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Verizon CEO: LTE Cannot Replace Fiber

Verizon Wireless CEO Dan Mead is not doing any favors for Comcast as it pursues approval to acquire Time Warner Cable. In August, he came out and publicly stated that no, LTE is not equal to fiber. The Verge quoted Mead, who was refreshingly honest about technical limitations and Comcast's motivations for making such outrageous claims:

"They're trying to get deals approved, right, and I understand that... their focus is different than my focus right now, because I don't have any deals pending," Mead said, a reference to the fact that Comcast is looking for ways to justify the TWC buy. "LTE certainly can compete with broadband, but if you look at the physics and the engineering of it, we don't see LTE being as efficient as fiber coming into the home."

A number of other organizations also try to educate the general public about the fact that mobile Internet access is not on par with wireline service. For example, Public Knowledge has long argued that "4G + Data Caps = Magic Beans." 

Our Wireless Internet Access Fact Sheet dispels common misconceptions, shares info about data caps, and provides comparative performance data between wireless and wired connections. While mobile Internet access is certainly practical, valuable, and a convenient complement to wired connections, it is no replacement. Wireless limitations, coupled with providers' expensive data caps enforced with overage charges, can never replace a home wired connection. Doing homework, applying for a job, or paying bills online quickly drives families over the typical 250 GB limit.

Speaking from experience, my own family of three routinely surpasses 250 GB per month and we are not bandwidth hogs compared to many other families in our social circle. Fortunately for us, the "enforcement of the 250GB data consumption threshold is currently suspended," as I am reminded every billing cycle.

Considering Mead's experience in both wired and wireless, how could any of us question his perspective:

Before moving to Verizon's wireless unit, Mead held executive roles in the company's landline business, responsible for traditional telephone service and high-speed internet to the home. "We know both sides of that pretty well," he continued. "So that may be a little bit of a stretch, and the economics are much different."

Hey FCC: Time to Expand Unlicensed Spectrum!

Remember that Washington Post story about bigger, free Wi-Fi networks? It went hugely viral with all manner of outlets picking the story up, unintentionally distorting it, and amplifying it.

Some good has come of it. For one thing, I was reminded that Ars Technica does a really good job of tech reporting, better than anyone else in my estimation. Cecilia Kang offered a follow-up story to clarify the original that should help more people to understand what is at stake.

But more importantly, we saw a lot of media coverage about something really important, whether we allocate future spectrum for everyone to use (much like Wi-Fi) or will we reserve it just for AT&T, Verizon, or another big corporation?

Harold Feld has a strong opinion on the matter:

This past week, we’ve had quite the discussion around Cecilia Kang’s WashPo piece describing a plan by the FCC to create a national WiFi network by making the right decisions about how to allocate spectrum between licenses for auction and what to leave available for the unlicensed TV white spaces (“TVWS” aka “Super WiFi” aka “Wifi on steroids”). As Kang describes, the FCC’s opening of sufficient spectrum for TVWS could lead to “super WiFi networks (emphasis added) around the nation so powerful and broad in reach that consumers could use them to make calls or surf the Internet without paying a cellphone bill every month.”

Needless to say, the article faced much pushback, despite a subsequent Washpo clarification to indicate the FCC was not, actually, planing to build a network. Amidst the various critics, there were some general defenders of the concept. My colleagues at EFF noted that increasing the availability of open spectrum for WiFi-type uses , and my friends at Free Press argued that such a free public wifi network (or, more accurately, series of networks) is in fact possible if the FCC makes enough good quality spectrum, suitable for broadband and usable out doors, available on an unlicensed basis.

I will now go a step further than any of my colleagues. I will boldly state that, if the FCC produces a solid 20 MHz of contiguous empty space for TV White spaces in the Incentive Auction proceeding, or even two 10 MHz guard channels that could nationally produce two decent sized LTE-for unlicensed channels, then we will have exactly the kind of free publicly available wifi Kang describes in her article. Or, “Yes Cecilia, there really is free national public wifi. Don’t let the haters and know-it-alls tell you otherwise.” ...

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I wrote a much shorter, far less impressive piece for the Media Action Grassroots Network that embraces a similar argument:

You know how you can buy a simple little device for as little as $30 now to set up your own Wi-Fi network that creates an easy in-home network? Imagine if your neighborhood could do that too!

