January 2010 Archives

January 15, 2010 1:08 AM

Before the Net Neutrality Deluge . . . Broadband Still Counts

I couldn't come up with a catchy title, but, before we get totally fixated on Net Neutrality for a big news cycle, I really wanted to draw attention to a very thoughtful, very comprehensive, broadband policy post, entitled "A Sensible Broadband Policy" written by the CEO of a competitive fiber provider--Dave Rusin, CEO of American Fiber Systems ("AFS").  Dave writes the blog TelecomStraightShooter that is linked to on the right hand side of my home page.  Obviously, if you read this post--and you should--you'll see that I'm mentioning it because parts of it sound a lot like some of the things I've said.

While the post is titled "a sensible broadband policy", that's a little misleading, because the description "broadband policy" is a lot broader than it sounds.  If you want to face the facts--as Dave does--"broadband policy" means the FCC's telecom agenda; and that is not an understatement.  

I don't agree with all of Dave's policy prescriptions, and some would probably need the law to change in order to be implemented, even if they are good ideas.  On the other hand, other ideas probably seem like good regulations for "other guys."  But, hey, show me a market participant in an FCC policy proceeding that hasn't advocated regulating someone else's rates to lower their own costs, or stimulate demand for their own product, and I'll show you my untouched Yeti/Loch Ness Monster/UFO photo collection.  Self-interest is not a sin, among FCC commenters, which is why I sincerely believe Dave Rusin's ideas should get as much "air time" as any inside-the-beltway "policy wonk", or "academic expert" (is that an oxymoron?).  Why?

Well, for starters, AFS is based in Rochester, NY--that's where the whole competitive telecom experiment started.  Another factor in Dave's favor is that he's obviously seen both sides of the various telecom skirmishes over the years, but, as a wholesale transmission guy, he doesn't have a dog in a lot of the fights, but he does understand the issues really well.  Finally, he's got to live under his own rules, sleep in his own bed, eat what he cooks . . . the metaphors just don't stop.  

But, before I canonize Dave, keep in mind that--as I said before--like an executive with any other carrier, they sometimes equate (conflate?) their self-interest with the public interest.  On the other hand, the self-interest of a wholesale carrier on the subject of broadband is interesting, because of their overriding incentive to stimulate output and fill the pipes.  That said, the reader must also keep in mind that these insights are not from a telecom regulatory attorney, so they are a little "raw" (e.g., the FCC had four, not five, original net neutrality principles), and some of the USF reform ideas need a little work, but, this is being too picky.

It isn't often that a carrier without attorneys and/or lobbyists on staff (or on retainer) even bothers to offer thoughtful, comprehensive policy ideas, and we don't listen enough to these parties.  This post, "raw" as it is, is also--from a policy perspective--broader, and more thoughtful, than most that I've seen from telecom executives on the operating side.  To be clear, I don't endorse all parts of it, but I don't think it should be ignored either.

January 13, 2010 9:56 PM

Comcast Isn't the Only One Afraid of a Big Win

Last Friday, the 8th, I did a post on the reports about the Comcast v. FCC oral argument that was held before a skeptical D.C. Circuit that morning.  The point of my post was that the Net Neutrality NPRM (comments are due tomorrow!) might be a "rainout", because most reports suggested the court was less than encouraging about the Commission having authority to enforce its Broadband Policy Statement, based on the two main statutory provisions the Commission relied upon in both defending the Comcast decision, and supporting the current NPRM and proposed rules.  If the court did vacate the Commission's authority to enforce its Policy Statement, or any similar Title I rules, then--my post noted--the Commission would have to start again with new rules based on different statutory authority.   

I also noted that, when asked if it would rather lose on "narrow" (did Comcast have adequate notice?) or "broad" (do the statues the Commission relies upon, really provide the authority to regulate specific Internet practices?) grounds, the FCC said it would prefer a narrowly-written loss.  I failed to note that Comcast agreed.  While I figured a "broad" loss for the FCC would be bad for cable, it seemed kind of speculative and I really didn't want to get into it.

