Economist/NYT opinion writer Paul Krugman coined the term “Zombie idea” to describe an idea that, despite being repeatedly refuted with evidence, keeps coming back. Not surprisingly, zombie ideas typically have powerful constituencies that benefit from the adoption of the zombie idea they push, and who invest a great deal of money and energy continuing to resurrect the idea each time it gets killed.
This Halloween brings us the return of the “content companies should pay money to last mile networks because they use more resources” idea. I first explained why this was a dumb idea back in 2006, after then-AT&T CEO Ed Whitacre explained that he wasn’t going to let companies with content his subscribers actually wanted “use his pipes for free,” Despite lots of reasons why this is a Dumb Idea that would end up seriously reorganizing the internet economy for the worse, you find carriers around the world reviving it because $$$. This is particularly true outside the U.S., where the argument also gets caught up in debates about American dominance of internet content and popular culture. There is a separate U.S. flavor, supported by folks like Brendan Carr, about charging “big tech” to build out broadband infrastructure, which I’ve also previously criticized. But the non-US flavor has been gaining traction as a function of the “Techlash” and therefore needs some in depth discussion — especially since we can actually see the predicted bad consequences play out in real time in South Korea.
Back in 2016, South Korea adopted a new interconnection rule based on a long-standing telco compensation rule called “sending party network pays” (SPNP). As I’ll explain in detail below, SPNP has deep roots in the whacky world of telecom “settlement” (the fancy word for who pays whom in international calling) how networks compensated each other for exchanging traffic. Those opposed to adopting this approach predicted (based on about 100 years of history) that it would prove impossible to enforce without super intrusive government oversight and would introduce severe latency into S. Korea’s networks as the “sending networks” (such as Netflix, but also gaming companies and others with high resolution visual content) routed traffic in clever ways to avoid paying significant charges. To the surprise of no one except the advocates for the proposal, the predicted badness happened. The cost of transit skyrocketed, latency dramatically increased, and the Korean government keeps needing to consider new and more intrusive ways to (a) stop companies from avoiding the fees to ISPs while (b) trying to target foreign content providers while protecting domestic uses they like — such as video chat and video games.
Despite this real world example, and an impressive array of folks explaining in detail why they totally hate this stupid idea, important folks in the European Council (egged on by the EU telcos) continue to think this is a Totally Awesome Idea. So I will explain how we got here, what traditional “sending network party pays” actually means, why this ain’t it, but even setting that aside, why what happened in S. Korea shows this is a Really Dumb Idea.
More below . . . .
(The original version of this appeared on the blog of my employer, Public Knowledge.)
At Public Knowledge, we’ve talked a lot about the Journalism Competition and Preservation Act (JCPA) and why we think it’s a very bad idea. But the most recent version made public raises a new twist. For a statute supposedly designed to save journalism and avert the “newspaperpocalypse,” it drastically favors broadcasters over newspapers and gives the biggest rewards to massive media conglomerates rather than local newspapers. Given the role media consolidation has played in destroying local news, and the fact that local TV broadcasting remains quite profitable, this outcome gets a rare 5 out of 5 Morissettes on the irony scale.
To make this even more annoying, Public Knowledge has a much better proposal for using big tech to support local media. Or Congress could go with this Free Press proposal (echoed by econ Nobel winner Paul Roemer in this op ed) to tax targeted advertising to fund local journalism. There are lots of better ways to tax big tech to fund local journalism that have the advantage of actually funding local journalism rather than media conglomerates. But no, Congress would rather create a new exception to the antitrust laws and bring cable must carry to the internet than expressly tax targeted advertising to fund local journalism. Le sigh.
Details on why the current JCPA favors big media below.
