Welcome to Webpass City, California


We won. Why shouldn’t you believe it?

Google finally ‘fessed up to ditching its fiber construction business. In a blog post worthy of Baghdad Bob, the (now) former head of Google Fiber and related businesses – Craig Barratt – promised to “stay ahead of the curve — pushing the boundaries of technology, business, and policy — to remain a leader in delivering superfast Internet“. As he also announced his resignation.

By the time you read this, Google Fiber’s website might have changed, I’m sorry, pivoted again, but as it stands Californian cities are either transitioning from potential fiber city limbo to incumbent monopoly hell, or have been blessed as “Webpass cities”.

Which amounts to the same thing.

As the dust settled on Barratt’s mea culpa mission accomplished declaration, the Silicon Valley communities of San Jose, Santa Clara, Sunnyvale and Palo Alto were left in the potential category, where Google is “going to pause our operations and offices”.

Translation: we’re done with you, but we’re not going to actually say it because we’d lose whatever leverage remains over AT&T, Comcast and the rest.

Google is also “ever grateful to these cities for their ongoing partnership and patience, and we’re confident we’ll have an opportunity to resume our partnership discussions once we’ve advanced our technologies and solutions”.

Translation: so long and thanks for all the fish.

But San Francisco, where it had previously said it was in the fiber business, San Diego where it said it might some day be, and Oakland, Berkeley and Emeryville where it’s never previously shown any interest, Google is now proclaiming as “Webpass cities”.

Translation: we bought Webpass, we’re not sure why anymore, but we own those customers there, so we’re going to claim them and hope no one notices the difference.

The possible, but not likely, exception is Irvine, which Google still lists as “upcoming”. Given the dismantling of its fiber construction operations, that’s a distinction without a difference: if there isn’t fiber there already, there never will be. Not from Google, at least, but almost certainly not from any competitive private sector player either.

ISPs should need permission to sell to sell subscriber privacy


Your choice to make.

Mystery continues to swirl around privacy regulations for Internet service providers. The Federal Communications Commission is set to vote on new rules at its meeting tomorrow, but with only a vague summary released to the public, no one outside of chairman Tom Wheeler’s circle of trust knows the details. One particular issue – the ability of ISPs to share your web browsing history – bears watching.

The FCC’s summary pegs web browsing history as the sort of sensitive information that ISPs will have to keep private, unless subscribers give positive permission – opt in – to share it. That’s drawn fire because websites and other online service providers have a lower standard to meet. Google, for one, believes ISPs should be able to treat routine browsing information – online shopping, for example – differently than really private information like medical records, telling the FCC that its “framework should allow such differentiation based on the nature of web browsing information, regardless of the company collecting the data”.

The problem with Google’s position – keep in mind it’s an ISP as well as an online service provider and advertising platform – is that consumers choose to go to particular websites and, up to a point, reveal information about themselves. A website might share that information with, say, advertisers, but that’s how you pay for otherwise free stuff on the Internet. Except for your current IP address, which is necessary to make two-way communication work, you don’t have to tell them anything about yourself.

Your ISP, which is not giving you free stuff, knows everything about what you do online. All your traffic passes through its servers and that information is saved, at least for a time. It’s one thing for an ISP to offer you an opt-in discount for the privilege of sharing information about your surfing habits with advertisers, but quite another for it to throw it open to public view whether you want it to or not.

The FCC’s summary implies that web browsing history will be treated the same way as other sensitive information like health or financial information or social security numbers. Sticking to that course would be the right call for FCC commissioners to make tomorrow.

Californians asked to help find telco trouble spots


If you’ve had problems, or not, completing or receiving a telephone, the California Public Utilities Commission wants to know about it. That includes collect calls and, particularly, calls to 911 or any of its sister services such as 211 (social service referrals) or 811 (underground utility locator, i.e. call before you dig). They also want to know if you’ve “seen conditions with telephone facilities that you believe pose a danger to safety or reliability of communications service (e.g., low hanging wires, wires on the ground, leaning or bent poles, overloaded poles, one pole holding up another, frayed or broken cables, lines attached to trees?)”.

The CPUC put up an online survey a couple of weeks ago, and as of the results posted yesterday evening, six people had responded. They’re posting the comments submitted (with identifying information removed). Six responses isn’t statistically significant, but the trend so far is kinda interesting. Most of the answers amount to no, I haven’t had that problem.

