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First Net Neutrality Complaint Filed Against...A Utility?

On the heels of FCC Chairman Julius Genachowski's boast that not a single complaint has been filed under the agency's Open Internet or net neutrality rules, a small Georgia broadband and VoIP competitor has filed what could be the first formal net neutrality complaint under the new regs.  L2 Networks, a small competitive voice and broadband provider in Albany, Georgia, filed the complaint at the FCC challenging actions taken by the Director of Telecommunications at The Albany Water Gas & Light Commission (AWGL), a regional utility and fiber-optic based competitive local exchange carrier.

L2 claims that it was forced to file the complaint because AWGL's Director of Communications (who is cited by name many times in a series of documents posted by L2 on its complaint summary page) has consistently interfered with the company's ability to deliver VoIP service to an unnamed mutual customer over AWGL's fiber optic network.  Among the steps this employee has taken are barring L2's access to its own facilities and entering L2's facilities without permission. 

Another big impetus for filing the complaint at the FCC:  AWGL has filed a criminal complaint against L2 alleging theft-of-service in Dougherty County, Georgia. The claim against L2 states L2 should have compensated the utility for use of their fiber-optic internet infrastructure while delivering services over the utilities “internet backbone” to existing internet customers of the utility.  L2, however, says that the criminal complaint is even further proof a net neutrality decision is warranted.  "The manipulative use of the criminal legal system to create an anti-competitive environment and otherwise remove the local competition, is 'far reaching' at best,” L2 said in its press release announcing the filing.

Telecompetitor's Joan Engebretson, meanwhile, points out that the utility's theft-of-service complaint against L2 follows other theft of service complaints against the company's CEO.  In January, L2 CEO Kraig Beahn was charged in January with stealing service from cable company Mediacom by tapping into a Mediacom outlet and running the signal into a client’s building for phone service.  In 2009, Beahn was also charged with theft of service in Alabama, according to the Herald, but those charges were dismissed when Beahn agreed to pay $5,000 in restitution.

In addition to this history, the whole dispute is ripe with colorful skirmishes and flourishes.  For example, a tussle is underway over L2's desire to gain access to AWGL documents under FOIA (AWGL is a municipally owned utility that is regulated by the Georgia PSC).  AWGL agreed to give up the documents, but only if L2 agreed to pay $9,850 in search and retrieval costs.  A March 8 meeting had been set by AWGL's General Counsel for L2 to look at the documents, but L2 didn't show up.

No reaction from the FCC on this potential landmark complaint.  

NTIA Chief of Staff Wins Best Quote of the Week Award

(Boston, MA)  This year's NCTA show, the cable industry's biggest annual gathering, featured a powerful spate of innovative tech announcements that few industry founders could have imagined when they first started stringing wires to deliver better over-the-air TV reception.  For example, on Monday, a group of top cable operators, including Bright House Networks, Cablevision, Comcast, Cox Communications and Time Warner Cable, announced Cable WiFi, which will enable those companies' customers to gain access to major metro Wi-Fi networks operated by the group, creating 50K+ monster hotspots.

Comcast, the nation's top cable company, unveiled Project Dayview, a sophisticated user interface that cuts across TVs, laptops, tablets and smartphones.  Through one screen, Comcast customers can access data and information from their TV, voice, Internet and even home security services.  On top of that, Comcast announced the launch of X1, which is a "next-generation cloud enabled television platform" that uses IP technology and cloud services to enable customer creation of customized TV apps.

In other words, this is not your mother's cable industry.  Tom Power, Chief of Staff for the Commerce Department's National Telecommunications and Information Administration, articulated well just how far and how fast the industry has evolved into a high-tech powerhouse.

Speaking during a public policy lunch, Power noted that he's been attending the NCTA show off-and-on for years.  He reminisced that the major announcement at his first cable show was the launch of cable network, TVLand, which began as a channel devoted to showing "classic" TV shows from TV's past.

"Twenty years ago the big news was that we got to see re-runs of a talking horse," Power said.  (TV Land actually launched as Nick-at-Nite in 1996, but the point is still valid.)  

Hill Staffers: Cyber Security Legislation Passage Not Likely

(Boston, MA) The controversial nature of cyber security legislation moving through the Congress combined with the compressed election-year legislative calendar diminishes the chance of cyber legislation enactment during this Congress. That was the main message coming from a panel of top Hill staffers speaking here at the NCTA Show today.

There are "a couple of clear fault lines here in terms of maybe getting a compromise" on cyber security legislation during this Congress, Greg Orlando, Counsel for Senate Commerce Committee member Roger Wicker (R-MS) said. Chief among these: "you've got the critical infrastructure piece and expanded role for DHS."

