U.S. house passes net neutrality bill but leaves the devil in the details and its fate to the senate

by Steve Blum • , , , ,

El diablo

A network neutrality bill cleared the democrat-controlled U.S. house of representatives yesterday and is on its way to the U.S. senate, where republican leader Mitch McConnell has been widely quoted as saying it’s “dead on arrival”. The vote in the house was “mostly along party lines”, with only republican – Bill Posey (R – Florida) – joining democrats, according to The Hill.

The text of the bill hasn’t been posted yet. The first draft simply reinstated the Obama-era net neutrality rules and blocked the Federal Communications Commission from making any changes. A later amendment gave smaller Internet service providers – those with fewer than 100,000 customers – an extra year to comply with some of the terms.

According to the Electronic Frontier Foundation, which tracked the action yesterday, more changes were made on the house floor, which were mostly benign but…

One amendment does give us pause, though. The last amendment to the bill (McAdams), affirms a bit from the old Open Internet Order, saying that the net neutrality prohibition on blocking doesn’t prevent ISPs from blocking “illegal” content, a distinction that includes copyrighted material…A broad reading of this amendment could easily have greenlit Comcast’s throttling of Bit Torrent, which led to a past FCC sanctioning the cable company for violating net neutrality…

As ISPs and media companies become even more intertwined, it’s easy to imagine this loophole being exploited. However, legislative debate..made clear that this amendment did not give an ISP the right to censor content solely because the ISP thought the content was unlawful.

It’ll take more than one renegade republican in the senate to prove McConnell wrong. But it’s happened before. Shorty before the current FCC rules took effect last year, three republican jumped ship and voted for a resolution of disapproval. It could have reversed the FCC’s decision, but didn’t go anywhere in the then-republican majority house.

Net neutrality bill with financial consequences passes Colorado legislature

by Steve Blum • , , ,

Colorado is about to have a network neutrality law that has teeth and a chance of surviving federal court challenges. Senate bill 78, which was just passed by the Colorado legislature, says that Internet service providers that don’t abide by net neutrality principles can’t get state broadband deployment subsidies, and might even have to return money previously awarded if they’re caught violating those rules in the future.

It’s a partisan issue. All republicans in both the Colorado house and senate voted against it; all democrats voted for it. The bill is on its way to Colorado governor Jared Polis for his signature. He’s a democrat too, so no points for guessing what he’s probably going to do with it.

Colorado ISPs will have to disclose their network management policies, and can’t block or throttle subscriber’s Internet traffic, or engage in paid prioritisation. Unlike Comcast and some other ISPs that say they’re against paid prioritisation, but spin it so narrowly that their pledges become meaningless, Colorado’s SB 78 has a reasonably robust definition of it…

“Paid prioritization” means the management of an Internet service provider’s network to directly or indirectly favor some traffic over other traffic, including through the use of techniques such as traffic shaping, prioritization, resource reservation, or other forms of preferential traffic management, either: (i) in exchange for consideration, monetary or otherwise, from a third party; (ii) to benefit an affiliated entity; or (iii) to disadvantage a competing entity or its affiliates.

Last year, the Colorado legislature set up a broadband deployment subsidy program that’s heavily biased in favor of incumbents, although it also allows for the possibility of municipal project funding in smaller communities. It tracks with old school universal telephone service programs, so the biggest impact of the bill will be on incumbent telcos. CenturyLink is the big one, and there are some smaller rural telcos too.

So far, California has taken a different path. Although lawmakers passed SB 822, a net neutrality bill last year that more or less reinstated rules scrapped by the current republican majority on the Federal Communications Commission, that law is tied up in federal court and is likely to stay there for years. A companion measure, SB 460 that would have barred state and local agencies from spending taxpayer money on non-net neutral broadband service died at the end of last year’s legislative session.

At the state level, it’s bills like Colorado’s SB 78 and California’s SB 460 that have genuine potential to make a difference. Although SB 822 was well meaning, enforcement requires the cooperation of federal judges and diligent effort by California attorney general Xavier Becerra, neither of which are evident so far. Key California lawmakers get big bundles of cash from big telecoms companies, and have so far not disappointed them in any meaningful way. It seems to be a different game in Colorado.

