Wednesday, August 20, 2014

Is FCC Chairman Tom Wheeler a sheep in wolf's clothing?

John Oliver wonders whether Tom Wheeler is
a dingo, but maybe he's a sheep.
President Obama appointed Tom Wheeler, who had headed national organizations representing the interests of the cable and wireless telephone industries and lobbied on their behalf, as FCC Chairman.

Cynics (and realists) saw that as a payoff for the ISP industry. Comedian John Oliver characterized it as "the equivalent of needing a baby sitter and hiring a dingo."

But, maybe Mr. Wheeler is not in the ISP's pocket after all.
  • He was an invited expert by the The President's Council of Advisers on Science and Technology, which issued a report calling for the use of smart radios and sharing federal spectrum. The executive order which followed cannot have pleased Wheeler's pals at AT&T who like exclusive spectrum licenses.
  • When asked to comment on John Oliver's comedy sketch, he said it was good that the public was taking an interest in net neutrality and the ISP industry and denied that he was a dingo.
  • He has spoken out against state laws that keep local governments from providing Internet connectivity.
  • More recently, he has responded to requests by legislators urging the FCC to take action against those restrictive laws, saying that laws restricting community broadband "have the effect of limiting competition in those areas, contrary to almost two decades bipartisan federal communications policy that is focused on encouraging competition" and acknowledging that "state laws that directly conflict with critical federal laws and policy may be subject to preemption in appropriate circumstances." Again, not something his ISP friends or politicians receiving donations from them want to hear.
Actions speak louder than words -- time will tell if he is a captive of the ISP industry or a sheep in wolf's clothing.

update 8/20/2014

Perhaps Tom Wheeler has decided to shift his attention from net neutrality and Internet fast lanes to local broadband networks. (It seems to me that the latter is a more important issue -- broadband competition is severely lacking in the US and the cost of fixing the blockage that is fueling the net neutrality debate between Netflix and the large ISP is small).

Regardless, a battle seems to be brewing over the right of states to restrict municipal broadband.

Matthew Berry, chief of staff to Republican FCC Commissioner Ajit Pai, argued that the FCC has no authority to invalidate state laws governing local broadband networks in a speech to the National Conference of State Legislatures. He evidently sees it as a states rights issue.

It would be nice to think that Mr. Pai and the other commissioners would decide this issue on the basis of broadband competition and investment rather than partisan politics and campaign contributions. Who is the FCC's constituency -- the ISP industry or the companies providing Internet services and the public which consumes them?

Unfortunately, I bet that even if Mr. Wheeler prevails, this question will be tied up in court until the next presidential election. If that is the case, folks like Google, Facebook and John Oliver better make Internet policy a major campaign issue.

Update 1/30/2014

The FCC has revised its definition of "broadband" from 4 mb/s download speed to 25 mb/s download speed -- much more realistic in the age streaming video. Using that definition, quite a few American have access to broadband, although that is often from a monopoly ISP:

Note that 6.8% of us have access to gigabit download speed and 6.7% of that is over fiber. In spite of Google Fiber, I was surprised that the figure is so high. It also seems that 0.1% have wireless gigabit access -- I wounder where.

Update 2/5/2015

Well, the big shoe has dropped -- Wheeler has proposed Title II, with forbearance, in an attempt to protect an open Internet. He evidently is a sheep in wolves clothing.

Here are a couple of links for details on the announcement:

Update 2/9/2016

FCC Chairman Wheeler has proposed a standard
TV-interface box that combines the functions of today's
set-top boxes and Internet interfaces.

Senators Edward J. Markey (D-Mass.) and Richard Blumenthal (D-Conn.) surveyed the top ten cable and satellite TV providers and found that approximately 99 percent of customers rent their set-top box directly from their pay-TV provider. The rents average $231 per year, which may total more than $19.5 billion annually.

FCC Chairman Wheeler has proposed a regulation requiring the cable and satellite providers to work with hardware and software companies to define a standard television set interface box that would combine the capabilities of their current set-top boxes and Internet interface devices from companies like Roku, Apple and Google.

The new set-top boxes would be capable of displaying video and would offer varying options for copy protection. There would also be a variety of user interfaces and capabilities for discovering video material.

I don't know what the current set-top boxes cost to manufacture, but renting them for $231 per year must be very profitable. If this proposal is accepted and an open standard defined, competing vendors will offer a variety of designs at lower prices than we are paying today.

The FCC will vote on the proposal February 18 and, if it passes, there will be a period of public discussion followed by the final regulation followed by product development, so don't expect new, standard set-top boxes to become available over night.

While this scenario would lead to low-cost integrated boxes with innovative user interfaces and content-discovery options, don't expect your overall bill to drop. The Internet/video service providers in the US are either local monopolists or near monopolists, and they will make up for lost revenue by increasing prices for content and connectivity.

Update 2/13/2016

Years before the FCC became involved with set top boxes that connect to cable and satellite networks, they were involved with the connection of devices to the telephone network.

Until 1956, AT&T succeeded in prohibiting anyone to connect devices to their network -- claiming they might cause damage. That policy was challenged by the Hush-a-Phone,

would not let users connect anything bu AT&T manufactured phones to their network.

The FCC sided with AT&T in baning the Hush-A-Phone, which users put over the phone so people nearby could not hear what was being said. They succeeded for some time, but were overruled by US Court of Appeals, in 1956.

The claim that a Hush-a-Phone could damage the phone network seemed ludicrous -- it did no more than would cupping one's hand around the phone while talking.

The next challenge was a little more reasonable. The Carterfone enabled one to connect a radio transmitter/receiver to the phone network. It let one patch a short wave radio call into a phone conversation. In 1968, the FCC ruled in favor of the Carterfone and other devices as long as they conformed to the specification of the network.

That opened the path for connecting computers to the phone network, and we soon had acoustic couplers, that cradled the telephone handset in a device that enabled one to connect computers to the network.

The early terminals that connected to acoustic couplers transmitted and receive data at the rate of 10 characters per second. They gave way to modems that were connected electronically. The early telephone modems ran at 1,200 bits per second and improved over time until modem speeds reached 64kbps.

If the FCC and courts had succeeded in stopping the Hush-A-fone and Cartherphone companies, we might still be purchasing modems from monopoly phone companies and our choices limited to their products. The current disagreement over the open standard set-top box is the latest fight in the war between corporate profit and the public good.

I hope the FCC proposal succeeds, but that will not be the end of the story. The ISPs will try to raise their Internet connectivity charges in order to compensate for lost set-top box revenue. They will be able to do so as long as they remain local monopolies or small oligopolies.


The FCC has voted 3 to 2 to pursue a plan to "unlock the set-top box: creating choice and innovation." (What do the two dissenting members have against competition)?

The proposal will compel cable companies to give third-party device makers the information they need to build set-top boxes that will be able to stream Internet and cable video. The boxes will be required to comply with open standards, thereby providing the opportunity for competition.

If all goes as planned, we will end up with cheaper set-top boxes that enable us to easily discover and display content while providing copy protection alternatives for content providers. Satellite and cable providers will lose a significant chunk of revenue.

That's the good news. The bad news is that this will take some time to come to fruition, and when it does, the Internet service providers will raise the prices on connectivity. They will be able to do that because they have monopolies or small oligopolies in most areas.

Update 4/19/2016

President Obama announced a new initiative through an Executive Order calling on departments and agencies "to make further progress through specific, pro-competition executive actions that empower and inform consumers, workers, and entrepreneurs." They are to report back with specific suggestions within 60 days.

He singled out set top boxes as being ripe for competition and also discussed set top boxes in his Weekly address to the nation:

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