The strict constructionist would say that the text of the Constitution did not protect the founders' iPhones, therefore it doesn't protect your iPhone. I'm not sure precisely what "effects" meant at the time of the ratification, but I'm pretty sure it didn't refer to handheld electronic devices. The "living constitution" folks would say that today's iPhone is the modern equivalent of papers and effects, and therefore should be protected. The idea of the living constitution is to adapt the broad principles of the constitution to modern circumstances. Seems like we could use more of that in this case.
While I understand many commenters are sad to see the PSTN go, I hope all acknowledge that it is simply not feasible to keep it running. Even today we're shelling out somewhere in the neighborhood of $12-15 billion a year in subsidies through the universal service and intercarrier compensation systems to rural telcos to keep the PSTN running. As PSTN subscribership continues to drop steadily (and it will), the required subsidy levels will only go up. Sure the PSTN had its merits, but ultimately it could not compete with IP networks in terms of efficiency and capabilities, and hence both service providers and customers are abandoning it in droves. Unless we are all happy to shell out tens of billions of dollars a year in subsidies, the PSTN is going to die and die quickly.
As an actual telecom attorney, I'd just like to clarify that this ruling applies very narrowly to the use of entrance facilities (wires running into telco offices) for the purpose of interconnection. The dispute centered on an order from the FCC that excluded these facilities from regulation under one part of the 1996 Telecommunications Act that requires unbundled access to network elements that are necessary for competing service providers and would impair their ability to provide service if they were denied access. A separate section of the Act requires telcos to provide cost-based access to network facilities for the purpose of interconnection. AT&T claimed that the order meant that they did not have to provide access to entrance facilities under either statutory provision. A competing provider, took them to court over it, the FCC filed a brief stating that AT&T was required to provide the facilities for the purpose of interconnection, and the Supreme Court endorsed the FCC view. That's it. This opinion does not expand the rights of competitors to unbundled access to incumbent networks in any general sense.
Sorry to distract you from the "But teh labour is too expensive in Amercia" rant but a $3/h repair job in China is fine when you're on US$40K a year but when you're on US$2K it's just as expensive as the "hyper inflated cost of labour in America".
Economy scales, you're paying roughly the same in the US as the Chinese are in China. Any differences can be attributed to skill shortage/abundance. For a Chinese person, Chinese labour is not cheap.
This is nonsense. Manufactured goods are not radically cheaper in China than in the US. Labor is. Think about what you're saying for a second. Manufactured goods are highly transportable. If the exact same goods sold in China for a fraction of the price they sell for in the US, how long would it take for large importers to make a fortune arbitraging that price difference until the prices balance out? In fact, Walmart has already done this. The fact that China keeps its currency devalued against the dollar only exacerbates the matter. Labor is cheap in China. Goods and services that are labor-centric and based on local market pricing are cheap (food, housing generally) compared to a Western nation. But prices for manufactured goods are pretty similar to what they'd be anywhere else. Labor is cheap in China, EVEN FOR CHINESE PEOPLE. In that sense, a Chinese company will simply throw more manpower at something that in the US we would instead deploy more machinery and technology (e.g., construction, agriculture). And people in China do repair everything because taking it to a repairman is cheaper than buying a new one.
If you can only sell 50 copies a week a $1, but can move 25k copies per week at $0, you need to find a way to make money off of $0. Find a sponsor, insert some advertising. That's a 50,000% difference in market reach between $1 and $0. Even if you can only figure out how to make $0.01 per customer, you've increased your revenue by 500%. This is the trap that the traditional media companies fall into--thinking they need so many units of product at the same prices they've always charged. It's a different platform, you need a different model.
So, Greenspan who ran the government monopoly of money supply, was a libertarian? I had no idea.
Actually, yes. Greenspan is well-known to have been a lifelong libertarian. The man was a close personal friend of Ayn Rand, for gods sake. Wikipedia:
During the 1950s, Greenspan was one of the members of Ayn Rand's inner circle, the Ayn Rand Collective, who read Atlas Shrugged while it was being written. Rand nicknamed Greenspan "the undertaker" because of his penchant for dark clothing and reserved demeanor. Although Greenspan continues to advocate laissez-faire capitalism, some Objectivists find his support for a gold standard somewhat incongruous or dubious, given the Federal Reserve's role in America's fiat money system and endogenous inflation.... However, when questioned in relation to this, he has said that in a democratic society individuals have to make compromises with each other over conflicting ideas of how money should be handled. He said he himself had to make such compromises, because he actually believes that "we did extremely well" without a central bank and with a gold standard.
IANAL, but I think it would be a hard sell to Constitution-following legislators (oh, how scant their numbers are these days). I think there could be some applicability for the Interstate Commerce clause (Art. 1, Sec. 8: To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes), however intrastate networks would and should be unfettered by Federal law. It would be up to the several states themselves to enact neutrality legislation if they so desire.
Constitutionality is really not an issue with net neutrality. The federal government has been regulating phone service the same way for decades, and there has never been much of a constitutional challenge to that regulation (and rightly so, international data networks are pretty appropriately considered a matter of interstate commerce). Basically all net neutrality does is rectify the mistake the FCC made when it classified broadband service as an "Information Service" exempt from common carrier regulation under Title II of the Communications Act. Turns out that was a moronic decision and Internet service really should be treated as a common carrier service--net neutrality is how they do that without an embarrassing full reversal of the previous decision (even though that would be a much wiser course).
Are you naive enough to believe that if Verizon Wireless paid less for the license they would drop the price to the consumer?
Precisely. In fact, Verizon's bid was calculated something like this:
(Predicted revenue from service on the spectrum) - (cost of providing service) - (reasonable return on investment) == maximum spectrum bid.
They already figured on what consumers were willing to pay for the services they'll sell on this spectrum. If the price of the spectrum went too high for those pricing expectations to be able to fund the bid, they wouldn't go ahead and buy the spectrum and jack up prices to compensate, they just wouldn't make the bid. Similarly, if they got the spectrum for cheap, they wouldn't just give away the services. They still sell them at the market rate and pocket the increased margin. With Google pushing up the price, that money goes into the treasury and reduces the deficit instead of lining the pockets of Verizon investors. I'd call that a win for the rest of us.
