Net neutrality debate flares brightly in the U.S. senate

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The U.S. senate will vote on network neutrality, and reinstatement might have enough votes to win the day. But that’s as far as it’ll go.

Yesterday, U.S. senate democrats executed a parliamentary maneuver and forced a full floor vote on a resolution of disapproval aimed at overturning the Federal Communications Commission’s decision to roll back the net neutrality rules adopted in 2015. It’s based on a law, called the Congressional Review Act, that allows congress to veto decisions made by federal agencies. If both houses of congress vote in favor and the president signs it.

There’s a chance that a majority of U.S. senators will vote for the veto. There are 49 democrats, and independents who vote with the democrats, in the U.S. senate. One republican – Maine’s Susan Colllins – is a co-sponsor of the resolution. That makes it 50 in favor of net neutrality, which could be enough to win, if Arizona republican John McCain stays on medical leave – the vote has to be taken by 12 June 2018, and he might be out that long (although there are predictions that the vote could come as early as next week).

To pull the same trick in the house of representatives, though, more than a dozen republicans would have to cross over and that’s highly unlikely. As is an approving signature from president Donald Trump. House republicans have already dissed the resolution, saying that they’re working on their own version of a net neutrality revival. So did senator John Thune (R – South Dakota), calling the move “political theater”, even while claiming he supports “rules that prevent blocking, throttling, and paid prioritisation of Internet traffic”.

So the resolution of disapproval will die along the way. But U.S. senators and, by default if nothing else, house members will have to line up on one side or the other. That’s enough to make it a potent campaign issue as democrats try to gain control of both houses in November.

California’s telecom right of way rules are detailed but not tidy

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I was asked yesterday about California’s public right of way (ROW) rules, as they apply to telecoms companies. There’s no one stop handbook that I know of (but if anyone else does, please chime in). The rules are fluid, and are mostly determined by CPUC decisions, with some court rulings thrown in.

In California, it starts with section 7901 of the public utilities code

Telegraph or telephone corporations may construct lines of telegraph or telephone lines along and upon any public road or highway, along or across any of the waters or lands within this State, and may erect poles, posts, piers, or abutments for supporting the insulators, wires, and other necessary fixtures of their lines, in such manner and at such points as not to incommode the public use of the road or highway or interrupt the navigation of the waters.

That’s interpreted to mean that local agencies can’t prohibit or charge a fee – either one-time or ongoing rents – for ROW use. Local agencies can regulate “time, place and manner” of access and charge one time permit fees based on processing costs, but can’t block use.

The fundamental CPUC decision setting the rules was issued in 1998. It’s been modified, directly and indirectly, many times since. The most recent changes were in 2016 to explicitly include mobile carriers and allow them to attach wireless facilities to utility poles, and last month to extend the same privilege to wireline telephone companies. In 2015, the commission narrowed the gap between broadband providers and traditional telephone and cable companies in a pair of rulings, one involving Google Fiber and the other a California Advanced Services Fund subsidy for a fiber to the home project.

Typically, the text of new decisions summarise the current state of the rules, and are a good starting point for figuring what’s what.

There’s also a case pending at the California supreme court – T-Mobile vs. City and County of San Francisco – regarding aesthetic standards. It’s a challenge to an appeals court ruling that allowed San Francisco to regulate wireless facilities on aesthetic grounds, up to a point.

The documents are all posted here:

Conduit, right of way, pole attachment, dark fiber and franchise agreement documents

I’ll update that page as I get new information.

California legislature takes on bots, false news and privacy

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Some bills that would regulate websites, social media and other consumer-facing Internet services are moving ahead in the California legislature. But not all of them.

Assembly bill 3169, carried by James Gallagher (R – Chico), is dead. It would have required “social media Internet web sites” and search engines to be politically neutral. It would have failed any First Amendment test. The assembly privacy and consumer protection committee scrapped it by ignoring it – when the vote was taken, only two members, both democrats, said aye and the rest remained silent.

One of those voting aye, assemblyman Ed Chau (D – Monterey Park), has a couple of privacy bills pending. AB 2511 would put restrictions on web sites and applications that use information about minors; AB 2935 would do the same for information collected by health monitoring devices. Both made it out of committee and are queued up for a floor vote in the assembly.

As originally written, senate bill 1424 by Richard Pan (D – Sacramento) was as dumb an idea as Gallagher’s proposal. It would have required social media platforms to place a warning on news stories containing false information. Besides being completely unworkable, it too would have collapsed at the first mention of the First Amendment. Pan rewrote it to require sites to disclose fact checking and other editorial policies. Even as amended, SB 1424 still looks like an overreach, though. The senate judiciary committee is scheduled to take a look at it today.

