVD, adding yet another window to the long list of windows that Hollywood uses. It's still not clear how more windows helps anyone but Hollywood, but they keep claiming this is some sort of consumer benefit. The thing is, their argument makes absolutely no sense at all when you look at the details. First of all, there was nothing whatsoever stopping them from releasing movies on PPV prior to the DVD release. Nothing. You don't need DRM to do it. In fact, some major studios already do this without breaking your TV in the process.
Of course, the MPAA's response is that it would never release movies this way without SOC, because then people would copy them and... um... piracy... oh mygod... Hollywood is dying. Or something like that. But that makes no sense. First, as noted, some studios already release movies this way. They don't need SOC. Second, the whole claim that this will lead to more unauthorized file sharing is a total red herring -- because all of the movies they're talking about were already in theaters -- and once a movie is in the theaters, it's already available widely on file sharing networks. There is no increase possible, because the content would already be widely available. On top of that, of course, as the GAO just noted, the MPAA's ridiculous claims of losses from "piracy" are totally bogus.
Given all that, it seemed ridiculous to think that the FCC would give in... but late last year the reports were that the FCC had already decided to give in to Hollywood, and today the FCC made it official (pdf):
The FCC's reasoning is bizarrely troubling and blatantly wrong. First, it claims that the studios "are unlikely to offer the service absent the ability to activate SOC." But... as noted, some studios already do offer such a service. On top of that, why is it the FCC's job to give the MPAA yet another window? Windows are anti-consumer, not pro-consumer. But, the FCC claims it's good for the consumers, and the MPAA's victory announcement makes the same ridiculous claim:
"This action is an important victory for consumers who will now have far greater access to see recent high definition movies in their homes..."
That logic is backwards. Basically, Hollywood is saying that it held the public hostage until the FCC let it break your TVs, and because the FCC caved in and Hollywood will release the movies it easily could have released before, consumers win. When someone is taken hostage and the family pays up, that's not a "win" for the family. As Public Knowledge points out, this appears to be the FCC doing this just as a favor to Hollywood.
Of course, in typical Genachowski FCC fashion, this ruling tries to walk that line between each side, in that it didn't grant the MPAA's full waiver, but tries to limit it, by saying it can only be used on films before the DVDs are released or for 90 days on a particular film (whichever comes first). The FCC will also "revisit" the issue in two years -- even under threats from the MPAA that if the FCC could revisit this issue, that uncertainty would lead the studios to scamper away, run and hide and not offer this service out of fear that the FCC would take away their right to break your TV. The FCC thought that was silly. It's not clear why the FCC didn't believe the MPAA's threat not to invest if the ruling could be reviewed, but do believe the threat not to release movies on TV earlier without this ruling... but that's the way this particular FCC seems to function.
In the meantime, now that the FCC has opened this door, expect more efforts to expand it much wider. Already -- before it had even been approved -- there was talk among politicians that it should be expanded to cover sporting events as well -- because, you know, we can't have people DVR'ing a sporting event any more.
The really ridiculous thing about all of this is that it's taking away functionality from the vast majority of law-abiding TV viewers who bought their TVs and DVRs expecting -- reasonably and accurately -- that they'd be able to record whatever is on TV, because of an amorphous and unproven "threat" of "piracy" which is based on bogus numbers and totally irrelevant given that the movies in question will already be widely available on file sharing networks.
Well, well. Earlier this week I had agreed to swing by the TechCrunch offices to be on a video panel discussing net neutrality, which was supposed to air at some point in the future. As I was out at lunch on my way to TechCrunch, the Wall Street Journal broke the news that (contrary to reports from the Washington Post earlier in the week), that FCC boss Julius Genachowski had decided to reclassify parts of broadband internet access as a Title II service, which would allow the FCC to regulate it. I found this out as I walked into the studio right before filming, so didn't have all the details, but if you'd like to see the discussion, here it is:
The panel was moderated by Andrew Keen, and included Gigi Sohn from Public Knowledge, Richard Bennett from ITIF, Larry Downes from Stanford and myself. With so many people, and not much time, I didn't get a chance to say much other than that this whole thing is a bit of a red herring, and that the real issue, that the FCC should be focused on, is making sure there's real competition in the broadband arena -- because if there were real competition, net neutrality wouldn't even be a discussion point (because, if any firm broke it, customers would go elsewhere quickly). However, the discussion itself is quite worthwhile, mainly for the viewpoints of the other three panelists.