On Monday (the 11th), though, Harold Feld waded into the topic with an excellent post, entitled Does Comcast Fear To Win Too Much? In this post, Harold confirms Comcast's fears by citing a back-pedaling post that appeared on Comcast's policy blog Monday.  The post was an excessive "clarification" of Comcast's "true position" that the FCC does have the authority to regulate Internet practices under Title I.  Now a Shakespeare aficionado might observe, "[Comcast] doth protest too much, methinks."  But, really, who cares what Comcast thinks?  The court's interpretation of the scope of the Commission's authority is going to come out sooner or later, anyway.


Continue reading Comcast Isn't the Only One Afraid of a Big Win
January 12, 2010 6:21 PM

CASH FOR MINUTES!! No Questions Asked . . .

Yesterday, I did a post--based on a court case initiated in 2007--that suggested traffic pumpers looking for revenue sharing arrangements (for traffic transport and termination) with high-cost LECs was maybe a little scandalous, or at least something you wouldn't want to go around asking about in polite company.  Well . . . as with a lot of things, it all depends on who's asking the question, how the question is asked, and whether the person asking really gives 2 cents what anyone thinks. (At this point, transition to your best Rod Serling voice.)  But in the Telecom Zone, everything is not always as it appears, which brings us to our next case.  Submitted for your consideration, the case of one TRX Telecommunications . . . .

If the "minute broker", mentioned yesterday, brought "buyers" and "sellers" of minutes together in a discrete, low-key, manner, TRX Telecom--the phone company that pays you--(by the way, that's their real tag-line) looks for revenue sharing arrangements with all the zeal of a direct marketing version of a monster truck show promoter.  No apologies, no discretion, no shame, no fear, just BUTT-KICKING, PLATFORM POUNDING, MINUTE CRANKING!!  

Heck, a better way to say it might be: no business plan? NO PROBLEM!  No software-based calling platform?  NO PROBLEM!  No services to sell? NO PROBLEM!  TRX Tel does all the work: they offer basic to more advanced, chat room and teleconferencing services.  What they don't do is judge . . . or ask you for anything . . . but MINUTES!  Even then, they don't make customers commit to any "minimum" level of minutes.  They just ask you to do your best, brother.  Any incremental minute (on the TRX platform) is a good minute, and you always get a cut--whether you produce 18 minutes or 18 MILLION minutes . . . .

But, if you DO produce 18 million minutes (per month)?  Well, you get a prize, my friend.  What type of prize?  AN A@$-KICKING, NITRO-FUELED, 5 CENTS/MINUTE!  That's right, brother, 5 CENTS/MINUTE!  That's 100 TIMES the large LEC interstate termination rate!  And this is a BOUNTY--it's not like they're giving you ALL the money that's being generated from your 18 million minutes.   

And here's the best part: all it takes to add a million dollars/month to your bottom line is to keep 500 lines busy 24/7 for a month. Convince 500 friends to use their flat-rated, bundled, triple-play phone line to stay on a 24/7 conference call, use their mobile phones for voice, and you can give them a nice discount.  Another option would be to use your Skype account while you're sleeping.  If that bothers you, then just get non-profits, and other groups looking to save money to actually use the services in a normal fashionIt doesn't matter!  Whether Al Quaida or Alpa Chino, "real" or "fake", the fact is that minutes are minutes, and "bounties" are "bounties."  I didn't invent this system, but I can't "un-invent" it either . . . .  So, here's to you TRX Tel, crack open a cold Bud Light, because you always tell it like it is, and, thanks to you, talk isn't always cheap!

[Note: I don't let my clients pay for this type of shenanigans, so if you're an IXC reading this, give me a call.  But, if you don't call, or you're not one of my clients, then your best bet is to just take the advice of "Teddy KGB" (from "Rounders").  Admit you got beat, and pay these men their money.]

January 11, 2010 5:24 PM

Pssst! Wanna Buy Some Minutes?

