Dear Commissioner Copps: Thank You for Your Public Service

On Monday evening, the Hunter College Roosevelt House is hosting an event on media policy and reform, featuring former FCC Commissioner Michael Copps. Sadly, it’s in the middle of my Monday class, so I will be unable to attend — and it’s oversubscribed, so I can’t urge you to attend either.

Still, I’m really excited for my colleague Andrew Lund, who is leading the conversation with Mr. Copps, as well as the many Hunter students and faculty who will be able to attend. Thus, I wanted to share a bit about what I’d like them (and the world) to know about this great public servant.

To fully appreciate how exceptional Copps was as an FCC Commissioner, a role he fulfilled from 2001 to 2011, you need to know how thoroughly the Commission has traditionally been a “captured” agency — that is, generally doing the bidding of the industries that it was constructed, in principle, to regulate.

You should also know how the “revolving door” of government works: After working in government in a position of any real importance, many former public servants often take plum jobs in the private sector where they can leverage their regulatory knowledge and even their interpersonal connections to the advantage of their new employers.

Once he started his term at the FCC, Commissioner Copps knew that, after his time in government, he could easily walk into a plum job in the private sector. After all, this had been the route taken by many of his predecessors — as well as many of his colleagues who stepped down in the interim.

Unfortunately, when looking at the decisions that many of these FCC folks who turned that experience into very-well-paid private sector jobs, one could be forgiven for wondering whether many of them truly had the public interest at heart. Some of their decisions suggest that they were, at least in part, also thinking about their long-term earning potential. I won’t name names, but all of us who follow communication law reasonably closely know the most obvious examples.

When looking at Commissioner Copps’ decisions, however, nobody could possibly doubt that his true allegiance really was with the public for the full decade of his service. Media reform groups like Free Press and Public Knowledge finally had an unabashed, reliable ally with his hand on the levers of power, on issues from broadcasting to telecommunications to pluralism and diversity.

Want a sense of where Copps stands on the issues? Go listen to this interview with Democracy Now. Or this one. Read this collection of speeches or this collection of op-eds. Over and over again, you see him supporting the importance of using the power of the state to shape a more democratic, fair, and representative media system.

Copps is probably best known for his opposition to consolidation in ownership between media companies. He “was the one vote against approving Comcast’s takeover of AT&T’s cable systems in 2002” (p. 261), but this was just a warm-up.

The real sea change on ownership came in late 2002 and 2003, as then-Chair Michael Powell proposed a substantial roll-back in the rules against media consolidation. Copps and fellow Commissioner Jonathan Adelstein pushed to have substantial public discussion around the proposal, including multiple, well-publicized hearings. Powell said no — allowing just one hearing — so Copps and Adelstein went on tour, holding 13 unofficial hearings.

Through this and other efforts, working alongside public interest-minded NGOs, Copps helped bring major public attention to Powell’s proposal, ultimately bringing it to a halt. This slowed (though certainly did not stop) the process of media consolidation, through which ever fewer companies control ever more of our media landscape.

Copps has continued to be known for his opposition to media consolidation — though unfortunately, when Adelstein stepped down in 2009, Copps lost an important ally in the fight. Echoing the 2002 vote, Copps was the only Commissioner to vote against allowing Comcast to purchase NBC-Universal in 2011.

I would love to say a great deal more about Copps’ time at the FCC, but I’ll say just a few more words on one more issue: broadband regulation. He came in just in time to dissent from the FCC’s decisions to give away the keys to the kingdom on broadband interconnection, in the decision that led to the Brand X ruling by the Supreme Court.

The FCC ruled that broadband infrastructure companies — the folks who’ve used imminent domain and massive public subsidies as key tools as they’ve laid the cable, phone, or fiber lines over which broadband is transmitted — are not obligated to share their “last mile” systems with competitors. (This requirement for “interconnection” was already in place for landline local and long-distance telephone service, which led to an explosion of competition and plummeting prices.)

The Supremes held that the FCC was within their rights to make the decision, not that it had to come out that way; if Copps had won the day, we wouldn’t be dogging it in the horse latitudes of poor service, high prices, and slow broadband speeds as the world runs past us on all three counts. In the years after, Copps made the best of a bad regulatory position, serving as the most reliable vote for for mandatory network neutrality.

Again, though ownership and broadband policy are among his best-known issues, Copps was a tireless voice for the public interest on virtually every issue imaginable that came before the Commission. Even though he stepped down from the Commission over a year ago, he continues the work today.

