Julius Genachowski on Wednesday made yet another call for Congress to speedily allow incentive auctions to free up badly needed spectrum for the wireless industry.

But while the content in the FCC chairman’s speech was familiar, his vehicle for delivering it was different. He’s given many speeches reading from a tablet, as he did in Vegas, but this was the first time he had done so on an Android model — a Samsung Galaxy 8.9.

“I’ve only done them on the iPad,” Genachowski said. “On my smartphones I’ve tried to make it a practice to switch them up.”

So how was it?

“It was all good,” Genachowski said, showing off his remarks on the Galaxy tab. His trusty iPad was nearby, which he used to dash off a quick email before our interview. “It was a seamless experience.”

As for the content of his talk, Genachowski focused on several points that are near and dear to his heart — first, that Congress enable the auctions quickly, and second, that it leave the FCC the option of keeping some of the spectrum freed up for unlicensed purposes.

“It would be a very serious mistake to pass incentive legislation and prohibit the FCC from using some spectrum for unlicensed (uses),” he said, echoing comments he made on a Silicon Valley swing late last year.

Such uses, he said, allow innovation that could provide for even more efficient spectrum usage than limiting it only to licensed purposes.

“We may see innovations there that lead to more efficient use,” he said. “To me, it’s a no-brainer.”

Genachowski said that allowing those with unused spectrum to auction it off could allow for the recovery of 100MHz of very high quality spectrum near the 700MHz band used for today’s 4G services.

“The work doesn’t end with incentive auctions, but incentive auctions are a sure way to provide very significant relief to spectrum.”

MORE CES NEWS:

• Complete coverage
• HP’s Former CTO: Ultrabooks Are Nothing New, webOS Still Has Life Yet
• Walt Shows Off CES Gadgets for Fox Business News (Video)
• What Kind of Web Video Plans Does Sony Have? (Video)
• Fujitsu Seeking Way Into Crowded U.S. Smartphone Market
• Why Rhapsody Is (Probably) Bigger Than Spotify — In the U.S.
• Microsoft Beefing Up CeBit Presence Even as It Pulls Back on CES
• Inside the CES Lost & Found
• FCC Chairman Has New Tablet, but Same Script: More Spectrum!
• Verizon Wireless: We Want to Connect Five Devices for Every Subscriber
• Ultrabooks From HP and Lenovo That Are (Kinda, Sorta) Different
• Walt and Katie Take a Tour of CES (Video)
• Schmidt-Storm Alert: The Google Chairman Didn’t Like Your Question
• T-Mobile Expands Bobsled Messaging Service
• Intel Shows Just How It Plans to Get Into Phones (Video)
• Motorola CEO: We’re Going to Release Fewer Phones This Year
• Kinect Helps Keep Aging Xbox at the Top of Its Game
• More From T-Mobile CEO: On Pricing, LTE and That Ever-Elusive iPhone
• Exclusive: New Boss Acknowledges Windows Phone Still Has “Awareness Problem”
• And You Thought Jawbone UP Was Going to Miss the CES Party!
• Interview: T-Mobile CEO Says No Second AT&T Deal Out There
• Grover Is at CES and I Am Missing It
• BlueStacks Bringing Android Apps to Windows 8
• Why the Future of TV Won’t Be Here Soon
• Nvidia’s Tegra 3 Tries to Save Battery in All Sorts of Different Ways
• Dynamic Dual Coverage: Ballmer’s Last Act in Vegas and the BCS Championship in 3-D
• Microsoft Phoning In Its Last CES Keynote
• Myspace — Yes, Myspace — Says It’s Going to Sell You Web TV
• Samsung Unveils “Super” 55-Inch OLED TV
• Nokia Unveils That LTE Windows Phone It’s Been Dying to Share
• Steve Ballmer Gives Ralph De La Vega a Very … Vigorous Greeting (Video)
• Interview: AT&T’s De La Vega on LTE, Tablets and Life After T-Mobile
• AT&T’s De La Vega: Shared Data Plans Still in the Works
• LG: 55-Inch Glasses-Free 3-D Screen Is on the Way
• LG Pushes 4G Smartphone Through Verizon: The LG Spectrum
• Live: AT&T’s Vegas Act Stars LTE and, Making Her Return to the Stage, Nokia
• CES Notebook: The Constant Search for Power and Vegas’ Worst-kept Secret
• Belkin Bringing Mobile TV to Lots of Cellphones, Will Anyone Tune In?
• Acer Introduces “World’s Thinnest” Ultrabook and a “Me-Too” Cloud Service
• There Better Be Some Cool Stuff at CES, Because CE Holiday Sales Data Bytes!
• CES 2012: Snooki and Bieber Are In, Gaga Is Out!
• Coming to a Smartphone Near You: Gorilla Glass 2
• RIM Hopes Next PlayBook OS Will Impress at CES
• Ultrabooks, the Ultra-Fancy New Name for Laptops
• At CES, Expect More Gadgets Telling You to Get Off the Couch
• Intel to Detail Its Phone Plans at CES Next Month
• Microsoft Pulling Out of CES After Upcoming Show
• Intel to Detail Its Phone Plans at CES Next Month
• Dell Will Drop the Flashy Vegas Act for CES This Year
• Ultrabook Conga Line Preps for CES 2012

“Leave the FCC the flexibility to make sure there is efficient use of spectrum, including unlicensed spectrum, so that we can adjust to the needs of the future,” Genachowski told AllThingsD in an interview. Genachowski was in town for an event announcing winners of a contest to develop community apps that make use of government data.

