Even Google needs video to compete against broadband incumbents

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Cut the cord carefully, if you bleed Dodger blue.

Video is an essential part of high speed broadband service. That’s the conclusion that Google has apparently reached. Google Fiber exec Milo Medin spoke at a conference in Florida earlier this week and, according to a story in Fierce Telecom, said…

What we have found is that while it’s not necessary to offer voice service because of wireless [substitution], if you don’t offer a good TV service your ability to compete with incumbents that bundle Internet and TV together is significantly impaired.

The ability of Google or any other new entrant in the broadband access business to offer television service, though, is also significantly impaired. Content companies charge small pay TV companies more per household than large ones, and some programming – particularly prized local sports programming – is completely unavailable. Medin pointed to Time Warner’s exclusive lock on L.A. Dodger games as an example of why Google Fiber won’t be expanding to southern California anytime soon.

Although more and more homes are doing without cable or satellite television subscriptions, it was only last year that the total number of U.S. pay TV subscriptions started to slip. According to the SNL-Kagan consultancy, there were about a quarter million fewer cable and satellite households in 2014 than in 2013. But that’s barely a tick in a market that claims 100 million of the 116 million homes – 86% – in the U.S.

Control of high value programming and a commanding share of video subscribers is a huge advantage for any broadband provider, which is why Comcast bought NBC/Universal and lusts after Time Warner. Television and Internet access services are not separate, stove-piped businesses, [preliminary decisions by a California Public Utilities Commission administrative law judge]() not withstanding.

Comcast sings the same old tune in LA

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You weren’t expecting a new act, were you?

It doesn’t look like any progress was made at a California Public Utilities Commission-supervised meeting between Comcast, its would-be mega-merger allies and opponents of the deal in Los Angeles on Tuesday. I was thinking of flying down to LA to see the show, but after reading the news accounts of it, I’m glad I didn’t. It seems – judging from those reports, anyway – that it was more of the same old, same old.

According to a story in the LA Times, two CPUC commissioners “heard from more than 140 outspoken advocates, many arguing the combination of the nation’s two largest cable companies would hurt California consumers”. But opponents were also joined by “representatives of dozens of community groups [who] voiced support for Comcast’s deal”.

It’s a familiar show. Comcast doesn’t have any problem turning out a crowd made up of local politicians and people from organisations that depend on its, um, charitable donations. Nor is there any shortage of opponents.

Comcast backed up its case with a blog post on Tuesday that tried to paint itself as the economic engine that drives the Southland…

In Los Angeles, we’re in the midst of investing over $1 billion in our West Coast businesses and our 25-year plan is expected to create more than 30,000 jobs and generate some $1.9 billion every year for the local economy, reinforcing our role as a major economic engine in the region.

Unfortunately for Comcast, no one in LA gives a damn about a 25-year plan. The Writers Guild of America West is one of the loudest critics of the deal, and isn’t impressed by Comcast’s promise of a better tomorrow

This merger will have troubling consequences for writers and others in the entertainment industry because it will give one company too much power over content. This will affect how much and what type of content is made, which could have negative implications for employment in one of this region’s most important industries.

Commissioners Carla Peterman and Catherine Sandoval convened the meeting and sat through all two and half hours of it, but “declined to disclose their positions”, according to the Times.

More lawsuits challenge FCC common carrier broadband rules

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Everyone jumps in.

The telecoms industry is piling on the Federal Communications Commission, filing a total of five separate appeals against the decision to impose common carrier rules on broadband service and infrastructure. The petitions were submitted to the federal appeals court – circuit, as it’s called – based in Washington, DC.

The most detailed protest came from the American Cable Association (ACA), which represents small cable companies…

The order (among other things) reclassifies broadband Internet access service as a “telecommunications service” subject to common carrier regulation under Title II of the Telecommunications Act of 1996…[the sections of Title II the FCC intends to enforce] impose significant new regulatory requirements—including substantive prohibitions, mandatory procedures, and record-keeping requirements on ACA’s members, many of which have never previously been subject to Title II regulation of any sort. The order also imposes three “open Internet” rules on broadband Internet providers: (1) a rule against blocking lawful content, applications, services, and non-harmful devices; (2) a rule against throttling lawful content, applications, services, and non- harmful devices; and (3) a rule against paid prioritization of data traffic…ACA seeks relief from the FCC’s Open Internet Order on the grounds that it is arbitrary, capricious, in excess of the FCC’s statutory authority, contrary to the Constitution, and otherwise not in accordance with law.