Senate legislation championed by Senator Joe Lieberman (I-CT) would implement minimum cyber security requirements on critical infrastructure industries such as utilities and banking, with those requirements administered by the Department of Homeland Security. Although objections by privacy advocates are largely acknowledged as threats to the passage of cyber security legislation, mandatory requirements on critical infrastructure could be the real fly in the ointment.

"Senator Rockefeller believes that if cyber legislation doesn't address critical infrastructure, we will have all failed," John Branscome, Communications Counsel, Senate Committee on Commerce, Science and Transportation said.

Although the Democratic-controlled Senate, along with the Administration, believe cyber security legislation should include critical infrastructure requirements overseen by DHS, House leaders aren't buying into that. ​"Having a single agency manage 13 industrial sectors,creates an opportunity for a single point of failure," Ray Baum, Senior Policy Advisor to Greg Walden (R-OR), Chairman of the House Subcommittee on Communications and Technology said. "It's very difficult to say that if you set outstanding standards, they wouldn't be out of date before the ink is dry. We need to leave that to the expert agencies."

Later in an interview, Baum said "if they tweak the privacy stuff and take out the critical infrastructure, you could pass a cyber security bill this Congress." Other than that unlikely scenario, cyber security legislation looks dead until the new Congress comes to town next January. "It's a hard year to be legislating," Danny Sepulveda, Senior Advisor to Sen. John Kerry (D-MA) said.

Comcast Prioritization Controversy: Is Xfinity-to-the-Xbox a Cable Service?

Bryan Berg, the Founder and CTO of MixMedia, has kicked up a controversy over whether Comcast is prioritizing its broadband traffic in violation of a consent decree the cable giant signed to gain the FCC's blessing over its merger with NBC-Universal as well as in violation of the FCC's Open Internet or net neutrality rules.  Berg engaged in a series of experiments with a new Comcast app for the XBox which allows users to watch the operator's Xfinity cable service live and streamed on the device.

His conclusion:  even though Xfinity is using the same RF spectrum that Comcast's Internet service uses, Comcast is using differentiated services code point, or DSCP, bits, at the edge to ensure that the Xbox service gains priority over other traffic.  Berg set out to intentionally exceed his Comcast Internet service download cap to see what happens to his Netflix-to-the-PC traffic versus his Xfinity-to-the-Xbox traffic.  Sure enough, when congestion was high, Netflix slowed down but Xfinity did not.  Berg concluded that the DSCP codes found in the Xfinity bits are signals to "prioritize" that traffic over competing traffic.

Comcast has denied Berg's accusations, both to Stacey Higginbotham at GigaOm and on the company's own blog.  Chief technologist Tony Werner wrote that "we provision a separate, additional bandwidth flow into the home for the use of this service — above and beyond, and distinct from, the bandwidth a customer has for his or her regular Internet access service. Our Xfinity TV content is provided through the Xbox over that separate service flow, and therefore does not use a customer's provisioned Internet service capacity."

Therefore, Xfinity-to-the-Xbox is not an Internet service at all but a separate and distinct transmission that is nothing more than regular cable service, only routed to the Xbox ,which acts much like a cable set-top box.  This is nothing but "our traditional cable television service, which is governed by something known as Title VI [italics added] of the Communications Act, and we provide the service in compliance with applicable FCC rules."

Title VI of the Communications Act is a crucial fact in this controversy.  Title VI governs the regulation of traditional cable services, which do not require non-discrimination in the way that the Open Internet rules or consent decree provisions do.  (The jurisdictional issues surrounding the net neutrality regulations are themselves controversial and complex.  See this CRS paper for an excellent summary of the byzantine jurisdictional routes that the net neutrality regs have taken.)

The issue then isn't whether Comcast is in compliance with the Open Internet or consent decree requirements.  The issue is whether multichannel video-over-IP is a traditional cable service under Title VI.  Comcast says it is.

Video-over-IP delivered to the Xbox is exactly the same thing as regular cable service delivery, which is video-over-QAM (quadrature amplitude modulation), Werner said.  It doesn't go over the public Internet, like Netflix or Hulu.  It is separate and apart from Internet content and it doesn't affect the quality of promised broadband service.

When Comcast first announced its streamed version of Xfinity, the company squarely took on the issue of Title VI.  In a statement, it said:
If we are delivering a traditional cable service on a Title VI basis, where the customer is already paying us for that service, and all we are doing is delivering it in IP over our managed network through a different device that effectively serves as an additional outlet in the house, then we don't believe it should count against their data usage threshold. There is no 'discrimination' here -- remember, we do count customer use of, the Xfinity TV app and against data usage threshold standards (because that's not a Title VI service being delivered only in the home)."
The obscure and legalistic Title VI is the key to this debate.  The question is not whether Comcast engaged in discrimination but whether Xfinity-to-the-Xbox is a cable service.