The House of Representatives has passed a bill that would include something the chairman badly wants: incentive auctions that would free up badly needed spectrum for wireless broadband. However, the bill also includes a provision that would limit the agency’s authority to manage unlicensed spectrum bands, something Genachowski opposes.

At one point during the event, held at the offices of Andreessen Horowitz, I asked for the password to the venture firm’s guest network.

“That’s why we need Wi-Fi,” Genachowski said, a reference to the fact that Wi-Fi is possible only because the FCC has been able to preserve and make available unlicensed bands of spectrum.

In a follow-up interview, he talked about the need for such spectrum.

“It takes spectrum that doesn’t lend itself for the same use (as that licensed to carriers and others) and says ‘Let’s put it out there as a platform for innovaton,’ not knowing exactly what will happen,” Genachowski said. “When the FCC first did this, no one knew that it would lead to Wi-Fi.”

Unlicensed spectrum has been used, he said, to help meet the challenges of lots of groups, including those faced by the wireless carriers that have licensed spectrum, Genachowski said.

“Wi-Fi itself has gone from something that was resisted by the licensed carriers to something that is now embraced because it is such an important part of addressing demands on spectrum. Wi-Fi offload is a critical part of the system.”

In a statement Friday, AT&T said commissioners won’t be able to vote a proposal announced Tuesday from FCC Chairman Julius Genachowski that the $39 billion merger be sent before an administrative law judge. The carrier announced it had withdrawn its FCC application in the early hours of the Thanksgiving holiday in the U.S.

Read the rest of this post on the original site »

As reported in March around the time the merger was first proposed, T-Mobile, a division of Deutsche Telekom, stands to gain about $3 billion in break-up fees should the deal fail to close. AT&T would also give T-Mobile certain wireless spectrum that’s not needed for the rollout of its next-generation wireless network.

While AT&T has said it plans to fight the action in court, the sudden move by the Justice Department and the fact that the Federal Communications Commission — which would also have to sign off on the deal — has yet to weigh in on it, make it extremely unlikely that the merger will ever be consummated, says James Ratcliffe, a telecom analyst with Barclays Capital in a note to clients today. He points out that, historically, when they challenge mergers in court, the agencies tend to win about 60 percent of the time.

“We believe that the deal is by no means dead, as the DOJ has stated that the ‘door is open’ for AT&T to propose remedies, but the fact that the DOJ took this strong step this early in the process makes the probability of completion much lower,” he wrote. “We now view the probability of success at 35-40%, down from our previous 75% view.”

One of the primary arguments in the complaint (the original filing is embedded below via Scribd) focuses on government and enterprise customers. Where critics of the deal would charge that the only notable competitors to AT&T and T-Mobile are Sprint and Verizon Wireless, AT&T management would rebut that Leap and MetroPCS are also players. The DOJ complaint discounts that argument, especially with regard to business and government customers. Leap and MetroPCS are really regional players, the DOJ says, and so corporations and government agencies with many offices around the country can only realistically consider national carriers, the number of which would be reduced to three were the deal approved.

“T-Mobile makes its presence felt competing head to head with AT&T and other carriers for a number of accounts, winning business in some cases and often pushing prices lower when it does not,” the DOJ’s complaint reads. “The merger’s elimination of T-Mobile as an aggressive competitor would likely result in fewer choices and higher prices for enterprise and government customers.”

And while the DOJ has drawn its legal line in the sand, it’s not the only agency yet to be heard from. The Federal Communications Commission would also have to sign off on the deal for it to be approved. Its chairman, Julius Genachowski, issued a carefully worded statement that gives a strong hint that it will ultimately oppose the merger. “Competition is an essential component of the FCC’s statutory public interest analysis, and although our process is not complete, the record before this agency also raises serious concerns about the impact of the proposed transaction on competition,” Genachowski said.

In a conference call with reporters today, Harold Feld, the legal director of PublicKnowledge, a telecom advocacy group that has opposed the merger, speculated that the FCC will likely send the matter to an administrative law hearing, which he called “the kiss of death” for mergers. “By the time that procedure would be finished, T-Mobile would have taken its breakup fee and gone and built an entirely new network,” he said.

So on what legal basis might AT&T and T-Mobile fight the case? The DOJ is using some new market analysis techniques that haven’t been used in antitrust cases before, says Barclays’s Ratcliffe. “Traditionally, the DOJ has used regional impact analysis to study the impact of wireless mergers, and it does so here again,” he writes. “In addition, however, the DOJ is also viewing the market as being national, a comparatively new approach, which might be more open to challenge in the courts.”

AT&T CEO Randall Stephenson has promised to fight it, and continued to argue that the deal will bring real benefits to spectrum management nationwide, and create jobs. Deutsche Telekom said it will join the fight, too.

Justice-ATT-TMobile-Complaint

The deal with Industry Canada calls for the sharing of commercial spectrum in the 700 megahertz band as well as some spectrum in the 800 MHz band, while the deal with Mexico’s Secretariat of Communications and Transportation is focused solely on the 700 MHz band.

“These arrangements will unleash investment and benefit consumers near the borders by enabling the rollout of 4G wireless broadband service and advanced systems for critical public safety and emergency response communications,” FCC Chairman Julius Genachowski said in a statement.

“I have concluded that this acquisition, if permitted to proceed, would likely cause substantial harm to competition and consumers, would be contrary to antitrust law and not in the public interest, and therefore should be blocked by your agencies,” U.S. Sen. Herb Kohl (D., Wis.), said in a letter to Attorney General Eric Holder and FCC Chairman Julius Genachowski.

