July 2008

Connected Nation's Private Interests Hit In FCC Comments

[Commentary] The Federal Communications Commission's rulemaking on collecting broadband data has brought some of the critics of Connect Kentucky/Connected Nation to the fore, while challenging the semi-sacred status of the "public-private partnership." In recent comments filed with the FCC, the arguments on who should map broadband deployment fall into two categories. On one side is Connected Nation and its allies -- telephone companies, cable companies and labor. On the other is the public agencies and publicly-owned utilities which are wary of too much of the "private" side taking over the equation. The Kentucky Public Service Commission (PSC) and the American Public Power Association (APPA), led by their Kentucky members, are in the forefront. As those Connected Nation opponents point out, the problem with public-private partnerships is that it's sometimes hard to tell where the private interests are. Connected Nation argues that the FCC shouldn't screw up all the "progress" that "public-private partnerships" have made in collecting information. That data would be much better than any collected by the FCC. The FCC should be a repository for data that others, these public-private partnerships (presumably like Connect), collect. But for the first time in a public record, Connect's critics are making the case that despite the near-universal official praise, the program has serious flaws, both in the structure of the "partnership" and in methodology.

What if you could own your own Internet connection?

That's a very different model where residential, businesses, or other institutions would pay for the installation and maintenance of their own "last mile" link to the Internet, thus improving broadband reliability and choice. Although the idea may seem far fetched, in Ottawa, Canada, a trial experiment is already underway trying out the consumer-owned model for a downtown neighborhood of about 400 homes. Bill St. Arnaud, Chief Research Officer at CANARIE spearheading the Ottawa trial says: "If broadband services like telephony and broadcast TV are going to be free, the challenge then is to find a way to build out and pay for the infrastructure. This is why we believe user owned and controlled optical last mile networks are important." The main challenges with this model are economic, rather than technical. Most importantly, ownership has to be made appealing and affordable to consumers. The construction company is using conservative estimates that only 10% of homeowners will sign up and there will be a per-customer cost of $2700. If you assume 50% take-up, then the per-customer cost drops to $1100. Both figures might seem like a lot, but people pay for a variety of improvements to their home -- like remodeled kitchens, or a deck -- that also cost large sums.

State Broadband Policy Survey

CostQuest Associates, a national telecommunications cost consulting and software firm, released the results of a 50 state survey it conducted in order to better understand the landscape of state policies developed to expand high-speed Internet availability. The survey shows that although most states have undertaken broadband initiatives, there is neither a single national model nor a consensus on best practices. CostQuest Associates conducted its survey to identify and track efforts in each of the 50 states to achieve broadband ubiquity. Among the key findings, CostQuest learned that at least 39 of the 50 states have some form of broadband initiative in place, either through legislation or through a more informal effort to increase broadband access. However, only 10 of the 50 states have undertaken
a definitive broadband mapping effort.

Embarq provides more details on Web tracking test

In a new report to Congress, Embarq is revealing more about its program that tracked Internet subscribers' Web-surfing habits for advertising purposes. The company performed the test on 26,000 customers in Gardner (KS) because it was Embarq's smallest market and near qualified technicians. The company included a notice about potential uses of customer Internet history for advertising on an obscure part of its Web site; 15 people asked not to participate. The company claims that the test didn't generate or use any information that would personally identify a specific customer. Embarq apparently doesn't plan to test the program again or expand its use throughout its markets in 18 states "until such time as privacy concerns have been addressed." Rep Edward Markey (D-MA), chairman of the Subcommittee on Telecommunications and the Internet, is glad Embarq had provided more information. However, he added, "I am still troubled by the company's failure to directly inform their consumers of the consumer data gathering test and the notion that an 'opt-out' option is a sufficient standard for such sweeping data gathering."

Every Major Senate Democratic Challenger Announces Support for Network Neutrality

[Commentary] Apparently, every single Democratic Senate challenger with more than $500k in cash on hand has announced their support for Network Neutrality. No organized telecom or cable money going to any of these candidates, with the exception of Al Franken (MN), Mark Warner (VA), and Mark Udall (CO). Franken and Warner both had careers with cable or telecom companies, so they have friends in those industries, and Udall is a sitting House member.