The whole net neutrality debate ultimately boils down to the big ISPs trying to control the video market. It's too lucrative to let it go the way of VoIP and turn into open competition of services over IP.
Consequently, any time you see one of these ISPs offer enough bandwidth to support high quality streaming video it will be priced well above the same ISP's offer for video service + broadband. Compressed HD video will require a steady feed at 10-15 Mbps. For multiple streams (a must for a cable-TV-replacement service) you can double or triple that. This Comcast deal offers that sort of bandwidth, and, predictably, it is priced at about twice the price Comcast would charge for cable TV + basic broadband. At that level, even if someone purchased a cable-replacement over IP service (which doesn't yet exist because no one has the bandwidth to make it useful), Comcast would still be making far more from the arrangement than their video service competitor.
This is all fallout from having shut down competition via open access to the broadband loop for cable and DSL. The cable/phone duopoly will push their non-competitive advantages in last-mile physical access as far up the application stack as they can until regulators tell them to stop. And if no one tells them to stop, we can look forward to a non-competitive duopoly for every bandwidth-intensive service that ever becomes popular.
Precisely. This question is irrelevant (and more that a little bit silly). Unless you manage to pry open the last mile and subject ISPs to actual competition, it doesn't matter what particular billing format they use. They're not going to give you what you want. It would just be a different flavor of getting reamed up the ass.
I think you have nailed it exactly. First responder network requirements are an absolute brick around the neck. Generator backup for every site for 8 hours is an expensive brick, 24 hours for major sites. There are probably calea requirements also that go beyond normal 'here is the subpoena, not give me the records' kind of thing.
You're confusing some things here. The backup power requirement applies to ANY telecom site. Wireless or wireline, any block, any sort of CMRS. They're all subject to the same backup power requirement (at least until the D.C. Circuit rules on the appeal of that requirement). And the D-block requirements have nothing to do with CALEA. CALEA will apply exactly the same to the D-block as to the other blocks in the 700 MHz auction. What made the D-block different is that whichever commercial carrier won the spectrum rights was to work out some arrangement where, in addition to building a commercial network on that spectrum, they would also build capacity for use by public safety agencies.
What killed the D-block was uncertainty. The FCC put out vague, put potentially onerous, obligations on the D-block. The auction winner's ability to exploit the spectrum was to be dependent on their ability to negotiate out some deal with a big mess of first responder organizations. At the time the FCC didn't seem terribly worried about this because they set everything up along the lines of a plan proposed by Frontline Wireless (a plan that first responders seemed favorably disposed towards), with Frontline's assurances that they would bid past the reserve price and ensure the block was sold. Then Frontline failed to secure the necessary capital to bid for the D-block and had to drop out. Everyone else just looked at the requirement of having to cut some sort of deal with the first responder organizations (who would all be fighting each other for bigger slices of the pie) before exploiting the spectrum and thought, you've got to be kidding me. No fucking way.
Not that I don't want to bash on Comcast; there are few things I enjoy more and certainly I believe that Comcast is dead wrong on net neutrality as a general matter... however, the Ars article and the/. summary have badly botched what Comcast actually said. It's funny that no one has deemed it worthwhile to link to the letter itself. This is the Internet after all...
Rather than arguing that the FCC has no enforcement power, Comcast is making the rather more limited argument that the FCC cannot create a new rule regarding net neutrality and enforce it against Comcast (i.e. levy fines and other penalties) at the same time. This is a pretty well established principle of law, although its application in an administrative setting may not be quite as clear cut. Comcast is simply asking that the FCC either adjudicate Comcast's P2P blocking under current rules, or that the FCC pass new regulations then give Comcast an opportunity to respond to them (e.g. stop blocking P2P) before any penalties are assessed. This is one of the more reasonable arguments you're ever likely to hear out of Comcast, so all of the hyperventilation in this discussion seems slightly misplaced.
Seriously, antitrust law in the US is a joke. It doesn't work. The federal judiciary has all bought in the Chicago school view of economics which essentially says that monopolies can't happen, or if they do, they can't exploit their monopoly because competitors will just enter the market and undercut them. As a result it is nearly impossible to convince a federal court that anyone has ever abused market power absent explicit evidence of some sort of price-fixing agreement. The fact that no real market operates the way their theoretical markets are supposed to operate doesn't seem to bother anyone.
Even disregarding the rather significant franchising problems discussed in other replies to your post, antitrust is not going to stop Comcast from crushing you into oblivion. Antitrust is useless.
It won't matter. If Obama wins the democratic nomination, then both presidential candidates will be pro-net-neutrality. There just isn't a popular platform for "yes, let's cripple the Internet so that corporations can profit more," and for once politicians have realized it.
As reported right here on slashdot, John McCain does not support net neutrality. In case you hadn't noticed, there was a pretty big flap a couple weeks ago over a New York Times story reporting on McCain doing favors for telecom lobbyists (and possibly sleeping with one of them (talk about being in bed with special interests), although that part seems fairly dubious). Neither, as far as anyone has been able to ascertain, does Hillary Clinton support net neutrality. Obama is the only remaining candidate who favors it. And I do believe he is quite sincere about it, and takes his technology platform pretty seriously. Evidence can be found in the emphasis his campaign puts on his successful bill to promote transparency by making earmark information publicly accessible on the Internet and in Larry Lessig's association with the campaign. It would be really novel to have a federal government that actually supported some of our interests instead of trying to fuck us over at every turn...
As far as I know every one of our sites, in the entire country, already has a couple days worth of backup power.
I'm not sure who you work for, but I can guarantee you that none of the big wireless carriers is currently in compliance with the 8-hour backup power requirement for transmitter sites, much less having several days worth of fuel. The national wireless carriers all believe that compliance would be extremely difficult and expensive and are currently in the process of appealing this order in the DC Circuit through their industry association (CTIA). If your cell sites stayed up for several days, that was likely due to specific pre-hurricane preparations. Kudos on that.