Comcast has to explain why it’s okay to start cherry picking rich, rural customers right now

by Steve Blum • , , , ,

Tesoro viejo youtube

The California Public Utilities Commission won’t jump the gun and give Comcast permission to compete directly with the Ponderosa Telephone Company. At least not yet. Comcast has to first explain why past CPUC decisions don’t apply to its request for permission to offer telephone service in Tesoro Viejo, an upscale master planned community of 5,200 homes in Madera County. Among other things, those rules protect highly subsidised rural telephone companies from competitors that want to cherry pick affluent customers in densely populated exurban developments, and ignore people in poorer and more sparsely populated communities.

The CPUC has been thinking about changing those rules for the past twelve years, with no decision yet on the horizon. It’s the normal course of business for the commission, which considers these kinds of issues in excruciating detail via an adversarial process that includes anyone with an interest in the outcome. It doesn’t happen quickly.

In a ruling last week, commissioner Liane Randolph rejected Comcast’s request for an immediate exception to current policy, saying that questions about why those rules do or don’t apply have to be answered first. That means considering a study of rural broadband and telephone competition completed last year, and a 2014 CPUC decision that concluded that companies like Comcast…

…may tend to serve only small portions of any of the [rural telco] service areas with high quality, high reliable voice service and…may be likely to “cherry pick” business customers rather than serve significant portions of rural service territories, particularly customers whose cost to serve is high.

That’s exactly what Comcast proposes to do in Madera County. It’s been clear that its ambitions are limited to the newly built homes, and that it does not plan to offer service to homes and businesses in the surrounding area. Ponderosa’s service territory includes traditional foothill ranch lands and remote Sierra Nevada towns, as well as new and wealthier exurbs.

Comcast and Ponderosa have two weeks to answer Randolph’s questions.

Collected documents regarding Comcast’s expansion into Ponderosa’s territory are here.

School bus WiFi and take home mobile hotspots for students funding in proposed California bill

by Steve Blum • , , , ,

Jet school bus2

A placeholder bill that originally targeted the California Advanced Services Fund (CASF) – the state’s primary broadband infrastructure subsidy program – was gutted, amended and turned into a subsidy program for after school Internet access for elementary and high school students. Assembly bill 1409 is carried by assemblyman Ed Chau (D – Los Angeles), who made a tech policy name for himself last year when he authored California’s new online privacy law.

As originally submitted, AB 1409 made what amounted to an inconsequential typographic change to the law that rewrote the CASF program in 2017. The usual purpose of such bills is to get something into the hopper ahead of the legislature’s annual deadline for introducing new legislation, with the intent of maybe doing something with it later.

That something turned into subsidies for “homework gap projects”, which are defined as projects that provide “pupils in kindergarten or any of grades 1 to 12, inclusive, with after school access to broadband, such as Wi-Fi enabled school buses or school or library Wi-Fi hot spot lending”. The money would come from the California Teleconnect Fund (CTF), which pays for broadband service for schools, libraries and some non-profit organisations, usually to help close the gap left by the federal e-rate program, which funds most, but not all, of the cost of such service.

It’s an incremental change. Both CTF and the federal e-rate program are already used to pay for free broadband access, via WiFi at schools and libraries, and some school districts have toyed with the idea of extending some kind of wireless service to students at home. Hotspot lending – allowing students to, say, take home an active 4G wireless router – and WiFi on school buses are already arguably eligible for CTF money, and some districts or libraries might already be doing it.

AB 1409 would clear up any doubt, and potentially create a whole new category of publicly subsidised broadband service. It could also open the door to boondoggles: there’s already an ecosystem of companies and organisations that push projects of dubious value to educators with little knowledge of technology and no experience as service providers. The bill scheduled for its first hearing in the telco-and-cable-friendly assembly communications and conveyances committee ton Wednesday. It’s worthing keeping an eye on.

Big broadband’s permission for, collection and use of customer info gets a federal review

by Steve Blum • , , , ,

The privacy practices of four major broadband service providers and one big disruptor are getting a hard look from the Federal Trade Commission. Comcast, AT&T, Verizon, T-Mobile and Google Fiber were given 45 days to produce detailed information about their business practices and subscribers, with particular emphasis on how they collect information about customers, whether it’s done with genuine permission, and what they do with it.

The information demanded by the FTC includes statistics on how many people actually read privacy policies, along with what promises to be a tall stack of those policies – every single one that’s been written by the companies, including copies that might be “different from the original because of notations on the copy”.

