Coyote Blog

I read a number of tech sites like Engadget every day, and am just shocked at the continued happy puppy reactions to the FCC's takeover of the web.  The articles can all be summarized as "Hey, isn't it awesome this old lady is taking us to her house in the woods and giving us free candy?"

Daniel Henninger shares my reaction:

Washington’s seizure of the Internet is one of the great case studies in the annals of political naïveté.

Over several years, leading lights of the Web—among them Netflix,Google and Tumblr—importuned the Obama White House to align itself with the cause of net neutrality.

“Net neutrality,” like so many progressivist-y causes—climate change, health care for all—is a phrase designed to be embraced rather than understood.

But net neutrality had real meaning. Its core idea was that the U.S. Federal Communications Commission, a Washington agency whose employees have been regulating communications since 1934, should design and enforce a price mechanism for the Internet. Up to now, nobody did that.

In February the FCC did, and on that day the Little Red Riding Hoods of net neutrality found out what big teeth grandma has. The FCC said its plans to regulate the Web were in a 332-page document, which no one can see until the agency is ready....

Mr. Karp and the rest of the 20-something and 30-something Peter Pans in the app development world should find their way to the 80-something communications lawyers and lobbyists retired in Florida for a tutorial on what it’s like trying to get Washington off your back once it has climbed on. Here’s the tweet-length version: You are going to pay and pay and pay. To save you, Washington will bleed you....

No one can do business until they first run it through the Beltway bosses. For the K Street corridor, it’s the golden age all over again.

As I wrote before, isn't anyone in tech worried that the government used a semi-imaginary problem that perhaps required a flyswatter to address to justify acquiring 16-inch naval guns?

Via the WSJ (emphasis added)

Nomar may be the most extreme example of a problem plaguing 911 response centers nationwide: false emergency calls made from cellphones that no longer have a contract or prepaid minutes with a wireless carrier and so can avoid being tied to a user. Under federal rules these disabled phones, which can't make ordinary calls, must retain the ability to dial emergency numbers.

Abuse of these phones has become enough of a concern that many 911 officials and some in the telecom industry are urging the Federal Communications Commission to shut off or phase out the emergency feature in the interest of public safety.

In the San Francisco Bay Area alone, anonymous dialers have made tens of thousands of false 911 calls since 2007—with Nomar alone believed responsible for over 30,000. (Call-center operators can detect a disabled phone in part because no phone number shows up on their screen.)

During a 24-hour period on Thanksgiving Day 2012, dispatchers at the city's Department of Emergency Management reported 1,527 false 911 calls—more than one a minute. They believed all the calls came from just five phones, based in part on the cellphone towers from which the calls were connected...

At the root of the problem is a 1997 FCC requirement that all carriers include emergency-dialing capability on cellphones whether they have working service or not. Back then, 911 centers supported the feature as a potential lifeline.

"Cell service was still a new thing," said Trey Forgety, director of government affairs at the National Emergency Number Association, a trade group of 911 centers in Washington. "We wanted people in dire straits to have reliable access to 911."

From Radley Balko, this is just staggering:

Federal employees’ job security is so great that workers in many agencies are more likely to die of natural causes than get laid off or fired, a USA TODAY analysis finds.

Death — rather than poor performance, misconduct or layoffs — is the primary threat to job security at the Environmental Protection Agency, the Small Business Administration, the Department of Housing and Urban Development, the Office of Management and Budget and a dozen other federal operations.

The federal government fired 0.55% of its workers in the budget year that ended Sept. 30 — 11,668 employees in its 2.1 million workforce. Research shows that the private sector fires about 3% of workers annually for poor performance . . .

The 1,800-employee Federal Communications Commission and the 1,200-employee Federal Trade Commission didn’t lay off or fire a single employee last year. The SBA had no layoffs, six firings and 17 deaths in its 4,000-employee workforce.

When job security is at a premium, the federal government remains the place to work for those who want to avoid losing a job. The job security rate for all federal workers was 99.43% last year and nearly 100% for those on the job more than a few years . . .

White-collar federal workers have almost total job security after a few years on the job. Last year, the government fired none of its 3,000 meteorologists, 2,500 health insurance administrators, 1,000 optometrists, 800 historians or 500 industrial property managers.

The nearly half-million federal employees earning $100,000 or more enjoyed a 99.82% job security rate in 2010. Only 27 of 35,000 federal attorneys were fired last year. None was laid off.

Forgetting for a minute the adverse selection and incentive problems from preferentially attracting folks who want to work in an environment without any accountability for performance, how can an institution that is running $1 trillion over budget not have any layoff either?

Hey, why make expensive investments when the government will just give you access to your competitor's infrastructure?

