Friday, July 15, 2005

Cell Phones on Planes: A Federal Matter?

Well, for once I find myself in perfect agreement with Democratic FCC Commissioner Jonathan Adelstein about something. In a Wall Street Journal (pg. B4) story today about FCC prohibitions on cell phone use during airline flights, Adelstein argues that, "Our job is to determine if it's technologically feasible and safe. Our job is not to decide etiquette. We're not Emily Post."

Amen brother! It's one thing for the FCC to determine the technical standards for spectrum uses and users, and then even adjudicate interference disputes among those uses. It is quite another matter for the agency to go a step further and determine whether a certain use of the spectrum is socially acceptable.

Now don't get me wrong, I detest the idea of cell phone chatter on long airline flights as much as the next person. The idea of a gabby jerk in the seat next to me screaming into their cell phone to talk above the already noisy jet engines, just makes me cringe.

But that doesn't mean this should be a matter of federal concern. Indeed, self-regulatory experiments by private carriers would make a lot of sense here. Understanding the frustration (perhaps even violence) that cell phone gabbing in the cabin could induce, most airlines will put policies in place to limit cell phone use.

For example, certainly flights could be designated as "cell phone free" or "cell phone limited." I can imagine that in an effort to appeal to many business travelers on high-volume routes (like NYC to DC or Chicago to Atlanta), some airlines would offer a few morning and evening flights that allowed unlimited cell phone use, while prohibiting calls on most other flights.

Alternatively, on larger aircraft, we might see the return of an in-flight lounge area (although probably much smaller than the ones of the past). Perhaps these cell phone lounges would be no bigger than current airplane bathrooms (perhaps they would be the bathrooms!) Regardless, these are just a few options that carriers could explore. They are certainly preferable to a federal etiquette regulatory regime for cell phone usage.

posted by Adam Thierer @ 9:56 AM | Wireless

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Friday, June 24, 2005

Know Your WPAN from Your WWAN?

The FT has a handy graphic and explanation of various Wi Fi standards.

posted by Kent Lassman @ 4:15 PM | Wireless

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Wednesday, June 15, 2005

Local Revenue Story: An Additional $3 a Month for Wireless in Alexandria

Many of PFF's most diligent blog readers live in the immediate Washington, D.C. area. Look out! Alexandria, Virginia is about to add a $3 per month surcharge to wireless consumers. WaPo has the story.

The good news is that the surcharge is marginally less than the recent $3.50 fee added by Baltimore. But then again, does anyone really want to crow about beating Baltimore?

posted by Kent Lassman @ 2:42 PM | Wireless

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Tuesday, June 14, 2005

Assessing Liability? Trespass on (Municipal) Wi-Fi Networks

The wireless network in my home is not connecting properly right now. The signal is going out and being received, but my wife's computer in a different part of the house is unable to connect to the Internet. I suspect that when Vonage recently sent me a replacement router, the new setup between the DSL, the wireless router, my computer and the telephone and fax lines got fouled. Surely once I spend the time to dig through all of the settings and endure a call to the helpdesk, we'll be up and running again in no time.

But conspiracy took over and I got to thinking: Maybe there is something sinister afoot. Several neighbors also have a wireless home network. In fact, we can pick up a strong signal for a network named after Cosmo, my neighbor's dog. In fact, we're probably smack dab in the middle of a target rich environment for malicious war drivers. What if someone is hijacking our Internet connections to spam the world or download and distribute illegal content?

In this post, I ask if municipalities have anticipated the liability and commons problems Wi-Fi networks are sure to create. My hunch is that bad guys will flock to the easiest networks to use (sorry Cosmo) and then to the networks that have the murkiest liability and enforcement regimes. In this paperby Robert V. Hale II, published in the Santa Clara Computer & High Tech Law Journal, some of the liability implications under current federal law are examined for Wi-Fi technologies.