BTW, the reason that the refueling crews could not reach the equipment was not so much that the roads were impassible. It was a credentialing problem. The national guard had closed off the disaster area and weren't letting anyone in, including telecom fueling and repair crews. It took days to get the mess straightened out.
That's exactly how cellular networks are designed. Do you know why? MONEY. Cell providers build just enough capacity in certain areas to get as much money as they can while providing adequate service. Their delivered quality of service is just good enough to not drive people to other carriers. Their networks get completely saturated during emergencies like 9/11? Of course, because they never intended for them to be used by everyone at the same time.
You say this likes it's a bad thing. If the mobile phone carriers built the capacity to support an event like 9/11, it would cost a metric crapload, and 99% of the time that capacity would sit unused. But we'd all share the costs in increased rates and charges and the rate increase would be substantial. Do you really want to pay for that? I'd rather not...
This issue with the backup power is similar. This is going to cost a ton of money and be absurdly inefficient. It will buy us 8 hours before the transmitter sites run out of gas and shut down. Then teams will have to arrive and refuel them. In general these wireless carriers already have made disaster preparations and pre-stage equipment and personnel to respond to outages. During Katrina, the teams from the telecom providers were not permitted access to the disaster zone, but they were standing by with backup power generators and repair crews. This backup power mandate doesn't really buy us much, but it is sure going to cost us...
...all you want, but it's not going to make free market utopianism a reality.
A local business investor can do just fine, especially in smaller towns or areas. The business investors has a better chance of acquiring the land rights (through direct involvement with property owners), and once they've acquired the rights, they can then lease them to other companies, or even outright sell those rights to another larger middleman. It could even be tens of thousands of individuals acquiring the rights in various areas.
But as I said, cable overbuilding is legal is many parts of the US. It's encouraged even. But it rarely ever happens. So, if you want to argue about why the market has failed to deliver competing last-mile cable, that's fine. But to blithely sit there and throw out explanations as to how the market will deliver networks when, in fact, it clearly hasn't is just silly. Reality beckons.
Providing communications is absolutely like providing jeans.
Providing communications is just like providing jeans if every jeans manufacturer who entered a region had to pay $200 cash to every jeans buyer in the region before any stores would stock their merchandise. But they don't, so it isn't. At all.
Outside the world of free market utopianism, not all markets are identical. Sometimes the only way to force competition is through regulation. And anyone who favors free markets over real competition has become so immersed in free market dogma that they've forgotten why markets are beneficial in the first place.
When it comes to private property, there is absolutely no reason why a cable-connect middleman can NOT go to each person and tender an agreement to utilitize their property for cabling. Part of the agreement would be the transfer of rights in the process of selling or leasing that property to others. It's done now with cell phone towers quite successfully on private land. I know of three building owners who get a nice chunk of change in exchange for placement of a cell tower on their property.
If someone does not want to sell, that's an issue, but not a big one. There is always a price.
This is a gross oversimplification. The reality is that overbuilding is allowed in many places in the US. It's not like regulators don't want competition in the cable market, they'd love it. But in practice it almost never happens. That's because it's just not that easy. In order to roll out a network you need to get a whole bunch of property owners to agree at the same time. If one of them holds out, well, depending where he is located you might be able to route around it at increased cost. If several hold out, you may have to scrap that loop. So whoever is going to be that last person who kills the project has the cable company by the balls for the full commercial value of the proposed network. The implication is that for a given property owner, if they let you string your network, they'll benefit from increased competition to the tune of maybe $5-10/mo. But if they can hold out and be the last piece of the puzzle for the network, they can extract tens of thousands of dollars from the cable company. Everyone has an incentive to be the holdout and get the big payday. It's a nightmare of transaction costs. This is what eminent domain exists for.
I guess the market can't support thousands of competing cell phone products, or thousands of competing jeans brands, or thousands of competing soft drinks, too?
But you're talking about businesses that sell fungible products. Selling cable service is nothing like selling jeans. It is not inefficient to have 1000 jeans manufacturers. The all pump supply onto the market, and the supply matches up with demand. If people demand more, they produce more, if people demand less, they produce less. But with last mile telecom networks, every network needs to reach all the consumers in its area, and does so at immense cost, but each consumer generally utilizes only one network. They have to pay out to reach every consumer in their region whether the consumer buys their product or not. Each existing network in the region cuts down proportionally on how many of the homes they will reach they can expect to subscribe. With a very low number of last mile networks you quickly reach the point where that proportion is no longer sufficient to fund construction of the network. This is nothing like selling jeans at all.
For many people, speed is not important.
For business customers who use the network for email and basic Internet, that is probably true. But my guess is that within 5 years residential consumers will demand 20+ Mbps, and given the state of technology and spectrum licensing today, the likelihood of wireless being able to deliver that is nil.
Parent is one of the most naively ignorant comments I've seen on the communications business. To wit:
Time and again we have people who moan about monopolistic tendencies of large corporations. They offer negative opinions of the so-called free market. Unfortunately for the consumer, the FCC and local municipalities have assured us of never having a truly free market in cable (and cable-provided services).
You can't get the local municipalities out of the cable business for the simple reason that the cable companies cannot possibly buy via the free market the property rights necessary to string up a network. It's a classic holdout problem. Every property owner (including the municipality itself) that sits in a strategic position will have the leverage and incentive to hold out from selling access until they can extract all of the cable company's profits. Without the political process to facilitate the necessary access to public and private property, it just doesn't happen. It's the same for the landline phone business. And wireless has its own reasons for requiring regulation. The simple fact is that this has always been a regulated business, and it always will be. It's the unavoidable nature of the business.
I know of so many people who are concerned that deregulation (national and local) of cable and comm providers would end up giving us millions of wires overhead on the telephone poles. This is untrue.
Your conclusion is correct, even if your reasoning is inane. There would not be millions of wires because that would be unbelievably economically inefficient. The market wouldn't support it. Even ignoring the property rights issues discussed above, last mile networks are extremely expensive and completely redundant. Combine with property rights complications and you have a market that will have very few entrants. Regulated or unregulated, there will be little competition for the physical last mile network. That's just going to have to be an uncompetitive market. The question is how far do you want this non-competitive market to extend? Should we allow lack of competition in last mile networks to turn into lack of competition in ISP's by getting rid of unbundling and open access to the local loop? Should we it to turn into lack of competition for services over the Internet like VoIP and IPTV by not enforcing net neutrality? The telecom companies want to push these noncompetitive advantages as far as possible into markets that are actually competitive. The only thing to stop them and preserve actual market competition is regulation.