Comcast P2P Critic Launches Class-Action Bid

Comcast faces a federal class-action lawsuit, led by an outspoken critic of the operator's peer-to-peer management practices, alleging the company cheated customers by surreptitiously "blocking" Internet file transfers. The lead plaintiff in the suit, Oregon resident Robb Topolski, has regularly spoken out against Comcast's efforts to curtail P2P traffic, including at a Federal Communications Commission hearing on providers' bandwidth-management practices. The suit asserts Comcast violated unfair trade practices and consumer-protection laws by misrepresenting its broadband service as "unfettered" and that it provides "the fastest Internet connection."

FCC Fines XM, Sirius About $20 Million for Past Violations

The Federal Communications Commission fined XM Satellite Radio and Sirius Satellite Radio about $20 million for past technical violations, in what may be the final step before approving the companies' merger. XM was fined $17.5 million and Sirius $2.2 million for violations regarding their use of certain radio receivers and terrestrial repeaters that did not comply with the agency's technical rules. Agency officials say they are "optimistic" that an agreement could be reached soon to approve the merger. The enforcement of the past offenses was an issue that Commissioner Deborah Taylor Tate had pushed before she would agree to the merger. Robert Kenny, an FCC spokesman, said she had urged the companies be fined $8 million. After his own review of the violations, Martin increased the amount

Analyst Discounts Satellite TV Merger Buzz

Now that the duopoly in satellite radio is about to get regulatory approval for a merger, Wall Street is pondering whether the satellite-TV duopoly of Dish Network and DirecTV might someday combine, too. Sanford C. Bernstein senior analyst Craig Moffett thinks the XM Satellite Radio-Sirius Satellite Radio merger -- which is expected to get approval with significant conditions attached -- is not a precedent for satellite TV, despite a buzz on Wall Street to the contrary, saying, "The regulatory issues ... are entirely different." Moffett said the criteria used in considering XM-Sirius was a broad definition of the audio-services market, which not only embraced terrestrial radio, but also portable music devices such as iPods. In such a big pie, satellite radio is a relatively small piece and, thus, regulators deem the merger as not anticompetitive. In 2002, both the Department of Justice and Federal Communications Commission opposed a proposed DirecTV-Dish merger based on the conclusion that satellite TV is a monopoly in rural America, where fixed-wire cable service is not widely available. That narrow definition of the marketplace made DirecTV and Dish big fish in a small fishbowl.

Verizon Wireless to Divest Markets for Alltel Merger

Verizon Wireless is offering to divest airwaves in 85 largely rural markets as part of talks with the Justice Department over a pending merger with Alltel Corp. In comments filed to the Federal Communications Commission on Tuesday, Verizon Wireless, a joint venture between Verizon Communications Inc. and Vodafone Group PLC, said it is committed to divesting overlapping properties with Alltel in the entire states of North Dakota and South Dakota and in parts of 16 additional states. In a statement, Verizon Wireless said the markets in which it is volunteering to strip holdings represent a preliminary list that may be expanded following additional discussions with the Justice Department. Verizon Wireless also promised to give small, rural carriers the option of maintaining any roaming agreements they now have with Alltel after the merger. The company also said small and rural companies that have roaming agreements with both Alltel and Verizon Wireless can opt for either agreement to govern all roaming traffic after the merger. The deal must be approved by both the Justice Department and the FCC before it can be finalized.

Intellectual-Property Bill Introduced in Senate

The Enforcement of Intellectual Property Rights Act was introduced in the Senate Thursday; the bill attempts to bring together a number of intellectual-property protection bills in the Senate, as well as to mirror the PRO-IP Act, which passed earlier this year by a wide margin in the House. The bill would create a post in the White House to coordinate enforcement of IP laws by various government agencies; would require coordinating with Congress to develop a strategic play to combat IP theft; and would boost resources for IP enforcement, all similar to provisions in the House PRO-IP bill. The bill gets the applause of TV and movie studios, publishers and other content creators and distributors. It was no favorite of Gigi Sohn, president of fair-use advocate Public Knowledge, who said, "This bill would turn the Justice Department into an arm of the legal departments of the entertainment companies by authorizing the DOJ to file civil lawsuits for infringement, forcing taxpayers to foot the bill." Public Knowledge is also concerned about provisions allowing for the seizure of equipment.

Benton

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