Wi-Fi works in your home because the federal government, which manages how the public airwaves are divided for various uses, decreed that a small slice of spectrum would be unlicensed - sitting there for anyone to use however they wanted. But that spectrum is not suited for a neighborhood-wide network. ...

And we have seen others take notice as well, including the Baltimore Sun Editorial Staff:

The companies who oppose the FCC's plan argue that the agency's mission to serve the public interest would best be achieved through the revenues from an auction of the airwaves. The last such auction, in 2008, generated nearly $20 billion for the government. That's a substantial amount of money, to be sure, but the relatively small portion of the spectrum that the commission now proposes to leave open to unlicensed use would be worth only a fraction of that — a pittance compared to the economic activity that could be generated through the creation of new products and services to take advantage of the unlicensed spectrum.

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Therein lies the danger. The big wireless lobbyists are pushing Congress and the FCC hard to ensure that they get the licenses. Republicans in particular are arguing that we need the billions (perhaps 3-5?) of dollars that an auction would fetch for the treasury. This would be a terrible tradeoff.

I doubt that anyone has a handle on the value of Wi-Fi, but it is orders of magnitude higher than a onetime infusion of a few billion dollars. How much would you pay any given day to use Wi-Fi? Multiply that by over 200 million people. And this new spectrum could allow bigger networks than Wi-Fi supports -- an even greater potential value!

Verizon and AT&T know this, of course. They will gladly spend billions to ensure that we are stuck paying far more for services from them than we can build for ourselves if only we are allowed to use our spectrum to do so.

Write your elected representatives to support increased unlicensed spectrum.

Lack of Competition Creates Capped Connections

This post comes to us from Patrick Lucey of the Open Technology Institute at the New America Foundation. The post was originally published there, but we are excited to feature it here as well.

Last month my colleagues and I at the the Open Technology Institute released a paper titled “Capping the Nation’s Broadband Future?” The paper examines data caps, an increasingly common practice where internet service providers charge individuals a fee if they exceed a monthly threshold on the data they use. The paper discusses how data caps are not a solution to network congestion concerns, nor a reflection of increased costs due to more people being online. A review of public financial documents for Comcast shows their broadband network operating are decreasing. Other costs, like bandwidth transit, are decreasing as well. Instead, data caps are a reflection of a lack of competition in both the home and wireless broadband market. 

As if to hammer home the larger point about a lack of competition, a few days after releasing the paper I received the following flyer in my mailbox. It is a promo piece from a joint marketing agreement between Comcast and Verizon Wireless where they promote each others’ services. Signing up for Verizon Wireless service will give me a discount on my home Comcast subscription. 

Although this agreement was approved by the FCC and Department of Justice, this kind of chummy behavior between supposedly rival companies is hardly a sign of aggressive competition. Verizon FiOS is often cited as the main competitor to incumbent cable companies, even though Verizon officials have stated the company is not expanding FiOS to new markets.  

At a recent public event, Vint Cerf, recognized as one of the creators of the internet, stated that since the days of dial-up service competition among broadband providers has “evaporated.”  Perhaps most telling for the American broadband market are recent developments in China, where new buildings are required to be wired with fiber optics if there is a larger fiber network in the area. The article touts how individuals will have their choice of internet providers. By adopting open access policies such as these on a large scale, customers in China -- a country that has embraced capitalism but is still nominally communist -- could end up enjoying greater free market competition than customers in the U.S. 

The lack of broadband competition in the U.S. has led more and more telecom policy leaders to worry that instead of competing and building state-of-the-art networks, internet service providers are increasingly focused on “harvesting” higher revenues from their customer base. Indeed, recent trends seem to confirm these fears, as providers have begun implementing data cap overage charges, introducing new modem rental fees, and entering into joint marketing agreements. 

It is important to have a discussion around data caps and what they mean for online innovation, commerce and consumer behavior. However, data caps are merely the manifestation of a larger problem: the lack of robust competition among U.S. internet providers. New entrants like Google Fiber in Kansas City or municipally-owned networks in other cities are offering faster broadband speeds and typically without data caps. Policymakers in Washington must focus on ways to encourage these local examples of innovation on a larger national basis in the broadband market.