Continue reading Assessing Liability? Trespass on (Municipal) Wi-Fi Networks . . .

posted by Kent Lassman @ 11:09 AM | Municipal Ownership, State Policy, Wireless

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Friday, June 10, 2005

Spectrum Reform: The UK Perspective in Guatemala

An interesting talk at the Guatemala spectrum conference by Martin Cave. Martin teaches at the Warwick Business School and is the author of a report that provided the basis for the UK's spectrum reform proposal which, as he puts it, is "a success story so far - in conception." The 2003 U.K. Communications Act included provision for efficient use of spectrum and trading. Ofcom, the responsible agency, has produced a strategy, an implementation plan and trading procedures. Martin made a few points that are not often discussed. One concerns the issue of windfall gains. The typical economist's solution to a problem like spectrum is to grandfather incumbents. This solution - which essentially makes explicit the property rights that the incumbents already implicitly have - is viewed as a way of buying off those with a vested interest in the status quo, while still realizing the efficiency benefits of moving to a property rights a regime. But Martin makes the point (one that I have recently come to believe myself) that this is not really a politically viable solution, because politicians are extremely reluctant to be viewed as giving private interests what are perceived as undeserved windfall gains. This, of course, makes the transition more difficult. He also talked about the issue of the large amounts of spectrum the government holds for defense, public safety and other uses. He made the point that it is important for the government agencies, as much as possible, to incorporate the opportunity costs of the spectrum they are using into their decision making. I made a similar point in a recent filing at the FCC.

posted by Tom Lenard @ 7:44 PM | Communications, Spectrum, Wireless

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Thursday, June 9, 2005

Spectrum Reform in Guatemala

Guatemala is on the cutting edge of telecom policy, as I'm learning here at a conference at the Universidad Francisco Marroquin, which was founded 30 years ago with a law and economics focus and has arguably become the best university in Guatemala. Guatemala's 1996 telecom liberalization law is also one of the best around. The intent: to make it as easy to start a telecom company as it is to open a hot dog stand. In addition to privatizing the state-owned telecom assets, the telecom law opened the telecom market by providing for free entry and exit, freedom to integrate and use any technology, freedom to operate in any area and, perhaps most importantly, pricing freedom. But, the focus of the conference is on spectrum, where Guatemala is also leading the way and has a lot to teach us. The Guatemalans have created a new legal regime for spectrum, by treating it as property like land. The new law has moved a lot of spectrum into private hands, facilitating new entry into mobile telephony and creating a vibrant secondary market. Mobile telephone penetration increased from 64 thousand in 1997 to about 3.2 million in 2004 - almost triple the number of land lines. This in a country of about 12 million people. The major problem seems to be a significant amount of illegal radio operation, which the system has not yet learned how to cope with. But all in all, Guatemala's spectrum reform is a significant success, with a lot to teach the rest of the world.

posted by Tom Lenard @ 11:42 PM | Communications, Spectrum, Wireless

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Tuesday, June 7, 2005

Arbitrage Be Thy Name

Outraged by mobile telephone taxes, this Forbes reporter figured out a way to game the system. Differential taxation in the digital era translates to arbitrage. The story comes complete with an interactive map to show state-by-state tax burdens.

posted by Kent Lassman @ 5:12 PM | Wireless

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Friday, May 27, 2005

Reality Check for Muni Wi Fi

CNET has a story today on some of the challenges cropping up for municipalities trying to jump on the "free Wi Fi" bandwagon. Of course, a great deal has been written on this issue (see here, and here) but it was the following line that really shook me.

"But once a system has overcome interference problems, the biggest concern is how to handle network abusers, such as spammers, illegal file-swappers and people launching virus attacks."

Continue reading Reality Check for Muni Wi Fi . . .

posted by Kent Lassman @ 3:03 PM | Broadband, Municipal Ownership, Wireless

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Monday, May 23, 2005

Ugh!

California legislators know better....

posted by Ray Gifford @ 7:20 PM | Communications, Wireless, Wireline

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DTV and Wireless Broadband: Come Now, Folks . .