Sen. Kohl, who heads a Senate subcommittee that examines antitrust issues, held a hearing on the proposed merger in May. Executives for AT&T and T-Mobile appeared before the subcommittee and defended the deal as good for consumers.

Read the rest of this post on the original site »

FCC Chairman Julius Genachowski said Monday the agency would begin considering a proposal to “explore new ways to empower consumers and protect Americans against cramming and mystery fees.”

Cramming is a term used to describe a phone company’s inclusion of an unauthorized or misleading charge in monthly bills. FCC officials offered an example of a Saint Louis woman who was charged for long-distance service for more than two years even though she hadn’t signed up for it.

Read the rest of this post on the original site »

Unfortunately for Sprint, it’s not Dan Hesse. Rather, it is Renata Hesse, a veteran antitrust lawyer–and no relation to the Sprint CEO. Hesse is a former DOJ antitrust lawyer who worked on the government’s opposition to the Oracle-PeopleSoft deal, among other transactions. Hesse is currently a partner with Wilson, Sonsini, Goodrich and Rosati.

“Renata’s wealth of legal expertise and experience is a welcome addition to the review team and I am thrilled that she will soon be joining us,” FCC Chairman Julius Genachowski said in a statement. “Her leadership will help ensure that our review of this important transaction is fair, thorough and efficient.”

Both the FCC and Justice Department must sign off on the deal. Sprint, headed by the other Hesse, has vowed to fight the deal.

Meted out by France’s Commission nationale de l’informatique et des libertés, or CNIL, the sanction is the agency’s highest ever and the first penalty levied against Google for data collection practices that have drawn complaints from dozens of countries.

According to the CNIL, though Google pledged to erase all the private data it collected, it “has not refrained from using the data identifying Wi-Fi access points of individuals without their knowledge.” Worse, the company continues to collect data on Wi-Fi access points via smartphones accessing its Latitude service, without clearly disclosing that to Latitude users. And, as it has done in other countries, Google refused to grant access to software used to harvest and store the information or an interview with the “rogue engineer” it claims is responsible for the whole debacle.

Google, of course, continues to play the penitent. “As we have said before, we are profoundly sorry for having mistakenly collected payload data from unencrypted WiFi networks,” Google’s Global Privacy Counsel Peter Fleischer said in yet another variation of the same statement the company has been issuing for nearly a year now.

PREVIOUSLY

• Lawmakers Would Like a Word With Google’s “Rogue” WiSpy Engineer
• Connecticut Won’t Press for Google WiSpy Data, Looks to Settle
• Well, Hell, If I Knew All I Had to Do Was Seize the Hard Drives…
• Look, Sergey, a Christmas Card From the Connecticut AG! Wait…
• Google Street View Privacy Debacle Far From Over
• FTC Closes Google Street View Probe
• Google CEO Apologizes for Street View Schmidtstorm
• Google CEO’s Advice to the Street-View Shy: The Video
• Schmidt: Don’t Like Google Street View Photographing Your House? Then Move.
• Mr. Schmidt, There’s an Inspector Lestrade on Line One
• State AGs to Probe Google’s “Deeply Disturbing Invasion” of Wi-Fi Data
• No Harm, Big Foul: Google Intercepted Passwords and Email Extracts
• Germany Questions Google’s Data “Mistake”
• Google Street View Cars Collected Wi-Fi User Data for Three Years

Republicans are targeting the “net neutrality” rules, which would bar Internet providers from blocking or slowing Internet traffic and services, as well as new regulations in such areas as health care and the environment, as unnecessary and overly burdensome on industry.

“Why would you put the government in charge of the Internet?” asked Rep. Fred Upton (R., Mich.), who chairs the House Energy and Commerce Committee.

FCC Chairman Julius Genachowski, a Democrat, defended the new rules during the hearing, saying the FCC “did the right thing” and that it is “pro-job and pro-investment” for the U.S. economy.

Read the rest of this post on the original site

“Google has played an enormous role in advancing the Internet as we know it today, but Americans have a right to know the relative facts of its Wi-Fi data collection activity known to U.S. consumers, regardless of whether the FCC finds a technical violation of the law,” the letter reads, noting that a handful of probes by state attorneys general has yet to yield access to the consumer data Google harvested or an interview with the “rogue engineer” the company claims is responsible for collecting and storing it.

“Nine months after Google first admitted to collecting this data, we still don’t have answers as to how this privacy breach was allowed to take place and how many Americans were affected, let alone a credible assurance that it will not happen again,” it continues. “The lack of progress in this investigation is concerning, particularly in light of the progress made by authorities in other countries.”

And that’s a valid, and troubling, point. South Korea recently analyzed the harvested consumer data; why can’t the United States do the same? And how is it possible that the FTC concluded its investigation into this matter without talking to that rogue engineer?

“A serious inquiry into this matter requires a hearing from the engineer that Google claims is responsible for the data collecting activity. Google’s Street View Vehicles captured and stored over 600 gigabytes of data. It is difficult to understand how just one individual could have been responsible for a data collection operation of this scale.”

PREVIOUSLY

• Connecticut Won’t Press for Google WiSpy Data, Looks to Settle
• Well, Hell, If I Knew All I Had to Do Was Seize the Hard Drives…
• Look, Sergey, a Christmas Card From the Connecticut AG! Wait…
• Google Street View Privacy Debacle Far From Over
• FTC Closes Google Street View Probe
• Google CEO Apologizes for Street View Schmidtstorm
• Google CEO’s Advice to the Street-View Shy: The Video
• Schmidt: Don’t Like Google Street View Photographing Your House? Then Move.
• Mr. Schmidt, There’s an Inspector Lestrade on Line One
• State AGs to Probe Google’s “Deeply Disturbing Invasion” of Wi-Fi Data
• No Harm, Big Foul: Google Intercepted Passwords and Email Extracts
• Germany Questions Google’s Data “Mistake”
• Google Street View Cars Collected Wi-Fi User Data for Three Years

After reminding the nation that “South Korean homes now have greater Internet access than we do,” he went on to call for a national wireless broadband network.