Even as a former Commissioner who spent a decade being the thorniest thorn in the sides of those seeking to make a quick buck at the public’s expense, Mr. Copps could still quickly make a quick buck himself working for industry. There are a large number of companies, industry trade groups, and swanky D.C. law firms that would be quite happy to give him a huge salary, cushy office, and first class travel budget to speak on their behalf.

Instead, Copps has moved on to work for Common Cause, one of our nation’s strongest voices fighting for the best interests of ordinary people. This is just the latest in a long line of decisions in which he has chosen to fight for the public interest, even though it’s easier and more lucrative to fight for those who already have disproportionate money and influence.

For public interest advocates, Michael Copps was, at a minimum, the greatest FCC Commissioner since Nicholas Johnson retired nearly 40 years ago — and perhaps the greatest ever. His work at the Commission will be missed, but I look forward to seeing him continue to have a major role in pushing for a fairer, more just media system for many years to come.

One more point, for anybody who’s read this far: As of now, Copps’ Wikipedia page is a mere stump — the Wikipedia term for an article that is too short and needs to be expanded. In this case, a great deal more needs to be said in order to do its subject justice. I call on you to help me do this in the coming weeks. Mr. Copps was and remains a tireless and effective servant of the public, and this is but a small favor we can do in return.

Congress Investigating High Cost of Txt Msgs

Here’s a great article by the Times exposing how text messages are incredibly overpriced and discussing one Senator’s investigation into the subject.

Text messages may cost you and me $.20 per, but they cost the carriers almost nothing to send, says Srinivasan Keshav, a professor of computer science at the University of Waterloo, in Ontario. Here’s a chunk from the article:

Perhaps the costs for the wireless portion at either end are high — spectrum is finite, after all, and carriers pay dearly for the rights to use it. But text messages are not just tiny; they are also free riders, tucked into what’s called a control channel, space reserved for operation of the wireless network.

That’s why a message is so limited in length: it must not exceed the length of the message used for internal communication between tower and handset to set up a call. The channel uses space whether or not a text message is inserted.

Professor Keshav said that once a carrier invests in the centralized storage equipment — storing a terabyte now costs only $100 and is dropping — and the staff to maintain it, its costs are basically covered. “Operating costs are relatively insensitive to volume,” he said. “It doesn’t cost the carrier much more to transmit a hundred million messages than a million.”

Keshav is no radical with an agenda, either; his research has been funded by one of the four major carriers.

Senator Herb Kohl, Democrat of Wisconsin and the chairman of the Senate antitrust subcommittee, has begun an investigation, only to be effectively stonewalled by carriers.

That texting is radically overpriced relative to carrier costs has been an open secret for years. I’m glad to see Congress looking into it.

Comcast to FCC: Why Regulate? We Have the Blogosphere

In a filing with the FCC (pdf), Comcast claims that, thanks to market competition and blogging watchdogs, there is no need for regulatory intervention to protect net neutrality.

The company’s recent discrimination against peer-to-peer traffic is the cause of the hearing. Last August, Comcast denied the charges (which were first documented on… drumroll please… a blog), but now the company has stopped fighting the clear and convincing evidence, instead changing the Terms of Service to reflect the fact that they are willfully throttling BitTorrent traffic.

Now, they claim:

Network Management is best left to the sound, good-faith judgment of the engineers and proprietors who run and own the networks and who are best able to remedy customer service issues promptly, rather than to regulation. The self-policing marketplace and blogosphere, combined with vigilant scrutiny from policymakers, provides an ample check on the reasonableness of such judgments.

There’s only one problem: whatever market pressure and public criticism can be leveled has already come to pass, and Comcast still has not changed direction. Could this have something to do with the market failure in the broadband market? After all, a duopoly is rarely the sign of a healthy market.

At least one prominent blogger and vocal Comcast critic finds the argument laughable.

On DRM-related sidenote, somebody (presumably Comcast) put a password on the PDF, preventing the wholesale one-step copying of text. Yet further evidence that the company is deeply committed to an open dialogue on net neutrality.

(Link from Lok)

Supercapitalism Really Is Super

Robert Reich’s latest book, Supercapitalism, is a fantastic analysis of the current relationship between corporations, citizens, and politics.