Last week's draft legislative proposal by House staff has generated some optimism regarding movement in the transition to digital TV. In addition to hastening the day when consumers can enjoy higher-quality and potentially more plentiful television programming, the DTV transition promises to jump-start deployment of wireless broadband and other competitive services even after roping off more spectrum for emergency services.

Yet the transition may stall again if Congress continues to miss the forest for the trees on the issue of subsidizing digital-to-analog "converter boxes." This obstacle, which seems small relative to the overall digital transition, suggests we should temper our optimism about recent progress with healthy unease that success still eludes us.

Continue reading DTV and Wireless Broadband: Come Now, Folks . . . . .

posted by Kyle Dixon @ 5:10 PM | Broadband, Capitol Hill, Communications, Spectrum, Wireless

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Wednesday, May 11, 2005

Mobile Phone Service is Getting Hit with Heavy Taxes

This story from USA Today comes with a handy chart detailing average taxation of mobile telephone services on a state by state basis. The national average of combined state and federal tax rates exceeds 15 percent and the combined rate is below 10 percent in only four states (using statewide averages). The low tax states: Idaho (8.24 percent), Nevada (7.16 percent), Oregon (8.28 percent) and West Virginia (9.05 percent). The story also does a good job of implicitly warning the reader about statewide averages. Baltimore recently added a $3.50 month tax. Presumably the effective rate is much higher there than in the rest of Maryland. About 160 of California's local jurisdictions have these taxes, including 10 percent in L.A. and 7.5 percent in San Francisco.

What's behind the move toward new taxes? The story is replete with quotes from public officials blaming the decline of wireline. A once steady and near invisible tax base is eroding because of consumer migration toward other technologies and service offerings. Sounds a lot like an argument for competitive markets.

posted by Kent Lassman @ 1:23 PM | State Policy, Wireless

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Sunday, May 8, 2005

The Art of the DTV Deal: Continued

In response to my DTV Art of the Deal post, PFF Adjunct Fellow Joe Kraemer e-mailed the following thoughts, which I reprint here by permission:

1. In order for a [DTV deal] to emerge, there must be uncertainty on the part of all parties that a legislatively-mandated transition date in 2008 or 2009 will be enforced. In other words, the broadcasters must believe that there is a material probability that the date will be enforced while those organizations that want to use the vacated spectrum must believe that Congress may lack the will to enforce the date. Therefore, a legislatively mandated date creates the opportunity because it will paradoxically increase uncertainty [particularly with a presidential race in 2008].

2. The basis for paying the broadcasters an incentive would be the present value of accelerating the transition so that the alternative users would have access two or three years earlier than they otherwise would. The value of the incentive is not the absolute value of the spectrum.

3. The broadcasters would receive funds to cover transition costs, as well as an acceleration premium. There may be a need to set up some type of Transition Administrator that is outside the FCC and would authorize incentive payments based on actual progress towards vacating the spectrum.

Continue reading The Art of the DTV Deal: Continued . . .

posted by Ray Gifford @ 5:15 PM | Broadband, Capitol Hill, Spectrum, The FCC, Wireless

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Wednesday, April 27, 2005

DTV: The Art of the Deal

Patrick's post on the DTV "transition," occassions some musings on the outline of a deal to get this spectrum into use. For consumers, for the competitive process, for the growth of broadband wireless technologies, it is absolutely indispensable that this spectrum be put into better use than (unwatched) digital television transmissions.

It is a classic public choice problem: a concentrated group of beneficiaries with low use-value but high transfer-value (the broadcasters) holding out against a diffuse group of would-be winners --consumers and companies that will flourish with more broadband pipes. In this fight, the addition of the High Tech DTV coalition is welcome.

Continue reading DTV: The Art of the Deal . . .

posted by Ray Gifford @ 4:57 PM | Wireless

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Free the DTV Spectrum!

