FCC eliminates a distinction between telecoms and cable companies


If you want to build your own broadband network, you need to have access to utility pole routes along the way – not only is it cheaper than installing your own, as a practical matter you’re unlikely, to say the least, to get permission to plant a second row of poles.

Nationally, the rates for pole attachments are set by the Federal Communications Commission. Last week, the FCC lowered the price for telecoms companies to the same rate paid by cable operators. FCC commission Ajit Pai explained why in a concurring opinion

Before Internet service providers (ISPs) can offer service to customers, they must string fiber optics, coaxial cables, and other wires on utility poles and through underground conduit. The rates for such attachments are determined by one of two formulas set forth in section 224 of the Communications Act. The first applies to “cable television systems” and has been historically lower (the cable rate). The second applies to “telecommunications services” and has been historically higher (the telecom rate). By reclassifying Internet access service as a telecommunications service, the Commission gave utilities the go-ahead to charge the higher telecom rate to cable and other non-telecom ISPs, costing American consumers up to $200 million a year1 in higher prices and slowing the deployment of high-speed broadband.

Today, the Commission starts to repair some of this damage by lowering the telecom rate to the cable rate. That’s a good thing for all broadband providers and their consumers.

Here in California, the California Public Utilities Commission has primary responsibility for regulating utility pole access, so the FCC’s order will have a limited effect. But it does set a precedent, both for the cost of getting on poles and, maybe more importantly, for the principle that there’s no practical difference between a telecoms company and a cable company. They’re all the same.

FCC order regarding pole attachment rates, 24 November 2015

Congress sends highway conduit bill into the slow lane


Broadband conduit won’t be getting a fast track into federal highway projects. A bill sponsored by Silicon Valley congresswoman Anna Eshoo would require broadband considerations, and conduit in particular, be included in the planning that states do for federally funded highway construction.

The easy way to get it done would have been to include the language in this years’ highway funding bill, which is a must pass piece of legislation. Eschoo tried to do that, but was rebuffed. So now it has go back into the house of representatives’ labyrinth of committees, where it has twice died before.

This time around however, there’s more reason to be optimistic. According to the Morning Consult newsletter all of the FCC’s commissioners – democrat and republican – are behind the bill, as are key industry players…

Will Rinehart, director of technology and innovation policy at the American Action Forum, said industry stakeholders and advocates all support Eshoo’s ‘Dig Once’ legislation. “I don’t think there’s a battle in this,” Rinehart said in an interview. “I think everyone generally agrees on what needs to happen”…

The private sector and think tanks in the policy space are also fans of the bill. The National Cable and Telecommunications Association, AT&T Inc., Verizon Communications, the Consumer Technology Association, the Information Technology and Innovation Foundation, and Tech Freedom have all released statements supporting Eshoo’s legislation.

According to Morning Consult, Eshoo’s bill has to be approved by both the house’s transportation and infrastructure committee and the energy and commerce committee, which inevitably includes detours through sub-committees. And that’s just to get it to the house floor, where it would have to be approved and then, potentially, sent through the same legislative gauntlet in the senate. Since no one seems to be in any rush, it could be this time next year before we know its fate.

Comcast does us all a favor by handing the FCC a clear net neutrality case


You don’t need a video replay to referee this one.

When is streaming Internet video not Internet video? When it’s a cable company doing the streaming. At least according to Comcast. Ars Technica has a good article on Comcast’s latest ploy, which is to offer a cut down video package over the Internet connection that broadband-only subscribers can buy, and not count it against the monthly 300 GB cap it’s beginning to impose in some states (but not yet in California).

It goes to the heart of the net neutrality standards set by the Federal Communications Commission earlier this year. The basic principle is that an Internet service provider can’t give its own content more favorable treatment than anyone else’s. On the surface that seems to be exactly what Comcast is doing, though, by saying that you can watch an unlimited amount of its video via your Internet connection but only 300 GB of, say, Netflix every month.

Comcast’s dodge is to say that its $15 a month streaming video package is not going over the actual Internet, just over its own, internal connection to customers, and is therefore a “specialised service” that just happens to be Internet protocol and therefore exempt from net neutrality requirements.

