Net neutrality avalanche looks more like a slush pile

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I’m still getting my head wrapped around the concept of three million comments. That’s how many individual bits of advice regarding net neutrality that the FCC received, as of Monday’s deadline to submit.

No single commissioner or, indeed, all the members of the commission working together can possibly read through the entire pile. Even if they divvied it up and only dwelt on each submission for ten seconds, it would take the five commissioners more than a year of work each to get through their respective in-boxes. That’s assuming they work full time on it and don’t do anything else. Ain’t gonna happen.

Most of the comments are likely either form letters or relatively brief and minor variations on one theme or another. “I want to watch Netflix”, say. Or “Don’t let the dingo eat the baby!“.

There’s also a ponderous stack of weighty arguments submitted by corporations, lobbyists, advocacy groups and public agencies (but not the California Public Utilities Commission) on every side of the issue. No need to read it all: just weigh it.

So with the help of machine analysis and some sturdy truck scales, a reinforced platoon of FCC clerks might be able to sort through it all in a couple of months. The result? A few graphs and tables summarising opinions and a thick memo full of pithy quotes.

And enough statistics for anyone, on any side of the issue, to be able to say “look, millions of people agree with me”. Leaving lobbyist-in-chief Tom Wheeler free to stay behind closed doors and cut whatever deal suits him and his fellow suits.

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Governor’s pen will write the story for community broadband development in California

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Three bills with big implications for community broadband in California are still sitting on Governor Brown’s desk, waiting for his approval or veto:

Assembly bill 2272 would blow a huge hole in the California Advanced Services Fund and roll back much of the progress made last year when the legislature – and Brown – added $90 million to the kitty and made independent ISPs eligible for broadband construction subsidies. By requiring every CASF-funded project – past, present and future – to follow the state’s so-called prevailing wage rules, the effective subsidy would drop from 60% (for underserved areas) to less than 30% and the cost to the state would nearly double. And AB 2272 would impose a heavy paperwork burden on any company that took the money. Brown should veto it.

On the other hand, AB 2292 would give cities and other local agencies another financing tool to pay for community broadband infrastructure. Authored by San Leandro assemblyman Rob Bonta, it would put broadband on a par with other types of public works, like roads, sewers or water systems, and make it possible for cities to pay for it via bonds issued by infrastructure financing districts. Brown should approve it.

Senate bill 628 is a half a step in the right direction for community broadband development, but a giant leap for public infrastructure overall. It would create the legal framework for enhanced infrastructure funding districts that would have far greater flexibility in building – with two-thirds voter approval – basic facilities. Like roads, sewers and water systems. But not specifically broadband networks, although it doesn’t exactly preclude it either. Half a step forward is still progress and Brown should also approve it.

The deadline for a decision is the end of the month.

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FCC’s net neutrality rules stack the deck in favor of the big boys

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What would Billy Bob do?

Even without the back and forth voting over whether or not to treat broadband providers as common carriers Thursday’s California Public Utilities Commission meeting offered an excellent discussion of net neutrality and the regulatory questions that surround it (assuming you’re into that sort of thing, of course).

Helen Mickiewicz, the CPUC’s assistant general counsel, walked commissioners through the main issues. You can see the video here:

CPUC Commission Voting Meeting – September 11, 2014

The net neutrality discussion begins at about 1:17:00 and runs for about an hour and 20 minutes.

One of the first questions Mickiewicz fielded was from commissioner Carla Peterman, who asked how the FCC’s proposed rules, which rely on highly subjective standards, would work (~1:38:30 on the video). Mickiewicz replied…

The way we understand this would work is that…Billy Bob, edge provider, enters into a deal with Comcast. And Billy Bob thinks the deal isn’t reasonable, isn’t commercially reasonable. For whatever reason. One of the problems with the commercially unreasonable practices is there’s really no way for Billy Bob to know what other deals someone else has entered into because there’s no disclosure requirement.

So, Billy Bob goes to a convention and finds out someone else got a better deal. What does that company do? It can challenge at the FCC, it would file a request with the FCC to review the deal and then the FCC would apply the proposed criteria that it has put into the rulemaking.

And actually, they’re pretty vague. They have more detailed criteria in the data roaming context than what they have proposed here. So it’s possible the FCC will have a follow up where they’ll adopt more detailed criteria. But at the moment what they’ve got isn’t all that detailed, so I’m not sure how it would work.

But the customer – the edge provider – would have to seek redress from the FCC. It is possible that before signing the deal Billy Bob could go to the FCC and say they’re offering me a bad deal. But I suspect that the FCC wouldn’t want to review it until it was done.