While Gigi characterizes the panel as three against one, I don't think that's quite fair. I'm sympathetic to her argument on the importance of this. I think that maintaining a "neutral" internet, or one where end-to-end principles are maintained, is important. I just think that it can be done without the FCC stepping in, and that having the FCC make this move now could very well open the door to problematic decisions down the road. No matter how good the principles are that Genachowski wants to lay out (and I think they're pretty good), this opens the door to the FCC making much worse decisions in the future. And, in the meantime, we'll see all sorts of work by lobbyists and special interests to either neuter the rules or slip in enough exemptions to make the whole thing somewhat meaningless, and just another regulatory nightmare. Gigi's optimistic that this won't happen. I'm not convinced.
Meanwhile, if you want a preview of exactly what the legal arguments are that will be filed in response to this decision, well, watch the exchange between Larry and Gigi over whether or not the FCC can even do what it's proposing to do. I honestly don't know who is right -- and both make compelling cases for their arguments. In the end, a judge (or perhaps nine Supreme Court justices) will make the final call. Larry has laid out why he doesn't think the FCC can win in more detail -- and I'm sure we'll see more from Gigi as well.
Either way, the one thing that is certain is that this will be tied up in court for many years, and I stand by my assertion that for the next few years this is going to be pretty meaningless for consumers. I disagree with Richard Bennett that this will impact investment in networks -- and not because "investment ignores regulation" (a phrase he used which I've never heard anyone utter and which makes no sense to me), but because he's wrong that this creates any more uncertainty than there was before. There's been a discussion over net neutrality for more than half a decade and threats to move the ball back and forth all of these years. There's been plenty of uncertainty all along. The only reason that there would be a decline in investment in broadband is if the major providers get fat and happy and realize there's no competitive pressure for them to continue upgrading.
Also, while I agree with Richard that the internet tends to "regulate itself" to prevent anything really egregious from happening, he's being a bit disingenuous in suggesting that it's consumer advocates who came up with the idea that telcos would slow down or block certain websites. That came from former SBC/AT&T (and now GM) CEO Ed Whitacre, who blatantly said that was the plan. However he is right that AT&T's inability to follow through has mostly been due to loud public outcries against it.
Finally, to Gigi's point that this is necessary so that there's someone looking out for consumers and mandating transparency... I still have to go back to the point that those things are not the job of the FCC, but of the FTC, who already has the power to protect consumers and to respond to actions like what Comcast did with BitTorrent, in that Comcast was selling consumers one thing and providing them with something else.
Of course, with all of that out of the way concerning the debate... what about what the FCC is actually going to do. After the WSJ article came out, the FCC put out a statement claiming that its plan -- which will be "outlined" today -- would not, in fact, be the so-called "nuclear option" of reclassifiyng broadband as a telecommunications service, but a magical "third way":
"The Chairman will outline a "third way" approach between a weak Title I and a needlessly burdensome Title II approach," says the statement. "It would 1) apply to broadband transmission service only the small handful of Title II provisions that, prior to the Comcast decision, were widely believed to be within the Commission's purview, and 2) would have broad up-front forbearance and meaningful boundaries to guard against regulatory overreach."
As Broadband Reports notes, this is all way too ambiguous. What everyone is saying is that this will apply to internet access, but not to internet providers -- whatever that means. Ambiguity in this situation is not good, because (yet again) it introduces all sorts of wiggle room for lobbyists to move things around. But this has become the way things seem to work in the Genachowski FCC, with vague plans announced that try to thread the needle between various sides, without ever taking a very firm stand on anything, but making sure not to piss off anyone either. It's why the big broadband plan seems to have so few specifics. It's as if Genachowski is afraid to take a real stand on anything. Even reading the FCC description of this move has him trying to explain why this isn't really a big deal, saying that it simply seeks to confirm what people felt was true before the Comcast ruling.
We'll see what the final announcement is -- and this is definitely a case where the devil is going to be hiding deep in the details -- but either way, you can rest assured that legal briefs are being written as we speak (if they haven't been written already), and this is all going to be in court for a long, long time before any of it really matters. The video above started out with the question of "what is network neutrality," and for the next few years, it's basically going to be gridlock in the court system.