Within the next five years, we’ll make it possible for businesses to deploy the next generation of high-speed wireless coverage to 98 percent of all Americans. This isn’t just about–(applause)–this isn’t about faster Internet or fewer dropped calls. It’s about connecting every part of America to the digital age. It’s about a rural community in Iowa or Alabama where farmers and small business owners will be able to sell their products all over the world. It’s about a firefighter who can download the design of a burning building onto a handheld device; a student who can take classes with a digital textbook; or a patient who can have face-to-face video chats with her doctor.

It’s the latest attempt by Obama to try to solve the difficult problem of broadband penetration in America. In many places, most of them rural areas with low population density, cable and telco companies can’t make back the investments required to build out network infrastructure, and so they don’t build at all. As I’ve said here before, for Americans in those places, the options for participating in the digital culture the rest of us take for granted are few, and it often means the difference between participating and not in so much of the daily discourse that occurs online.

Part of the answer lies in taking back some radio spectrum that’s used for other things. In June, Obama signed a memorandum calling for the freeing up of certain radio frequency spectrum in the 500 MHz range. This is a block of spectrum largely owned by TV broadcasters for free over-the-air TV transmission. Broadcasters have been under pressure–and so far they are resisting–to voluntarily give those licenses up so that the spectrum can be re-auctioned off.

Julius Genachowski, chairman of the Federal Communications Commission, essentially telegraphed that this is going to be the commission’s major policy priority in comments at the Consumer Electronics Show in Las Vegas earlier this month. He has said he’d like to offer broadcasters incentives to give up their spectrum, but this would require a new law passed by Congress, and those in Congress have their own ideas about how this should be done. You can expect a lot of debate about this in Washington this year, but probably not a lot of progress.

In a 4-1 vote–Commissioner Michael Copps dissented–the FCC is allowing the deal to go through, but with some conditions, most of them relating to the online video business. One key requirement that’s not happening: Comcast isn’t being required to divest itself of its equity in the Web video site Hulu, which a few lawmakers had called for. It will however be required to give up its role in managing Hulu. NBC U jointly owns it with the Walt Disney Co. and News Corp. (which also owns this Web site).

In a statement, FCC Chairman Julius Genachowski said the conditions imposed “include carefully considered steps to ensure that competition drives innovation in the emerging online video marketplace.”

Among those conditions, the FCC will also require Comcast to offer Web versions of its TV shows to what it calls “bona fide online distributors” under the same terms it offers them to cable and satellite providers. This would indicate that shows appearing on Hulu will probably end up on Apple TV or YouTube or elsewhere, meaning, as MediaMemo’s Peter Kafka suggested last month that Hulu’s exclusive rights to NBC content are over.

Comcast will also be required to offer broadband to some 2.5 million low-income households for less than $10 a month, and will be required to extend its network to reach 400,000 homes, build out service in six rural communities and provide free video and high-speed Internet access to 600 schools and libraries in underserved areas. This will allow Genachowski to claim some kind of victory on one of the Obama administration’s signature technology policy issues, which is spreading the availability of broadband.

In a dissenting statement, Copps called the merger “a transaction like no other that has come before this commission–ever,” and said “It confers too much power in one company’s hands.”

Harold Feld, legal director at Public Knowledge, a Washington, D.C.-based public interested group, said the organization was largely satisfied with the conditions except for one. It would have liked to see Comcast required to sell broadband service on a wholesale basis. “As longtime supporters of wholesale access, we believe such a condition would go a long way to help consumers by increasing broadband competition,” he said.

So what does that mean for Hulu, which has already locked up exclusive rights to NBC’s Web video?

A couple of possible answers: Perhaps Federal Communications Commission head Julius Genachowski is trying to put a fork in Hulu. Or maybe the conditions he wants to place on the merger are so toothless that they don’t really count as conditions at all.

Background: Each of Hulu’s three partners/owners–GE’s NBC, News Corp.’s Fox and Disney’s ABC–has agreed to mutual exclusivity pacts. If you want to watch one of their shows for free online, you can see them on the networks’ own sites, or via Hulu–either on the main site itself, or via other sites that are taking Hulu’s feed. (News Corp. also owns this Web site.)

But one of the primary conditions Genachowski wants to place on FCC approval for the Comcast-NBC deal is that Web competitors will get access to NBC’s shows, according to the New York Times and The Wall Street Journal. Here’s the WSJ:

Comcast would be required to offer NBC Universal programming to any online video provider that has reached a similar deal for content with some of NBC’s competitors, such as Walt Disney Co. or Fox Television, a division of News Corp.

That’s a bit vague, so we won’t really know what Genachowski intends until he goes public with his proposed rules. But there are basically two ways to interpret what the Journal is reporting here. Either:

• The FCC wants to make sure that NBC doesn’t prevent Hulu from syndicating its content out to third-party sites, as it’s already doing with Yahoo, AOL and…Comcast. If that’s all Genachowski wants, that’s no big deal, and not really  a restriction at all. Because Hulu’s business plan is predicated on wide distribution. Or….
• The FCC is telling NBC that it has to offer its shows directly to other Web sites. That’s potentially devastating news for Hulu. If, say, Yahoo can license “The Office” directly from NBC, it may not want to bother cutting a deal with the joint venture site. And to be clear: The overwhelming majority of Hulu’s traffic comes from people watching shows from its big three partners.