Federal Communications Commission has decided to mandate data roaming by a 3-2 vote. Simply put, major carriers like AT&T and Verizon will be required to let you check your email and perform VoIP calls over their federally-licensed airwaves even if you're actually paying a regional carrier for your cellular coverage instead -- just as they've been required to do for voice and messaging since 2007. As you can imagine, Big Red and Ma Bell aren't exactly jumping for joy at the news, with both threatening to slow expansion into niche markets if they'll be forced to share their infrastructure. The victorious members of the FCC claim that this doesn't constitute common carriage because the big boys still get to negotiate "commercially reasonable" rates. Considering that two dissenting commissioners say that it is, indeed, common carriage, though, and thus beyond the powers granted to the FCC, we imagine we haven't heard the last of this debate.

By the way,  the commercially reasonable rate piece is so much BS.  I can say from experience that there is no such thing as a true price negotiation when one party is forced to make a deal.  In one of my great moments in not reading the fine print, I signed a commercial lease with the National Park Service in which the fine print demanded that I buy the personal property used in that operation from the former tenant.

Well, you can imagine what happened.  The contract said I had to buy it at a reasonable market price, but at the end of the day, if they guy insisted on selling me a pile of useless junk for $100,000, my negotiation options were limited because I could not just walk away.  Just to really hammer the lesson home to me about being careful in such deals in the future, the former tenant really went the extra mile in taking advantage of the provision.  He stripped out every good asset from the operation and shipped in every non-working piece of junk equipment he could find in his other operations -- after all, I seem to have given him an open-ended "put".  Only his, shall we say, excessive creativity in the latter eventually saved me, as trying to sell property from other operations (there was even some old couches from someone's house sitting in the boat repair shed) was considered by the NPS to be a violation of the rules and they eventually released me from the requirement.

Via the WSJ

A federal appeals court ruled last month that the Federal Communications Commission lacks the authority to regulate the Internet. No worries, mate. This week the Obama Administration chose to "reclassify" the Internet so it can regulate the Web anyway. This crowd is nothing if not legally creative.

For the past decade, broadband has been classified as an "information service" and thus more lightly regulated than traditional telephone services. This has led to an explosion of new investment and Web innovation, but it hasn't sat well with Democrats who want more control over the telecom business, as well as with some Web companies (Google) that want more leverage over Internet service providers like Time Warner or Verizon.

FCC Chairman Julius Genachowski did their dirty work this week by announcing that he plans to reclassify broadband lines so his agency can regulate them under rules that were written for Ma Bell in the 1930s. This means subjecting the Internet to new political supervision"”from the federal government and 50 state public utility commissions. The goal is to put one more industry under Washington's political thumb.

Just what we need, the government choosing winners and losers in media like they do earmark recipients.  Since government ownership of GM was politicized in Congress before the ink on the court agreements was dry, I wonder how fast Congress will find a way to use a government media bailout to punish the critical and reward sycophants.

A top Democratic lawmaker predicted on Wednesday that the government will be involved in shaping the future for struggling U.S. media organizations.House Energy and Commerce Committee Chairman Henry Waxman, saying quality journalism was essential to U.S. democracy, said eventually government would have to help resolve the problems caused by a failing business model.

Waxman, other U.S. lawmakers and regulators are looking into various options to help a newspaper industry hurt by the shift in advertising revenues to online platforms.

Waxman continues:

"Eventually government is going to have to be responsible to help and resolve these issues,"

Why?  You mean like when the US government stepped up in the 19th century to bail out pamphleteers and failing broadsheet publishers when the market moved to new media?  Or when it moved to bail out network television under assault from new cable channels?  Remember that?  Neither do I.

Next steps:

At the Federal Communications Commission, officials are embarking on a quadrennial review of the state of U.S. media. The study, which is mandated by Congress, seeks to determine whether current rules should be changed to allow for a more vibrant media industry serving a diverse audience.

We have that.  Its called the Internet.  It emerged entirely free of government action (save some funding of some original infrastructure).  Go away.

Good roundup over at the Knowlege Problem on regulation of Voice over IP (VOIP - basically telephone calls over broadband Internet). 

The Federal Communications Commission declared today that a type of Internet telephony service offered by Vonage Holdings Corp. called DigitalVoice is not subject to traditional state public utility regulation.

The Commission also stated that other types of IP-enabled services, such as those offered by cable companies, that have basic characteristics similar to DigitalVoice would also not be subject to traditional state public utility regulation.

This may be good news.  If it keeps regulation low and lets this new technology continue to innovate and find its way in the market, great.  If it is just two bullies snarling over who gets to take my lunch money, then its not-so-good news.