One particular concern of the FTC is whether the companies treat customers differently based on the degree of privacy they’re willing to surrender…

Has the Company ever offered different levels of service, quality of service, rates, pricing, rewards, or other incentives for consumers who opt-in to the collection of information about themselves, their Devices, their communications, their viewing history, or their online activities? If so, Describe in Detail such practices and produce Each materially different notice provided to consumers concerning the practice…

Has the Company ever denied service, or otherwise degraded the quality of service, for consumers who fail to opt-in to the collection of information about themselves, their Devices, their communications, their viewing history, or their online activities, beyond information that is necessary for the provision of Internet or cable services? If so, Describe in Detail such practices and produce Each materially different notice provided to consumers concerning the practice.

AT&T and Verizon will have to produce information about both their wireline and mobile subsidiaries. It’s probably a good assumption that Comcast will have to submit data about its wireless business practices too. One company that’s notably absent from the list is Charter Communications, which has nearly as big a market share as Comcast. Sprint is missing too, but it’s the smallest of the major mobile carriers and might not be around much longer anyway.

Intentional or not, the FTC’s fishing – whaling – expedition is a welcome response to a damning assessment by the federal general accounting office assessment that the agency is largely clueless about the online world.

Cities have broad authority over wireless facilities, California Supreme Court rules

by Steve Blum • , , , ,

In a landmark decision, the California Supreme Court gave cities a major victory today, ruling that the way San Francisco regulates the appearance of wireless facilities is legal, and isn’t preempted by state law or California Public Utilities Commission regulations. Its interpretation goes beyond lower court decisions and adopts a narrower view of state-level restrictions on municipal control of telecommunications infrastructure. The unanimous opinion also opened the door to further regulation of cell sites and other telecoms facilities – wired or wireless – by drawing a line between specific limits the legislature put on local oversight of construction activities, and the general ability of cities to set standards for the appearance, placement and, potentially, other aspects of wireless equipment after it’s built.

An earlier appellate court decision ruled that cities can set aesthetic standards for wireless facilities because 1. section 7901 of the California public utilities code says telecoms infrastructure can’t “incommode the public use of the road or highway”, and 2. the visual impact of ugly equipment falls within the dictionary definition of incommoding.

Today’s California Supreme Court decision endorsed that finding…

Neither the plain language of [public utilities code] section 7901 nor the manner in which it has been interpreted by courts and the PUC supports plaintiffs’ argument that the Legislature intended to preempt local regulation based on aesthetic considerations. The statute and the ordinance can operate in harmony. Section 7901 ensures that telephone companies are not required to obtain a local franchise, while the [San Francisco] Ordinance ensures that lines and equipment will not unreasonably incommode public road use.

But municipal authority goes beyond that, according to the Supreme Court. The ruling said that state law only restricts some of the broad discretion and power that cities have under the California constitution. Cities can’t effectively prohibit telecoms companies from building infrastructure or regulate their operations, but…

The Legislature has not adopted a comprehensive regulatory scheme. Instead, it has taken the limited step of guaranteeing that telephone corporations need not secure a local franchise to operate in the state or to construct local lines and equipment. Moreover, the statute leaves room for additional local action and there are significant local interests relating to road use that may vary by jurisdiction.

Nor does the authority given to the CPUC override local control or responsibilities. The commission regulates “a utility’s relations with its customers”, the decision says, but municipalities “are forbidden from yielding to the PUC their police powers to protect the public from the adverse impacts of utilities operations”…

Consistent with these statutes, the PUC’s default policy is one of deference to municipalities in matters concerning the design and location of wireless facilities. In a 1996 opinion adopting the general order governing wireless facility construction, the PUC states the general order “recognize[s] that primary authority regarding cell siting issues should continue to be deferred to local authorities… . The [PUC’s] role continues to be that of the agency of last resort, intervening only when a utility contends that local actions impede statewide goals … .” The order itself “acknowledges that local citizens and local government are often in a better position than the [PUC] to measure local impact and to identify alternative sites. Accordingly, the [PUC] will generally defer to local governments to regulate the location and design of cell sites … .”

Finally, the Supreme Court said that public utilities code section 7901.1, which puts specific limits on local control of the public right of way, only applies while construction work is going on…

It is eminently reasonable that a local government may: (1) control the time, place, and manner of temporary access to public roads during construction of equipment facilities; and (2) regulate other, longer term impacts that might incommode public road use under section 7901. Thus, we hold that section 7901.1 only applies to temporary access during construction and installation of telephone lines and equipment. Because the City treats all entities similarly in that regard, there is no section 7901.1 violation.

In other words, the requirement that all telecoms companies be treated that same only applies while facilities are being installed. Cities are free to adopt wireless-specific ordinances that apply after construction work is completed.