So which is it? The FCC held a farcical press conference yesterday where it wouldn’t answer any specific questions about the deal. But it would be nice if it could clear this one up soon.

Now we have a full text of the actual rules, weighing in at a voluminous 194 heavily footnoted pages, which just became public on the FCC’s Web site. As with some of the other documents relating to this, I’ve uploaded this one to Scribd and embedded it below. This is the document that corporate lawyers, lawmakers and other policy wonks at think tanks and trade associations will be combing through in the coming weeks and months in hopes of either watering down or strengthening the rules, depending on your point of view. Others will be looking through this text for provisions they can challenge in court. And congressional Republicans have already promised to hold hearings next year and will probably try to find a way to legislate these rules out of existence.

FCC-10-201A1

If you’ve been following the issue, nearly nothing about the arguments will be new to you, but as I watched the meeting live today, I was struck by the thoroughness of the arguments both in favor of and against the rules, in particular the polar opposition in the views of Chairman Julius Genachowski and the lengthy, detailed dissent by Republican Commissioner Robert McDowell. With a little help from Scribd and YouTube I’ve embedded some samples of the day’s proceedings below.

First is the prepared statement by Genachowski.

Net Neutrality, Genachowski statement

And here’s the spirited dissent by Commissioner Robert McDowell.

Net Neutrality, McDowell Dissent

Finally, if you you’d rather just watch the proceedings for yourself, here’s a the two-hour-plus session in its entirety. The net neutrality stuff begins at about the 30-minute mark, following other business. The statements by the various commissioners begin at the following time marks:
Copps: ~49 minutes
McDowell: ~1:09
Clyburn: ~1:35
Atwell Baker: ~1:42
Genachowski: ~2:02

The reactions are all over the map, and no one is exactly happy. I’ve collected a few of the reaction statements below.

President Obama:

“This decision is an important component of our overall strategy to advance American innovation, economic growth, and job creation. As a candidate for President, I pledged to preserve the freedom and openness that have allowed the Internet to become a transformative and powerful platform for speech and expression. That’s a pledge I’ll continue to keep as President. As technology and the market continue to evolve at a rapid pace, my Administration will remain vigilant and see to it that innovation is allowed to flourish, that consumers are protected from abuse, and that the democratic spirit of the Internet remains intact.”

Rep. Fred Upton, R-Michigan, incoming Chairman of the House Energy and Commerce Committee

“The FCC’s hostile actions toward innovation, investment and job creation cannot be allowed to stand. We must use every resource available, including the Congressional Review Act, to strike down the FCC’s brazen effort to regulate the Internet. … Despite FCC claims that these are just rules of the road that everyone agrees with, anyone can recognize that what the Commission claims to be statements of broad industry support are really cries of ‘uncle’ resulting from threats of even more onerous regulation.”

Rep. Greg Walden, R-Oregon, incoming Chairman of the Subcommittee on Communications and Technology

“More troubling than the substance of the network neutrality rules are the legal theories underpinning them. If left unchallenged, this power grab will allow the Commission to regulate any interstate wired or wireless communication on barely more than a whim. For all these reasons, we plan to look at all legislative options for reversing the decision. We also plan to hold a series of hearings early next year on the substance, process and claims of authority underlying this proceeding.”

Sen. John Kerry, D-Massachusetts

“The FCC’s Democratic Commissioners should be applauded for reaching a consensus on rules that will protect network neutrality on the Internet. As Commissioner Copps, a lifelong champion of open communications and democratic discourse, said in his statement today, vigilant and vigorous implementation of the rule is critical to its success.”

Dish Network CEO Charlie Ergen

“DISH Network applauds Chairman Genachowski and Commissioners Copps and Clyburn for adopting critically important net neutrality rules. The Commission’s Order is a solid framework for protecting the open Internet. The new rules give companies, including DISH Network, the framework to invest capital and manpower in Internet-related technologies without fear that our investment will be undermined by carriers’ discriminatory practices. While we wish the Commission would have gone further to expressly prohibit discrimination on wireless platforms, we are pleased that there will be ongoing Commission oversight and enforcement authority.”

Kyle McSlarrow, President and CEO, National Cable and Telecommunications Association

“Our consistent view has been that the current ‘openness’ of the broadband marketplace can be preserved while simultaneously fostering the innovation and massive private investment needed to ensure the future growth and vitality of the Internet. While we agree entirely with Commissioners McDowell and Baker that new regulation is not necessary to accomplish that goal, it has been clear for some time that there were three votes at the Commission for rules that would go much farther than those adopted today. Thus, the question before us has been whether rules could be drafted in a manner that avoids a raft of unintended consequences and that preserves broadband providers’ ability to innovate and invest in a marketplace that justly represents a great American success story.”

J. Scott Holladay, Economics Fellow, Institute for Policy Integrity

“Today, the FCC voted on a batch of tepid new rules. Some net neutrality protection will be provided, but the exclusion for wireless will create barriers to new start-up content providers and chill content innovation over wireless Internet.”

“The new but not-yet-properly-defined ‘managed service’ exemption may amount to the first step down a slippery slope of non-neutral Internet service. The exemption should be carefully tailored to address only a small number of special categories of applications that cannot operate under the existing open framework.”

“The FCC rests these decisions on shaky legal ground. Rather than invoke its more robust regulating powers, FCC bases the new rule on legal authority that was called into serious doubt by court decision earlier this year making the long term prospects for the rule quite poor.”