Verizon and Big Cable Win - Competition Loses

Once again, we are witnessing the federal government allowing a few massive telecommunications companies to collude rather than compete. Verizon is about to ally itself with major cable companies, to the detriment of smaller competitors in both wireless and wireline.

One of the reasons we so strongly support the right of communities to decide locally whether a community network is a smart investment is because the federal government does a terrible job of ensuring communities have fast, affordable, and reliable access to the Internet. By building their own networks, communities can avoid any dependence on the big cable or telephone companies that are more interested in consolidating and boosting shareholder dividends than they are in building the real infrastructure we need.

The Department of Justice released a statement on August 16th, that it will allow the controversial Verizon/SpectrumCo deal to move forward with changes. We have watched this deal, bringing you you detailed review and analysis by experts along with opinions from those affected. One week later, the slightly altered deal was also blessed by the FCC.

Many telecommunications policy and economic experts opposed the deal on the basis that it will further erode the already feeble competition in the market. In addition to a swap of spectrum between Verizon and T-Mobile, the agreement consists of side marketing arrangements wherein Verizon agrees not to impinge in the market now filled with SpectrumCo (Comcast, Time Warner Cable, Cox, and Bright House Communications).

Verizon has been accused of hoarding spectrum it doesn't need. The marketing arrangements constitute anti-competitive tools that the DOJ has decided need some adjusting. From the announcement:

The department said that, if left unaltered, the agreements would have harmed competition by diminishing the companies’ incentive to compete, resulting in higher prices and lower quality for consumers.

The deal was considered inevitable when FCC Chairman Julian Genachowski released a statement indicating that his agency had no problem following the DOJ. A PDF of the FCC statement can be viewed here.

In scrutinizing the deal, the FCC and DOJ bisected the analysis, which worked in the parties' favor. Susan Crawford looked at the process:

Bottom line: The companies involved in the transaction can credibly claim that the deal itself is not going to change the facts on the ground for most Americans. Without “merger-specific harms,” and with an impressive display of bureaucratic sleight-of-hand – FCC got the spectrum part of the deal but DOJ got the joint marketing arrangements, and the two agencies have different statutory authority and DNA, leading to lots of finger-pointing and careful behavior – the companies will avoid being interfered with unduly by the feds.

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Harold Feld, another strong critic of the deal, recently commented on the issue of FCC authority in this particular review. Feld notes that challenging FCC authority is a growing trend, and not good for telecommunications policy. Those who challenge it are diluting at what many consider an already tepid application. In essence, the "repeat loudly and often and eventually they will believe you" phenomena is creeping in and even FCC Commissioners are buying it. From Feld:

Given all this, it is rather difficult to understand why both Commissioner McDowell and Commissioner Pai likewise question the FCC’s authority to engage in ongoing monitoring in the wake of the agreements.  Given that this transfer involved spectrum, cable, broadband, and even broadcasters (shout out to my NBC peeps! What it is O & Os!), the only way this could implicate more FCC jurisdictions would be if one of the parties owned a maritime radio service.

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Given that there is no question that the FCC has authority to entertain complaints going forward, and certainly has authority to monitor how the markets under its jurisdiction are developing, it is hard to understand the jurisdictional argument even as the worship of empty formalism.

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I would think that “we’ll keep an eye on things, anyone with complaints can file over here” would be applauded as the lightest touch possible rather than condemned as regulatory overreach.

Feld goes on:

Which requires me to point out one of the more unfortunate problems in telecom policy (and regulatory policy) these days. There is a huge difference between “it’s bad policy, don’t do it” and “you don’t have authority.” It is unfortunate that those who agree with the FCC on matters of policy increasingly seek to cast their arguments as arguments of regulatory authority. I get that if you don’t like the policy, you would prefer the FCC not have authority to implement it. But just as real lawyers read the footnotes, real lawyers (and non-lawyers) ought to be honest about the difference between policy and authority. Certainly there are times when authority is genuinely contestable, and I will never blame a litigant for making the traditional Hail Mary pass at jurisdiction. But where, as here, the authority of the FCC over reseller agreements is well established, attacks on authority can only be the interpreted as careless or disingenuous.

