Joho the Blog
An Entry from the Archives

Rep. Rick Boucher is here at Freedom to Connect, the day that the Telecom Subcommittee has opening statements about the "franchise" bill. It would mean that companies wishing to offer cable TV wouldn't have to get a franchise from local communities. He expects the House will pass it in May.

He says the bill creates a national franchise for multichannel video providers that are seeking to enter the cable TV market as competitors. First, this will be the telephone companies. Verizon, he says, is unusual in that it is building fiber to users, which he wishes more companies would do. E.g., for Verizon to offer multichannel video to its subscribers, it would have to get 10,000 local franchises, while it was in fact getting about 15 franchises a year. Boucher supports creating a national one-stop shop for franchising. A company that wants to offer multichannel TV [which I think just means "cable tv"] can simply file a federal application, so long as they agree to support certain rules: 1. They pay a 6% franchise fee to the local government, which is 1% more than the typical cable franchise fee; 2. They'll have to carry the same public access and educational channels; 3. They have to abide by the same right of way rules as apply to cable; 4. They have some consumer protection requirements that will be laid out by the FTC. Cable companies will get a national franchise when their local contract runs out so long as there is a wired competitor (not satellite because it's already national) in that community. The provider may not "red line," choosing to serve only the rich part of town. But it doesn't say that within a certain number of years the new provider would have to serve the entire cable franchise area; this portion of the bill is contentious.

Boucher also strongly supports opening the door for local communities to offer wifi. We're 20th in broadband penetration. We're paying more and getting less. Some states have barred muni wifi. The new law will make it illegal for states to bar this. Boucher is also excited about what mesh networks could do because it is a "far more efficient and lower cost way" of putting wireless into play, especially in poorer neighborhoods.

But, Boucher is not a fan of Network neutrality. He says the FCC didn't enforce Powell's Four Principles because it wasn't clear that it had the statutory authority to turn them into rules. "These principles are fine as far as they go, but they don't go far enough." The principles are:

1. Consumers are entitled to access the lawful Internet content of their choice;
2. Consumers are entitled to run applications and services of their choice, subject to the needs of law enforcement;

3. Consumers are entitled to connect their choice of legal devices that do not harm the network; and
4. Consumers are entitled to competition among network providers, application and service providers, and content providers.

[David Isenberg has pointed out that the FCC Commissioner Martin's modification of these rules effectively guts them.]

The new bill gives the FCC statutory authority to enforce the principles. It gives it a complaint process so that the agrieved party could file a complaint and the FCC could resolve it with authority. But the FCC would not be allowed to elaborate on these principles; they can't expand on them by issuing a rule. The big problem, he says, that when the principles were announced, no one knew that the telcos would be charging content providers (e.g., Google, Microsoft) for fast-lane treatment. Everyone else gets slow-lane. The major problem with this is that there could be a dramatic adverse effect on innovation. "It wasn't very long ago that Google was in a garage getting started, and there are Google wannabes in garages right now. How is that Google wannabe going to pay every provider to get fast ane access. In the slow lane they won't be able to compete." [Yay!] [As always, all quotes are approximate, and all non-quoted paraphrases are even more approximate.]

The telephone companies say "Let's wait and see how the market developments." But, says Boucher, once revenue is being derived from a business model it's simply impossible to outlaw the business model.

Boucher and three other Democrats will offer an amendment that says that if a telephone company or broadband provider of any kind decides to prioritize any content, they have to offer that same fast-lane treatment to all content providers without charge.

Q: (Frankston) The bits have noting to do with the content, so why isn't there anti-trust case?
A: This is a competition issue in part, and it's an effort on the part of the telephone companies to exert market power, extending their power from transport to content. Under traditional antitrust principles, that is viewed with suspicion. The House Committee on the Judiciary has antitrust oversight, and we've begun to look at this and the recombination of Ma Bell with SBC now having acquired most of the local exchanges and AT&T's long distance service, although I think there are less obvious antitrust implications because of the dramatic changes since it was broken up. But I'm excited about looking at the antitrust implications of going from transport to content.

Q: (Cynthia de Lorenzi) Why are we cutting off copper when we put in fiber? It's a usefully redundant network, and unlike fiber it doesn't run on batteries.
A: This is a big issue. There's no reason to root out the copper. The telephone companies say that if they're required to leave it in place, they have to maintain it even though they're not using it. The better approach might be to buy the copper from them. [Who would maintain it?]

Q:
A: The principles would apply to anyone who offers broadband service to customers, over the last mile, no matter who or what technology.

Q: Yesterday Michael Powell warned us not to codify his principles
A: These principles are broadly applicable. I don't know what his concern is. The FCC ought to be able to assert its authority in a case like the Madison River case.

Q:
A: If we all had lots of bandwidth, these issues wouldn't arise. But so long as we're restricted to a couple of megabits, this is a critical issue. It's a transitional issue. (He says 30Mbps would be a good starting point; the IRC disagrees where one contributor says Japan has 100Mbps symmetric for US$ 30/month.)