The Writers Guild of America, East

“A compromise means the parties to a dispute reach agreement. Here, no one has agreed to anything. These tepid rules will be challenged in court and in Congress, and they fail in the most fundamental ways – permitting paid prioritization and all manner of discrimination in wireless. Our members write most of what people watch on television and in the movie theaters and increasingly, online. Today’s FCC vote will diminish our members’ ability to create and distribute innovative content and audiences’ ability to watch the content of their choice.”

Even those who are voting in favor are doing so holding their noses. Of the five voting members of the commission, only one, Democrat Michael Copps, had been considered remotely likely to vote with the two Republicans who had pledged to vote against it. When he announced he would vote in favor yesterday he said he was doing so with reservations.

Republicans, both on the commission and in Congress, sense an opportunity, the size of which you can discern by the size of the headlines topping the Drudge Report during the last few days. Genachowski is being portrayed in 80-point type as the villain “Julius Seizure” out to ruin the freewheeling Internet by shackling it with a list of bureaucratic rules and regulations. The irony is that the current proposal on the table is a dramatic step back from a far more ominous one: Immediately after losing a court case brought by the cable company Comcast over the extent of its legal authority to regulate the Internet, Genachowski considered reclassifying the Internet under the FCC’s Title II authority, which governs regulation of the phone system. This was an extreme response, thankfully abandoned, that would have certainly warranted the nickname. The current proposal is by no stretch of argument so extreme that it amounts to a seizure.

But rules they are, and no one likes new rules where none existed before, least of all multibillion dollar corporations like Comcast and Verizon. Having established in the courts that they have the right to control the use of certain applications that impact the performance of their network–or, more precisely, the fact that the FCC has no legal authority to tell them not to exercise such control–they’re now going to be required to disclose how and why they exercise such controls.

The rules allow for “reasonable network management” by service providers, which is a squishy phrase. Internet companies like Amazon and Skype, which aren’t service providers themselves, argue that the new rules are weak and don’t protect them from service providers that may “reasonably manage” their products and services out of existence. Get your stopwatches ready, because there will almost certainly be several lawsuits over what constitutes “reasonable network management.”

The scenario is easy to imagine: Embittered broadband customers band together in a class-action lawsuit complaining that their provider refuses to allow them to experience the latest video streaming or video chat application. They argue that the provider favors another inferior application that it happens to own. The provider argues that it’s only engaging in “reasonable network management” allowed under FCC rules, leaving judges to tease out what that means. Lawyers are probably already shining up their Ferragamos as they polish their legal briefs.

These cases are already appearing. Comcast and Level 3 Communications are sparring over the terms under which Comcast conveys to its customers video streaming traffic sent by Level 3 associated with its relationship with Netflix. Level 3 has turned to the FCC and the U.S. Department of Justice at a delicate time for Comcast: It wants federal approval for its takeover of NBC Universal, and wants it now.

The FCC’s new rules, rightly or wrongly, make Comcast and companies like it more vulnerable to similar threats by regulators in response to actions taken in their own reasonable self-interest. Until today, this sort of dispute between companies would normally be worked out by negotiators in private, not regulators on the public dime. No matter whose side you tend to favor, the prospect of government gumming up the work with endless busywork isn’t a happy side effect.

The rules themselves may also be challenged. There’s still a huge question–as FCC commissioners Meredith Atwell Baker and Robert McDowell have both argued in recent newspaper op-eds (one in yesterday’s Wall Street Journal, the other in today’s Washington Post)– about the FCC’s legal authority over the Internet. House Republicans are already making noise about jumping into the policy fray, and another court challenge is probably likely.

The one overarching mission concerning the Internet that the FCC can undertake with some measure of agreement is that of widening the availability of the network to places it doesn’t adequately reach and to people who don’t have broadband access for economic or other reasons. In an age where so much of daily public business–from applying for a job to becoming an informed voter in the presidential election–all but requires a broadband link, far too many remote and rural areas are the victim of market forces where the investment to build infrastructure in sparsely populated areas outweighs the potential for a reasonable return.

Genachowski has argued that by adapting the Universal Service Fund (which helped the telephone network penetrate these same underserved areas) for broadband, providers could get this otherwise impossible job accomplished. Extending broadband availability was one of President Obama’s campaign promises, but the $7.8 billion in federal stimulus funds awarded under the auspices of the National Telecommunications and Infrastructure Administration and the Department of Agriculture’s Rural Utilities Service have not and will not make a significant dent in the problem.

Why not focus on what is clearly the more important problem and without question in the national interest, and leave the finer points of how service providers and Web companies carry content to sort themselves out? Like it or not, a new, more legally complicated Internet is here.

Democratic Commissioner Mignon Clyburn said in a separate statement that she plans to vote in favor of the rules, while Republicans Robert McDowell and Meredith Attwell Baker have both promised to vote against them.

Copps’s statement is below.

“These past three weeks have been devoted on my part to intensive discussions about ensuring the continued openness of the Internet and putting consumers, not Big Phone and Big Cable, in maximum control of their online experiences. I have been fighting for nearly a decade to make sure the Internet doesn’t travel down the same road of special interest consolidation and gate-keeper control that other media and telecommunications industries–radio, television, film and cable–have traveled. What an historic tragedy it would be to let that fate befall the dynamism of the Internet. The item we will vote on tomorrow is not the one I would have crafted. But I believe we have been able to make the current iteration better than what was originally circulated. If vigilantly and vigorously implemented by the Commission — and if upheld by the courts–it could represent an important milestone in the ongoing struggle to safeguard the awesome opportunity-creating power of the open Internet. While I cannot vote wholeheartedly to approve the item, I will not block it by voting against it. I instead plan to concur so that we may move forward. I do thank the Chairman for his engagement, and I owe a special debt of gratitude to Commissioner Mignon Clyburn for her thoughtful and creative work to improve this item.”