Thankfully, we're seeing more solutions slowly popping up. WiFi networks, maybe WiMax networks, and other competitive products should hopefully push the cabled providers to lowering their prices, which may end up having the effect of creating a deregulated market before government will move to unrestrict that competition.
Funny that you should phrase it as if the emergence of wireless competition would spite the FCC. Platform competition has been the primary aim of the FCC. That's why they shut down unbundling and access to the local loop. Unfortunately I don't think it will play out very well. I remain unconvinced that wireless access networks (as opposed to WiFi, which is not really an access network at all) will be able to compete with wired access networks for speed. WiMax is likely to deliver 2-4 Mbps. Cable and DSL could do 10 times that (and do in other countries, although not often in the US), and fiber, forget about it. Wireless is just not in the same class, and as people more and more start to depend on broadband to get video content, that's going to make a big difference. And while we've all spent a decade waiting for broadband over powerlines, it just doesn't appear that it is going to be commercially viable. So we could be looking at a long term duopoly for residential broadband Internet service between the cable and phone companies. The market will not save us.
What do they know that we don't know? Are they trying to shift the ban from % of local ownership to national ownership? Are they trying to get this move knocked down in the legal system to set precedent for something else?
No way George W. Bush's FCC is having a change of heart about big business ownership. So what's the scoop on this and other recent anti-cable proposals? And why are they trying to rush a vote on it?
This is a spat between FCC Chairman Kevin Martin and the cable industry. It's been going on for years, but just blew up in a big way in the past month or so. No one appears to know how it started, the rumor is that the cable industry opposed Martin's nomination to replace Powell as the chairman, then after his confirmation Martin decided to push hard for ala carte cable in retaliation and things have gone downhill from there. The cable companies tried to keep a low profile with Martin until last month at which point they apparently decided there was nothing they could do to placate him and declared open war. The cable companies have gotten dozens of congressmen to write the FCC in the last couple weeks telling Martin to back off, and have effectively peeled off the support of the other Republican commissioners (note it's the Democrats joining Martin in this vote). I think the cable companies don't intend to back off until they run Martin out of office. By federal bureaucracy standards, it's high drama.
"Al-Haramain worked to spread a strict view of Islam through philanthropy, missionary work and support for mosques around the world." I'm pretty sure that alone qualifies as supporting terrorism.
Even if Al-Haramain did support terrorism, how does that justify an illegal wiretap on their lawyers? Are we to assume that the mere accusation of terrorist connections means someone is denied their constitutional right to due process of law? Al-Haramain is entitled to their day in court, something they cannot fairly have if their communications with their lawyers are intercepted and available to government lawyers. Attorney-client privilege and confidentiality are key elements of effective assistance of counsel.
Sure, some techies will say that it is extremely expensive to enter the "last mile" market to provide services, but this is untrue -- if there is a profit to be made, companies will enter the market. In many towns, the last mile providers are given freedom from competition, and without competition, of course there is corruption.
You should really take an Econ 101 course and pay attention to the part about natural monopolies. You can make valid arguments as to whether or not the last mile is a natural monopoly, but you have to concede that there is such a thing as a natural monopoly. And if a particular market is one that, given the supply and demand curves, tends towards natural monopoly, other companies will not enter the market, because there is no profit to be made, regardless of how much profit the incumbent company is raking in. Whatever company develops a leading market share will be able to undercut any new entrants (and still turn a profit while doing so).
I think a decent argument can be made that for basic internet service (and even for broadband in the 1-5 Mb/s range) the last mile is not a natural monopoly due to emerging wireless services. However, for fast connections (20+ Mb/s) we will probably be stuck with a monopoly or duopoly for the foreseeable future. If people come to prefer those fast connections (which seems likely), we're going to continue to need regulation in this area for a long time to come.
The lawyers can't be outsourced, because they formed a union. Or precisely, they have 50 unions. They call them state bar associations. And no one can be a lawyer in any state without the approval of the union. Doctors do the same thing. So while other professionals get their jobs shipped out of the country, you can rest secure knowing the lawyers and doctors are laughing at you.
Have we all forgotten the debate over opening access to the local loop to competition for DSL service? This was supposed to be one of the premises of the 1996 Telecom Act. The FCC initially implemented this, unbundling DSL service, allowing CLEC's to compete over the incumbents' phone lines. But the incumbents fought tooth and nail in the courts and found a receptive audience in certain anti-regulatory judges on the D.C. Circuit Federal Appeals Court. The FCC repeatedly had to redraft the rules, and the whole thing dragged out until the Bush administration came in at which point the FCC just gave up on unbundling the local loop, claiming that there was plenty of competition in the broadband internet market and there was no need for the FCC to mandate line sharing. This was, of course, bullshit. Few people in the US have more than two real options for broadband (and many would count themselves lucky to have two). The zip code data collection system grossly inflates the number of broadband options available, providing a misleading picture of the state of broadband competition in the US. If they actually collected accurate data on competition it would quickly become apparent how badly misguided the decision to abandon unbundling was. And so there has been a pitched battle over data collection between Commissioner Copps (who supported unbundling and wants accurate data) and Chairman Martin (who is happy the crappy zip code system). It looks like Copps has gotten the upper hand...
...Copps is a Democratic commissioner in a Republican administration. Which means there's very little he can do about it (although his position has improved considerably after the midterm elections). Copps has been railing about this problem for years. The news in this story is that Kevin Martin, the Republican FCC chairman, finally admitted that the data the FCC has been collecting is worthless.
I look forward to the restructuring of the FCC after this where they purge the evil and the misguided statistics....because i'm absolutely sure that will happen.
It will happen, but you may have to wait until early 2009...