I put Supercapitalism on my wish list after Prof. Lawrence Lessig’s glowing recommendation. While I make no pretense of being such a gifted writer as either of these scholars, here I attempt to summarize the book and follow with a few minor points.

Reich, the former Labor Secretary and current Professor of Public Policy at Berkeley, describes us all as being of two minds. On one hand, we are all consumers and (most of us are also) investors. As such, we’re always seeking to minimize our costs and maximize our profits. This leads to lower costs and higher profits; companies that cannot deliver lose customers and investors.

On the other hand, we are also all citizens and employees. In that capacity, we are generally frustrated by the effects of our growing collective power as consumers and investors. Those low prices and high profits squeeze employees, main street family-run stores, and the environment.

Our civic selves object to these negative effects, but we know that our individual purchasing and investing power cannot reverse these trends. Even were we to make the sacrifices of paying higher prices and earning lower returns by supporting more “socially responsible” businesses, we cannot make a difference with our dollars alone. Even social movements calling for corporate responsibility fail because, even if the companies comply, they leave an economic vacuum to be filled by other companies; otherwise, companies just revert to their old ways once the heat is off.

In the “Not Quite Golden Age” of postwar America, companies could pay high wages and CEOs could act on what they saw as the public interest. Most major industries were composed of cozy oligopolies with little product variation. The high cost of industrial production set high barriers to entry, leaving companies with plenty of room to negotiate relatively good deals for employees and the public.

Thanks in large part to new information technologies, as well as the growth of worldwide shipping infrastructure, we have entered what Reich calls supercapitalism over the past 30 years. Companies can design a product on a computer in Denver, buy parts from Brazil, Egypt, and Hungary, and subcontract with a factory in Korea to follow the computerized assembly instructions.

The increasingly fierce competition between companies has led to the squeezing along every part of the supply chain. Main Street retailers can’t sell refrigerators for $1200 when the same icebox is $799 at the big box store 2 miles away. Ford can’t stay profitable by paying its workers $70 per hour in salary and benefits when comparably skilled Koreans will do the same job for half. Suppliers get squeezed, too; ask any of WalMart’s suppliers about this process.

In the era of supercapitalism, companies have little choice but to minimize prices and maximize profits. In the Not Quite Golden Age, a system of cozy oligopolies gave consumers and investors little choice; both groups had mediocre but predictable deals all around. Now, consumers and investors who do not get the best possible deals will take their money elsewhere. Companies that do not ruthlessly squeeze their costs go bankrupt or get bought out.

This process has also led to the corruption of the democratic process. In the ever-accelerating contest for strategic advantage within and between industries, companies have begun to game the system to a degree that was generally not necessary 30 to 50 years ago. Reich’s own experience in government illustrates the impact of the rapid influx of money into the DC area:

Even by the mid-1970s, when I worked there as a political appointee at the Federal Trade Commission, much of the downtown was still run-down. I’d take any lobbyist who insisted on a lunch to a cockroach-infested sandwich shop on the other side of Pennsylvania Avenue, after which I would never see the lobbyist again. But when I returned to Washington in the 1990s, the town had been transformed. … The flow of money had inflated everything in its path. (p. 132)

Corporations are the primary folks funding this influx of capital. NGOs and labor make just a drop in this rapidly growing bucket of lobbyists, PR firms, campaign donations, “expert” consultants, hotels, and fancy restaurants with leather menus and $75 steaks.

Corporations spend this cash in the search for competitive advantages within or between industries. They may not even want to play, but they have to in an attempt to counterbalance other companies’ or industries’ efforts. Competition for customers and investors is too fierce, and one bill can kill a company’s bottom line.

The result is the increasingly impenetrable Beltway we all know and love. Corporate cash has purchased such a cacophany that citizens’ voices are drowned out.

Reich does offer some hope for a cure. Some of the usual suspects are here, from policy changes such as stronger labor protections to procedural reforms such as publicly funded campaigns. The really interesting recommendations, though, center on Reich’s argument against the anthropomorphic view of corporations as people.

Corporations are nothing more than bundles of contracts, so he insists we should neither give them standing to sue to overturn duly enacted laws nor find them criminally liable nor tax their income as though it is the company that owes. Their shareholders and employees would still retain all their rights and responsibilities, which is proper, since a corporation is just a collection of shareholders and employees.