The relevant section of the FCC’s broadband common carrier rules reads…

IP-services that do not travel over broadband Internet access service, like the facilities-based VoIP services used by many cable customers, are not within the scope of the open Internet rules, which protect access or use of broadband Internet access service. Nonetheless, these other non-broadband Internet access service data services could be provided in a manner that undermines the purpose of the open Internet rules and that will not be permitted. The Commission expressly reserves the authority to take action if a service is, in fact, providing the functional equivalent of broadband Internet access service or is being used to evade the open Internet rules. The Commission will vigilantly watch for such abuse, and its actions will be aided by the existing transparency requirement that non-broadband Internet access service data services be disclosed.

I’m glad Comcast has done this. It’s 1. a crystal clear example of what network neutrality advocates were trying to prevent and 2. it’ll be judged against the FCC’s case by case review standard that lobbyist-in-chief Tom Wheeler promoted with such enthusiasm.

We’ll finally know who’s side the FCC is really on.

Fitness trackers could be this year’s gift everyone gets but doesn’t use


It has wrists, but does it it have legs?

The fitness tracker category is going to huge this holiday season. It’s hard to go to a meeting without seeing a Fitbit or a similar bracelet on the trendiest wrists in the room.

Most people seem to use the devices for step counting, to reassure themselves that their normal daily activity is an adequate workout. It’s useful feedback, and a lot of people seem to be altering their routine to maximise steps. Some companies have incorporated fitness trackers into corporate wellness programs, and that’s positive too. When a product becomes ubiquitous, it also becomes a default gift for the hard-to-buy-for.

The real question is whether this is a typical fitness fad, like office treadmills or boot camp workouts, or if it represents a long term change in fitness awareness and proactive health management.

At this stage, it appears to be the latter. From my personal – and not statistically valid – observations, actual usage has a half life of two or three months at best. A fitness tracker might appear on someone’s wrist, but it’s gone within a few weeks or months. Any fashionable workout routine, however benign, loses its novelty value and simply becomes another chore.

There’s one technological improvement that could change the equation, though, and that’s longer battery life. If the tracker is something you have to remove periodically to recharge, then the odds are high that sooner or later you’ll just leave behind for good one day. On the other hand, if you can put it on your wrist and forget about it for two or three years, like a wristwatch, then the case for long term adoption and usage will be a lot better.

New effort to require broadband conduit in federal highways


It’s easier to dig first, pave second.

Silicon Valley congresswoman Anna Eshoo is taking a third try at baking dig once requirements into federally funded transportation projects. She’s introduced a bill in the house of representatives that would require states to evaluate the need for broadband conduit as part of planning road projects…

If the evaluation reveals an anticipated need in the next 15 years for broadband conduit beneath hard surfaces to be constructed by the project, the conduit shall be installed under the hard surfaces as part of the covered highway construction project…

The Secretary shall ensure with respect to a covered highway construction project that an appropriate number of broadband conduits as determined by the Administrator of the National Telecommunications and Information Administration, are installed along such highway to accommodate multiple broadband providers, with consideration given to the availability of existing conduits…

The Secretary shall ensure that any requesting broadband provider has access to each broadband conduit installed pursuant to this section, on a competitively neutral and nondiscriminatory basis, for a charge not to exceed a cost-based rate.

It’s not an iron-clad guarantee that conduit will actually be installed during federally financed road construction. There are several specific exceptions and a general loophole for “consideration of other relevant factors”. But it turns the tables and creates a presumption that broadband conduit is an integral part of highway construction. Given that most transportation planners either consider broadband infrastructure to be someone else’s problem or hesitate to include it on their own initiative, it would be a big step forward if it’s approved.

Whether that happens or not is up to congress. Similar bills that Eshoo introduced in 2009 and 2011 died quiet deaths in committees. As a democrat, she’s in the minority in the house, so she’s signed up an Oregon republican, Greg Walden as a co-sponsor. He’s the chair – and Eshoo is the ranking democrat – of the communications and technology subcommittee, so at least it’s off to a good start.

