October 2009

FCC Seeks Input on the Impact of Middle and Second Mile Access on Broadband Availability and Deployment

In the National Broadband Plan proceeding, the Federal Communications Commission specifically requested that parties provide information as to whether "backhaul costs . . . stand as impediments to further broadband deployments . . ." As the FCC develops a National Broadband Plan, several entities have claimed that adequate, reasonably priced, and efficiently provided access to middle and second mile transport services and facilities play an important-if not gating-role in the economics of broadband deployment, particularly in rural, unserved, and underserved areas. In this Public Notice, the FCC seeks further information in order to understand more fully the cost and availability of these important facilities and how they relate to making broadband available to all Americans.

The FCC has specific questions about:

1) Network Components of Broadband Connectivity,

2) Availability and Pricing of Middle and Second Mile Connectivity,

3) Pricing and Availability of Internet Connectivity,

4) Economics of Deployment, and

5) Nature of Competition and Availability of Alternatives.

Comments in the proceeding are due November 4.

Also see the FCC's order to protect confidential information.

FCC Acts to Protect Broadband Data

The Federal Communications Commission issued a protective order on October 8 to protect "documents or other materials that contain proprietary or confidential information." The order is intended to facilitate and expedite the review of confidential information submitted by interested persons. Submitted information can be designated as Highly Confidential and the FCC will limit access to such materials to Outside Counsel of Record, their employees, and Outside Consultants and experts whom they retain to assist them in the National Broadband Plan proceeding. To qualify as "Highly Confidential," the information is not otherwise available from public sources and that consists of detailed or granular information regarding the location, type, or cost of last-mile infrastructure used by a Submitting Party to offer broadband service. Submissions may also be classified as Confidential Information. In all cases where access to Confidential Information or Highly Confidential Information is permitted, before reviewing or having access to any Confidential Information or Highly Confidential Information, the person seeking such access shall sign an appropriate Acknowledgment and file it with the FCC. Each Submitting Party shall have an opportunity to object to the disclosure of Confidential Information or Highly Confidential Information to any persons seeking access. Any objection must be filed at the Commission within three business days after receiving a copy of that person's Acknowledgment.

The order was released in conjunction with a new request for information about the impact of middle and second mile access on broadband availability and deployment.

A National Broadband Plan Needs A National Fiber Plan

[Commentary] Too often broadband policy debates get caught up in attempts to be technology neutral, losing sight of the significance of individual technologies, the most significant of which is fiber. When you think of the Internet, you should think of fiber as the vast majority of the interconnected networks that make up the Internet are fiber. When we talk about middle mile and backhaul networks, those are most often fiber. When remote broadband networks complain about not having affordable access to the Internet, what that really means is having affordable access to the long-haul fiber running through or near their communities. When anyone's discussing the next generation of wireless access, that means finding a way to get fiber to every wireless tower. The same holds true for most next generation wireline networks, which generally all rely on laying fiber ever closer to homes to deliver higher speeds. And when you talk about the next generation of healthcare and education, those conversations presume the presence of reliable, high capacity, symmetrical access capable of handling lots of simultaneous usage, which only fiber can truly deliver. A national fiber plan encompasses all of this. It recognizes that you can't have an effective national broadband plan without a comprehensive national fiber plan because fiber is so critical to delivering truly next generation broadband.

Public Knowledge President Calls for More Spectrum Sharing

In San Diego for the Federal Communications Commission's field hearing on the National Broadband Plan, Gigi Sohn of Public Knowledge said it will be "extremely difficult, if not impossible" to free up more spectrum to be used solely by wireless services. The problem, she said, is that most of the spectrum that would have value to industry is controlled by the Defense Department and Federal Aviation Administration. It will "prove politically difficult" to reallocate that spectrum, she added, noting that today spectrum that was supposed to have been cleared by government users from a 2003 auction still is "bogged down and underutilized." Sohn said, "We believe that it will be impossible to convince government to abandon the spectrum it controls, and that the better course is for the FCC, working with the National Telecommunications and Information Administration, to promote shared use of federally controlled spectrum." She proposed a four-point policy program, saying the FCC should: 1) complete its white spaces proceeding, 2) ask for public input on the possibility of variable power for white spaces devices in rural areas for fixed and backhaul services, 3) confer with NTIA to determine how best to promote the shared use of spectrum controlled by the federal government; and 4) urge Congress to pass the Radio Spectrum Inventory Act.