Reactions are quickly coming from net neutrality advocates. First out of the gate is FreePress, a nonpartisan advocacy group. Its Managing Director Craig Aaron isn’t happy.

“We are deeply disappointed that this Commission appears to be moving forward with deeply flawed rules that don’t live up to the promises of the president or the FCC chairman to protect the free and open Internet. These rules appear to be flush with giant loopholes, and the FCC chairman seems far more concerned with winning the endorsement of AT&T and the cable lobbyists than with listening to the millions of Americans who have pleaded with him to fix his proposal. This short-sighted decision is all too familiar to those who have watched the Obama administration and its appointees squander the opportunity for real change in favor of industry-written compromises that reward the biggest players from Wall Street to health care and now the Internet. There is overwhelming public support for real Net Neutrality, and this setback won’t stop those fighting to save the Internet.”

Next up is Gigi Sohn, president of Public Knowledge–another advocacy group:

The actions by the Federal Communications Commission fall far short of what they could have been. Instead of a rule that would protect everyone, from consumers to applications developers from predatory practices of telephone and cable companies, the Commission settled for much less. Instead of strong, firm rules providing clear protections, the Commission created a vague and shifting landscape open to interpretation. Consumers deserved better. The FCC should have fought for consumers, not put the burden on them to fight for their rights.

There are of course a lot of moving pieces surrounding this debate, and however the chips fall, it’s going to have a long-term effect over how the Internet operates over the next several years.

Earlier this year, FCC Chairman Julius Genachowski was dealt an important setback when the U.S. Court of Appeals ruled that the FCC doesn’t have the legal authority to impose net neutrality rules on broadband providers. In hopes of still finding a way to rein in the providers, he’s since circulated new proposed rules that would require providers to disclose what kind of traffic they intend to throttle and why, giving consumers a little more information so they can make a more informed choice when picking a provider. And in a speech on Dec. 1, Genachowski also expressed support for “usage-based pricing,” which would essentially allow providers to charge variable pricing plans where consumers would pay higher fees for using higher amounts of bandwidth.

Certain Internet companies that aren’t providers, but who rely on having unfettered pipes through which they can deliver their services, aren’t happy with the proposed rules either. Companies like Amazon, Skype and Netflix, want stronger rules that would prevent the providers from slowing down traffic from their sites or blocking them altogether. They’ve even pushed the FCC to reconsider regulating the Internet outright as a telecommunications service, as it does the telephone system today, an idea that Genachowski briefly considered, then abandoned.

No surprise, they’ve been lobbying the FCC heavily, as have the telecom providers. According to Capital Business, a Washington Post publication, 150 organizations have hired 118 lobbying firms to try to influence the outcome of tomorrow’s vote.

The pressure isn’t stopping there. Republican commissioner Robert McDowell has pledged to vote against the rules, saying, as he did in a Wall Street Journal op-ed today, that imposing regulations would threaten everything that makes the Internet a source of innovation. Commissioner Meredith Baker Attwell, also a Republican, has attacked the proposal and similarly pledged to vote against it, arguing that only Congress, not the FCC, has the authority to regulate the Internet.

Congressional Republicans, with their heads full of steam after their November electoral wins, are rushing into the fray. Michigan’s Republican Representative Fred Upton, who will chair the House Energy and Commerce Committee when the new Congress comes into session early next year, wrote Genachowski and called his proposal “the most controversial item the FCC has had before it in a decade.”

Meanwhile, Congressional Democrats are pressing fellow Democrat Michael Copps to vote for Genachowski’s rules, fearing that a vote against them would hurt President Obama politically, as Sara Jerome wrote in Hillicon Valley. In the end, he is expected to fall in line and vote in favor.

Perhaps a harbinger of things to come is the spat between Level 3 Communications and Comcast. Level 3, which operates much of North America’s fiber-optic network, last month accused Comcast of “trying to set up a toll booth” by charging Level 3 recurring fees whenever a Comcast subscriber streamed content that got delivered by Level 3. This happened right after Level 3 cut a deal to become the primary delivery network for Netflix.

The dispute has reached sufficient intensity for Level 3 to ask federal regulators to impose conditions on Comcast in its efforts to acquire NBC Universal, arguing that Comcast’s demand for the fees “adversely changes the nature of the Internet.” The FCC may yet get serious about reviewing the merger, as Politico reported last week.

Comcast for its part has argued that Level 3 is gaming network peering rules, and has “demanded unlimited capacity at our cost.”

Whatever the outcome of tomorrow’s vote, expect lots of unhappy people.

Here are a few highlights:

• Half of all U.S. residential broadband connections fall below the minimum speed established by the Federal Communications Commission of four megabits per second down and one megabit up. That definition of what constitutes “broadband” is however all of six months old.
• The median download speed was three megabits per second and 595 kilobits up, and these have only improved a little bit since the 2009 survey. At the rate the U.S. is going it will take 60 years to catch up with South Korea, where broadband network speeds are legendary, averaging 34 megabits per second.
• Only one percent of broadband connections in the U.S. run at 50 megabits per second down and 20 up, meeting the FCC’s goal for the year 2015.

The report points out a few other findings from the FCC’s research: As many as 100 million people–roughly one in three–don’t have access to broadband at home, and of those, 24 million can’t get it if they want it, usually because they live on the wrong side of a seemingly arbitrary line on some map. Others say it’s too expensive or that they simply don’t know how to use it.