Former FCC Media Bureau Chief Ken Ferree once said of broadcasters and the spectrum they're supposed to release after the DTV transition that "they'd rather eat their children than give up this spectrum." Well, for the sake of all of those little tykes I hope Ferree's prediction doesn't come true, because the pressure is rising to free up that spectrum.

The High Tech DTV Coalition, launched today, is urging an early, hard deadline for release of the 700 MHz band spectrum. Executive Director Janice Obuchowski and her colleagues wrote leaders on Capitol Hill Tuesday arguing this point:

Certainty will allow the U.S. high-tech industry to secure the investment and develop the business plans required to deploy wireless broadband services in the 700 MHz band. This, in turn, will bring greater inter-modal competition among providers of multiple types of network technology, accelerating broadband build-out and lowering consumer prices.

Continue reading Free the DTV Spectrum! . . .

posted by Patrick Ross @ 3:23 PM | Wireless

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Monday, April 25, 2005

Will A Wireless Ratings Scheme Be Enough to Head Off Cellphone Censorship?

As I've mentioned in previous posts (here and here), the potential for cell phone content regulation is something worth monitoring. There have been some rumblings in Washington already about the need for the wireless industry to take steps to shield children from potentially objectionable material even before it hits the market. And you'd have to be a fool not to realize that at some point very soon, technological & media convergence is going to bring adult-oriented fare to mobile devices. The question is, once that happens, will regulatory convergence follow technological convergence? More specifically, will broadcast TV and radio "indecency" controls be imposed on wireless content in coming years?

Continue reading Will A Wireless Ratings Scheme Be Enough to Head Off Cellphone Censorship? . . .

posted by Adam Thierer @ 9:44 AM | Free Speech, Wireless

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Wednesday, April 20, 2005

More on Cellphone TV Regulation

As I mentioned in a previous post, cellphone television is coming and that raises the interesting question of whether cellphone censorship will follow.

The New York Post has a short article today about the new race to develop a standard for cellphone video transmission. The article quotes Neil Strother, an analyst with In-Stat, a Scottsdale, Ariz., tech research firm, saying: "It's a technology that's here. But I think it'll be about four years before it becomes mainstream."

So cellphone video is coming quicker than anyone expected and the question now is whether the government will attempt to expand "indecency" regulations to cover it, much as they are currently trying to do for cable and satellite television.

Continue reading More on Cellphone TV Regulation . . .

posted by Adam Thierer @ 10:45 AM | Free Speech, Mass Media, Wireless

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Thursday, March 24, 2005

Texas E-911

I'm not sure I agree with the general thrust of Ray's Nanny State blog on the Texas Attorney General's E-911 lawsuit filed against Vonage under the Texas Deceptive Trade Practices Act. Having in mind the grandstanding tendency that seems to be endemic in some generic--or maybe genetic--way in some of the state AGs' offices, and not knowing everything about the facts of this specific case, it nevertheless seems to me largely unobjectionable as a matter of principle to consider whether Vonage has violated Texas' general deceptive practices law.

I'm not sure why the end result of such a lawsuit, implicitly or otherwise, necessarily would lead to a mandate that Vonage adopt particular functionality, as opposed to a change in advertising and promotional materials if it is determined it has failed to comply with the deceptive practices law. It even seems to me that it may be easier to argue for market-oriented solutions to the E-911 question when there is a consumer protection regime of general applicability in play and as a backdrop.

posted by Randolph May @ 11:49 AM | Wireless

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Thursday, March 17, 2005

Red Lion R.I.P.: FCC Declares the Scarcity Doctrine Dead

"[T]he Scarcity Rationale for regulating traditional broadcasting is no longer valid." So begins a stunning new white paper from the Federal Communications Commission. In the paper, "The Scarcity Rationale for Regulating Traditional Broadcasting: An Idea Whose Time Has Passed," author John Beresford, an attorney with the FCC's Media Bureau, lays out a devistating case against the Scarcity Rationale, which has governed spectrum & broadcast regulation in the United States for over seven decades.