For most people, the Supreme Court’s decision in West Virginia v. Environmental Protection Agency was about environmental policy and what the Environmental Protection Agency can still do to cut carbon emissions. For a smaller subset, mostly lawyers, W. VA v. EPA was an important (but confusing) administrative law case that we will spend a bunch of time arguing about how to apply to agencies generally. And for the tiniest of all possible subsets, meaning me and a handful of other telecom lawyers, it was about . . . net neutrality. Because just about everything in telecom still revolves around net neutrality. Srsly. If we were living in the Don’t Look Up universe and a giant asteroid was about to smash into the Earth, I’d be getting questions from folks about whether I thought the asteroid supported classifying broadband as Title II.
The other basic truism about these events is that they are rather like ink blots, where what you see depends a lot on what you already think. So those who hate Title II are convinced that this spells doom for any FCC reclassification efforts, whereas those on the pro-Title II side think this doesn’t really change anything. I’m as much a human being subject to this bias as anyone else. So I can only explain why I think W.VA. v. EPA hasn’t changed anything and let y’all decide if I’m right. It all depends on what the Court means by a “major question” that requires “clear proof” that Congress intended to vest the agency with the power to do the thing.
Annoyingly, the Supreme Court has not been particularly clear on this concept. The anti-Title II folks point to Kavanaugh’s dissent from the D.C. Circuit’s refusal to rehear USTA v. FCC (the case that upheld the FCC’s 2015 Title II/Net Neutrality Order, which rested in part of what Kavanaugh called “the major rule” doctrine (now officially called “major question” doctrine) and the fact that the Roberts decision in W.VA v. EPA cited the Kavanaugh dissent (although not for anything having to actually do with net neutrality.) On the other hand, as I explain below, the actual language describing the “major question doctrine” if you read the case runs against the description of the “major rules doctrine” as described by Kavanaugh in USTA. More importantly, the Court’s reliance on Gonzales v. Oregon – which cites the FCC’s authority over broadband in Brand X approvingly as an example of where Congressional delegation is “clear” – seems to me much more important than a passing citation to the Kavanaugh dissent.
Additionally, while we always knew where Kavanaugh would be if this ever reaches SCOTUS again, there is plenty of reason to believe he lacks 4 additional votes for his position. Notably, Thomas (and to some degree it seems Alito and Gorsuch) have all fallen in love with common carrier again. True, that is in the context of social media, but it would be a level of weirdness to find that judges by common law can determine Facebook is a common carrier but broadband providers can’t be common carriers without Congress expressly saying so. Also, Thomas actually wrote the Brand X opinion, which found that it was totally cool for the FCC to classify DSL as Title II even if cable broadband were classified as Title I, so it’s hard to see how this kind of agency discretion is compatible with “major question doctrine.”
I break all this down in detail below . . .
I would never have imagined that we could get past Memorial Day without Gigi Sohn’s confirmation as the 5th FCC Commissioner/3rd Democrat. But Republicans who think there is no downside to dragging Sohn’s confirmation out interminably to block Title II — especially those who voted in favor of the Infrastructure Investment and Jobs Act of 2021 (IIJA) and are looking for that broadband money to begin flowing to their states — may wish to think again. Why? Because without a vote on the broadband map of 2022, the NTIA cannot distribute the bulk of the Broadband Equity Access and Deployment (BEAD) money (or the Middle Mile money, FWIW). And while it is entirely possible that the FCC might issue the map on a 4-0 vote without controversy, I would not want to bet my state’s broadband on it given that I can’t find a single broadband report vote in the last decade that wasn’t a 3-2 party line vote. (Technically, the 2011 vote was 3-1 with Commissioner Baker not participating. But you get the idea. This does not traditionally go smoothly, and is a lot less likely to go smoothly with $45 billion on the line.)
Why yes, the FCC broadband map does need a majority vote of the full Commission to get issued. Nor does the relevant provision of the IIJA (Sec. 60103) require the FCC to publish the new maps by any specific deadline. It simply requires the FCC to publish the maps before NTIA distributes either the BEAD money or the Middle Mile grant money. So if the Republicans and Democrats cannot come to an agreement on the new 2022 broadband map, the broadband map does not issue in 2022. Or 2023. Or until whenever the FCC gets a third Commissioner.