Tennessee says muni broadband law limits cities not service


The Federal Communications Commission went beyond the bounds of regulating interstate telecommunications when it issued an order that preempted state restrictions on municipal broadband systems in Tennessee and North Carolina. That’s one of two core arguments that the state of Tennessee made yesterday as it rebutted the FCC’s defence of the order in a federal appeals court case

The Order contains none of the hallmarks of interstate communications policy regulation; it is neither neutral nor generally applicable. The Order does not advance a uniform regulatory scheme in furtherance of national objectives. Instead, it targets two State governments and their relationship with their subordinate units as the objects of its action. One need look no further than the title of the FCC’s underlying proceeding to see that the agency’s goal was to isolate and redefine municipal authority to provide broadband services. This case has never been about promoting a uniform, nationwide “communications competition policy.” It is about federal interference with two States’ plenary control over their political subdivisions.

Tennessee’s reply acknowledges that “a wide range of neutral telecommunications regulations apply to all service providers, whether or not those providers are arms of a State government”, but leans on the point – which is its second core argument – that it’s up to a state to decide if a city can get into the broadband business, and if so what geographic limits and financial requirements apply.

The U.S. supreme court set the bar high for federal agencies that want to preempt a state’s traditional power to decide how it, and its subordinate layers of government, will conduct business. It requires that congress give a federal agency “unmistakably clear” authority to do so. That’s why the FCC is arguing instead that the case is about regulating interstate communications, which it clearly can do.

North Carolina is also challenging the FCC’s order. Its reply brief, also filed yesterday, reiterates essentially the same points.

Tennessee reply brief
North Carolina reply brief

Broadband subsidies collide in the California desert


Up, down, who cares? This is as fast as I go.

The 3,800 homes in the Anza area of Riverside County are a big step closer to getting fiber to the home broadband service from the local electric cooperative. The California Public Utilities Commission published a draft decision on Friday giving the Anza Electric Cooperative a $2.7 million grant from the California Advanced Services Fund (CASF) to pay for 60% of the project.

The project is remarkable for two reasons. First, the subsidy cost per household is only $710, something like an order of magnitude less than typical CASF-funded FTTH projects. That’s the advantage of working with an incumbent service provider – albeit electric service – that already has access to utility poles and right of ways, an established customer base, and the people and equipment to make it all work.

The second reason invokes more controversy than the first, though. The Anza area has also been targeted by the Federal Communications Commission for a similar sized subsidy from the Connect America Fund program. I haven’t crunched all the numbers, but just looking at the town of Anza itself, which accounts for fewer than a third of the households in the project area, the FCC has put something in the neighborhood of $1.6 million on the table. And Frontier Communications has said it will take that money up, if it’s allowed to buy the Verizon copper system that provides telephone, but not DSL, service in the area.

My numbers are rough, but in the ball park. The CAF estimate for the town of Anza is based on the average per-premise subsidy offered by the FCC in Riverside County and discounts the six annual payments at a rate of 5%. You can shift those assumptions pretty far either way, though, and still reach the essential conclusion: the CPUC and the FCC could each give a few million dollars to two different, and ultimately competing, service providers to upgrade broadband infrastructure in the Anza area.

The CPUC is getting the better bargain, though. Anza Electric is promising to deliver 50 Mbps down and up to homes for $50 per month, and as much as 500 Mbps down and up to commercial customers. Assuming the fiber network is intelligently engineered, service could be upgraded as far as necessary for decades to come. The FCC, on the other hand, is only requiring Frontier to deliver 10 Mbps down and 1 Mbps up, and charge whatever the going rate is in urban areas. Which isn’t likely to be much less than what Anza proposes to charge for 50 megs each way, and could very well be more.

Even if the copper system was magically upgraded to the FCC standard before the CPUC’s expected vote on the project next month, it wouldn’t change anything. Unless an area has service available at 6 Mbps down and 1.5 Mbps up, it’s eligible for CASF subsidies. The FCC’s standard fails on the upload side.

If the tables were turned, the CPUC standard would fail on the download side, but Anza is proposing something way beyond the minimum. From a taxpayer’s standpoint, the rational thing to do would be for the FCC to pull its offer, contingent on performance by Anza Electric, and spend its subsidy money elsewhere in California.