The problem I have with the FCC’s – chairman Tom Wheeler’s – proposal is that Comcast has platoons of lobbyists and lawyers and millions of dollars of campaign cash to hand out. In Wheeler’s no lobbyist left behind world, Billy Bob doesn’t stand a chance.

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Hope still flickers for thoughtful Internet policy at the FCC

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There might yet be an intellectual debate at the FCC about network neutrality. A debate on facts and philosophy, rather than a negotiation for spoils or a partisan punch up. Four commissioners – the entire FCC minus chair Tom Wheeler who did a solo turn earlier – had an hour-long conversation with new CTIA head (and former FCC commissioner) Meredith Baker at a standing room only session at the CTIA show in Las Vegas last week.

When the talk turned to the FCC’s current net neutrality proceeding, commissioner Jessica Rosenworcel put Exhibit A for an open Internet on the table: the new virtual economy that’s been built, starting in the U.S., on a ubiquitous network that runs without centralised control, either by government or industry. “Our Internet economy is the model for the world”, she said. But as control of the Internet, particularly the last mile, becomes increasingly concentrated in the hands of large incumbent companies, government regulation is a necessary counterweight.

Commissioner Ajit Pai, on the other hand, characterised net neutrality as “a solution in search of a problem”, and particularly so in the U.S. mobile industry, where there is comparatively robust competition and a history of light regulation, and billions of dollars of investment as a result.

Rosenworcel seems to lean toward stricter, or at least more specific, net neutrality rules than the draft floated a couple of months ago by Wheeler. Pai doesn’t want any at all. They’re both right on the facts and they both start with the facts and reason the problem through from there. So long as the conversation continues on that basis, there’s still hope for a rational, rather than political, outcome.

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How the CPUC’s regulate ISPs as common carriers, oops, never mind drama played out

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The California Public Utilities Commission spent more than an hour listening to a presentation and then discussing net neutrality and broadband regulation issues on Thursday, before voting 3 to 2 to tell the FCC that it should treat broadband infrastructure companies as common carriers – no different, in concept, than electric, gas, water or, indeed, telephone companies.

But then something happened, as you can see on the video:

CPUC Commission Voting Meeting – September 11, 2014

The vote comes around the 2:33:30 mark. The issues on the table and the ramifications of the vote were reviewed in excruciating detail ahead of time – no confusion there. Commissioner Carla Peterman leads off with a yes vote, in favor of common carrier – Title II – regulation, followed quickly by commissioners Mike Florio and Catherine Sandoval. Michael Picker votes no.

As does president Michael Peevey, who then says “so that’s what’s adopted. All the other pieces go with that. There is no need for any other vote on any other matters”. He then looks down the table in Peterman’s direction and says “unless anyone wants to reconsider their vote rather quickly”.

Peterman, at least, seemed to think he was looking at her. She quickly said no, and the meeting moved on.

The commissioners worked through the rest of the agenda and then Peevey called for a 5 minute break.

Not unreasonable, given they’d been sitting there more than 3 hours. Except the meeting was over: all that remained was a few seconds of formalities to close it.

The 5 minutes turned into 20, before they returned (about 3:33:00 on the video).

At that point, Peevey reconvenes the meeting and then mumbles “I want to ask Carla, commissioner Peterman, to say something here”.

Peterman then explained she wanted to rescind her yes vote, in the hopes that the commission could eventually come to a unanimous position on net neutrality and broadband infrastructure regulation.

So that was that. But for about an hour, the CPUC was on record calling for the FCC to regulate broadband service providers – to one extent or another – as common carriers. They’ll resume the discussion next month.

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It’s not about the watch, it’s about Apple diving into health care

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When Tim Cook unveiled the Apple Watch on Tuesday, and launched into a rapturous description of the digital crown – the old school winding wheel on the side that’s redesigned into a user interface – the first thing I thought was “they made the damn watch for right-handed people”. Any southpaw old enough to remember having to wind a watch every day – yes, me – remembers having to unstrap it and shift hands first. The crown is on the right side, which is the wrong side if you’re a lefty.

Well, not exactly. The display can be flipped around so you can wear the watch on your right hand with the crown pointing left, albeit sub-optimally positioned lower down. But enough grumpiness.

The big take away for me isn’t the design or functionality. It’s Apple’s determination that smart watches are about health and fitness. The Apple Watch will display text messages and otherwise serve as an iPhone extension, but the killer app is health and fitness, with Apple forming a high caliber development team around it.