This is not, of course, much of a problem for the giant ISPs lobbying hard to keep Sohn off the Commission. For them, the BEAD program is more a threat than a money maker, since the money will go to places the largest ISPs don’t want to serve (otherwise, they would be building there already). Indeed, the money is likely to go to potential rivals/competitors. Hence the likely controversy over the maps. The ISPs will do their best to minimize the geographic area unserved by broadband (defined in the statute as 100 megabits down/20 megabits up). Because while giant ISPs might like some of that money, it is far more important to them to keep potential new entrants or existing potential competitors from getting the money anywhere close to where the established ISPs offer service. By contrast, areas that don’t actually have broadband today want maps that reflect this reality — not maps that protect existing incumbents. Hence my belief that (like previous mapping exercises with even less on the line) the vote to produce the 2022 broadband map will be along party lines and thus need a 3rd Democrat.
Which, of course, is impossible without Sohn being confirmed as the 5th Commissioner. Which is just fine by the giant ISPs doing the lobbying, but not for Senators — R or D — from rural states.
I unpack all this below.
It isn’t the sultry Regency drama of Bridgerton, the action psycho-drama of Moon Knight, or even the, um, whatever the heck Human Resources is. But for those of us in Telecom land, the annual season of Spectrum Wars holds an attraction like no other. This year is shaping up to be a major spectacular, with lots of old plot lines coming back (like 5.9 GHz), sleeper issues (like 12 GHz) and an unexpected new dramatic plotline around the FCC’s overall auction authority — and More! With the FCC close to finally getting a full cast, it’s looking like 2022 could be a total blockbuster (which will, of course, end in the cliffhanger of a new Congress — with Ted Cruz as potential Chair of the Senate Commerce Committee!).
Of course, not every potential plotline will work out, and we’ll undoubtedly have plenty of surprises along the way, but here’s a (not so) brief recap of what you need to know to follow along this season. If I missed your favorite show, let me know in the comments.
(And no, we’re not going to talk about net neutrality. Or any of the broadband money. This is just spectrum, not wireless service.)
5G has been accused a lot of ridiculous things — causing Covid, causing cancer, causing autism. This article provides a list of 9 separate conspiracy theory/whacky things 5G is supposed to do, from killing birds to depopulating the planet. Today we can add another thing to the list to make an even ten — causing planes to fall out of the sky. Unfortunately, the source of this particular new rumor is the Federal Aviation Authority (FAA). Specifically, the new FAA “Special Airworthiness Information Bulletin” on “Risk of Potential Adverse Effects on Radio Altimeters” (generally referred to as “FAA guidance” by the industry). This has lead to a spate of articles where FAA folks anonymously leak statements about how sister agency the Federal Communications Commission (FCC) is outa control and does what she wants, bitch, whatevah! and planes are gonna fall outa the sky and shut down air travel for everyone unless the FCC stops the roll out of 5G in something called “C-Band” (with phased in roll out scheduled to start in December — now delayed until January).
If this sounds familiar, it’s because a different agency within the Department of Transportation pulled the same nonsense over the FCC’s efforts to reclaim unused spectrum from the auto industry in the 5.9 GHz band. The Department of Defense has made similar accusations against the FCC wrt its approval of Ligado. I could list several more cases, but they basically boil down to the same thing — the federal government’s processes for addressing spectrum policy is severely broken. Unhappy federal agencies that don’t like the outcome of an FCC proceeding respond by undermining the FCC in the press and trying to wage proxy wars through allies in Congress. But the FAA’s actions here take this behavior to new heights of irresponsibility and danger.