No one is reporting problems with their phone being reported out of service when it isn’t, or with accepting or placing collect calls or with reaching 211 or 811 services. One person had a phone line cut accidentally and another is unhappy with getting out-of-service messages, although based on the comment it might be because the numbers dialled actually are out of service.

On the other hand, two people – both apparently in Tuolumne County – have had problems reaching 911 operators, and three people have seen what they believe to be unsafe pole conditions.

The survey is part of an investigation into rural telephone service reliability being led by commission Catherine Sandoval, but the questions being asked in the online survey apply to phone service anywhere in California, and the questions about unsafe or precarious poles, cables and other infrastructure are very relevant to broadband service as well. Poorly maintained legacy phone lines cannot generally deliver even minimum levels of acceptable broadband service. Finding those problems is the first step towards fixing them.

Click here to take the survey.

Only one regulatory hurdle looms for AT&T-Time Warner deal


Clearing it is not a given, though.

AT&T’s bid to acquire Time Warner has little direct effect on the broadband industry, but the indirect effects have set off anti-competitive alarm bells. Compared to other recent mega-deals, though, there will be relatively little regulatory review of the transaction.

Time Warner already spun off its cable systems into an independent company, which was snapped up by Charter Communications earlier this year. That followed a similar, unsuccessful attempt by Comcast. Both deals triggered reviews by the California Public Utilities Commission, the Federal Communications Commission, and the federal justice department’s anti-trust team. Comcast’s purchase of Time Warner was scuppered by the FCC and the federal justice department; Charter successfully ran that gauntlet. As did Comcast when it took control of NBC Universal, at least at the federal level.

But AT&T is in much different position. Time Warner is a content company. It doesn’t own any regulated telephone subsidiaries, which is what caused the California Public Utilities Commission to become involved in the Charter and Comcast transactions. It does own one television station, WPCH-TV (formerly WTBS-TV) in Atlanta, and the FCC would have to approve any change in ownership, but that might be finessed. According to the joint statement issued by the two companies on Saturday

AT&T and Time Warner are currently determining which FCC licenses, if any, will be transferred to AT&T in connection with the transaction. To the extent that one or more licenses are to be transferred, those transfers are subject to FCC review.

Translation: we don’t want the FCC coming anywhere near this deal, so we will try like hell to figure out some other way to get rid of the television station.

The justice department will do a standard, anti-trust review and, likely, impose conditions that’ll be limited to direct, competitive issues like exclusivity of its programming or zero rating the bandwidth that mobile subscribers consume to watch it. Or it could simply kill the deal on the grounds that the anti-competitive harm is beyond mitigation. But at this point, that’s not the way to bet.

Forward mobile spectrum auction goes into reverse


Maybe it’s just a Rockford?

Well, that didn’t take long. Two hours after the Federal Communications Commission starting taking bids from mobile carriers (and, perhaps, would-be mobile carriers) for 90 MHz of television spectrum, it shut the auction down. Instead of stretching out for several bidding sessions over many days, or even weeks, the second stage of the incentive auction ended fast, and on a down note.

Mobile carriers were willing to pay $21.5 billion for the 90 MHz that was on offer. Unfortunately for them, though the minimum price set was $56.5 million. That’s about a billion dollars less than the carriers were willing to pay in the first stage of the auction, when 100 MHz was up for grabs. On the other hand, the gap is closing, sorta: in that first stage, broadcasters were asking $35 billion more than they did in this second one.

There are two schools of though as to what will happen when the FCC launches subsequent rounds of reverse-and-forward bidding, with progressively lower amounts of spectrum on the table. It could be that as the supply tightens, the value to buyers – the demand – will increase and mobile carriers will start putting more money on the table. There are a number of forecasters who talk about a final meeting price somewhere in the $30 billion range, for maybe two-thirds of the current amount of bandwidth that’s up for sale.

But there’s also the possibility that wireless carriers will simply say less spectrum is worth less money and keep their bids heading in a southerly direction. For the process to be a success, broadcasters would have to drop their asking prices at an even faster rate. In this case, success equals more spectrum for mobile broadband – where bandwidth demand continues to outstrip supply – and less for television broadcasting, where allocations made decades ago in ancient analog times are far too lavish in the digital age.

The FCC will announce the third stage schedule later this week.