AT&T: Don't Burden Us With New Regulations

In his keynote Wednesday morning at the CTIA Wireless IT & Entertainment 2009 show, AT&T Mobility CEO Ralph de la Vega followed the Federal Communications Commission chairman with a stand against more regulation in the wireless industry. The wireless boss started his speech with a 10-point presentation about how and why the US wireless industry is the most competitive in the world. He saved the red meat for his closing statement, however: "Before we begin fixing what isn't broken, we need to be thoughtful about the consequences. We believe the marketplace today is vibrant, and there is no need to burden the mobile Internet with onerous new regulations," de la Vega told the crowd. He also bemoaned the disproportionate wireless bandwidth usage of iPhone users -- just 3 percent of AT&T's smartphone customers (read iPhone users) use 40 percent of all smartphone data, that they consume 13 times the data of "the average smartphone customer," yet represent less than 1 percent of AT&T's total postpaid customer base. Big problem -- but AT&T management should have seen this coming a year ago. Or maybe they did, but getting Wall Street to buy into the idea of aggressive and costly network upgrades is like pulling teeth without anesthetic -- lots of screaming. So in the absence of new spectrum and new, faster 4G networks, what does AT&T intend to do about the growing demand in the near term? Without the proper management of these networks, De la Vega said, regular data users will be "crowded out" by the small number of users (read iPhone users) who use massive amounts of data. But what exactly does De la Vega mean by "proper management"? Does AT&T intend to quietly begin rationing the data usage of bandwidth hogs like the iPhone? Will AT&T begin to quietly "manage" the duration and speed of my 3G connection based on how much data I've used in a given day, or on the type of content or services I'm using the bandwidth to access?

World's Fastest Broadband

Discussions about the public's access to broadband often focus on which areas or countries have the most high-speed Internet connections. The Organization for Economic Cooperation & Development, for instance, publishes an annual list of countries that have the most per capita connections. But for many users of the Internet nowadays, it's not enough simply to have a broadband connection. Increasingly what really matters is the speed of the connection: how much information can a user download or upload, and how quickly. Broadband speeds can vary widely—from 1.5 megabits per second (Mbps) to more than 25 Mbps. And that can make all the difference to a person who's trying to use the Web to learn a new skill, access medical records of an ill patient, or simply watch a movie downloaded from Netflix. In the first quarter of 2009, about one-fifth of the Internet connections around the world were at speeds greater than 5 Mbps, according to the State of the Internet report published quarterly by Akamai, a maker of software designed to speed the flow of information over the Internet. The report includes broadband adoption data gathered from across Akamai's network of more than 50,000 servers in 70 countries, and categorizes Internet connections by download speeds. Which countries can boast the fastest broadband connections?

Trying To Decipher CableOne's New Caps

CableOne, owned by the Washington Post, is tinkering with some of their speeds, adding a 12 Mbps downstream, 1.5 Mbps upstream plan to their lineup. In a sign they're falling a bit behind the times, CableOne's previously fastest tier was 10 Mbps downstream 1 Mbps upstream. The company also offers 1.5, 3 5, 8 and 10 Mbps tiers. Perhaps more interesting is the fact that CableOne is tinkering with their already odd caps. The carrier has always employed a unique capping system that restricts how much bandwidth users can use at certain times of the day. CableOne's new speed and cap list is anything but clear, listing both "extended speeds" and "standard speeds" (usually half of extended speeds), before noting that users are capped during different times of the day.