["None of us are going to deny what other people are doing. If saying bullshit is somebody's thing, then he says bullshit. If somebody is an ass-kicker, then that's what he's going to do on this trip, kick asses. He's going to do it right out front and nobody is going to have anything to get pissed off about. He can just say, 'I'm sorry I kicked you in the ass, but I'm not sorry I'm an ass-kicker. That's what I do, I kick people in the ass.' Everybody is going to be what they are, and whatever they are, there's not going to be anything to apologize about. What we are, we're going to wail with on this whole trip."]
-- Tom Wolfe (The Electric Kool-Aid Acid Test)

I kicked off with that quote, and I want you to read it--and understand this--I respect authentic, original, people in the telecom business.  They may not be the most likeable people in popular opinion polls, but they do want they do without regard to the opinions of others, and they almost always drive change (for better or for worse).  Dave Erickson of FreeConferenceCalls.com ("FCC.com") is such an individual.  And, as much as I might crack on "traffic pumpers", Dave has posted up on this blog--under his own name--without regard to what anyone thinks . . . and I like that.  I mean, as traffic-pumpers go, he's "doing it right out front and nobody is going to have anything to get pissed off about."  So, brother, if you're reading this, you need to know I've got nothing but mad respect for the way play your game--and that's no joke.  

But (and you just knew there was a "but" coming), this is a story--contained in a court case--that I've never seen reported, and it's an enduring testament to Dave Erickson's stone cold, "bad-ass"-ness, but it's a story that readers have got to hear to believe.  At this point, Dave will probably disagree with every characterization I make . . . but that's part of why I'm going to be what I am, and there's not going to be anything to apologize about.

OK, so on with the story.  Let's say you think there's a good way around the FCC's Farmers and Merchants Order, where the Commission found in favor of Qwest in a complaint against a local exchange carrier ("LEC") that specific revenue-sharing contracts between the LEC and conference calling companies, did not constitute the provision of switched access services, where calls are terminated to an end-user premise, consistent with the LEC's tariff on file with the Commission.  So, that order means nothing to you--maybe you've got some cool creative tariff attorney and some inventive new traffic pumping scheme.  Fair enough; so far, so good, but here's the big question: if you're a free conference calling company, looking to set up shop in a high cost area with a cool, new tariff, or traffic-pumping plan, have you ever thought about how you'd actually do it?


Continue reading Pssst! Wanna Buy Some Minutes?
January 8, 2010 10:06 PM

Comcast Oral Argument: Is The Net Neutrality NPRM A "Rainout"?

OK, first let me say, that I was NOT at the oral argument in the Comcast v. FCC case in the DC Circuit this morning.  So, everything I'm going to say is based on second hand reports from people that were there or from news stories.  Thus, having established only the thinnest of credentials to opine on the "near and present" dangers of the court's potential decision, I will pontificate . . . but first some background.

In 2008, the FCC (in a 3:2 decision) issued an order finding that Comcast had violated the principles in the Commission's 2005 Policy Statement regarding broadband Internet access by surreptitiously degrading customer use of peer-to-peer ("P2P") applications. ("Comcast Order").  The Policy Statement held that "consumers are entitled to run applications and use services of their choice." (Policy Stmt at ΒΆ 4)  In its 2008 Comcast Order, the Commission said that Comcast's method of degrading P2P traffic in order to limit upstream congestion in its networks did not constitute "reasonable network management," and, therefore, violated the Commission's policy that consumers be allowed to run the applications of their choice.  This policy violation, the Commission added, was compounded by Comcast's failure to candidly disclose these practices to its subscribers and the Commission.

Comcast appealed this decision to the DC Circuit, and the court held oral arguments today.  Comcast made essentially 2 arguments: 1) being cited for a "policy" violation was improper, because the Commission had not adopted rules specific enough to warn Comcast that its practices might violate the Commission's application of its principles (i.e., the "narrow" argument), and 2) that the Commission, relying on only general policy statements in the Communications Act (in Sections 230 and 706), lacked any specific statutory authority over Internet practices to enforce the policy principles, which were enacted under Title I of the Communications Act--another general statement by Congress authorizing the Commission to regulate communications by wire or radio (i.e., the "broad argument").

Press reports indicate that the judges were skeptical of the Commission's authority to discipline Comcast on either the "narrow" or "broad" arguments.  At least one press report had the FCC's General Counsel stating that he would rather the Commission lose on "narrow" grounds.  As a taxpayer, I'm not so sure I would agree, and here's why. 

Continue reading Comcast Oral Argument: Is The Net Neutrality NPRM A "Rainout"?