The 68-page report (PDF) goes on to break down the broadband situation in each state and a few U.S. territories.

The CWA released the report at a press conference in Washington, D.C., today, and FCC Chairman Julius Genachowski was on hand to lend his support and talk about his plans to reform the Universal Service Fund so that besides funding telephone service in rural areas, which was the reason it was created, it can be used to help fund broadband deployments in markets where service is limited for one reason or another. He also talked about getting some of the hurdles out of the way of private companies, so that when they choose to build infrastructure they can move fast. Simply cutting red tape can reduce the deployment costs by 40 percent.

Below is a grab of the CWA’s speed map of the U.S. (Click on it to zoom in.)



Update: And here’s a video of today’s press conference at the National Press Club. Genachowski is the second speaker.

]]> http://allthingsd.com/20101215/if-speed-matters-why-is-american-broadband-so-slow/feed/ 5 http://allthingsd.com/20101201/no-one-seems-happy-with-fcc-chairmans-speech-except-broadband-investors/ http://allthingsd.com/20101201/no-one-seems-happy-with-fcc-chairmans-speech-except-broadband-investors/#comments Wed, 01 Dec 2010 20:52:29 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=33

Everyone has something to say about today’s speech by FCC Chairman Julius Genachowski on the subject of net neutrality (video below). Having been blocked in the courts from imposing sanctions on Comcast for throttling users of BitTorrent, the commission has been spinning its wheels trying to find a way to nudge the broadband industry in a direction toward treating all Internet content fairly.

To Genachowski and network neutrality proponents, a bit is a bit is a bit, and your broadband service provider should have nothing to say in blocking you from using the services and applications that you choose and saying what you want to say so long as you’re not breaking any laws.

It makes sense until you hear rebuttals from the providers who spend billions to build the networks, arguing that they should have some right to protect their networks from cases where the heaviest users–video-downloading BitTorrent users are the classic example–can degrade the experience of other users. Think of it as “My network, my rules.”

Without the legal authority to force net neutrality on the providers, Genachowski has circulated draft rules that would instead require them to disclose what they intend to throttle and why, so that consumers can more intelligently choose whom they’re going to do business with. If there are going to be rules, put them on a sign where all can see them before walking in the door, he’s saying here.

Gone is the talk of reclassifying broadband, which some had described as a sort of “nuclear option” that would potentially give the FCC the authority to force net neutrality on the carriers, and would have probably led to more pointless, expensive lawsuits.

The big shift came when Genachowski said he’d be open to “business innovation to promote network investment and efficient use of networks, including measures to match price to cost such as usage-based pricing.”

That means broadband providers can start creating variable price plans under which consumers will pay more for using more.

Oh, and the wireless Internet? It’s too early in its lifetime to impose any rules on it. The FCC, he said, “would closely monitor the development of the mobile broadband market and be prepared to step in to further address anti-competitive or anti-consumer conduct as appropriate.”

The reactions have been predictable:

It’s “not perfect,” but it’s reasonable, says Kyle McSlarrow, president of the National Cable & Telecommunications Association. If the order changes materially, however, the group reserves the right to fight it.

It’s a step in the right direction but needs to be “strengthened,” says Gigi Sohn of Public Knowledge, a Washington, D.C., public interest group.

Tyrone Brown of the Media Access Project says he is “very disappointed.” By taking the reclassification option off the table, the FCC loses a key piece of the legal authority it would otherwise need to require service providers to extend broadband service to people who don’t currently have access, which has been a key objective of the Obama administration.

Josh Silver, president of FreePress, another policy organization that advocates for net neutrality, called it “fake Net Neutrality” and said that “Genachowski is taking the same exact approach to splitting the open Internet into fast and slow lanes that Verizon and Google proposed last summer.”

Republican FCC Commissioners Robert McDowell and Meredith Attwell Baker essentially promised to vote against the proposal when it comes before the commission on Dec. 21. Only Congress, Baker said, should decide if the Internet is to be regulated. Unlikely with the GOP taking control of the House in less than a month. “We don’t have authority to act,” he said.

After all that: Comcast stock is up 4 percent today; Verizon shares up one percent; Time-Warner shares are up more than two percent; Cablevision shares are up about 1.5 percent. This news will be a boon to broadband providers, says Sanford Bernstein analyst Craig Moffett in a research note issued today.

Usage-based broadband plans are probably soon to follow, which would be good for business because consumers would probably embrace them. One question for all the critics: Would that be so bad?

Here’s the video of the speech:

]]> http://allthingsd.com/20101201/no-one-seems-happy-with-fcc-chairmans-speech-except-broadband-investors/feed/ 4 http://allthingsd.com/20101101/verizon-and-the-grift-that-keeps-on-giving/ http://allthingsd.com/20101101/verizon-and-the-grift-that-keeps-on-giving/#comments Mon, 01 Nov 2010 17:10:18 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=51730 A new record for Verizon. In early October the company’s wireless division claimed title to the largest consumer telecommunications refund in history, saying it would pay $52.8 million to some 15 million subscribers who were charged for data usage, though they weren’t on data usage plans. Now, thanks to the Federal Communications Commission, it can claim another. The agency last week slapped the company with a $25 million fine, the largest in its history.

“I am pleased that Verizon Wireless is now taking the appropriate steps to repay 15 million consumers more than $52 million dollars,” FCC chairman Julius Genachowski said in a statement. “Their $25 million payment to the U.S. Treasury–the largest in FCC history–is an important recognition of the harmful impact on consumers.”

]]> http://allthingsd.com/20101101/verizon-and-the-grift-that-keeps-on-giving/feed/ 0