Next round looms in muni broadband preemption fight


Responses from the states of Tennessee and North Carolina to the Federal Communication Commission’s defence of its preemption of their restrictions on municipal broadband are due later this week. My expectation is that they’ll gloss over most of the counter arguments offered by the FCC and several other groups that support the preemption, and reiterate their core point, which is that states have the traditional right to set limits on how, what and where cities may offer service of any sort, and current telecoms law doesn’t say otherwise.

The Internet Association, which is a lobbying group that represents big companies like Google, Facebook and Amazon, weighed in on the FCC’s side. Its filing essentially says Internet service sucks because there’s no competition. Which is fine, but it misses making a convincing case that congress gave the FCC the necessary and “unmistakably clear” authority to preempt a “fundamental” state prerogative.

Municipal broadband legal expert Jim Baller, representing the City of Wilson, North Carolina – one of the cities at the heart of the case – makes a clearer argument that “states are not free to ignore federal competition law and policy when their municipalities are acting in a commercial capacity”. The problem with that line of reasoning, though, is that Tennessee and North Carolina aren’t telling cities how to provide broadband, but rather where they can do it – within their city limits – and how the decision to get into the business in the first place is made – for example, via a public vote.

Even so, Tennessee and North Carolina have to convince the federal appellate court that the only issue that really matters is whether congress specifically gave the FCC the power to do what it did. This is their chance to do it.

Sailfish mobile OS development is shuddering to a halt


Another attempt to build an alternative to the Android mobile operating system is circling ever closer to the drain. A Nokia spin-off, Jolla, is laying off about half of its employees because an expected new round of investment didn’t come through. That means that development of its Sailfish operating system will be on the back burner. According to a story in TechCrunch, Jolla’s chairman, Antii Saaarnio, they need the money in order to hang onto talent…

“We are of course hoping that these are temporary actions… And we are committed to continue the company but really this depends on the external investors as well, how are we able to continue operations,” Saaarnio adds…

However he concedes it would be unable to retain the talent and fund the expensive development work needed to ensure its Sailfish OS is competitive against more well-resourced mobile OS rivals.

The main problem is that Jolla was relying on a single, unnamed strategic investor to pony up the new round of cash. I’ve seen that scenario play out in several start ups personally. Strategic investors don’t tend to be interested in a new product itself, but rather in either the opportunities it might create for their primary line of business or in the leverage it can give them in negotiations with competitors. Once they get what they need, there’s no reason to keep pumping money into the project.

Jolla has already slow tracked plans to manufacture phones to go along with the Sailfish OS, focusing instead on licensing it to companies in developing countries. So far, it has one licensing deal signed with an Indian manufacturer; no phones are on the market yet.

Regional economy depends on infrastructure, particularly fiber and conduit


More broadband equals more work and fewer cars on the road.

“The most important infrastructure for the future is fast, reliable internet connectivity”, said Bud Colligan, co-chair of the Monterey Bay Economic Partnership (MBEP) as he opened a day long conference on the state of the region’s economy. He said that incumbent telephone and cable companies have a big role to play in that, but “it is in our public interest to have a level playing field with robust competition”.

Broadband is intertwined with other infrastructure problems. Rebuilding or expanding roads, for example, offers an opportunity to put conduit in the ground. Colligan said MBEP would be working to make sure that dig once policies developed by the Central Coast Broadband Consortium – under consideration now by several local agencies – are approved and implemented by every city and county in the region.

Some – both the City and the County of Santa Cruz, for example – have adopted those policies, but actually getting broadband conduit into open trenches is still a challenge. “There’s a tremendous problem because the budgets for the roads don’t include any money for conduit, even though it’s so inexpensive”, said Peggy Dolgenos, CEO of Cruzio, a local Internet service provider, pointing out that it’s as much about transportation as it is about telecoms. “One of our goals is to get 3,000 people off the roads…one of the ways we’re trying to do it is better broadband”, she said.

“I urge all the elected officials in the room, it’s something that you all have to ask for in every meeting”, Colligan concluded. “If we’re not making this minimal investment right now…then we’re really being penny wise and pound foolish”.