Google's Schmidt and Brin on Books, Culture and Evil-ness

In a wide-ranging, 90-minute news conference Wednesday, Google Chief Executive Eric Schmidt and co-founder Sergey Brin discussed the economy, the company's recent announcement with Verizon Wireless, the books settlement, Gmail outages and its merger and acquisitions outlook.

1) On paid content models online: Schmidt said, "There is clearly a market for free content, and that market is the size of the Internet. There is clearly a market for subscription content- — meaning per-view or per-month payments — and it's clear there are also going to be very expensive negotiated transactions for high-value content." He said it is similar to broadcast television, cable television and pay-per-view. "The size of those markets are correspondingly different. So when we argue over this, we're not arguing about the principle. We're arguing over the size of the market." "We are working on payment systems and subscription models to enable those other tiers," Schmidt added. Content owners will not set the price. "Everyone is familiar with this problem in selling your house. We're not going to use the price you suggest," he said.

2) On Google's plans to buy one company a month: Schmidt said, "That was our historic average...I think it's going to be small companies of five to 10 people. Half of the most interesting things at Google came from small companies. When Larry and Sergey bought Android I didn't even notice. Sergey was surfing on the Web one day and came across what became Google Earth. He came in my office and said 'I bought them.' I said, 'For what price?' It was a small number so I said OK."

3) On the problem of "orphan works" in the Google books settlement: On Tuesday, Google said it would submit an amended books settlement in November. One of the criticisms of the settlement has been that it gives Google license to orphan works, whose rights-holders are unknown. "Some of the criticisms are legitimate and can be addressed by changes in the settlement. Some other criticisms are by people who don't want a change," Schmidt said. "The scenario in front of us is not perfect. But the perfect is the enemy of the good...my challenge to the critics is, make an alternative proposal that solves the problem that consumers do not have access to books that they cannot read today." "The companies that are making these objections have done nothing for orphan works," Brin added. "Nobody was interested in these works at all, and there is no existing market for them. So I think these objections that Google will be the only one are pretty ludicrous given that no one else has done this." He said that he has written an opinion piece on the topic that he hopes will be published soon.

TV Everywhere and the end of free TV

The end of free TV is looking imminent. The pay TV providers are already laying the groundwork for their response to disintermediation from free online TV sites, but the best way to turn online eyeballs into profit is still a topic up for discussion. As TV Everywhere ramps up, the question becomes, is there even money to be made from online video? According to The Diffusion Group analyst Colin Dixon, the answer depends on the execution. TV Everywhere - as a concept - is very popular with consumers. TDG surveyed consumers on the notion of getting TV content on the PC and found that about 46% of broadband heads of households were very interested in the service, and 30% saw enough value to pay upwards of $10 for it. The problem is, Dixon said, that pay TV providers are not going to be able to deliver on this concept of program-rich TV Everywhere. "They really can't start charging for this until they can deliver on that promise," Dixon said. "Consumers will be very disappointed when they get the service and they can't get ESPN, ABC, Disney or other programs." The success of any business model will rest on the operators' ability to authenticate their users.

Legal Expert Questions FTC's New Blogger Rules

The Federal Trade Commission's recommendations that bloggers disclose freebies has drawn much controversy this week, with some commentators questioning whether such a governmental mandate is either necessary or appropriate. But another portion of the FTC's new guides to endorsements and testimonials might be trumped by a separate federal law, according to law professor Eric Goldman. The guides say that marketers who have deals with companies that hire bloggers to write reviews might be liable if the reviews contain unsubstantiated claims. For instance, if a marketer signs up with PayPerPost -- a company that pays bloggers to write reviews -- and a blogger says something misleading, the marketer might be on the hook for deceptive advertising. The FTC illustrated its point by discussing a scenario involving a skin care products company that participates in a blog advertising service. In the example, a skin care manufacturer requests that a blogger try a new lotion and review it. If the blogger does so and makes an unsubstantiated claim -- such as that the lotion cures eczema -- both the blogger and the advertiser could be liable for making misleading representations, according to the FTC. But, says Goldman, the Communications Decency Act specifies that users of interactive services are not responsible for material published by other content providers.