Award Winning Blog

Friday, April 29, 2016

Anatomy of Defective Legislation: The No Rate Regulation of Broadband Internet Access Act, H.R. 2666

             The U.S. House of Representatives has passed a bill that would prohibit the FCC from regulating Internet Service Provider rates.  While one surely can appreciate the merits of such legislation, House Republicans have created a remarkably flawed document.

            The drafters do not seem to understand that the Communications Act, which the bill would amend, vests the FCC with jurisdiction in Section 208 to oversee “charges, classifications, regulations or practices.”  H.R. 2666 creates the kind of ambiguity that allows the FCC to remedy through its preferred statutory interpretation, because one person’s rate regulation is another’s lawful regulation of charges, classifications and practices.

            The Supreme Court has created something called the Chevron Doctrine that creates a model for assessing whether courts should defer to regulatory agency legislative interpretation.  While agencies like the FCC must apply the clear meaning of an unambiguous law, court must defer to reasonable agency interpretations when the applicable law is ambiguous.

            On its face, H.R. 2666 is ambiguous, because one could readily argue that this bill does not repeal Sections in the Communications Act that authorize the FCC to investigate complaints about carrier billing and treatment of information about customer network usage (Sec. 222) as well as issues that affect out of pocket cost, but can be deemed something other than a rate.

            In the Internet ecosystem, ISPs often negotiate agreements that do not involve rates and even the exchange of money.  Instead they use customer information as a marketable currency of great value to advertisers.  Data mining configures and analyses ISP subscriber behavior that can be monetized, but not converted into applicable rates and tariffs.

Monday, April 25, 2016

Set Top Box Death Watch—Are You Kidding?

            A new rationale has appeared on the media landscape explaining that the FCC needn’t bother trying to promote set top box competition, because these devices will soon disappear. Who knew?  Apparently not Comcast which has spent much time, money and effort promoting its new and costly X1 box, nor other incumbents who have attempted to explain how they need a perpetual monopoly. 

            So let me get this straight.  The cable industry has done nothing to promote set top box competition, yet even with outright opposition to an unfettered marketplace the requirement to install and use a cable-company supplied box will evaporate soon.

            This does not pass the smell test, particularly in light of the cable industry's concerted efforts to block competition, to thwart next generation “cable-ready” television sets and to tout as an adequate solution a sorry performing CableCard technology that prevents many value adding features from functioning, including electronic programming guide navigation.

            Around and around the spin goes, unwittingly promoted by newspapers who should know better than to publish undisclosed, sponsored research.  In my capacity as telecom and Internet researcher, I make a point to read anything and everything, including blatantly wrong and obviously sponsored advocacy masquerading as “research.”

            Let’s be clear: the cable industry wants to milk its set top box monopoly for as long as possible.  Had the FCC not acted—in the waning days of the Obama Administration—no one would have attempted to dislodge the status quo.  Comcast would not have embraced Roku and a nominal set top box alternative and you wouldn’t see bogus explanations why the set top box monopoly does not exist.

            Speaking of alternatives, incumbents point to Internet Protocol Television as proof positive that consumers have plenty of substitutes to mandatory set top box access to video content.  Ah yes, another half-truth: there are video access options, like Hulu, but there are no alternatives to set top box access to cable television supplied content.  It’s quite glib and wrong to equate Hulu’s relatively limited inventory as the functional equivalent to that available via cable television.  Certainly the cable industry makes that argument in justifying its substantially higher monthly rates, but of course you aren’t supposed to remember that bit of self-congratulations in the context of the set top box debate.

            Readers: follow your noses, trust your instincts and check your wallet.  The disinformation swirling around you on the matter of set top box competition is designed to confuse and obfuscate.  Can there be any basis for thinking a single rental option offers consumers a better value proposition than competitive access to multiple boxes, like that becoming available for IPTV?  Have you looked at your year-over-year set top box rental costs?

            By why believe me?  I have no advocates, agents and publicists touting my work and securing placement in major papers.  I simply follow my nose, common sense and the money trail without sponsorship of course.