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The strict constructionist would say that the text of the Constitution did not protect the founders' iPhones, therefore it doesn't protect your iPhone. I'm not sure precisely what "effects" meant at the time of the ratification, but I'm pretty sure it didn't refer to handheld electronic devices. The "living constitution" folks would say that today's iPhone is the modern equivalent of papers and effects, and therefore should be protected. The idea of the living constitution is to adapt the broad principles of the constitution to modern circumstances. Seems like we could use more of that in this case.
While I understand many commenters are sad to see the PSTN go, I hope all acknowledge that it is simply not feasible to keep it running. Even today we're shelling out somewhere in the neighborhood of $12-15 billion a year in subsidies through the universal service and intercarrier compensation systems to rural telcos to keep the PSTN running. As PSTN subscribership continues to drop steadily (and it will), the required subsidy levels will only go up. Sure the PSTN had its merits, but ultimately it could not compete with IP networks in terms of efficiency and capabilities, and hence both service providers and customers are abandoning it in droves. Unless we are all happy to shell out tens of billions of dollars a year in subsidies, the PSTN is going to die and die quickly.
As an actual telecom attorney, I'd just like to clarify that this ruling applies very narrowly to the use of entrance facilities (wires running into telco offices) for the purpose of interconnection. The dispute centered on an order from the FCC that excluded these facilities from regulation under one part of the 1996 Telecommunications Act that requires unbundled access to network elements that are necessary for competing service providers and would impair their ability to provide service if they were denied access. A separate section of the Act requires telcos to provide cost-based access to network facilities for the purpose of interconnection. AT&T claimed that the order meant that they did not have to provide access to entrance facilities under either statutory provision. A competing provider, took them to court over it, the FCC filed a brief stating that AT&T was required to provide the facilities for the purpose of interconnection, and the Supreme Court endorsed the FCC view. That's it. This opinion does not expand the rights of competitors to unbundled access to incumbent networks in any general sense.
Sorry to distract you from the "But teh labour is too expensive in Amercia" rant but a $3/h repair job in China is fine when you're on US$40K a year but when you're on US$2K it's just as expensive as the "hyper inflated cost of labour in America".
Economy scales, you're paying roughly the same in the US as the Chinese are in China. Any differences can be attributed to skill shortage/abundance. For a Chinese person, Chinese labour is not cheap.
This is nonsense. Manufactured goods are not radically cheaper in China than in the US. Labor is. Think about what you're saying for a second. Manufactured goods are highly transportable. If the exact same goods sold in China for a fraction of the price they sell for in the US, how long would it take for large importers to make a fortune arbitraging that price difference until the prices balance out? In fact, Walmart has already done this. The fact that China keeps its currency devalued against the dollar only exacerbates the matter. Labor is cheap in China. Goods and services that are labor-centric and based on local market pricing are cheap (food, housing generally) compared to a Western nation. But prices for manufactured goods are pretty similar to what they'd be anywhere else. Labor is cheap in China, EVEN FOR CHINESE PEOPLE. In that sense, a Chinese company will simply throw more manpower at something that in the US we would instead deploy more machinery and technology (e.g., construction, agriculture). And people in China do repair everything because taking it to a repairman is cheaper than buying a new one.
If you can only sell 50 copies a week a $1, but can move 25k copies per week at $0, you need to find a way to make money off of $0. Find a sponsor, insert some advertising. That's a 50,000% difference in market reach between $1 and $0. Even if you can only figure out how to make $0.01 per customer, you've increased your revenue by 500%. This is the trap that the traditional media companies fall into--thinking they need so many units of product at the same prices they've always charged. It's a different platform, you need a different model.
So, Greenspan who ran the government monopoly of money supply, was a libertarian? I had no idea.
... However, when questioned in relation to this, he has said that in a democratic society individuals have to make compromises with each other over conflicting ideas of how money should be handled. He said he himself had to make such compromises, because he actually believes that "we did extremely well" without a central bank and with a gold standard.
Actually, yes. Greenspan is well-known to have been a lifelong libertarian. The man was a close personal friend of Ayn Rand, for gods sake. Wikipedia:
During the 1950s, Greenspan was one of the members of Ayn Rand's inner circle, the Ayn Rand Collective, who read Atlas Shrugged while it was being written. Rand nicknamed Greenspan "the undertaker" because of his penchant for dark clothing and reserved demeanor. Although Greenspan continues to advocate laissez-faire capitalism, some Objectivists find his support for a gold standard somewhat incongruous or dubious, given the Federal Reserve's role in America's fiat money system and endogenous inflation.
This is why it was shocking to many when Greenspan made the concession before Congress last week that his ideological model of how the markets worked was flawed.
IANAL, but I think it would be a hard sell to Constitution-following legislators (oh, how scant their numbers are these days). I think there could be some applicability for the Interstate Commerce clause (Art. 1, Sec. 8: To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes), however intrastate networks would and should be unfettered by Federal law. It would be up to the several states themselves to enact neutrality legislation if they so desire.
Constitutionality is really not an issue with net neutrality. The federal government has been regulating phone service the same way for decades, and there has never been much of a constitutional challenge to that regulation (and rightly so, international data networks are pretty appropriately considered a matter of interstate commerce). Basically all net neutrality does is rectify the mistake the FCC made when it classified broadband service as an "Information Service" exempt from common carrier regulation under Title II of the Communications Act. Turns out that was a moronic decision and Internet service really should be treated as a common carrier service--net neutrality is how they do that without an embarrassing full reversal of the previous decision (even though that would be a much wiser course).
Are you naive enough to believe that if Verizon Wireless paid less for the license they would drop the price to the consumer?
Precisely. In fact, Verizon's bid was calculated something like this:
(Predicted revenue from service on the spectrum) - (cost of providing service) - (reasonable return on investment) == maximum spectrum bid.
They already figured on what consumers were willing to pay for the services they'll sell on this spectrum. If the price of the spectrum went too high for those pricing expectations to be able to fund the bid, they wouldn't go ahead and buy the spectrum and jack up prices to compensate, they just wouldn't make the bid. Similarly, if they got the spectrum for cheap, they wouldn't just give away the services. They still sell them at the market rate and pocket the increased margin. With Google pushing up the price, that money goes into the treasury and reduces the deficit instead of lining the pockets of Verizon investors. I'd call that a win for the rest of us.