Two bills took aim at bots – automated processes that can mimic people, and collect and post information on websites and social media. AB 1950 by Marc Levine (D – San Rafael) would have required sites that use bots to disclose the practice. It was also killed by the assembly privacy and consumer protection committee (although death is never final in the California legislature – anything can happen so long as it’s in session).

SB 1001 by Bob Hertzberg (D – Van Nuys) specifically targets bots that act like people – chatbots, as they’re sometimes called. If a company invites you chat online but doesn’t tell you that, say, Eliza, is just a computer program designed to make you think they care, then they could face consumer fraud charges. It was approved by both the senate judiciary and business, professions and economic development committees, and is awaiting a final blessing from legislative leaders on the appropriations committee before heading to the senate floor.

Market competition pushes down San Jose light pole lease rates

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The City of San Jose will finalise a light pole lease agreement with AT&T. The San Jose city council approved a set of deal points on a nine to one vote last week. AT&T will pay $1,500 per year each to attach small cell equipment to city-owned light poles, plus pay $1,850,000 toward fees and a permit streamlining program.

That’s less than half of what San Jose was trying to charge.

“We have a fast changing landscape”, San Jose mayor Sam Liccardo said. “I’Il be talking with Verizon tomorrow and that’s one of several companies – we’re having challenges nailing them down on prices that are moving very rapidly, in some cases, the wrong direction”.

San Jose’s rate card had a top rate of $3,500 per year for the smallest of small cell attachments, with higher rates for bigger or more powerful equipment. Besides being too expensive, San Jose couldn’t predictably approve permit applications, which led AT&T to invest elsewhere, Dolan Beckel, San Jose’s director of civic innovation, told the council…

In September of 2016, AT&T submitted 17 small cell permit applications. Over a year later in November of 2017…none of those 17 small cell permits were approved. AT&T could not justify further investment in our small cell infrastructure – we are too expensive, we are too slow and we could not generate any predictability. They are pulling their capital investment in small cells out of the city and directing it to other cities.

Whether AT&T would have walked away from San Jose for good is an open question. Probably not – it can’t afford to concede the biggest city in northern California and Silicon Valley to its rivals. But even AT&T’s capital isn’t infinite. Choices have to be made and, for now at least, investment will follow the path of least resistance.

The lower fees and faster permits – the city will try to get permits processed in two months – will lead to an initial build of 170 small cell sites, with 1,000 or more promised in a later phase, Beckel said.

The deal also gives AT&T direct responsibility for dealing with complaints or objections by residents, on a fast track basis. AT&T would snail mail notices to people who live within 300 feet of proposed small cell sites. Recipients would have 20 calendar days to “contact…AT&T with their concerns and questions”. It would be up to AT&T to resolve problems they can and let the city know about the ones they can’t. What happens after that is still undefined.

Charter’s franchise “should be revoked”, New York state says

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Charter Communications is one step closer to losing its license to operate in New York City, if not New York state as a whole. Earlier this year, the state of New York’s Public Service Commission – its equivalent to the California Public Utilities Commission – slapped a $1 million fine on Charter and said it would “investigate Charter’s compliance with its New York City franchise agreements”.

That investigation seems to have led to legal action. Speaking on behalf of New Governor Andrew Cuomo, a spokesman for the commission said the gloves are off

The New York State Public Service Commission has commenced legal action against Spectrum Media Company for potential violations of its franchise agreement. The State approved Spectrum’s acquisition and its ability to operate in New York based on the fulfillment of certain obligations, including providing broadband access to underserved parts of the State and preserving a qualified workforce.

“The Governor believes it is essential that corporations doing business with the State uphold their commitments, and we will not tolerate abusive corporate practices or a failure to deliver service to the people.

”Large and powerful companies will be held to the same standard as all other businesses in New York. The Spectrum franchise is not a matter of right, but is a license with legal obligations and if those are not fulfilled, that license should be revoked."

It’s not clear if the New York commission is specifically going after Charter’s New York City franchise, or its ability to operate statewide. Either way, it will put a giant hole in Charter’s balance sheet if it’s successful. That’s a strong incentive to negotiate a settlement.

Charter also has obligations in California, that likewise stem from its purchase of Time Warner Cable in 2016. Among other things, by November – thirty months after the deal closed – Charter must “convert all households in its California service territory to an all-digital platform with download speeds of not less than 60 Mbps”. That includes all its analog systems in Kern, Kings, Modoc, Monterey, San Bernardino and Tulare counties.