The FCC and the DOJ may have tried to lighten the negative impact this deal will have on competition by making slight adjustments. Their efforts amount to putting a band aid on a bullet wound. The decision to allow this deal to move forward was telecommunications business as usual.

Crawford, like many others, sums up this deal for what it is:

"...the SpectrumCo transaction is an outcome, not a cause, of the primitive approach to communications that characterizes this country."

Verizon Wireless Busted for Violating Network Neutrality

In December, 2010, Verizon Wireless began operating its network via C-Block spectrum with licenses it acquired in the 2008 auction. In keeping with net neutrality rules unique to C-Block usage, Verizon agreed long ago that it would not block or limit consumers' ability to tether on their 4G LTE network.

Tethering allows a consumer to use a device, such as a smartphone, as a modem to funnel Internet access to an additional device. On July 31, the FCC agreed to end an investigation into whether or not Verizon Wireless had violated this rule. In exchange, Verizon Wireless would make a $1.25 million "voluntary contribution."  Verizon Wireless did not admit it broke the rules. The FCC's consent decree requires the practice cease and that Verizon Wireless implement policies to curtail the behavior.

The story began in 2011. Verizon Wireless began charging its customers an addition $20 per month to allow them to tether additional devices to their smartphones and called the feature "Mobile Broadband Connect."

The Free Press filed a complaint. The FCC began their investigation in October, 2011. From the Free Press website:

Free Press argued that by preventing customers from downloading these applications that allow customers to use their phones as mobile hotspots, Verizon violated conditions of its 700 MHz C Block licenses, the spectrum in which Verizon operates its LTE service. When Verizon purchased the licenses, it agreed to abide by conditions that it not “deny, limit or restrict” its customers’ ability to use the applications or devices of their choosing.

The company also asked the Google Play Store store to block Verizon Wireless customers from accessing software that would enable tethering. Google complied with the request, even though it has often advocated for net neutrality, but were not investigated because they are not an ISP.

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From Free Press Policy Director Matt Wood:

Today's action makes it clear that Verizon was flaunting its obligations as a spectrum-license holder and engaging in anti-competitive behavior that harmed consumers and innovation.

The FCC sent a strong signal to the market that companies cannot ignore their pro-consumer obligations. Unfortunately, the fact that Verizon worked to block these apps in the first place is a clear indication that wireless providers have a strong incentive to discriminate against certain content and applications, an incentive that continues to threaten online freedom and innovation. While we are pleased that the FCC finally acted on our long-standing complaint, and did so before taking action on Verizon's pending spectrum acquisitions, we remain concerned that consumers of other carriers lack the same basic protections that Verizon's customers have under the law.

We encourage 4G users to test to see it Verizon Wireless got the message and changed its ways. Apparently, Fletcher, Heald & Hildreth ran this test three days after the consent decree was released. At the time, Verizon Wireless was still trying to charge $20 for the ability to tether.

Using the micro-USB to USB cable that came with the phone, connect the phone to a laptop, and turn both on. On the phone, go into Settings, and possibly More Settings or Advanced, looking for “USB Tethering.” Tap it and see what happens. What happened to us was a “Sign up” screen inviting us to incur that $20 per month.

Related:

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Apparently, Verizon isn't the only big corporate telco snubbing its nose at net neutrality protections for consumers. The freepress just reported on AT&T's similar attempt to nickel and dime customers with added restrictions:

AT&T just announced that unless its iPhone customers subscribe to a more expensive "mobile share" unlimited text-and-voice plan, the company will cripple the device's built-in FaceTime app so users can't make mobile video calls.

So if you want to use an app rather than make a call -- something you'll be able to do on a "3G" network when Apple updates its operating system -- then you first have to pay for more old-fashioned phone calls and text messages. Say what?

You can learn more and let the FCC know your thoughts on AT&T's policy change at the freepress Take Action page.

The FCC has only applied the bare minimum of regulations on wireless, far less than what we, and groups like Free Press, believe are best of innovation and consumer protection. But AT&T and Verizon are running roughshod over even these basic rules. We are heartened to see the FCC upholding its rules and protecting the public interest in this case.

Harold Feld Examines The Meaning Behind The Verizon/SpectrumCo/Cox Deal

Several months ago, we wrote this post but it got lost in the system. We think it still worthwhile, so here it is.