The whole net neutrality debate ultimately boils down to the big ISPs trying to control the video market. It's too lucrative to let it go the way of VoIP and turn into open competition of services over IP.
Consequently, any time you see one of these ISPs offer enough bandwidth to support high quality streaming video it will be priced well above the same ISP's offer for video service + broadband. Compressed HD video will require a steady feed at 10-15 Mbps. For multiple streams (a must for a cable-TV-replacement service) you can double or triple that. This Comcast deal offers that sort of bandwidth, and, predictably, it is priced at about twice the price Comcast would charge for cable TV + basic broadband. At that level, even if someone purchased a cable-replacement over IP service (which doesn't yet exist because no one has the bandwidth to make it useful), Comcast would still be making far more from the arrangement than their video service competitor.
This is all fallout from having shut down competition via open access to the broadband loop for cable and DSL. The cable/phone duopoly will push their non-competitive advantages in last-mile physical access as far up the application stack as they can until regulators tell them to stop. And if no one tells them to stop, we can look forward to a non-competitive duopoly for every bandwidth-intensive service that ever becomes popular.
Precisely. This question is irrelevant (and more that a little bit silly). Unless you manage to pry open the last mile and subject ISPs to actual competition, it doesn't matter what particular billing format they use. They're not going to give you what you want. It would just be a different flavor of getting reamed up the ass.
I think you have nailed it exactly. First responder network requirements are an absolute brick around the neck. Generator backup for every site for 8 hours is an expensive brick, 24 hours for major sites. There are probably calea requirements also that go beyond normal 'here is the subpoena, not give me the records' kind of thing.
You're confusing some things here. The backup power requirement applies to ANY telecom site. Wireless or wireline, any block, any sort of CMRS. They're all subject to the same backup power requirement (at least until the D.C. Circuit rules on the appeal of that requirement). And the D-block requirements have nothing to do with CALEA. CALEA will apply exactly the same to the D-block as to the other blocks in the 700 MHz auction. What made the D-block different is that whichever commercial carrier won the spectrum rights was to work out some arrangement where, in addition to building a commercial network on that spectrum, they would also build capacity for use by public safety agencies.
What killed the D-block was uncertainty. The FCC put out vague, put potentially onerous, obligations on the D-block. The auction winner's ability to exploit the spectrum was to be dependent on their ability to negotiate out some deal with a big mess of first responder organizations. At the time the FCC didn't seem terribly worried about this because they set everything up along the lines of a plan proposed by Frontline Wireless (a plan that first responders seemed favorably disposed towards), with Frontline's assurances that they would bid past the reserve price and ensure the block was sold. Then Frontline failed to secure the necessary capital to bid for the D-block and had to drop out. Everyone else just looked at the requirement of having to cut some sort of deal with the first responder organizations (who would all be fighting each other for bigger slices of the pie) before exploiting the spectrum and thought, you've got to be kidding me. No fucking way.
Not that I don't want to bash on Comcast; there are few things I enjoy more and certainly I believe that Comcast is dead wrong on net neutrality as a general matter... however, the Ars article and the /. summary have badly botched what Comcast actually said. It's funny that no one has deemed it worthwhile to link to the letter itself. This is the Internet after all...
Rather than arguing that the FCC has no enforcement power, Comcast is making the rather more limited argument that the FCC cannot create a new rule regarding net neutrality and enforce it against Comcast (i.e. levy fines and other penalties) at the same time. This is a pretty well established principle of law, although its application in an administrative setting may not be quite as clear cut. Comcast is simply asking that the FCC either adjudicate Comcast's P2P blocking under current rules, or that the FCC pass new regulations then give Comcast an opportunity to respond to them (e.g. stop blocking P2P) before any penalties are assessed. This is one of the more reasonable arguments you're ever likely to hear out of Comcast, so all of the hyperventilation in this discussion seems slightly misplaced.
Seriously, antitrust law in the US is a joke. It doesn't work. The federal judiciary has all bought in the Chicago school view of economics which essentially says that monopolies can't happen, or if they do, they can't exploit their monopoly because competitors will just enter the market and undercut them. As a result it is nearly impossible to convince a federal court that anyone has ever abused market power absent explicit evidence of some sort of price-fixing agreement. The fact that no real market operates the way their theoretical markets are supposed to operate doesn't seem to bother anyone. Even disregarding the rather significant franchising problems discussed in other replies to your post, antitrust is not going to stop Comcast from crushing you into oblivion. Antitrust is useless.
It won't matter. If Obama wins the democratic nomination, then both presidential candidates will be pro-net-neutrality. There just isn't a popular platform for "yes, let's cripple the Internet so that corporations can profit more," and for once politicians have realized it.
As reported right here on slashdot, John McCain does not support net neutrality. In case you hadn't noticed, there was a pretty big flap a couple weeks ago over a New York Times story reporting on McCain doing favors for telecom lobbyists (and possibly sleeping with one of them (talk about being in bed with special interests), although that part seems fairly dubious). Neither, as far as anyone has been able to ascertain, does Hillary Clinton support net neutrality. Obama is the only remaining candidate who favors it. And I do believe he is quite sincere about it, and takes his technology platform pretty seriously. Evidence can be found in the emphasis his campaign puts on his successful bill to promote transparency by making earmark information publicly accessible on the Internet and in Larry Lessig's association with the campaign. It would be really novel to have a federal government that actually supported some of our interests instead of trying to fuck us over at every turn...
As far as I know every one of our sites, in the entire country, already has a couple days worth of backup power.
I'm not sure who you work for, but I can guarantee you that none of the big wireless carriers is currently in compliance with the 8-hour backup power requirement for transmitter sites, much less having several days worth of fuel. The national wireless carriers all believe that compliance would be extremely difficult and expensive and are currently in the process of appealing this order in the DC Circuit through their industry association (CTIA). If your cell sites stayed up for several days, that was likely due to specific pre-hurricane preparations. Kudos on that.