Allowing ISPs to sell your bandwidth to someone else is not economic freedom

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The American Enterprise Institute (AEI) – the Washington, D.C. consulting group that ate the brain of beamed down to the Federal Communications Commission as the Trump administration prepared to take office – is sounding off about paid prioritisation (h/t to the Baller, Stokes & Lide list for the pointer). The fight over that particular concept is shaping up to be the front line of the network neutrality battle as it shifts from the FCC to the courts, congress and the states.

Monopoly telephone and cable companies disingenuously say they are willing to forgo blocking and throttling your Internet traffic, so long as they can prioritise it based how much money they’re getting from content companies. But allowing one particular video platform to stream on ahead means holding back – blocking and throttling – all the others.

AEI’s case on their behalf begins with the idea that prioritisation is sometimes a good thing – video is more sensitive to network congestion than, say, email. Fair enough. But its argument starts to wobble when it dismisses out of hand the idea of prioritising potentially fragile traffic, such as video, on a neutral basis – all video gets equal priority – and then collapses completely when it claims that the only fair way to do it is by selling the place at the head of the line to the highest bidder.

The debate over paid prioritisation isn’t about consumer choice. It’s about whether monopoly broadband providers can sell the bandwidth you’ve already paid for to someone else. In a competitive marketplace, that wouldn’t be of much of an issue – if consumers had the information and freedom to switch between neutral and sponsored bandwidth at competitive prices, the decision would be theirs. But when all that’s on the table is take it or leave offers from monopoly providers, there’s no choice at all.

Broadband, as it’s offered today in the U.S., is a classic example of a common carrier service. When it repealed net neutrality rules, the FCC deliberately ignored that simple truth. Fortunately, it has not yet had the final word.

California opens up utility poles to mobile infrastructure companies

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It’s a small change, but one that might speed up mobile broadband deployment in California. Wireline telephone companies can now install pretty much any kind of wireless equipment on utility poles, thanks to a decision by the California Public Utilities Commission.

The primary beneficiary will be mobile infrastructure companies – Crown Castle, Wave, Extenet for example – that build cell sites, large and small, and operate them for licensed mobile carriers, such as AT&T, Verizon and whatever T-Mobile and Sprint eventually become. A couple years ago, the CPUC allowed mobile carriers to attach cellular equipment to utility poles under the same, open-to-all rules that apply to wireline telcos and electric companies. The only difference is that wireless companies have to pay pole owners more, because they take up more space.

But that 2016 ruling only applied to federally licensed mobile carriers. The infrastructure companies that serve them operate under wireline rules – they are competitive local exchange carriers (CLECs) blessed by the CPUC. So they couldn’t demand the same kind of access.

Now they can.

There were, and still are, workarounds. One-on-one deals can be done and paperwork can be – expensively – shuffled to make it look like the licensed mobile carrier is doing the work. But that can mean delays and extra costs, with no practical benefit to the companies involved or the public.

Not everything is fair game, though. There’s a particular set of rules that govern utility poles, which are typically made out of wood and shared by electric, telephone and cable companies. Those rules don’t completely preclude local permits and don’t apply to other vertical assets in the public right of way, such as street light poles – cities that own them can still negotiate fair market leases. Nor do they apply to 120-foot steel masts, such as those proposed by Mobilitie, another infrastructure company that has tried to play fast and loose with right of way privileges.

CPUC considers FTTH upgrade subsidy for Marin County town

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Bolinas, a coastal community of about 700 homes in Marin County, is up for a $1.9 million broadband infrastructure subsidy from the California Public Utilities Commission next week. It’s the first grant proposal submitted to, and considered by, the CPUC since assembly bill 1665 was signed into law last year by governor Jerry Brown.

AB 1665 imposed severe restrictions on how money from the California Advanced Services Fund (CASF) can be spent. It lowered California’s minimum broadband standard to 6 Mbps download/1 Mbps upload speeds – if service is available at that level, then the legislature reckons no upgrade is needed. It also fenced off areas where incumbents, mainly AT&T and Frontier Communications, are getting federal subsidies, and allowed them to block grants in other parts of their service territories at will, unless they’re getting the money themselves.

The Bolinas Gigabit Network cleared all those hurdles, at least according to the draft resolution posted by the CPUC: there’s no broadband service available at 6 Mbps down/1 Mbps up, AT&T isn’t getting federal subsidies to serve the 600 homes (out of 700) that will benefit, nor did it exercise its jus primae noctis right of first refusal and preempt the project.