Drumbeat Grows for Smart Meter Opt-Outs

The Obama Administration threw the weight of the federal government behind the accelerated deployment of smart grid technology in the 2009 American Recovery and Reinvestment Act, authorizing $4.3 billion in matching grants to speed grid modernization.  The vast majority of the freed-up funds are going to wide-scale smart meter deployments and virtually all utilities are either in the midst of smart meter deployments or on the cusp of making a decision to go down the smart meter road.

But that road has proven to be a rocky one at the state level, with consumer advocates, public interest groups and increasingly organized smart meter opponents urging state regulators and legislators to allow consumers to opt-out of the advanced two-way communications devices, which provide detailed visibility into grid operations and customers' energy usage level.  Last week, Business Week cast a spotlight onto the controversy.

Over the weekend the AP elevated the issue higher with a piece that focused on legislation enacted in Vermont that makes Vermont the first state in the nation to allow customers to reject the new devices without paying a surcharge.  Other states, including California, Maine, Nevada and Oregon (with more states in the queue), have permitted customers to stick with their analog devices but only if they pay an opt-out fee.  Utilities say the fee is necessary to cover the costs of meter reading labor, expenses that disappear with remote, electronic meter reading.

Fueling the Vermont legislature's move was a group called "Wake Up Opt Out," a grassroots campaign aimed at warning consumers about potential privacy violations and ill health effects flowing from smart meters.  Regarding the privacy violations, the ACLU of Vermont concurs, warning that "the temptation to use this information [smart grid data] for something other than managing electrical loads will be strong – as it has been for cell phone tracking data and GPS information."

The health issue, though, is much more controversial, with little solid evidence to back up the group's claim. But the fear of "radio frequency radiation" from the communications capabilities embedded in smart meters, along with the privacy concerns, is a common rallying point among smart meter opponents.  Groups such as Stop Smart Meters and Take Back Your Power, and a handful of others, are mobilizing to create even greater grassroots backlash to smart meter deployment.

Vermont may have been the first state in the nation to give customers the ability to opt-out of smart meters at no extra charge, but it may not be the last.

Alexander, McCain Agree on Inevitability of Large-Scale Cyber Attacks, Disagree on Critical Infrastructure Requirements

As the fight over cyber security legislation shifts to the Senate, a battle line is being erected by the Administration and Senate Democrats:  the need to establish mandatory cyber security standards for "critical infrastructure" companies such as electric utilities, gas pipelines and banks.  In late-April, over the objections of the Obama Administration, the House passed  the the Cyber Intelligence Sharing and Protection Act (CISPA), which allows private companies, including critical infrastructure players, to voluntarily share cyber threat information with government agencies.

Senate Democrats and the Administration opposed CISPA not only on inadequate privacy protection grounds but also because the bill fails to impose cyber security standards on critical infrastructure. Instead, they favor a bill introduced by Sens. Joe Lieberman (I-CT) and Susan Collins (R-ME) that would give the Department of Homeland Security (DHS) the ability to impose minimum cyber security requirements on critical infrastructure companies.

In the midst of the legislative wrestling, Sen. John McCain (R-AZ), Ranking Member of the Senate Committee on Armed Services, has engaged in a lively exchange of letters with General Keith Alexander, Director of the National Security Agency and Commander of U.S. Cyber Command regarding his support of the Administration's position that requirements are needed.  (Hat tip to the wonderful Lawfare blog for tracking these exchanges.)  McCain kicked off the correspondence following March testimony by Alexander.  Alexander responded on May 8 and McCain replied to that letter on May 9.

Both McCain and Alexander agree on the inevitability of a large-scale cyber attack on the U.S.  In his initial letter, McCain said "I view the inevitability of a large-scale cyber attack as an existential threat to our nation."  Alexander said that he shared McCain's view that "the United States will inevitably face a large-scale cyber attack."

Beyond that, though, the two military men disagree.  Echoing Obama's position, Alexander thinks that "some minimum security requirements will be necessary to ensure that the core critical infrastructure is taking appropriate measures to harden its networks to dissuade adversaries and make it more difficult for them to penetrate those networks."

McCain, reflecting the Republican position, is fearful of creating a bureaucracy that will promote mere compliance with what he perceives to be ineffective regulations, particular under the DHS.  "Our vulnerability to cybcr attacks will not be remediated by creating additional layers of bureaucracy in an agency already failing in several of its core missions.including aviation security and border control," he wrote.

In the meantime, Senator Jay Rockefeller (D-WV), a co-sponsor of the Senate bill, is reinforcing the line drawn by the Democrats.  Yesterday he told reporters he is not open to removing the mandatory requirements provisions from the legislation.  "That's just like giving up the basic national security protection of the country," he said.

Image courtesy of Occupy Los Angeles.