The National Cable and Telecommunications Association (NCTA), which looks after the interests of the big cable boys, objected on the grounds that the FCC might eventually regulate the “rates and practices” of its members. AT&T and CTIA – the cellular industry’s lobbying front – filed virtually identical petitions, which called out the FCC’s decision to “reclassify wireless broadband Internet access service as a commercial mobile radio service, or its functional equivalent”. I’ve already written about the appeals filed by US Telecom and Alamo Broadband.

Others can still get in on the fun – there’s just under two months left to file an appeal and no shortage of lobbyists and lawyers willing to do so. The whole process will take years to play out.

ACA petition 13 April 2015

AT&T petition 13 April 2015

CTIA petition 13 April 2015

NCTA petition 13 April 2015

US Telecom revised petition 13 April 2015

US Telecom initial petition 23 March 2015

Alamo Broadband petition 23 March 2015

Net neutrality clock starts counting down

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Three, two ,one.

The twelfth of June is the day that new net neutrality rules will become effective. Those rules were approved by the Federal Communications Commission in February and released in March, and were officially published in the Federal Register yesterday, with the 12 June 2015 date specified.

There’s a big if involved, though. That’s only if a federal court doesn’t put everything on hold while considering the legal challenges that have already been filed and those that are expected to come.

The US Telecom Association immediately updated its lawsuit, in what looks like an attempt to keep the case in the Washington, DC appeals court. Both US Telecom and Alamo Broadband, a Texas wireless ISP, filed challenges in two different courts. The DC circuit was then randomly chosen as the primary appeals court in the matter, which should make other big, Beltway-based lobbying groups happy. The National Cable and Telecommunications Association (NCTA) and the Cellular Telephone Industries Association (CTIA) are expected to jump in with their own challenges.

The FCC’s other recent broadband decision – the one preempting state restrictions on municipal broadband systems – is also in court. The state of Tennessee filed its appeal with the federal appeals court in Cincinnati last month, and it looks like that’s where the case will stay. No one filed a separate challenge in another jurisdiction within the initial ten day limit. The way the federal appeals court rules work that means the Cincinnati circuit has the ball if other states or organisations file their own challenges later.

CPUC commissioner urges rejection of Comcast’s California merger plans

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It’s a new game.

The California Public Utilities Commission will formally consider denying Comcast’s proposed takeover of Time Warner and Charter cable systems in the state. Until now, the conversation has been guided by a tentative decision drafted by a CPUC administrative law judge that would approve the merger and market swap, with a long list of temporary conditions. On Friday, commissioner Mike Florio proposed an alternative decision that would reject the deal outright…

Certain material facts are beyond serious dispute: the merger will roughly double Comcast’s share of broadband subscribers in California, leaving it with several times more broadband customers than all its competitors combined; Comcast’s market dominance is even more dramatic if the market is defined as broadband above 25 Mbps; and given this substantial increase in market share, Comcast will have a concomitant increase in control over Californians’ access to online content and services…

Comcast and Time Warner each have an effective monopoly on providing broadband services within its local geographic area…a post-merger Comcast will have a monopoly on speed tiers of 25 Mbps and above in approximately 78 percent of California census blocks, with only one competitor in almost all the rest. Merger of the parent companies creates a single company that is capable of serving over 84 percent of the homes in California…

[The conditions proposed by the administrative law judge] appear difficult to enforce, and even if fully implemented, could last for five years at most. We find that conditions that only temporarily or incompletely mitigate identified harms to the public interest are not sufficient to offset those harms.

Florio’s draft wraps up by saying “no conditions could mitigate all of the negative impacts of the proposed transaction” and simply denies it.

The CPUC has scheduled a public meeting in Los Angeles on Wednesday, where Comcast and its dance partners will face off against opponents of the deal as well as groups hoping to benefit from the conditions originally proposed. At least two commissioners – Carla Peterman and Catherine Sandoval – will be there. Florio and the others may as well. It’s their answer to Comcast’s suggestion that they should work everything out behind closed doors.

For now, there are two possible outcomes on the table: approval of the deal with temporary conditions or outright rejection. It won’t be decided on Wednesday, but it might be Comcast’s last chance to make its case. Ultimately, the five commissioners will vote on which alternative they want to take.

