Federal Communications Commission

Industry Demand calls for quick approval of FCC’s Wireless Spectrum recommendations

Cambridge Wireless + DCKTN: Spectrum and the N...

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There is increasing demand from the Wireless Sector that opening new spectrum, as championed by the FCC, would speed application roll-outs for broadband in the immediate future. Mobile providers are clamoring to offer increasingly sophisticated applications to connect users with everything on a Mobile Internet.

The recent CTIA Wireless convention in Las Vegas purported a salivating by Mobile operators to upgrade their networks in anticipation of increased demand by consumers and businesses alike to expect newer and better applications from mobile devices. This continues to drive a tremendous need for additional spectrum for the Wireless Industry. See (Cellphone firms see big opportunity in wireless Internet)

Approval of additional spectrum critical

Without the speedy approval of additional spectrum for the wireless industry both new and innovative applications, speeds, and wireless access will suffer. In addition, new job creation for struggling and unemployed workers will not materialize. Sufficed to say, the approval of the proposed plan to reallocate needed spectrum from the broadcast industry to wireless is essential in keeping this sector of the economy growing and creating new jobs. See (Recommendation 17-National Broadband Plan)

Broadcasters failed to innovate and use needed spectrum

The broadcasting industry failed to use its existing spectrum to innovate its way out of a declining ad supported revenue market. As any entrepreneur will affirm, innovation, change, and speed to market are an integral part of the continual and fast changing dynamics within a competitive marketplace. The FCC has outlined plans to compensate the broadcasters for this spectrum, and it is now time to move forward. We can no longer wait and haggle over how spectrum should be used, or whether current owners have the right to sit on it. If anything, their dormant spectrum use should be considered abandoned.

Reward Opportunists

The key phrase is (seizing the opportunity). Our government must support and reward companies that seize the opportunity in creating new, innovative, and competitive products; companies that create a new niche market, or offer products which no other has contemplated; the Google’s, Cisco’s, Facebook’s, Twitter’s, and Apple’s of the world, just to mention a few. This is what our economy is all about. It is a mantra that creates new jobs and works to lower consumer prices. The FCC is on the right track in seeing a demand and moving to fill its needs.

Cell execs say more steps needed to meet demand (seattletimes.nwsource.com)
FCC wants 120MHz of spectrum from TV stations (computerworld.com)
Wireless Carriers Celebrate FCC’s National Broadband Plan (blogs.wsj.com)

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The National Broadband Plan: Affordable-Speedy-Accessible-Competitive-Socially Sound

A connected America

The FCC’s recent release of its long awaited Broadband Plan has hit the streets with a resounding affirmation of what America needs with connectivity, competitiveness, affordability, speed, and social readiness. If the plan is adopted as proposed, America will truly benefit from the economics of a public-private partnership in creating a superior broadband pipeline for global success, see (National Broadband Plan: Connecting America).

The Plan Outline:

Accessible and Affordable to 100 million homes with speeds of 100 megabits upload and 50 download
Be (Number One) in Mobility access and speeds compared to any other nation
Create Universal Access for all Americans including the means, skills, and affordability; if they choose
Upgrade Community Schools, Hospitals and Government buildings for access to 1 Gbps broadband service
Create a Public Safety Wireless Network and access for all first responders
Promote a Clean Energy Economy, and ensure Americans are able to track energy consumptions through broadband

The Road Map:

Foster robust competition within the broadband sector to drive demand for increased network performance while lowering deployment cost of infrastructure; monitor and benchmark competitive behavior, provide consumers with performance of broadband services, reform access to right-of-ways, review wholesale access policies, and increase spectrum availability

Reallocate the existing Universal Service Fund to provide all Americans with access to broadband just as the plan was used to fund telephone service to all Americans in the 20^th Century
Reclaim Broadcast Spectrum in auctions of, (300 MHZ by 2015-500 MHZ by 2020), for the Wireless Industry and other ancillary uses thereby fulfilling a need to expand a burgeoning Mobile demand in connecting consumers, businesses, and the public sector
Promote E-rate and Rural Health Care Programs, support non-profit and government institutions with affordable and alternative means of connectivity to broadband infrastructures which allows lower investment costs by reforming incentive structures, licensing and data interoperability for all public organizations

Shifting Priorities

The FCC moved to gather existing spectrum from the Broadcast Industry to help free up space for the Wireless Industry, in much need of new spectrum on its continued growth forecasts. The benefactors will be companies like Cisco, providing network support, and Verizon and AT&T Wireless operators. Broadcasters will benefit from sharing in spectrum auction fees of their unused bandwidth.
The Universal Service Fund will be used to promote and incent companies to build-out their networks to underserved portions of the markets for wire-line and wireless access. This fund is severely outdated from its original intent of providing access to telephone service for the nation.