As I explain in greater detail below, the technical evidence on which the FAA bases its interference concerns have a lot of problems — not least of which that about 40 other countries operate similar 5G deployments in the same C-Band without any interference showing up. Either physics works differently in the U.S., or the report at the center of this controversy needs to explain why this hasn’t shown up in any other country where deployments are either authorized or have already taken place. What is worse, the FAA has basically been playing “chicken” with the FCC by failing to turn over needed information to verify the report or replicate the results until literally the day before FAA staff leaked the “planes are gonna fall out of the sky” story to the Wall St. J.
But more importantly, we need this inter-agency warfare over 5G spectrum policy to stop. Things have always been difficult That we now have an FAA that would prefer to actively undermine confidence in the safety of air travel than actually work with the FCC (and trust the FCC to do its job) underscores just how bad this problem has become. Congress can help by swiftly confirming Alan Davidson as head of NTIA (the federal agency that is supposed to mange the spectrum management process on the federal side) and Jessica Rosenworcel and Gigi Sohn at the FCC.
More below . . .
President Biden has finally made his critical telecom appointments to fill out the Federal Communications Commission and the National Telecommunications Information Administration (NTIA). As expected, Biden named Acting Chair Jessica Rosenworcel to serve as full chair and renominated her to fill her expired term. As hoped, he also nominated my former boss (and all around Telecom Boss) Gigi Sohn to be the third FCC Commissioner. In addition, Biden nominated Alan Davidson to serve as Administrator/Assistant Sec. for NTIA. In addition to the critical role NTIA plays in spectrum policy, NTIA will also be the agency running the multi-billion broadband infrastructure program in the Bipartisan Infrastructure Bill (assuming that passes).
This makes lots of important things possible. Not just headline items like reclassifying broadband as Title II (which one would expect any Democratic FCC to do at this point). It includes developing smart and innovative policies to close the digital divide, enhance competition, put consumer protection front and center, and advance new spectrum management technologies that move us from scarcity to abundance. This trio (combined with already serving FCC Commissioner Geoffrey Starks, a champion of privacy and inclusion) are as potentially transformational in telecom policy as the appointment of Lina Kahn and Alvaro Bedoya to the Federal Trade Commission.
The Key word here is “potentially.”
One of the biggest mistakes that people keep making in policy and politics is that you can just elect (or in this case, appoint) the right people and go home to let them solve the problems. Then people get all disappointed when things don’t work out. Incumbents are not going to simply surrender to new policies, and political power has limits. This will be especially true if Congress flips in 2022. So while this is definitely cause for celebration, we are going to have to fight harder than ever to get the policies we need to create the broadband (and media) we need — starting with the fight to get them confirmed over the inevitable Republican resistance.
Happily, fighting to achieve the right thing is much more enjoyable than fighting to prevent the wrong thing. But no one should think we can just go home, problem solved. As I have said for over 15 years, you can’t outsource citizenship. Citizen movements are citizen driven, or they either get co-opted or die. We are going to need to support (and occasionally push) the new FCC and NTIA in the face of unflagging industry pressure and political obstacles. The laws of political reality have not been repealed — but we have a unique opportunity to use them to our advantage.
A bit more about who these people are and the policy opportunities below. . . .
This originally appeared on the blog of my employer, Public Knowledge.
Frances Haugen, the (hopefully first of many) Facebook whistleblower, made one thing abundantly clear this week in both her 60 Minutes interview and her Senate Hearing: The United States needs a specialized agency to oversee digital platforms. Antitrust enforcement alone is not enough. Breaking up Facebook would solve some problems, but without additional oversight it will also produce a bunch of smaller companies all running algorithms that maximize engagement regardless of the harm to society (something I have called the “Starfish Problem” — tear up a starfish and the pieces regenerate into lots of smaller starfish). Companies, Haugen warned, “will always put profits over people.” Haugen further emphasized that effectively regulating Facebook (and other digital platforms) requires specialized expertise about the sector. “Right now, the only people in the world trained to analyze these experiences are people who grew up inside of Facebook,” Haugen said. We don’t just need new laws, or to expand the Federal Trade Commission. As Haugen stressed multiple times, we need a specialized, sector-specific regulator to do the job right.