The word "cartel" drums up many negative annotations - drug cartels, oil cartels. Never anything positive, such as bunny cartels or chocolate cartels. Harold Feld (of Public Knowledge) explains the emergence of another cartel in My Insanely Long Field Guide To The Verizon/SpectrumCo/Cox Deal, on his Tales of the Sausage Factory blog. This is  great tutorial on how the deal came about and what it can mean for the future of broadband.

Rather than chocolate, drugs, oil, or bunnies, the product in question is telecommunications services. At the heart of the cartel are the familiar names: Verizon, Cox, and SpectrumCo. The latter being a consortium of Comcast, Time Warner Cable, and Bright House. All the big hitters in telecom are involved in a way that is veiled, secretive, and not good for competition.

"It's almost as if your companies got in a room together, and you agreed to throw in the towel and stop competing against each other," Sen. Al Franken to representatives from Verizon and the cable companies at the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights, March 21, 2012.

Feld's investigation begins with the licensing and collecting of spectrum by SpectrumCo but ends with a more practical look at how these big hitters have decided that it is better to join forces than to compete. Side agreements, secretive multi-layered entities, and threaded loopholes keep the FCC at bay. This begins as an article about telecommunications, but quickly expands into an antitrust primer. The most alarming facet of this situation is that the product in question is information.

Joel Kelsey of Free Press testified at that same committee, warning how this deal will compromise access, quality, and affordability to broadband in America and how drive us further behind the rest of the world.

Update:

On August 16, 2012, the Department of Justice announced that it approved the deal with changes. Citing:

"...the spectrum transactions facilitate active use of an important national resource and thereby promise substantial benefit to wireless consumers."

Video: 
See video

New Year, Same Lame Cable and DSL Monopolies

It's a new year, but most of us are still stuck with the same old DSL and cable monopolies. Though many communities have built their own networks to create competition and numerous other benefits, nearly half of the 50 states have enacted legislation to make it harder for communities to build their own networks.

Fortunately, this practice has increasingly come under scrutiny. Unfortunately, we expect to see massive cable and telephone corporations use their unrivaled lobbying power to pass more laws in 2012 like the North Carolina law pushed by Time Warner Cable to essentially stop new community broadband networks.

The FCC's National Broadband Plan calls for all local governments to be free of state barriers (created by big cable and phone companies trying to limit competition). Recommendation 8.19: Congress should make clear that Tribal, state, regional and local governments can build broadband networks.

But modern day railroad barons like Time Warner Cable, AT&T, etc., have a stranglehold on a Congress that depends on their campaign contributions and a national capital built on the lobbying largesse of dominant industries that want to throttle any threats to their businesses. (Hat tip to the Rootstrikers that are trying to fix that mess.)

We occasionally put together a list of notable achievements of these few companies that dominate access to the Internet across the United States. The last one is available here.

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As you read this, remember that the FCC's National Broadband Plan largely places the future of Internet access in the hands of these corporations. On the few occasions the FCC tries to defend the public from their schemes to rip-off broadband subscribers, Republicans (joined by a number of Democrats) threaten to overrule what is supposed to be an independent agency to defend the corporations that just happen to be donors to their campaigns.

Back when most assumed AT&T would be able to push its horribly anti-competitive takeover with T-Mobile through an impotent federal government, a few stories exposed the tip of the iceberg of AT&T's astroturf efforts, as with this report from the Center for Public Integrity:

“It is important that we, as Christians, never stop working on behalf of the underserved and forgotten,” the Rev. R. Henry Martin, director of the clinic, wrote to FCC Chairman Julius Genachowski in June. “It might seem like an out-of-place endorsement, but I am writing today in order to convey our support for the AT&T/T-Mobile merger.”

...

Not included in Martin’s letter to the FCC was the fact that his organization had received a $50,000 donation from AT&T just five months earlier. Indeed the Shreveport-Bossier Mission is one of at least two-dozen charities that were recipients of AT&T’s largesse and have written in support of the T-Mobile buyout, which will cut the number of national wireless companies from four to three.