Calling the Scarcity Rationale "outmoded" and "based on fundamental misunderstandings of physics and economics," Beresford goes on to show why just about everything the FCC every justified on this basis was misguided and unjust. He points out what countless economists have concluded through the years, namely that:

(1) the scarcity the government complained of was "largely the result of decisions by government, not an unvoidable fact of nature." In other words, the government's licensing process created artificial scarcity.

(2) a system of exclusive rights would have ensured more efficient allocation of wireless resources.

(3) even if there ever was anything to the Scarcity Doctrine, there certainly isn't today in our world of information abundance.

Continue reading Red Lion R.I.P.: FCC Declares the Scarcity Doctrine Dead . . .

posted by Adam Thierer @ 6:05 PM | Free Speech, Mass Media, Wireless

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Monday, February 28, 2005

New Meaning to "High-Speed"

Frustrated you can't use your VoIP phone while driving your car at 80 miles per hour? Find your way to the beautiful Sonoran desert, which will be in bloom soon, and chat away.

posted by Patrick Ross @ 2:46 PM | Wireless

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Tuesday, February 1, 2005

Which is bigger?

This Wall Street Journal lead (or is it more in-the-know to say, lede?) is startling:

SBC Communications Inc.'s agreement to acquire AT&T Corp. for $16 billion comes on the heels of Sprint Corp.'s $35 billion merger deal with Nextel Communications Inc.

Yes, that's right, the SBC-AT&T deal is worth less-than-half of the Nextel-Sprint merger. Wireless is where the action is...and the market capitalization.

posted by Ray Gifford @ 7:17 PM | Communications, Wireless

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Digital Age Communications Act

We announced the Digital Age Communications Act Project this morning at a National Press Club Event. The nature of the project and participants can be followed here.

posted by Ray Gifford @ 1:31 PM | Broadband, Capitol Hill, Communications, The FCC, Wireless

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Monday, January 31, 2005

Listen to Humpty Dumpty

Yes, the potential SBC/AT&T merger is a significant event, and, yes, the antitrust authorities and the regulators will give it careful scrutiny, as they should.

But there will be much talk today about offspring growing up to slay their parents and the like. Maybe even talk of Oedipus complexes.

I much prefer to listen to the simpler Humpty Dumpty tale....the one about "all the King's horses and all the King's men, couldn't put Humpty together again."

It really is a very different--and much more competitive--telecommunications marketplace we have now than when Reed Hundt called a Baby Bell/ATT combination "unthinkable". This time, before jumping to any quick conclusions, I'd be thinking Humpty.

posted by Randolph May @ 9:52 AM | Antitrust, Communications, Wireless

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Thursday, January 27, 2005

A Rare Event

It is always a big event - and unfortunately all too rare - when a government agency reverses a bad decision, but that is exactly what happened today when the California Public Utilities Commission suspended the consumer "bill of rights" it had adopted last year. The 3-1 vote, in which Commissioner Susan Kennedy and CPUC President Michael Peevey were joined by newly appointed Commissioner Dian Gruenreich, illustrates that elections sometimes do have consequences.

Continue reading A Rare Event . . .

posted by Tom Lenard @ 4:32 PM | Wireless

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Kicking it Down the Road...or Kicking it to the Curb?

The CaPUC voted 3-1 today to push off implementation of onerous new wireless rules that were set to go into effect last month. RCRNews has the story. The issue will be revisited in April. The political story isn't far from the surface in the Governator's state. The critical vote came from just-sworn in Commissioner Dian Grueneich. The San Francisco Democrat joined two other Democrats, Commissioners Kennedy and Peevey, to stay the regulations. Hear, Hear! Let's cheer economically rational decisions.

posted by Kent Lassman @ 4:29 PM | Wireless

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Thursday, January 6, 2005

Power Struggle...