Bottom line: California cities can set aesthetic standards for cell sites, and have more authority over wireless and wireline infrastructure than they or telecoms companies thought. It’s a comprehensive defeat for T-Mobile, Crown Castle and Extenet, who sued the City and County of San Francisco. They’ll even have to pay San Francisco legal costs.

Although the ruling opens the door to further local regulation of wireless facilities, including stricter aesthetic standards, the extent of that discretion wasn’t defined, and there are still federal preemptions of state and local authority that could apply. But today’s decision gives California cities a green light to test those limits.

My clients are mostly California cities, all of whom are directly affected by this case. I’m not a disinterested commentator. Take it for what it’s worth.

California Supreme Court majority opinion, T-Mobile West v. City and County of San Francisco, 4 April 2019.

First District, California Court of Appeal, T-Mobile West v. City and County of San Francisco, 15 September 2016.

CPUC orders Charter to prove its broadband upgrade claims

by Steve Blum • , , ,

Charter Communications was given ten days to deliver granular broadband deployment data to the California Public Utilities Commission yesterday. Administrative law judge Karl Bemesderfer granted a motion by the CPUC’s public advocate office (PAO) to force Charter to hand over information to support its claim that it is meeting the conditions imposed by the commission when its purchase of Time Warner and Bright House cable systems in California was approved in 2016.

Among other things, the commission required Charter to upgrade all of its Californian systems – new and old – to 300 Mbps download capability by the end of this year. The PAO hasn’t been able to verify compliance because the information it received “provided no explanation or supporting data to show how Charter identified or quantified the progress it claimed to have achieved”.

To fix that problem, the PAO

Requested census block level broadband deployment information similar to that provided by Charter to the Public Advocates Office during the proceeding [to approve the Time Warner/Bright House acquisition]…

And then made…

Additional requests for Charter to explain how it calculated the household percentages it provided in its December 2017 progress report letter, and to provide the data Charter used to perform the calculations.

Charter refused. So the PAO asked Bemesderfer to intervene. Despite Charter’s objection, yesterday’s ruling directs Charter to respond to the data requests “with substantive, complete, and accurate responses” by a week from Friday.

The details of the PAO’s data requests and Charter’s response are being treated as confidential. According to the commission’s 2016 decision, Charter must “offer broadband Internet service with speeds of at least 300 Mbps download” by 31 December 2019 to all of the broadband-capable homes in its new, expanded footprint.

I hope the PAO is asking for performance data as well as marketing data. It’s one thing to “offer” service, it’s quite another to deliver it.

FCC takes aim at city planners, HOAs, landlords with new wireless preemptions

by Steve Blum • , , ,

Wireless broadband hub

More federal preemptions of property ownership and local oversight of permits for wireless facilities are on the way. The Federal Communications Commission is scheduled to vote later this month on starting the process of rewriting its interpretation of federal law regarding home antennas.

The rule in question is inelegantly known as OTARD – over the air reception devices. The law behind the rules was originally intended to allow homeowners and renters to install small satellite dishes for, say, DirecTv or DISH. Over the years, it expanded to include other consumer gear such as broadcast TV and fixed wireless broadband antennas.

Now the FCC wants to turn the rule inside out, and make it apply to property occupied by mobile carriers and wireless broadband providers, and to equipment that’s not normally reckoned to be consumer devices. In other words, take a law and a rule that was written to allow consumers latitude to install (relatively) small antennas on their homes, and use it to give wireless companies a free pass to install anything they want within the one meter limit, anywhere they want, so long as they’re already own or, more commonly, are leasing the site.

The FCC’s draft notice of proposed rule making falsely spins the changes as correcting an earlier misinterpretation…

Should the Commission clarify that it will interpret “antenna user” to include fixed wireless service providers? For example, if a fixed wireless service provider leases space for a hub antenna on private property, should the Commission clarify that the service provider becomes the “antenna user” with respect to that property? Would doing so be necessary to ensure that fixed wireless providers are able to take advantage of an expanded OTARD rule?…Should the Commission revise this provision to delete the word “customer”? Is doing so necessary to ensure that the rule applies to hub and relay antennas?

The way it works now, if a homeowner wants to install a satellite, broadcast or broadband receiving antenna there’s no need to get a permit or ask permission from a city planning department or a homeowners association, so long as it’s no more than one meter across. Some regulations, such as electrical and safety codes and minimal concealment requirements might still apply, but the right to install a dish or other antenna is sacrosanct. The same privileges apply to a renter: a landlord might be able to dicker about placement, but can’t ban dishes or other types of antennas.