When AT&T's wasn't able to buy enough influence with legitimate groups willing to sell out the interests of their members (who would pay more for their communications in a less competitive environment), it would simply create its own groups to push its interests:

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Tallahassee Mayor John Marks brought an Atlanta nonprofit to the city as a partner in a $1.6-million federal-grant project, saying it would put high-speed Internet into the hands of poor people.

What he didn't say, and now says he didn't know, was that the Alliance for Digital Equality (ADE), in its first three years of existence, was nearly 100-percent funded by AT&T and spent most of its money — four of every five dollars — to pay board members, consultants, lawyers and media companies to push the global communication giant's positions on Internet and wireless regulation. Nor did Marks disclose, initially, that ADE had paid him $86,000 over several years as a member of its board of advisers.

We continue to see these massive companies abuse their market power to increase their prices, knowing that their lobbying arms will continue pushing legislation to stop communities from building their own networks.
Time Warner Cable hiked its rates in North Carolina immediately after passing its legislation to stop communities from building networks. Mediacom raised its prices while it attempts to sabotage efforts in rural Minnesota to build networks in unserved areas. And invented new fees to rip off its subscribers while trying to disrupt a rural fiber-to-the-farm initiative that slightly overlapped some territory in which they have long refused to invest.

Even as profits on cable broadband services approach Exxon proportions, Time Warner Cable has pushed for usage-based pricing to further overcharge subscribers, but mostly to strangle enormously popular competitors like Netflix. CenturyLink is not far behind, with usage caps prioritizing its own video content over competitors.

Verizon Wireless tried to sneak a new fee past subscribers by announcing it just before Christmas but backed down after outraged consumers reacted. One has to wonder whether it would have backed down in a world where AT&T took over T-Mobile, resulting in 3 out of 4 wireless customers being with Verizon Wireless and AT&T. Four competitors isn't the robust competition envisioned by Adam Smith, but it still beats the duopoly dynamic that results from even less competition.

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Speaking of less competition, the recent deal between Verizon and cable companies is troubling. We already knew that FiOS was all but dead, but this deal truly puts a fork in it:

I'll assume that neither cable operators or Verizon are going to let us see the deal fine print to confirm the Times guess, but the logic fits Verizon's strategy. Verizon already cherry picked the most valuable FTTH upgrade markets, and has shown total disinterest in further upgrades. This deal allows them to save money on FTTH upgrade costs, instead soaking up remaining customers with LTE -- which we noted was the plan some time ago. This deal is very bad news to the rural telcos without the cash for large-scale upgrades (CenturyLink, Frontier, Fairpoint, two of which Verizon sold aging DSL networks to), and for satellite broadband providers.

The future of next-generation networks is now only community networks, cooperatives, and some small private networks.

We've long argued that phone and cable companies have systematically overstated their coverage in mapping efforts as part of their effort to blunt any sensible public policy that would result in all Americans having a choice between fast, affordable, and reliable connections to the Internet. The New England disaster called FairPoint is back in the news for overstating the number of subscribers that have access to DSL. The company has not met the requirements it agreed to when purchasing Verizon's lines a few years ago.

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And in the continuing saga of Comcast's growing domination over the information people can access, Bloomberg TV is fighting Comcast's practice of discriminating against channels in which it has no ownership stake. Comcast has long strongly encouraged those who want to put television channels on its lineup to give Comcast a piece of the action, not unlike a mobster encouraging a small business to pay protection money. It wants to continue expanding its role as a gatekeeper to the Internet, particularly in the many areas where people have no real choice from other high speed providers.

And perhaps the best example of why we should not trust these massive corporations to run essential infrastructure is the revelation that AT&T defunded 9-11 call centers in Tennessee to gain a market advantage over competitors, a practice they were previously caught doing, leading to settlements out of court.

These corporations are not evil, they are following a sensible mandate to maximize their shareholder value. It is our government that is not sensible -- entrusting them with the future of Internet access without even bothering to enact the most basic regulations. Communities must continue to wise up and ensure they have the access they need to modern communications -- access that reponds to their needs, not those of distant shareholders.

Tethering, Verizon, and the Problem with Public Interest Requirements

When Verizon won an auction to use the 700MHz band of the spectrum to deliver mobile broadband, it promised to adhere to a set of openness rules that included allowing customers to use applications and devices of their choosing. But Verizon is now blocking "tethering" apps that allow us to use our cell phones as a modem for our computers.