The FCC seems to have done its homework. Congratulations to the FCC commissioners, staff, and partners, for their hard work and dedication in creating a viable and workable solution for a National Broadband Plan roll-out for the next decade. While it is not heavy on regulation; the plan sets out a road-map to foster collaboration, innovation, investment opportunities, and transparency within its recommendations. Legislators should look to affirm the plan quickly and move forward with an innovative and economically sound superior broadband gateway for our public and private sectors.

Fred Campbell Responds to the FCC’s National Broadband Plan on BitsonBroadband.com (prweb.com)
TV broadcasters to fight FCC over broadband spectrum (newstatesman.com)
Wireless Carriers Celebrate FCC’s National Broadband Plan (blogs.wsj.com)
Plan would give 90% high-speed Internet (cnn.com)

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Retrans-Consent: Be Careful What You Ask For!

With the recent battle between Cablevision and Disney over Retransmission Consent in New York regarding WABC-TV carriage on Cablevisions 3.1 million subscribers, and thereby producing a coalition of Cable Providers to petition the FCC to intervene in negotiations, is akin to the saying: (be careful what you ask for).

It seems to me, this is a business market negotiation best handled through competitive market forces rather than asking the FCC to get involved in a dispute between two companies. The (ax can cut both ways) when it comes to oversight of the pipeline distribution and broadcasting industries. Yes, consumers are caught in the middle, wanting pertinent and relevant programming for a reasonable price, while public negotiations and threats of signal cuts dominate the headlines; see (Cable firms seek FCC help in fee disputes).

The issue remains, how much is WABC-TV worth to Cablevision for carriage and distribution of their signal. Retransmission Consent was formulated years ago when broadcast stations wanted assurance that cable companies would carry their local signals, and be compensated for their original programming. In the beginning most broadcasters just asked for Must-Carry, or assurance their signals would be distributed by pipeline providers for 3 years, see (Moody’s expects to see more retrans battles).

Fast-Forward to today and times have changed. Providers are paying substantial sums per month to distribute most of their programming to consumers. Cable Programmers have reaped the benefits of these carriage agreements in producing top-quality programs through carriage fees along with ad supported revenues; a dual revenue model. Broadcasters are struggling to stay afloat with the single, Ad Revenue Model . Therefore, Retransmission Consent has become a battleground for demanding monthly carriage fees, just as most Cable Programmers ask for, and receive. Broadcasters have seen a significant drop in Ad Revenues in recent years along with a lose network subsidies. Without additional revenue streams, broadcasters are looking to lucrative distribution agreements to make up the short-fall.

This is a market demand negotiation, not a regulation matter for the FCC to consider. If Cable Providers want to lessen the impact of these carriage fees, they should consider (Tiering) Broadcast signals to accommodate and moderate fee increases. Yes, if negotiations demand an unreasonable price for most customers, negotiate for the signal to be on a Tier where consumers can pay an extra cost if they value the programming. Some consumers will lose in this scenario, but overall consumer rates would be adjusted for those who can afford the additional cost.

This is not a regulatory issue, but one of market demand and supply. In my opinion the coalition of cable providers should think twice before asking the FCC to intervene in their business negotiations, or risk having regulations that regulate them into non-existence. This is a Free Market System, let it work as intended.

Time Warner Cable to ask FCC for new rules on negotiating programming deals (latimesblogs.latimes.com)
Cable and satellite operators take their case to Congress (latimesblogs.latimes.com)
Cable Companies Petition FCC (online.wsj.com)
Washington weighs in on Disney – Cablevision fight (latimesblogs.latimes.com)

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Fox Vs Time Warner Cable: More Revenues for Fox-Higher Rates for Consumers

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Two giants in the telecommunications industry battle publicly over Retransmission Consent. Both Fox and Time Warner Cable have let cooler heads prevail in their war over money to be doled out in fees to Fox by extending their negotiations beyond the Dec 31, 2009 deadline.