Apple didn’t make the first MP3 player or the first smart phone or the first tablet. But it figured out what those devices were good for and how to build supporting platforms and content to make them useful and attractive to consumers. That track record is reason enough to presume that Apple has done the same for smart watches, and could do as well for other wearable categories.

Health, particularly, has been a tough sector for technology companies to penetrate. Microsoft has been trying to run an online medical record platform for years, with little success. Stringent legal requirements and the threat of further regulation has been a stumbling block for nimble startups. Apple has the market strength, development talent and raw resources to succeed, though. It’s not a done deal – an Apple Watch and health platform would be the first post-Jobs attempt at a category breakout – but that’s the way to bet.

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CTIA successfully reboots its mobile industry trade show

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It’s still a work in progress, but the reengineered CTIA wireless trade show looks like it’s relevant enough to mobile industry execs to keep drawing them to Las Vegas. The new show tries to blend content from the CTIA’s traditional big springtime convention and MobileCon, its fall technology conference (or content or apps or whatever – usefully, it never stagnated), and consolidate the show floors.

The exhibits were workmanlike and generated a fair amount of traffic, at least on the first day (the only full day I was there). The keynote sessions offered an opportunity to take the measure of industry execs, including Meredith Attwell Baker, the new president of CTIA. But the quality of the keynote presentations was uneven, a problem shared by the conference program.

The panel discussion with FCC commissioners was excellent, but some of the others were pure sales pitches. Not unusually so, though. Like many trade shows, CTIA has reached the point where the aftermarket – the online audience for live streamed and archived speeches and conference sessions – is more important to corporate marketers than the actual attendees.

My one big complaint is that exhibit halls are bad places to put presentations and panel discussions. I understand why trade show organisers do it – they want to generate traffic for both exhibitors and speakers – but it’s distracting and dissipates attention. The best thing about the old MobileCon show was a well organised conference program, and the occasionally claustrophobic sessions only added to the energy.

But the new CTIA show – branded Super Mobility Week – and its escort of smaller events, like the Competitive Carriers Association conference, does bring people to town, and that is the point of holding conventions. The greatest value is in the chance conversations, one-on-one meetings and corporate parties that result, and in that regard this week’s show delivered.

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FCC rural broadband experiments become 10% more cost effective in California

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Any Californian ISP that gets funding from the FCC to build out and operate an experimental rural broadband system can also get money from the California Advanced Services Fund. The California Public Utilities Commission yesterday approved a blanket 10% match of any federal funds an ISP might win via the FCC’s program.

The hope is that the extra CASF subsidy will buy down the cost of pursuing those rural broadband experiments in California, making them more cost effective in the eyes of the FCC and giving them a competitive edge against proposals from other states.

The FCC has set aside a total of $100 million for the program. The CPUC estimates California’s fair share of that to be $10 million, which means the hit to CASF would be something like $1 million. Not a huge amount, relatively: there’s about $160 million left CASF. It could be less or it could be more, since the FCC doesn’t have a particular geographic formula for handing out its money.

Based on past experience with federal broadband programs focused on rural areas, California would normally do well to score as much as 10%. Midwestern and southern states have proven more adept over the years at defining the rural subsidy game and then playing it. This spiff from CASF, though, might make a big difference.

The CASF contribution is preauthorised, which means any Californian applicants can simply include the money in the budget they submit to the FCC and, per yesterday’s resolution, “explicitly reduce their federal contribution request up to ten percent”. There’s still some paperwork to be done for the CPUC’s benefit but, compared to normal CASF grant and loan applications, it’s hardly any all.

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CPUC approves then pulls back endorsement of common carrier regulation for broadband

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I come down strongly behind Title II, it’s the only thing that makes sense here.

It was high drama at today’s California Public Utilities Commission meeting in San Francisco, at least by the CPUC’s normally placid standards. Commissioners first voted 3 to 2 to tell the FCC that broadband infrastructure should be regulated under common carrier rules. About an hour later, after commissioners returned from a nominal five minute break that lasted somewhat longer, commissioner Carla Peterman asked to change her yes vote to abstain.

That put the commission’s debate on network neutrality policy on hold at least until its next meeting in October, which means missing next week’s deadline to officially file comments on the matter with the FCC. Assuming commissioners eventually come to a decision, they’ll put any recommendations they have in a less formal letter and send it to the FCC later.

Originally, Peterman joined commissioners Catherine Sandoval and Mike Florio in endorsing a recommendation to tell the FCC that broadband infrastructure should be regulated under common carrier rules.

The initially approved and ultimately walked back comments are in this staff report – it gives quite a bit of background as well. The two key recommendations – number 5 and 7 – were first adopted as is, then finally walked back and held for further study.