Back in May, Facebook V.P. of Global Public Affairs Nick Clegg wrote an op-ed also calling for the creation of a digital regulator. “Finally,” writes Clegg, “the U.S. could create a new digital regulator. Not only would a new regulator be able to navigate the competing trade-offs in the digital space, it would be able to join the dots between issues like content, data, and economic impact — much like the Federal Communications Commission has successfully exercised regulatory oversight over telecoms and media.”
How do these two diametrically opposed people arrive at the same recommendation? Does the fact that Facebook also says it wants a regulator automatically make it a bad idea? Given that Public Knowledge has repeatedly pushed for a sector-specific regulator since 2018, we obviously don’t think so. But if a sector-specific regulator is the right answer, why is Facebook also pushing for a digital regulator?
In Part I, I provided all the legal and political background to understand why the Federal Communications Commission’s (FCC’s) investigation into T-Mobile’s data breach impacting about 53 million existing customers, former customers, and folks who applied for credit checks but never have been customers, may be complicated politically. But what are the mechanics of the investigation? How does this actually work? What are the rules, and what remedies or penalties can the FCC impose on T-Mobile?
I explore these questions below . . . . .
T-Mobile announced recently that it experienced a major cybersecurity breach, exposing personal information (including credit card numbers) for at least 53 million customers and former customers. Because T-Mobile is a Title II mobile phone provider, this automatically raises the question of whether T-Mobile violated the FCC’s Customer Proprietary Network Information (CPNI) rules. These rules govern, among other things, the obligation of telecommunications service providers to protect CPNI and how to respond to a data breach when one occurs. The FCC has confirmed it is conducting an investigation into the matter.
It’s been a long time since we’ve had to think about CPNI, largely because former FCC Chair Ajit Pai made it abundantly clear that he thought the FCC should not enforce privacy rules. Getting the FCC to crack down on even the most egregious violations – such as selling super accurate geolocation data to bounty hunters was like pulling teeth. But back in the Wheeler days, CPNI was a big deal, with Enforcement Bureau Chief Travis LeBlanc terrorizing incumbents by actually enforcing the law with real fines and stuff (and much to the outrage of Republican Commissioners Ajit Pai and Mike O’Reilly). Given that Jessica Rosenworcel is now running the Commission, and both she and Democratic Commissioner Geoffrey Starks are both strong on consumer protection generally and privacy protection in particular, it seems like a good time to fire up the long disused CPNI neurons with a review of how CPNI works and what might or might not happen in the T-Mo investigation.
Before diving in, I want to stress that getting hacked and suffering a data breach is not, in and of itself, proof of a rule violation or cause for any sort of fine or punishment. You can do everything right and still get hacked. But the CPNI rules impose obligations on carriers to take suitable precautions to protect CPNI, as well as obligations on what to do when a carrier discovers a breach. If the FCC finds that T-Mobile acted negligently in its data storage practices, or failed to follow appropriate procedures, it could face a substantial fine in addition to the FCC requiring it to come up with a plan to prevent this sort of hack going forward.
Assuming, of course, that the breach involved CPNI at all. One of the fights during the Wheeler FCC involved what I will call the “broad” view of CPNI v. the “narrow” view of CPNI. Needless to say, I am an advocate of the “broad” view, and think that’s a proper reading of the law. But I wouldn’t be providing an accurate primer if I didn’t also cover the “narrow” view advanced by the carriers and Pai and O’Reilly.
Because (as usual) actually understanding what is going on and its implications requires a lot of background, I’ve broken this up into 2 parts. Part I gives the basic history and background of CPNI, and why this provides the first test of how the Biden FCC will treat CPNI enforcement. Part II will look at application of the FCC’s rules to the T-Mobile breach and what issues are likely to emerge along the way.
More below . . .