BTW, the reason that the refueling crews could not reach the equipment was not so much that the roads were impassible. It was a credentialing problem. The national guard had closed off the disaster area and weren't letting anyone in, including telecom fueling and repair crews. It took days to get the mess straightened out.
That's exactly how cellular networks are designed. Do you know why? MONEY. Cell providers build just enough capacity in certain areas to get as much money as they can while providing adequate service. Their delivered quality of service is just good enough to not drive people to other carriers. Their networks get completely saturated during emergencies like 9/11? Of course, because they never intended for them to be used by everyone at the same time. You say this likes it's a bad thing. If the mobile phone carriers built the capacity to support an event like 9/11, it would cost a metric crapload, and 99% of the time that capacity would sit unused. But we'd all share the costs in increased rates and charges and the rate increase would be substantial. Do you really want to pay for that? I'd rather not... This issue with the backup power is similar. This is going to cost a ton of money and be absurdly inefficient. It will buy us 8 hours before the transmitter sites run out of gas and shut down. Then teams will have to arrive and refuel them. In general these wireless carriers already have made disaster preparations and pre-stage equipment and personnel to respond to outages. During Katrina, the teams from the telecom providers were not permitted access to the disaster zone, but they were standing by with backup power generators and repair crews. This backup power mandate doesn't really buy us much, but it is sure going to cost us...
...all you want, but it's not going to make free market utopianism a reality.
A local business investor can do just fine, especially in smaller towns or areas. The business investors has a better chance of acquiring the land rights (through direct involvement with property owners), and once they've acquired the rights, they can then lease them to other companies, or even outright sell those rights to another larger middleman. It could even be tens of thousands of individuals acquiring the rights in various areas.
But as I said, cable overbuilding is legal is many parts of the US. It's encouraged even. But it rarely ever happens. So, if you want to argue about why the market has failed to deliver competing last-mile cable, that's fine. But to blithely sit there and throw out explanations as to how the market will deliver networks when, in fact, it clearly hasn't is just silly. Reality beckons.
Providing communications is absolutely like providing jeans.
Providing communications is just like providing jeans if every jeans manufacturer who entered a region had to pay $200 cash to every jeans buyer in the region before any stores would stock their merchandise. But they don't, so it isn't. At all.
Outside the world of free market utopianism, not all markets are identical. Sometimes the only way to force competition is through regulation. And anyone who favors free markets over real competition has become so immersed in free market dogma that they've forgotten why markets are beneficial in the first place.
When it comes to private property, there is absolutely no reason why a cable-connect middleman can NOT go to each person and tender an agreement to utilitize their property for cabling. Part of the agreement would be the transfer of rights in the process of selling or leasing that property to others. It's done now with cell phone towers quite successfully on private land. I know of three building owners who get a nice chunk of change in exchange for placement of a cell tower on their property. If someone does not want to sell, that's an issue, but not a big one. There is always a price.
This is a gross oversimplification. The reality is that overbuilding is allowed in many places in the US. It's not like regulators don't want competition in the cable market, they'd love it. But in practice it almost never happens. That's because it's just not that easy. In order to roll out a network you need to get a whole bunch of property owners to agree at the same time. If one of them holds out, well, depending where he is located you might be able to route around it at increased cost. If several hold out, you may have to scrap that loop. So whoever is going to be that last person who kills the project has the cable company by the balls for the full commercial value of the proposed network. The implication is that for a given property owner, if they let you string your network, they'll benefit from increased competition to the tune of maybe $5-10/mo. But if they can hold out and be the last piece of the puzzle for the network, they can extract tens of thousands of dollars from the cable company. Everyone has an incentive to be the holdout and get the big payday. It's a nightmare of transaction costs. This is what eminent domain exists for.
I guess the market can't support thousands of competing cell phone products, or thousands of competing jeans brands, or thousands of competing soft drinks, too?
But you're talking about businesses that sell fungible products. Selling cable service is nothing like selling jeans. It is not inefficient to have 1000 jeans manufacturers. The all pump supply onto the market, and the supply matches up with demand. If people demand more, they produce more, if people demand less, they produce less. But with last mile telecom networks, every network needs to reach all the consumers in its area, and does so at immense cost, but each consumer generally utilizes only one network. They have to pay out to reach every consumer in their region whether the consumer buys their product or not. Each existing network in the region cuts down proportionally on how many of the homes they will reach they can expect to subscribe. With a very low number of last mile networks you quickly reach the point where that proportion is no longer sufficient to fund construction of the network. This is nothing like selling jeans at all.
For many people, speed is not important.
For business customers who use the network for email and basic Internet, that is probably true. But my guess is that within 5 years residential consumers will demand 20+ Mbps, and given the state of technology and spectrum licensing today, the likelihood of wireless being able to deliver that is nil.
Parent is one of the most naively ignorant comments I've seen on the communications business. To wit:
Time and again we have people who moan about monopolistic tendencies of large corporations. They offer negative opinions of the so-called free market. Unfortunately for the consumer, the FCC and local municipalities have assured us of never having a truly free market in cable (and cable-provided services).
You can't get the local municipalities out of the cable business for the simple reason that the cable companies cannot possibly buy via the free market the property rights necessary to string up a network. It's a classic holdout problem. Every property owner (including the municipality itself) that sits in a strategic position will have the leverage and incentive to hold out from selling access until they can extract all of the cable company's profits. Without the political process to facilitate the necessary access to public and private property, it just doesn't happen. It's the same for the landline phone business. And wireless has its own reasons for requiring regulation. The simple fact is that this has always been a regulated business, and it always will be. It's the unavoidable nature of the business.
I know of so many people who are concerned that deregulation (national and local) of cable and comm providers would end up giving us millions of wires overhead on the telephone poles. This is untrue.
Your conclusion is correct, even if your reasoning is inane. There would not be millions of wires because that would be unbelievably economically inefficient. The market wouldn't support it. Even ignoring the property rights issues discussed above, last mile networks are extremely expensive and completely redundant. Combine with property rights complications and you have a market that will have very few entrants. Regulated or unregulated, there will be little competition for the physical last mile network. That's just going to have to be an uncompetitive market. The question is how far do you want this non-competitive market to extend? Should we allow lack of competition in last mile networks to turn into lack of competition in ISP's by getting rid of unbundling and open access to the local loop? Should we it to turn into lack of competition for services over the Internet like VoIP and IPTV by not enforcing net neutrality? The telecom companies want to push these noncompetitive advantages as far as possible into markets that are actually competitive. The only thing to stop them and preserve actual market competition is regulation.