Alternative language – also in the staff report – endorsing the FCC’s currently proposed net neutrality approach, which relies on broader but less rigorous statutory authority was, in effect, rejected only to be brought back under consideration at the end.

Commission president Michael Peevey supported that approach, seemingly out of an expressed desire to maintain solidarity with FCC chairman Tom Wheeler. The fifth commissioner, Michael Picker, wanted to delay the decision in order to study it further.

But for at least a brief time, the CPUC was on record supporting stringent rules regarding net neutrality, based on regulating ISPs as common carriers.

The concept of allowing ISPs to cut deals with content providers based on whether the terms are “commercially reasonable” is at the center of the FCC’s proposed net neutrality rules, as currently drafted. There’s no standard for deciding what’s commercially reasonable, though. As the staff report points out the rule “would not prevent anti-discriminatory Conduct or practices at the outset; rather, upon receiving a complaint after the fact, the FCC would have to review, on a case-by-case basis whether a provider’s conduct was ‘commercially reasonable.’”

The accepted-then-rejected language would have told the FCC that’s not good enough…

The commercially reasonable standard would allow ISPs to discriminate under an undefined and likely unenforceable standard. Accordingly, the CPUC would oppose FCC adoption of the proposed “commercially reasonable” standard, and argue instead for adoption of the “no unreasonable discrimination” standard rooted in Title II. It is unclear whether or how the FCC could craft a “commercially reasonable” standard that would be workable and, as the Verizon decision requires, would allow providers to discriminate among edge provider traffic. Further, a rule that achieved both of those goals likely could not simultaneously further the FCC’s vision of protecting and promoting an “open Internet.”

“Title II” refers to the law that allows the FCC to regulate telecoms companies as common carriers, and make them subject to stringent oversight. Currently, broadband infrastructure is far more lightly regulated, at both the federal and state level.

Whatever the CPUC finally decides, its eventual letter to the FCC will stand alongside two million other comments that have flooded in. But it will be among the most significant.

First, one might hope that the nation’s top authority will care what it’s second most important telecoms regulator thinks.

Second, and more importantly, it will tell both the FCC and the telecoms industry whether the CPUC believes, as Florio put it, that “regulating infrastructure is not the same as regulating content” and that broadband infrastructure is as much a public utility as electricity and water, or that Californian regulation will be guided by Wheeler’s more lenient and accommodating approach.

Either way, Florio summed it up well: it is “the defining issue of our time in the telecommunications world”.

UPDATE 12 September 2014: The video of the meeting has been posted here:

CPUC Commission Voting Meeting – September 11, 2014

The staff presentation and commission discussion regarding net neutrality and the regulatory issues around it runs from about 1:17:00 to 2:36:30 – it’s excellent viewing, by the way, if you’re interested in the details of such things. It ends with the CPUC’s initial endorsement of Title II regulation for broadband infrastructure. The subsequent decision to reverse it runs from about 3:33:00 to 3:41:30.

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Setting the Vegas stage for a declaration of net neutrality victory

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“Our goal in this proceeding is to establish the rules of the road for Internet openness that will provide certainty in the marketplace”, FCC chair Tom Wheeler told his former clients at the CTIA wireless show in Las Vegas on Tuesday. He was talking about network neutrality rules that he drafted and hundreds of thousands of people and organisations are commenting on now. Rules that set up a process for governing the Internet that will be anything but open and certain.

A key question for the mobile telecommunications industry is whether it will have to play by the same “rules of the road” as wireline providers. Right now, it doesn’t. Or at least it wouldn’t if version 1.0 of the network neutrality rules – written in 2010 and tossed out by a federal court earlier this year – was still in effect. Back then, the wireless industry successfully lobbied to be effectively exempt from restrictions on how last mile providers might or might not cut deals with content providers and third-party service platforms.

The reason then was that restricted and expensive mobile bandwidth required different network management practices. Wheeler asked his audience whether that justification is still valid. True to form, Wheeler posed it as a rhetorical question – something for mobile industry lobbyists to refute – rather than an expression of vision or principle. And he not-so-subtly set out a negotiating position: give ground on mobile data caps and throttling and maybe you’ll keep your special status.

Balancing interests is not necessarily a bad thing for a regulator to do. But that doesn’t seem to be the game that Wheeler is playing. Instead, he’s offering to make a populist swap: getting something his “new client, the American people” can understand without thinking too hard – a warm and fuzzy and loophole-ridden declaration on data caps, say – and giving mobile carriers, his former clients, the ability to make up the difference and more on the back end by dodging arcane network neutrality rules imposed on their competitors.

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