Richmond’s hail mary aside, second batch of CASF public housing proposals looks pretty much like the first

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The second round of applications for grants to install broadband facilities in California public housing projects produced about as many proposals as the first, but the total ask is more than three times as high.

Forty-eight proposals seeking a total of $4.4 million were sent to the California Public Utilities Commission by the 1 April 2015 deadline, versus 52 totalling $1.3 million submitted three months earlier. The difference is in the technologies proposed.

The lion’s share of the requests this time around – $3 million – came from the Richmond Housing Authority in western Contra Costa County. It would pay for pulling fiber to three public housing properties and running Cat 6 cable through the buildings. Bandwidth would be provided by a non-profit – the Internet Archive – although the application didn’t commit to any particular service level.

At first glance, though, there are problems with the three applications. Public housing grants from the California Advanced Services Fund are only supposed to be for inside wiring, and not for constructing offsite fiber backhaul. It’s not entirely clear that’s part of the grant budget, but it looks that way. Regardless, CPUC’s project goals set an average budget of $500 per unit; Richmond is asking for about $10,000 per unit. One more cause for scepticism: according to the Center for Investigative Reporting, the U.S. Department of Housing and Urban Development has labeled Richmond “as one of the worst-run housing agencies in the country“. That’s a finding that’s well supported by CIR’s own reporting.

Most of the remaining 45 applications are for WiFi mesh networks, with some DSL upgrades thrown in. If you back out the Richmond application, this round produced much the same results as the first one. There’s plenty left of the $20 million in the CASF public housing kitty. Next due date for applications is 1 July 2015.

Comcast can’t find love at home

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The City of Philadelphia expects more out of one it’s most prominent corporate citizens. Looking ahead to renewal of Comcast’s cable franchise, the city commissioned a 500-plus page study that found that residents are not getting the level of service they – and, in some cases, the FCC – expect. Mayor Michael Nutter said in a blog post that he’s expecting Philly-based Comcast to up the ante in renewal negotiations…

The City will be seeking high speed broadband capacity and computing technology to support the City’s KeySpots locations and libraries; free broadband access in areas designated as “unserved” or “underserved” or PhillyRising neighborhoods; a program to provide computers and digital literacy education opportunities; and high speed broadband capacity to support the local tech and startup communities, and broadband co-working facilities throughout Philadelphia…

Philadelphia’s cable subscribers reported satisfaction levels ranging from one to eleven percent (1%- 11%) lower than Comcast franchise areas in selected markets where similar studies were completed in the last six years. Overall, however, the survey found that 74% of Comcast cable subscribers are satisfied with their cable service…

The study also found many instances of maintenance failures and code violations on Comcast’s part. It also recommended that Philadelphia build its own dark fiber network to support city operations, rather relying on Comcast to meet its needs.

From its towering downtown Philadelphia corporate headquarters, Comcast wasted no time in firing back. In a blog post entitled A Philadelphia Love Story, two senior execs said “many of the findings are inaccurate, over-stated, or misleading” and warned that “the FCC clearly delineates what a City may ask for as part of a cable franchise”.

Love has its limits, even in Philadelphia.

Local California governments would have little to say about cell sites, under bill proposed in Sacramento

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Sometimes, the shot clock means what it says.

What started out as a wide-ranging attempt to rationalise broadband construction policy in California has turned into a narrowly focused effort to drastically limit, if not end completely, the ability of local government to tie up cell tower and site approvals for years on end.

Assembly bill 57, authored by assemblyman Bill Quirk, an East Bay democrat, now reads

The Legislature finds and declares that a wireless telecommunications facility has a significant economic impact in California and is not a municipal affair as that term is used in…the California Constitution, but is a matter of statewide concern.

Specifically, if cities and counties don’t act quickly, applications to build cell sites and towers will, in effect, be automatically approved…

A colocation or siting application for a wireless telecommunications facility…shall be deemed approved if both of the following occur:
(1) The city or county fails to approve or disapprove the application within the time periods established by the Federal Communications Commission…
(2) All public notices regarding the application have been provided consistent with the public notice requirements for the application.