It’s also an exceptional project. According to the Bolinas Community Public Utility District, it’s “one of the largest…and densest communities which remains under- and un-served for broadband in rural California”. Its population is relatively well off – $74,000 annual median household income, versus $64,000 statewide – and exurban.

The character of the community led the company behind the project – Inyo Networks – to project that 80% of homes will subscribe to fiber to the home service, costing $90 per month for a symmetrical gigabit (a household with a child in a low income school lunch program can get 25 Mbps up/down for $30 per month). Whether that take rate is plausible is a fair question, but it does underline the rare, if not unique, circumstances of the project.

(The post AB 1665 CASF rules are still being written. It’s possible that higher income areas won’t be eligible or will have a lower priority in the future. But for now, a community’s wealth, or lack thereof, is not an established criterion).

In rural areas of California, the federally subsidised carveouts that Frontier and AT&T received are scattered about in checkerboard fashion. Finding a CASF-eligible area with a population that’s sufficiently dense and affluent to support an independent upgrade, and a local company with the resources and track record to implement it is a needle-in-a-haystack job.

Needle or not, Bolinas deserves due consideration, under current standards and rules. Delivering equal service to the haystack, despite AB 1665, is the CPUC’s true challenge.

Pay top dollar for low speed broadband, CPUC told

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The counter punches landed at the California Public Utilities Commission yesterday, as nine organisations filed rebuttals to previous comments about how the California Advanced Services Fund (CASF) should be run. The broadband infrastructure subsidy program is undergoing a complete make over, thanks to last year’s assembly bill 1665, which lowered California’s minimum broadband speed standard and turned the fund into a piggy bank for AT&T and Frontier Communications.

The Central Coast Broadband Consortium’s reply, which I drafted and submitted, led off with a correction – I got the math wrong on service level weightings. We recommended using the Federal Communications Commission’s discounting criteria, which is based on download/upload speeds and latency, for determining how much of a project is subsidised. The corrected table is below.

That proposal drew fire from AT&T. It wants full funding for low speed, 10 Mbps down/1 Mbps up wireless service, claiming it “provides capabilities that are more than sufficient to meet the broadband needs of a typical household, even with multiple simultaneous users”. Sure. So long as that typical household hasn’t bought a new television recently. Half of U.S. homes will have a 4K set by the end of next year, well before AT&T completes any CASF-subsidised upgrades. Those require at least 15 Mbps of steady service just to watch one 4K program.

Likewise, the California Emerging Technology Fund (CETF), which sponsored AB 1665 and successfully lobbied governor Jerry Brown to sign it, scoffed at the idea of basing CASF subsidies on infrastructure quality and performance, comparing it to rearranging deck chairs on the Titanic.

Thus spoke the iceberg.

CETF and AT&T phrased it differently, but both arguments lead to the same conclusion: lock rural California into slow and unreliable service – insufficient even by today’s standards – for decades to come. That’s not good enough. If service providers get public subsidies, they should build what all Californians need, now and tomorrow.

The full list of CASF-related comments and reply comments is here.

T-Mobile, Sprint combo is anti-competitive, but that’s the feds’ call

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The $26.5 billion dollar proposed purchase of Sprint by T-Mobile can’t go forward unless it’s given a pass by anti-trust watchdogs. As a practical matter, that means the federal justice department’s anti-trust unit sits on its hands and doesn’t challenge it in court, and the Federal Communications Commission signs off on the license transfers involved.

In theory, the California attorney general could jump in. In practice, that’s unlikely. So let’s set it aside for now. Unless there’s some obscure wireline telephone asset involved – anything is possible, but I don’t think so – the California Public Utilities Commission isn’t in the game either.

It’s down to the feds. And the likeliest source of opposition is the justice department’s anti-trust unit. It took on AT&T’s acquisition of Time Warner, although its lawsuit appears to be on the ropes.

The question is whether combining T-Mobile and Sprint into one company makes the U.S. mobile telecoms market significantly less competitive. Right now, they are two of the four mobile carriers that are worth worrying about (the other two are AT&T and Verizon, but you knew that).

T-Mobile has 17% of the U.S. mobile broadband market; Sprint has 13%. Both are in the habit of making significant market gambles – unlimited data plans, for example – that the big boys, with roughly a third of the U.S. market each, are forced to match. That’s a significant benefit to consumers, even if it doesn’t warm shareholders’ hearts.

When you’re in imminent danger of falling off a market share cliff at any moment, you assess risk differently than someone with a comfortable third of the pie. Which is what the new T-Mobile would have. Allowing it that level of comfort would decrease the competitive pain of its new peers, as well as consumer’s competitive market pleasure. We’ll see if the federal justice department arrives at the same answer.