At issue, the Fox owned broadcast networks carried by the Time Warner Cable pipelines. Under Retransmission Consent broadcasters can choose (Must-Carry), where cable operators agree to carry stations throughout the consent period for free, or negotiate for (Advertising) or (Fee-Based) arrangements to solidify carriage. Obviously, Fox has chosen the latter with a proposed $1.00 per month charge per Time Warner Cable subscriber.

Keep in mind that local Fox Affiliates have agreed to terms with Time Warner Cable, which is significantly lower in compensation than the $1.00 fee proposed by Fox owned stations. Evidently Fox views its owned stations in larger markets to be worth much more than its affiliates in smaller DMA’s.

A $1.00 per sub fee to Time Warner Cable for Fox broadcast stations would mean millions of additional expense added to their bottom lines on a per month basis. How will the cost be absorbed? Traditionally, these costs are passed on to customers in increased monthly fees, and with linear programming configurations taking the heat from consumers, as paying for more than they want, Time Warner Cable does not want to take that inevitable backlash. This is evidenced by Time Warner Cable’s website asking customers where they should draw the line.

With broadcasting revenues on a continuing decline, Retransmission Consent negotiations have become a target for broadcasters like Fox to recoup falling revenues. While content is worth money, where do cable companies draw the line on preventing the rising costs? It would seem monetary negotiations should reflect program ratings on a per market basis, i.e. American Idol, and NFL Giants Games and local programming? What is market demand for this type programming?

Unfortunately, this saga has moved to the public arena with both sides trying to sway public opinion. It has become so public that both Senator John Kerry and FCC Chairman Julian Genachowski have stepped in to cool the situation, which serves to highlight the fight over revenue and costs, and consumers disdain for being caught in the middle. So much for public relations!

News Corp.’s Chase Carey tells Sen. John Kerry he’s not interested in arbitration with Time Warner Cable (latimesblogs.latimes.com)
Fox Channels ‘May Very Well’ Disappear from Time Warner Cable, Says News Corp (wired.com)
Time Warner OKs Arbitration With Fox (abcnews.go.com)
Time Warner, Fox Deal Extended (abcnews.go.com)
Why Isn’t Fox Gone From My TV Yet? [The Great Cable Standoff] (gawker.com)
News Corp. network allows signals to continue; Time Warner Cable says ‘up to Fox’ to nail deal (taragana.com)

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The Cable Pipeline: Top 10 Predictions for 2010

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What will 2010 bring for the Cable-Telecom-Wireless Industry’s? Broadband and Wireless will continue an evolution of defining the way we communicate and make decisions that affect our daily lives in significant ways. Relevant companies will struggle to deal with an ever increasing shift of consumer preferences in their business and home information, communication, and entertainment needs.

Here are my Top 10 Predictions for 2010:

The FCC will move to increase regulation of ISP’s as a way to open broadband options for both business and consumers
The Universal Service Fund will be re-directed to increase broadband access to the underserved
The FCC will gain spectrum back from the broadcasting industry to advance Wireless industry initiatives and will continue to grow exponentially in 2010
Consumers will look for economical and alternative ways to connect to the things that are important to them through a broadband global universe, including information, entertainment, education, and health
Cable TV companies will struggle with a dwindling demand for linear programming and the consumers demand for viewing content on their own terms. TV Everywhere will be a success in the short term
Cable-Telecom companies will continue to struggle with customer satisfaction issues and will begin to focus more on this issue as subscribers continue to migrate elsewhere. Companies like Cox Communications will continue to thrive due to a focus on quality engineering and customer service
Demand for access to content on an A-La-Carte basis will gain ground with Over-The –Top Access Providers making significant head-way during the year
Cable-Telecom companies with underperforming networks will be subject to buy-outs and take-over’s as the industry continues to consolidate and upgrade infrastructures
Verizon (FIOS) will continue to gain market share where rolled-out due to its advanced capabilities for consumers and businesses
The Cable-Telecoms will continue to make their bundles more competitively attractive as they compete for the one-stop-shopping experience

2010 will be all about the customer experience and a continued change in broadband dynamics. The Cable Industry will struggle with a diminishing demand for linear programming, and the success of alternative Over-The-Top models of content access.