In theory, the FCC has already said that permits not acted on within 60 days will be “deemed approved” and companies can simply start construction work. But, guess what, local governments can go to court and jam it up for as long as it takes the wheels of justice to grind through. Which can be a very long time indeed. Quirk’s bill would pull the legal rug out from under appeals launched by local governments. That’s not to say wireless tower disputes won’t end up in court – this is California, after all – but the deck would be decisively stacked against nimbys.

Cities and counties can disapprove a cell site application, but the grounds for doing so are very limited. Knowing that, some jurisdictions have chosen to put permit requests in the deep freeze. If Quirk’s bill passes, it won’t be open season for mobile broadband companies, but at least the game will be allowed to play on. An assembly committee is due to consider the bill the week after next.

CPUC considers $3.3 million subsidy for two FTTH projects

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Poor broadband service in Helendale now, but fiber could be on the way.

Two fiber-to-the-home projects in the California desert, northeast of Los Angeles, will be getting a total of $3.3 million in subsidies from the California Advanced Service Fund (CASF), if the California Public Utilities Commission approves draft resolutions released last week.

The proposals, for Helendale and Wrightwood, were submitted last December by Ultimate Internet Access (UIA), an independent Internet service provider that’s already active in the area. As I noted back then, the Helendale project is particularly interesting. The plan there is to take a defunct cable system – built by Falcon and ultimately abandoned by Charter – and retrofit it with fiber. The cost for the project is pretty low – about $1,000 per household, $600 of which would be coming out of CASF. It’s estimated there are just under 2,300 homes in the area, so the CASF tab would be $1.4 million.

The Wrightwood project would run on existing poles and would cost more – $1,700 for each of the 1,900 homes reached, with CASF paying $1,000 of that. Total ask for CASF is $1.9 million.

Standard residential service would be 1 Gbps up and down for $70 a month. To make the business case work, UIA has to hit a take rate of 75% or so. That’s troubling for two reasons: it’s extremely high, even given the relative affluence of the residents and the lack of alternative, and UIA intends to use licensed microwave for backhaul. Providing an uncapped gig to something like 1,400 to 1,800 subscribers in each town, without a fiber middle mile to rely on, will be fraught.

The draft resolutions are notable for another reason. CPUC staff reviewed and approved the applications in less than four months. That’s lightning speed compared to the last CASF round, when it took a minimum of seven months and a maximum of, well, 26 months and counting, to make a go/no go decision. It bodes well for the coming year. Eleven more projects from the current round of applications are under review, as well as two from the 2013 round, with many more expected.

Wrightwood draft resolution

Helendale draft resolution

Clear and limited mandate proposed for CPUC’s broadband oversight role

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OK to open it back up again.

A bill raising broadband standards in California also clears up any confusion about whether state regulators can do the job delegated to them by federal law. Assembly bill 238, authored by assemblyman Mark Stone (D – Santa Cruz), originally focused on upping the minimum acceptable service level to 25 Mbps down/3 Mbps up for projects subsidised by the California Advanced Services Fund (CASF). As just amended, it still does that, but also…

  • Levels the playing field somewhat for independent Internet service providers and cities and counties that want to chase CASF dollars. Incumbents and certified telecoms companies still would have priority, but all applicants would face the same restrictions regarding eligibility of areas for funding.
  • Gives a higher priority to areas where broadband service is particularly bad.
  • Allows the California Public Utilities Commission to update infrastructure standards in the future, to keep in line with federal benchmarks.

Most importantly, though, the bill now says that the CPUC’s job includes encouraging broadband deployment, which is a task that federal telecoms law splits between federal regulators and state commissions. The key paragraph is section 706 of the current telecoms act, which directs that the CPUC and their colleagues in other states…

Shall encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans…by utilizing…price cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment.

That section of federal law is the basis for the CPUC’s proposed conditions on Comcast’s consumption of Time Warner and Charter cable systems in California.

The confusion comes from a law passed three years ago that barred the CPUC from regulating Internet protocol services. It’s not about broadband infrastructure, though, and it specifically allows the CPUC to do work that’s required by federal law. But it’s a handy club for lawyers to swing, and Stone’s bill would take it out of their hands, without touching any of the limits actually placed on the CPUC by California’s existing public utilities law.

An assembly committee hearing on AB 238 is scheduled for next week in Sacramento.

Update: the hearing was bumped, now it’s set for the week of 20 April.

I’m involved in the AB 238 effort, so I’m not a disinterested commentator. Take it for what it’s worth.