On the other hand, wireless companies generally need permits to install cell sites – small or large – and other network infrastructure on private property. It’s also common for leases to include specifications for what’s to be installed. That’s a particular concern when a wireless company leases space on top of a roof or at a mountaintop site which hosts many providers’ equipment.

Any new rules are still months away. Before anything is finalised, there will be ample opportunity to file comments. But on the evidence of two recent and contentious proceedings – net neutrality and preemption of public agency ownership of poles – the republican majority at the FCC has already made up its mind and is simply giving notice of its intent.

My clients are mostly California cities, as well as some private communities, all of whom are directly affected this case. I’m not a disinterested commentator. Take it for what it’s worth.

Apple TV’s so so content depends on ecosystem integration for success

by Steve Blum • , ,

Apple tv keynote aniston witherspoon 25mar2019

Apple unveiled a new subscription video service last week. If it were any other company except Apple making the announcement, there would have been a huge yawn from the market. The Apple TV service, at least what we know of it, isn’t significantly different from other over-the-top services. They’re borrowing business model bits from several different platforms and putting the pieces together a little differently and, but overall it looks very familiar.

Apple will have exclusive programming, as the big OTT players do, and that will help it position its video brand as it has for HBO and Netflix, but it’s just icing on the same cake as everyone else’s.

What makes it different is the Apple branding, and Apple’s ability to leverage its existing customer relationships and its hardware/software ecosystem. It’s a fair question whether that’s going to be enough to make it stand out in the TV business, but it’s a unique advantage and Apple is smart to use it like this. The future growth of the company will have to come from services. Apple’s hardware and software lines aren’t hurting, but the market is maturing and whatever growth comes its way will be incremental.

The move into video by Apple – and others – and is a lot like the early days of digital satellite TV in the mid–90s. There was some programming that was unique to particular platforms – such as DirecTv’s NFL package – but for the most part programming line-ups were identical. What distinguished them was 1. bundling – DISH, for example, focused on low-cost packages – and 2. distribution – DirecTv and U.S. Satellite Broadcasting (my company) were launched via RCA’s then-formidable consumer electronics retail channel.

Apple brings customer relationships and system (and revenue) integration to the table. Netflix, Roku, Hulu and the rest built subscriber bases, but do not play in the consumer technology space. The question is whether Apple’s advantages amount to a unique selling proposition that’s meaningful to consumers. If Apple TV creates the same kind of seamless user experience that iPhones and Macs deliver – seamless technically, operationally and transactionally – then it has a shot. If it can’t, it’ll be just another OTT service.

AT&T hides 4G digital divide behind 5GE facade

by Steve Blum • , , , ,

Opensignal att 5ge 22mar2019

AT&T’s 5GE scam is unravelling. Measurements taken by an independent testing company, OpenSignal, show that slapping a phony 5G label on upgraded 4G LTE service does not make the user experience any faster.

According to OpenSignal’s blog post

Some AT&T users in the U.S. have recently seen “5G E” appear on the status bar of their existing smartphones, replacing 4G. This move has sparked controversy because AT&T is using updated 4G network technologies to connect these smartphone users, not the new 5G standard…

Analyzing Opensignal’s data shows that AT&T users with 5G E-capable smartphones receive a better experience than AT&T users with less capable smartphone models…But AT&T users with a 5G E-capable smartphone receive similar speeds to users on other carriers with the same smartphone models that AT&T calls 5G E. The 5G E speeds which AT&T users experience are very much typical 4G speeds and not the step-change improvement which 5G promises.

If anything, AT&T’s attempt to jump the 5G gun seems about to backfire. The tests show that real 4G improvements have been made by AT&T, as well as Verizon and T-Mobile. Combining upgraded LTE infrastructure with current generation smartphones produces significantly faster download speeds. But instead of trying to capitalise on 4G success, AT&T is positioning itself as an evolved 5G failure.

To a large extent, AT&T’s future is built on expanding its portfolio of 4G systems. It’s using federal subsidies to build a 4G-based national public safety network and to deploy its 4G-based wireless local loop technology to replace rural copper networks. It will be building true 5G systems over the next five to ten years in urban markets where money and customers are thicker on the ground, but not in rural communities where 5G equipment will be relegated to an “infill” role, if it’s deployed at all.

Slapping a 5G label, with or without the microscopic E, on everything is an attempt – doomed, hopefully – by AT&T to disguise the growing divide between digital haves and have nots.