Feds Mull Rules, Fees to Spur Net Access (online.wsj.com)
FCC outlines seven biggest barriers to broadband adoption (arstechnica.com)
FCC discusses barriers to national broadband plan (news.cnet.com)
Big cable: move millions from phone subsidies to broadband (arstechnica.com)
Broadband economics: Competition lowers prices (news.cnet.com)

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Net Neutrality’s Increasingly Complex Debate

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At issue, the language the FCC crafted in its proposed rule making, specifically FCC NPRM Paragraph 106 as implicated by Digital Society. (see FCC NPRM prohibits good network management)

“We understand the term (nondiscriminatory) to mean that a broadband Internet access service provider may not charge a content, application, or service provider for enhanced or prioritized access to the subscribers of the broadband Internet access service provider, as illustrated in the diagram below. We propose that this rule would not prevent a broadband Internet access service provider from charging subscribers different prices for different services. We seek comment on each of these proposals. We also seek comment on whether the specific language of this draft rule best serves the public interest.”

The crux of the debate for those seeing paid-peering-agreements as essential to increased participation by innovative content, application, or service providers, whether they be start-ups or seasoned, seem to be an open ended interpretation which would ban prioritization. See (What is true neutrality in the network?)

With the wide range of content flowing through the pipelines, and increasing at a rapid pace, the network cannot become a (dumb pipeline). Network management seems to be an essential characteristic needed to handle the flexibility of constantly differing requirements from Internet users. This is not a linear format with constant speeds and demands.

The network must constantly adjust to those varying needs which may require one user to demand more capacity than others at unique times. This management will not degrade the network for other users. It is a matter of choosing one higher demand over a lower demand without degrading the demand for both. It manages the requirements of each user.

As private networks, ISP‘s should know their responsibilities regarding consumer and commercial traffic, and the management issues of prioritizing. Obviously, paid peering is needed for those whose products depend on increased speed and bandwidth for business survival. The consumer wants the same whether they are streaming movies, or downloading PDF’s or just sending e-mail attachments.

It comes down to understanding how the Internet works regarding network access management capabilities across a wide variety of circumstances and geographical locations. In essence, what will it take for both large and small ISP’s to handle the varying traffic over their networks and upgrading to a standard that reasonably doesn’t degrade the user experience?

Hence, the NCTA’s recent reference to First Amendment issues in discriminating against ISP providers in Paid-Peering Agreements. The FCC should revisit NPRM Paragraph 106 and make sure proposed Net Neutrality rules do not discriminate against one party in favor of another.

FCC Agrees to Set Rules on Net Neutrality (gigaom.com)
FCC: We’re Going to Make Net Neutrality the Law [Net Neutrality] (gizmodo.com)
Feds Mull Rules, Fees to Spur Net Access (online.wsj.com)
FCC approves net neutrality rules (seattlepi.com)

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Comcast Consummates the Deal: Now the Tough Part Begins

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It happened, as predicted by some and discounted by others; a Comcast-NBC Universal merger that has wide-ranging implications on both future Content and Internet usage. However, the tough part for Comcast begins now, today, and that is to placate dissenters like the Consumer Federation of America, the Free Press, and tough Federal Regulators that this will help both competition and increase access to broadband, not hinder it.

The Free Press has issued a press release denouncing the merger while giving reasons that the deal should be at least, a violation of Video Competition Anti-Trust Laws; see (Comcast-NBC Merger: Just Say No). On the other hand, Comcast CEO Brian Roberts released his own statement regarding the merger designed to get out front of the expected controversy that the deal would attract. (Comcast and GE to Create Leading Entertainment Company)

“We are prepared to make affirmative commitments to ensure that the pro-consumer and public interest benefits of the transaction are realized,” Roberts said. “Today, we have announced a number of initial commitments that expand on the capabilities that Comcast and NBCU have built over the years, and the new opportunities that this combination makes possible. These commitments address the needs of various audiences and stakeholders, and we will provide additional details on these and other commitments in our public interest filing with the Federal Communications Commission.”

The merger announcement comes after the National Cable Telecommunications Association press release of Adoption Plus (A+) Program, a pilot initiative of cable operators, manufacturers and vendors of which Comcast is a member, creating a public/private partnership to provide increased broadband participation to a vulnerable part of the population, underprivileged Middle School children. This does partner with the FCC’s vision of increasing broadband adoption and access to the underserved population.

Comcast may have to make serious concessions to pass the regulatory scrutiny that will certainly come such as, keeping Hulu cost free for consumers, share fairly its newly acquired content with competitors, separate retransmission negotiations with NBC from cable operations, and possibly divest itself of NBC stations in overlapping markets. Comcast has not come this far to lose the game in the “home stretch”, and it will use all the lobbying and public relations power needed to win that regulatory approval.