Thankfully, we're seeing more solutions slowly popping up. WiFi networks, maybe WiMax networks, and other competitive products should hopefully push the cabled providers to lowering their prices, which may end up having the effect of creating a deregulated market before government will move to unrestrict that competition.
Funny that you should phrase it as if the emergence of wireless competition would spite the FCC. Platform competition has been the primary aim of the FCC. That's why they shut down unbundling and access to the local loop. Unfortunately I don't think it will play out very well. I remain unconvinced that wireless access networks (as opposed to WiFi, which is not really an access network at all) will be able to compete with wired access networks for speed. WiMax is likely to deliver 2-4 Mbps. Cable and DSL could do 10 times that (and do in other countries, although not often in the US), and fiber, forget about it. Wireless is just not in the same class, and as people more and more start to depend on broadband to get video content, that's going to make a big difference. And while we've all spent a decade waiting for broadband over powerlines, it just doesn't appear that it is going to be commercially viable. So we could be looking at a long term duopoly for residential broadband Internet service between the cable and phone companies. The market will not save us.
What do they know that we don't know? Are they trying to shift the ban from % of local ownership to national ownership? Are they trying to get this move knocked down in the legal system to set precedent for something else? No way George W. Bush's FCC is having a change of heart about big business ownership. So what's the scoop on this and other recent anti-cable proposals? And why are they trying to rush a vote on it?
This is a spat between FCC Chairman Kevin Martin and the cable industry. It's been going on for years, but just blew up in a big way in the past month or so. No one appears to know how it started, the rumor is that the cable industry opposed Martin's nomination to replace Powell as the chairman, then after his confirmation Martin decided to push hard for ala carte cable in retaliation and things have gone downhill from there. The cable companies tried to keep a low profile with Martin until last month at which point they apparently decided there was nothing they could do to placate him and declared open war. The cable companies have gotten dozens of congressmen to write the FCC in the last couple weeks telling Martin to back off, and have effectively peeled off the support of the other Republican commissioners (note it's the Democrats joining Martin in this vote). I think the cable companies don't intend to back off until they run Martin out of office. By federal bureaucracy standards, it's high drama.
"Al-Haramain worked to spread a strict view of Islam through philanthropy, missionary work and support for mosques around the world." I'm pretty sure that alone qualifies as supporting terrorism.
Even if Al-Haramain did support terrorism, how does that justify an illegal wiretap on their lawyers? Are we to assume that the mere accusation of terrorist connections means someone is denied their constitutional right to due process of law? Al-Haramain is entitled to their day in court, something they cannot fairly have if their communications with their lawyers are intercepted and available to government lawyers. Attorney-client privilege and confidentiality are key elements of effective assistance of counsel.
Sure, some techies will say that it is extremely expensive to enter the "last mile" market to provide services, but this is untrue -- if there is a profit to be made, companies will enter the market. In many towns, the last mile providers are given freedom from competition, and without competition, of course there is corruption.
You should really take an Econ 101 course and pay attention to the part about natural monopolies. You can make valid arguments as to whether or not the last mile is a natural monopoly, but you have to concede that there is such a thing as a natural monopoly. And if a particular market is one that, given the supply and demand curves, tends towards natural monopoly, other companies will not enter the market, because there is no profit to be made, regardless of how much profit the incumbent company is raking in. Whatever company develops a leading market share will be able to undercut any new entrants (and still turn a profit while doing so).
I think a decent argument can be made that for basic internet service (and even for broadband in the 1-5 Mb/s range) the last mile is not a natural monopoly due to emerging wireless services. However, for fast connections (20+ Mb/s) we will probably be stuck with a monopoly or duopoly for the foreseeable future. If people come to prefer those fast connections (which seems likely), we're going to continue to need regulation in this area for a long time to come.
First, let's outsource all the lawyers.
The lawyers can't be outsourced, because they formed a union. Or precisely, they have 50 unions. They call them state bar associations. And no one can be a lawyer in any state without the approval of the union. Doctors do the same thing. So while other professionals get their jobs shipped out of the country, you can rest secure knowing the lawyers and doctors are laughing at you.
but why do they even measure these things at all?
Have we all forgotten the debate over opening access to the local loop to competition for DSL service? This was supposed to be one of the premises of the 1996 Telecom Act. The FCC initially implemented this, unbundling DSL service, allowing CLEC's to compete over the incumbents' phone lines. But the incumbents fought tooth and nail in the courts and found a receptive audience in certain anti-regulatory judges on the D.C. Circuit Federal Appeals Court. The FCC repeatedly had to redraft the rules, and the whole thing dragged out until the Bush administration came in at which point the FCC just gave up on unbundling the local loop, claiming that there was plenty of competition in the broadband internet market and there was no need for the FCC to mandate line sharing. This was, of course, bullshit. Few people in the US have more than two real options for broadband (and many would count themselves lucky to have two). The zip code data collection system grossly inflates the number of broadband options available, providing a misleading picture of the state of broadband competition in the US. If they actually collected accurate data on competition it would quickly become apparent how badly misguided the decision to abandon unbundling was. And so there has been a pitched battle over data collection between Commissioner Copps (who supported unbundling and wants accurate data) and Chairman Martin (who is happy the crappy zip code system). It looks like Copps has gotten the upper hand...
...Copps is a Democratic commissioner in a Republican administration. Which means there's very little he can do about it (although his position has improved considerably after the midterm elections). Copps has been railing about this problem for years. The news in this story is that Kevin Martin, the Republican FCC chairman, finally admitted that the data the FCC has been collecting is worthless.
I look forward to the restructuring of the FCC after this where they purge the evil and the misguided statistics....because i'm absolutely sure that will happen.
It will happen, but you may have to wait until early 2009...