Back in 2006, a startup called M2Z Networks asked the FCC to give it a sizable chunk of valuable spectrum for free, and in exchange, it would set up a nationwide wireless broadband network to offer free (and slow) "family-friendly" service and pay the government 5% of the revenues from a paid premium service also running on the network. We were skeptical of the plan because of its aggressive rollout schedule and the network's slow speed ("512 kbps" -- keep that figure in mind -- for the free tier/3 mbps for the paid tier), but mostly because of the huge expenditure required to build out a wireless network covering 95 percent of the US population -- expenditure which would be very difficult to recover from a free, slow service. The FCC wasn't convinced, either, and rejected M2Z's proposal in 2007, though that wasn't the end of it. A congresswoman introduced a bill tailor-made for M2Z's specs, but it went nowhere. Still, M2Z lives on, and it's now looking for a chunk of stimulus funding to start building its network.
It doesn't look like M2Z has updated its plan at all since 2006, doing nothing to address any of the concerns, beyond replacing the need for private investment with a second government handout, on top of its free spectrum. In particular, they don't seem to have upped their targets for the speed of their network. What the company was proposing wasn't exactly fast in 2006, is pretty pokey now, and will be even less attractive by the time its network would get up and running. In addition, it's worth clarifying that the "512 kbps" M2Z talks about is arrived at by adding the 384kbps downstream speed plus the 128 kbps upstream speed they plan to offer. That's a new trick we haven't seen before, even in the world of "up to" broadband speed advertising.
Once upon a time, FCC Commissioners were engineers, thinkers and experts across a variety of fields. These days the well-lobbied agency's stable of Commissioners is populated exclusively with lawyers, politicians and revolving-door lobbyists, and as you might expect -- its primary product (no matter which party is in control) is quite often partisan bickering and broken policy. The nation's recently unveiled first-ever national broadband plan is only the latest example of the kind of product the agency now creates, paying lip service to a myriad of industry problems but doing very little about the state of competition in the sector. Granted, to some, the plan looks good -- focusing on feel-good efforts like "digital eduction" -- but there's very little in the plan that really challenges the status quo.
The majority of bad FCC policies are unsurprisingly driven by bad data. The agency has made huge broadband industry policy decisions over the last decade using completely useless data that overestimated the volume of competition in the market. The rosy picture painted by the FCC was in part thanks to the confidential, unverifiable data provided by carriers, who have a vested interest in data that doesn't try very hard to highlight limited coverage, slow speeds, or high prices. The FCC is only just now getting around to actually collecting comprehensive broadband price data or mapping broadband availability, though in many states this latter job was simply doled out to friends of the phone companies.
While the FCC is still pushing into territory that may be better suited to the FTC, there's at least a few signs the FCC is trying to fulfill their recent promises that they'll be a more data-driven agency. In a post over at the FCC blog, the FCC's Dave Vorhaus notes that the agency has picked UK speedtest firm SamKnows to help them test the real-world speeds obtained by home users. SamKnows does similar testing for British regulator Ofcom, and it helps the regulator determine if a consumer is getting what they pay for. While normal speedtests will illustrate whether a user is getting full speed, SamKnows uses in-home residential routers with modified firmware to specifically determine why. According to Vorhaus, the FCC is looking for volunteers to help them collect data:
In a couple of weeks, we will be asking for consumers from across the country to voluntarily install hardware in their homes (on an opt-in basis) that is capable of measuring broadband performance. The measurements will give us results across a broad swath of providers, service tiers and geographic areas. More details on how to volunteer will follow in the coming weeks. We are tremendously excited about this announcement, the next step in the process of increasing transparency and competition in the broadband market and better informing consumers about their broadband service.
While the selection of a UK firm might raise the hackles of those who think that job should have been given to a U.S. company (a Wall Street Journal blog headline makes a jab about stimulating the British economy), SamKnows is among the best in the telecom sector at this particular job, and is also used by UK ISPs to assess their own network performance. Of course quality data won't mean anything if the FCC doesn't use it to make smart policy choices (like realizing that fixing competition helps fix things like network neutrality without additional regulation). You also have to wonder if the FCC's going to have a lot of free time, given the recent Comcast ruling all but ensures the agency is going to spend the next two years bogged down in a bare-knuckled fight with carrier lobbyists.