California rules might make self-driving cars drive for the border


Companies that are developing self-driving cars apparently aren’t happy with proposed new rules floated by California’s department of motor vehicles. There was a public meeting in Sacramento earlier this week to discuss the DMV’s latest plan for opening up California’s road to autonomous vehicles, both for research and development purposes and for actual operation.

The draft would require companies to compile testing data for a year, before applying for permission to run a car without a driver – and without a steering wheel and all the other controls humans need. As reported by Reuters, an industry group characterised that as a needless barrier

The state’s approach “could greatly delay the benefits that self-driving vehicles can bring to safety and mobility for individuals,” said David Strickland, who heads the Self-Driving Coalition for Safer Streets that includes Google, Ford, Lyft, Uber Technologies Inc. and Volvo Car Group.

Another, more problematic rule would short circuit any legal protections manufacturers – or eventual owners – might have against police searches. According to the DMV’s draft

The manufacturer shall certify that it will release autonomous technology sensor data…that is in its possession or control to law enforcement or peace officers within 24 hours of their request for such data.

R&D restrictions also drew fire. Rather than set statewide standards, the DMV wants driverless car developers to get local approval from any jurisdiction where they might be operating. While it’s probably a good idea to give local cops advance warning about what’s going on, subjecting tech companies to the whims of every nimby along the route is sure way to encourage them to just keep driving to, say, Nevada or Arizona.

Nothing is carved in stone yet. The next move is up to the DMV.

Now or never: California broadband subsidies will end without fast action


It’s not just the lakes that are drying up.

No more money will be flowing into the California Advanced Services Fund to pay for broadband infrastructure subsidies. The program has hit the limit set by the California legislature, and the tax that funds it will no longer be collected.

By this time next year, if not sooner, the infrastructure kitty will likely be spent down to zero. If more money is ever going to be added, it’ll have to happen soon. When CASF runs out of money, it’ll go into a bureaucratic deep freeze: paperwork will be processed for existing projects, but any forward looking activities will end. Thawing it out will take years. The last time CASF was fully rebooted was in 2010, and the first grant applications weren’t accepted until more than two years later.

Troublesome though it may be, that’s not the big problem. At this point, the tax that funds CASF has merely lapsed. Restarting it will be difficult enough, given the increasingly aggressive lobbying against it by AT&T and the cable industry’s political front organisation, the California Cable and Telecommunications Association. But it would still be just a restart.

If we get into 2018 with no renewal, CASF will be a different and perhaps unmanageable political animal. The tax that funds it will have faded far enough into memory that reinstatement will be perceived as imposing a new tax, rather than taking an existing one off an unintentional hiatus.

Even if democrats win a two-thirds supermajority in the California legislature in November and gain the ability to approve taxes and budgets without republican concurrence, it’ll be a steep, uphill fight. Broadband infrastructure is not at the top of wish lists at the state capitol. There is a multitude of interest groups with far more photogenic and heart rendering causes, and with the political muscle to push to the head of the line. A new broadband tax – that’s how it’ll be spun – will please few voters and upset corporate lobbyists, who can wipe away their tears with fistfuls of campaign cash.

It would be a crying shame.

California’s broadband competition outlook dims as telcos head for the exit


The market for high speed, residential broadband service is not competitive in California, and the problem might be getting worse rather than better. That’s one of the conclusions of a draft decision prepared by an administrative law judge for consideration by the California Public Utilities Commission.

Although a typical household might have access to more than one kind of service, most have no choice – or no availability – when it comes to getting Internet access at 25 Mbps download and 3 Mbps upload speeds. That’s the level that the Federal Communications Commission considers the minimum necessary to enjoy the full benefit of the online opportunities and services that are available today.

According to the draft decision…

From the perspective of the average California end-user, the threshold choice is between three different types of last-mile channels to connect to the larger network: the legacy telephone carrier’s wire (copper or fiber); coaxial cable from a cable provider; and a wireless transmission path (or paths) to a cellular antenna (radio frequency or spectrum). For roughly half or more of California customers, the choice for residential high-speed broadband at 25/3 Mbps benchmark narrows to one provider or none at all.

It’s a problem that seems likely to get worse, rather than better, because traditional phone companies, like AT&T, seem to be walking away from the table…

Indeed, there is some reason to question whether the traditional telephone utilities are leaving the high-speed, residential broadband market to the cable companies. Verizon first halted the development of its fiber (FIOS) plant, and then sold its entire California local wireline network to Frontier. We also observe the increasing market share of the cable carriers.