Tumblr Exec: Europeans Are Not, Like, Crazy Regarding the Right to Be Forgotten

The European Commission (EC) is proposing to create a brand new right in its data privacy regulations called "the right to be forgotten," which would make Internet companies liable for 2% of their global income if they fail to remove content that users post online but then later regret doing so.  The hotly debated right to be forgotten is paving a collision course between American free speech advocates (and Internet companies) and Europe's vocal privacy advocates. (Jeffrey Rosen has this excellent summary of the issue here.)

"What they're saying is that I am an autonomous moral actor, I should be able to interface with the world in a way that I want and that means that I should be able to withdraw what I put out there, I should be able to withdraw what I've put out there in the world," explained Andrew McLaughlin, Tumblr Vice President and former U.S. Deputy CTO during New America Foundation's annual retreat (video posted yesterday at Slate).  But, what happens when someone else -- a friend, a journalist -- uses the retracted content in their own postings?  Would they then be forced to delete their content too and would re-posters of that content be forced to delete their content, sparking a chain reaction of mass content deletion?

That's the heart of the free speech collision.  "The problem with that is in a digital world of speakers and listeners you may have the right to forget what you've said but you don't have the right to make people forget what they've heard you say," McLaughlin said.

From an American perspective, the right to be forgotten looks nuts.  But, "the Europeans are not, like, crazy," McLaughlin, who also served as Director of Global Public Policy for Google, said.  "When they think about the right to forget, they think about the Stasi.  We don't have that historical experience in this country."

On top of that the United States is an outlier in the global spectrum in terms of the minimal amount of speech that is restricted.  Other countries, including democracies such as the UK, Brazil, India and others, have "through democratic processes recurrently re-legitimated its set of speech restrictions that flows out of a set of cultural values and a set of norms," McLaughlin said.

Consumer Reports on Facebook Privacy: It's A Labyrinth

Consumer Reports issued this scary report today on Facebook privacy and it reinforces what we already know, which is that Facebook is a giant privacy sieve.  Noting that Facebook has "labyrinthian policies and controls," the report walks through a litany of dangers that face users if they don't adequately protect their Facebook accounts, from biometric privacy invasions (from Tag Suggest which scans your face for recognition) to IRS snooping to surveillance by criminals.  

Consumer Reports focused on Facebook not only because it's a giant, but also because the company is about to reap riches from an upcoming IPO.  What better way to kick the company into cleaning up its privacy act than to issue a highly publicized report on the eve of a public offering .  It seems to have worked - CR notes that " even as this article went to press, the company announced that it would offer users greater access to records of their past Facebook activity."

Facebook probably also doesn't want to be the prime bad guy during next week's Senate Commerce Committee hearing on the need for new legislation that mandates baseline privacy protections.  Jeff Jarvis laments the publication of the Consumer Reports article precisely because he thinks it will spark a "moral panic" and make it easier to usher in bad regulations.  Tune into next week's hearing to see just how often the CR report is cited.

Picture credit:

Telcos Decry "Utility-Style" Regulation

As the number of communications companies dwindles, the major telcos are hard-pressed to deny the obvious consolidation in the traditional wired and wireless transmission businesses.  And deals keep coming which threaten to trim the ranks of communications competitors even further -- AT&T's failed bid to buy T-Mobile and Verizon's deal to buy AWS spectrum from a consortium of cable companies (and then run a joint venture with the cablecos) are the most recent examples.

In hopes of shifting the debate, and warding off nasty measures by antitrust officials and the FCC, AT&T and Verizon are pushing a new model of communications competition, which argues that broadband service is merely one part of a new Internet "ecosystem."

Speaking at a US Telecom webinar today, economist and professor Jeffrey Eisenach warned against applying "public utility-style" regulation to broadband.  Unlike the old days, phone companies aren't the end-game when it comes to communications, he argued, saying that the new broadband world is multisided and filled with value "circles" where "communications is just a complement among complements."

The iPhone is a classic example, according to Eisenach.  "In the real world, Apple is the customer-facing firm.  In that context, the carrier becomes secondary," he said.  Comparing Apple's stock price with that of AT&T since the introduction of the iPhone, Eisenach said that "Apple has waked away with the lion's share of the profits."

In this buzzing ecosystem, carriers are a commodity and not the key segment of the the edge-core value chain model that the FCC has adopted when assessing broadband competition, Eisenach argued.  Antitrust oversight is needed but the "1934 regulatory agency" model embodied by the FCC's recent net neutrality and data roaming orders no longer applies.

Whatever the merits of this new mode of thinking (which predictably downplays the power of communications pipeline providers while injecting some fresh ideas into the debate), it's clear from Eisenach's talk that the telcos are threatened by Apple.  "By creating a differentiated product, Apple…really can dictate the terms of trade," he said at one point.

Is the fear that Apple will ditch AT&T and Verizon and start its own mobile communications company?  Whitey Bluestein has this piece today in GigaOm saying that's exactly what will happen.

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