A mild power struggle is developing at the California PUC over rules that would micromanage the wireless marketplace. Next week we'll see if the Governor's new appointments will flex muscle on the issue.

posted by Kent Lassman @ 4:54 PM | State Policy, Wireless

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Thursday, December 9, 2004

Sprint & Nextel...

to merge?

Who will survive? That deadpan guy in the black trenchcoat, or the giant antenna in the middle of the country? Will NASCAR have to repaint its cars? These are questions regulators will want to ask.

posted by Ray Gifford @ 5:49 PM | Wireless

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Tuesday, December 7, 2004

VoIP Goes Mobile

Visually it's not as striking as Kyle's fleet of dirigibles, but imagine a bank of devices working like mobile phones, connected to various wireless networks. Now imagine those devices also connected to the Internet. If I read the company's literature correctly, that's what you have with Xcelis. For a flat monthly fee, you can get unlimited wireless phone service. How? It seems you call Xcelis on your mobile phone, that call is treated like a mobile-to-mobile call (which increasingly is free) and then Xcelis uses VoIP to complete your call. Can't imagine the wireless providers will be too happy with that -- this could be an arbitrage business model that won't last -- but it sure is an example of someone building a better mouse trap.

posted by Patrick Ross @ 10:10 AM | VoIP, Wireless

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Friday, November 5, 2004

The End of the NextWave Saga

It took far more time and money than The Lord of the Rings trilogy, but with Verizon Wireless acquiring its remaining PCS licenses today, NextWave is no longer a PCS carrier. Under the deal all of NextWave's "customers," loosely translated as shareholders, did just fine.

85 million shares of NextWave stock traded hands in the over-the-counter market today, closing at $6.90. NextWave now plans to "pursue broadband wireless market opportunities" after paying off what it owes to the FCC, its creditors and existing shareholders, who "will receive a distribution of cash and interests in the newly formed operating company." About the only positive spin I can come up with is that between this deal and the FCC's auction of previous NextWave licenses in an upcoming auction in January, all of NextWave's original PCS spectrum will be back out on the market . . . eight years later.

posted by Adam Peters @ 8:04 PM | Wireless

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Monday, October 18, 2004

The Middlemen Win

The FCC has denied several petitions seeking a rulemaking or a waiver of the designated entity (or DE) rules in an upcoming auction of so-called "C Block" PCS licenses in January. These licenses were returned to the Commission in a settlement following the now-infamous NextWave bankruptcy.

As I explained in a previous posting and argued in reply comments filed at the FCC, the DE set asides create a perverse set of incentives by creating a layer of "middlemen" who obtain valuable spectrum licenses, meet their first construction benchmark, and then (if they don't go bankrupt first) flip the spectrum to larger regional or national carriers for a hefty profit. By keeping this spectrum out of the hands of those firms who value it the most, the rules make little sense where, as here, the market for wireless services is predominantly national in scope. But according to the FCC's Order, these and other arguments for opening a rulemaking are insufficient to force further delay and a reexamination of existing rules. Score it a 10-8 round for the Commission.

In related news, today's Communications Daily analyzes a rumored deal between Verizon Wireless and DE licensee NextWave, whereby VZ Wireless would pay up to $3 billion for 20 MHz of spectrum in New York. That's nearly half of Qwest's market capitalization. And, best that I can figure, between NextWave's initial down payment for its licenses and its settlement payment to the FCC after filing for bankrupty and years of litigation, NextWave paid out $1.6 billion. NextWave already has sold remaining licenses to Cingular, Verizon and Metro PCS in the past year for around $2.4 billion. The Comm Daily report mentions that NextWave shares were trading at $6.15 in over-the-counter trading last Friday, up over one dollar for the week.

Car dealers have nothing on these guys. Last month, an illuminating article in the The Washington Post noted that, due to bankruptcy protection, NextWave "has networks up and running in 26 markets but has never served a single paying customer." NextWave's founder is pictured standing in front of a courthouse grinning from ear-to-ear. I would be, too.

posted by Adam Peters @ 9:35 PM | The FCC, Wireless

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