Wendy Davis at MediaPost offered more context:

Whether it's legal for a wireless carrier to cripple tethering services is unclear. Verizon agreed to follow open Internet principles as a condition of acquiring the spectrum that it uses for 4G wireless phones. One interpretation of that condition is that the company shouldn't attempt to restrict tethering on its 4G network -- though apparently it's still free to do so on the 3G network.

But aside from neutrality issues, Verizon's move clearly seems hard to justify from a pricing standpoint. Given that the company is already going to charge new users based on the amount of data they consume, there's no reason for it to also impose a surcharge for tethering.

Free Press filed a complaint with the FCC to investigate:

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Free Press will file a complaint today with the Federal Communications Commission against Verizon for violating the rules that govern the licenses for its LTE network. Licensees of the C Block of the upper 700 MHz block, over which Verizon runs its LTE network, may not “deny, limit, or restrict” the ability of their customers to use the applications or devices of the customers’ choosing.

Recent reports reveal that Verizon has been doing just that by asking Google to disable tethering applications in the Android Market. Tethering applications, which allow users to make their phones into mobile hot-spots, implicate the customers' ability to use both the applications and devices of their choice. Free Press argues that by preventing customers from downloading tethering applications from the Android Market, Verizon is restricting not only the applications available to them, but also limits use of tethered devices such as laptop or tablet computers. [Read the Full Complaint here]

Free Press Policy Counsel Aparna Sridhar noted:

“In 2007, Verizon argued aggressively against the adoption of these basic openness protections. Having lost that policy battle but won the auction for the spectrum licenses, Verizon has adopted a new regulatory strategy: simply ignore the rules on the books. The Commission must move quickly to investigate and stop these harmful practices.”

This is the problem with imposing public interest requirements, and more generally, regulating companies that are providing essential infrastructure. Companies like Verizon are incredibly powerful and regularly ignore rules they do not like, understanding that they can delay any rule or punishment for years. They can often delay long enough for DC to change administrations or simply grow weary of trying to defend the public interest (often when the public has no idea what is happening).

If the US pursued a policy where the infrastructure elements were publicly owned and independent service providers competed on top of that infrastructure, we would have more tools to prevent abusive practices. For one, companies would have to adhere to the rules in order to use the infrastructure. For another, we would have more providers competing, allowing people to switch away from abusive carriers -- a luxury many do not have currently given our duopolistic telecom markets.

This matter of tethering is incredibly important for the future of mobile access to the Internet, as explained by Barbara van Schewick (always a worthwhile read):

The questions raised by the complaint are too important to be decided without public participation: The C Block of the 700 MHz band is currently the only spectrum that is subject to mobile network neutrality rules.[1] Knowing that there is at least some part of the mobile spectrum that is protected by basic network neutrality principles is important for users, innovators and investors. Whether the openness conditions indeed afford protection depends, however, on how they are interpreted and enforced. Thus, the proceeding has important implications for many businesses, innovators and users in the Internet ecosystem, so they should have a chance to have their voice heard, too. In addition, as I explain in the letter, the proceeding raises important issues regarding openness in mobile networks in general.

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The good news is that the FCC has told Verizon is must respond to Free Press' complaint. The bad news is that we have no idea how long it will take to resolve this and whether the FCC, which has maintained a cozy relationship with the big carriers through Republican and Democratic Administrations, will actually protect the public. The FCC has two stellar Commissioners that regularly defend the public interest and two commissioners that regularly stand with the carriers. And the current Chair … well, he caved to AT&T and Verizon rather than standing for principles he defended for years and Obama campaigned on.

Thanks to Free Press, Barbara van Schewick, and all the others who are defending the public good.

Axcess Ontario Middle Mile Network Wins Award

CIO Magazine is the third organization in less than a year to recognize the importance of Ontario County's broadband investment in itself. CIO received a "CIO 100" award to go with recognition from Computerworld and the John F Kennedy School of Government at Harvard.

Axcess Ontario is an open access middle mile network built without any federal loans or grants. They wanted to invest in themselves and have succeeded. The network serves multiple private sector telecom firms, including Verizon Wireless - a fact that should be recognized in an age when some would have us believe the public sector should never be involved in this essential infrastructure.