The draft makes a direct connection between competition and better service – where Google Fiber has entered the market, incumbents have upped their game, for example. And there’s an equally clear divide between lucrative urban areas, which maintain a higher level of both competition and service, and not so rich rural areas, which do not.

The draft is light on remedies – mostly, it calls for better data collection and analysis – but if adopted it would lay the groundwork for more aggressive intervention by the CPUC in the future, including pro-competitive policies such as making middle mile connectivity and last mile poles and conduit accessible to new providers on an open and transparent basis.

Proposed decision analyzing the california telecommunications market and directing staff to continue data gathering, monitoring and reporting on the market

CPUC considers manifesto for broadband regulation


Not this Karl.

California doesn’t have a competitive market for broadband service, and the distinction between it and phone service is essentially irrelevant. With all due regard for the danger of trying to boil down 168 pages into 20 words, that’s the bottom line of a proposed decision by a California Public Utilities Commission administrative law judge.

ALJ Karl Bemesderfer was given the job of sifting through mounds of data, testimony and arguments submitted in the course of a CPUC investigation into whether there’s sufficient competition among telecommunications companies in California. His draft decision, which has to be approved by commissioners before it has any effect, was posted yesterday. Key conclusions include…

  • The residential, high-speed broadband market in all of California’s geographic markets is highly concentrated.
  • No census block in California is served by a mobile carrier that consistently achieves high-speed broadband speeds.
  • Although there are varying estimates, roughly half (or more) of California households have access to only one (or no) wireline broadband provider at speeds of 25 Mbps down and 3 Mbps up…
  • Competitors’ access to the built network infrastructure is a critical aspect of the competitive landscape for telecommunications services.

Highly concentrated is a term of art that means, in this case, that even though broadband in California isn’t technically a monopoly, the power to set prices and determine service levels in concentrated in few enough hands to thwart market forces and allow carriers – telephone, cable, mobile and fixed wireless companies – to extract rents, i.e. profits that a genuinely competitive environment wouldn’t otherwise allow.

The remedies Bemesderfer proposes “are limited to those for which we presently have clear and unambiguous legal authority”. If commissioners agree, broadband companies would have to provide detailed information regarding both last mile and, critically, middle mile services, and staff would have to supplement it with independent research and analysis.

If commissioners agree.

A vote could come as soon as 1 December 2016, or it could be bumped off into next year, when the make up of the commission might be different – two commissioners, Mike Florio and Catherine Sandoval, who tend to take a harder line regarding broadband regulation, are coming to the end of their terms and governor Jerry Brown has not announced whether or not they’ll be reappointed.

Proposed decision analyzing the california telecommunications market and directing staff to continue data gathering, monitoring and reporting on the market

Pro tip: read the whole document. There’s a lot worth learning in it.

Frontier complaints drop as it fixes California FTTH problems


Hundreds of fiber-to-the-home customers crashed and burned when Frontier Communications took over ownership of Verizon’s wireline networks in California last April. Phone, Internet and television service was disrupted, apparently because the customer data Frontier received from Verizon was faulty. The problems were compounded by a temporary call center that was drafted in to help Frontier get through the transition period.

The company’s position is they’re in business as usual mode now, and preliminary data from the California Public Utilities Commission appear to back it up.

The CPUC met in Long Beach last week, ground zero of Frontier’s meltdown. Of the 30 or so members of the public who signed up to speak at the meeting, only one man used his time to lambaste Frontier. That’s one indicator that things are getting better – more people made the trip to Sacramento last May to complain to legislators, when the troubles were at a peak.

The available stats also show marked improvement. More than 500 people filed complaints about Frontier with the commission in April, and more than 600 in May. By June, that number was down to a quarter of that level and it continued to drop in July and August. In September, only 62 complaints were received, which does look like business as usual – Frontier expects to handle 50,000 service issues in a normal month, according to regional president Melinda White, speaking to lawmakers in May.

The flood of problems was concentrated on the FTTH systems that Frontier acquired from Verizon, and “there was no similar widespread service disruptions for the rest of the service territory using traditional voice service over copper lines during this transition period”, communications division director Michael Amato told commissioners. The communities hardest hit were Camarillo and Santa Monica, and a cluster of cities around Long Beach, including Lakewood and Huntington Beach.