He makes a compelling case for the feasibility and benefits of taxing shareholders instead of companies; corporations would withhold taxes on shareholders’ behalf and give them something like a W-2 form at the end of the year. This would be feasible in the era of computer-processed financial transactions, and it would be progressive, since the wealthiest would pay a higher rate on this income. It would also eliminate corporate inefficiencies caused by some wrinkles in the tax code.

The jaded may initially blow these off as politically impossible (I certainly did), but Reich points out that most companies would rather not be shaken down. A coalition of likeminded corporations helped leverage McCain-Feingold into law, and combined with public pressure, a similar coalition could create even greater reforms.

The prospect for procedural reform in particular is not impossible, but it is quite optimistic. A few industries with a history of winning backdoor negotiations with little effective opposition would fight tooth-and-nail against anything that would reduce their unique power position: oil, telecom, and the entertainment industry all come to mind.

For instance, he perpetuates the mistaken notion that the net neutrality debate was just another contest between corporate interests. In fact, tech companies were seriously outmatched on The Hill, and it was only due to the outstanding work by NGOs such as Free Press and the mobilization of over 1 million citizens that Sen. Ted Stevens’ (R-AK) 2006 telecom bill died as a net neutrality hostage.

Additionally, Reich regrettably fails to consider the potentially obstructionist role of the corporate media in blocking political reforms. The media have an obvious economic incentive to keep campaign funding the way it is: teeming with corporate cash that winds up buying tons of ads for several months every two years.

Any attempt to tie campaigns’ spending to taxpayers’ willingness to pay would generate substantial media opposition, and a bill mandating free airtime would drive media companies to break out every political tool they have. Congress speaks to its constituents through the media; these same media will turn on them (even if not as overtly as, say, Fox) in a heartbeat, and politicians know that.

Finally, Supercapitalism could better integrate theory generally and political economy more specifically. This is ironic; the book is itself an excellent introduction to political economic analysis. But theories about the flow of political information (such as Oscar Gandy’s theory of information subsidies) and the policymaking process (perhaps Baumgartner and Jones’ theory of punctuated equilibriums) could add some heft to Reich’s analysis. This is clearly a trade press book, but it is not impossible to drag a little theory into a book with wide appeal. Paul Krugman’s highly readable book, The Age of Diminished Expectations, is a fine example, and he was using economic theory.

All told, though, Reich’s book is nothing less than a beacon of hope in a world of dark political realities. This should be on your must-read list, and I’m already thinking about how I could use it in the classroom.

VZ installing fiber, yanking out copper

As Verizon moves forward with installing FiOS fiber optic phone/internet/TV service in (mostly wealthy, white) neighborhoods throughout the country, it is taking the time and expense to pull out copper wires.

Why spend the money? As explained on the Consumers Union blog, Hear Us Now, there are two obvious incentives. First, consumers can’t go back. Unhappy with FiOS? Want to go back to Ma Bell? Too late now!

Second, they’re required to lease their copper lines. Thus, some cities have a (nominal) choice in local phone service, and everyone can choose their long distance provider. Those regulatory schemes only apply to copper line telephone service, so pulling the copper cuts Verizon’s obligations as a common carrier.

NY Times: How many times did Bush say “nectarine”?

The New York Times has created a searchable database for studying the words used during Bush’s State of the Union addresses.

The database provides a total of how many times he’s used a word in each speech, and you can see each use of a word in its context. Play with it for a minute; it’s fun.

In seven speeches, Bush has often mentioned the countries he has invaded (e.g., “Iraq/Iraqi(s)” 124 times), but he has mentioned “diplomacy” or “diplomatic” just 8 times. Here’s a choice use in context:
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FCC OKs AT&T/BellSouth merger; Deal includes 30 months of net neutrality

After months in front of a deadlocked FCC, AT&T has a green light to swallow BellSouth (pdf). The new company will control “more than half the telephone and Internet access lines in the U.S.”

The merger likely would have sailed through on the strength of the FCC’s 3-2 Republican majority, but the newest Republican commissioner, Robert McDowell, recused himself from the decision upon his appointment in June. Commissioner McDowell recently worked as a lobbyist for companies opposed to the merger and has remained on the sidelines to avoid the appearance of a conflict of interest.

To make the merger more palatable to the likes of Jonathan Adelstein and Michael Copps, the Commission’s Democratic members, AT&T finally proposed several voluntary conditions on the merger. As CNet explains:

The conditions of the merger proposed by AT&T and agreed to by the FCC included the sale of certain wireless airwaves in the 2.5 gigahertz band, a special $19.95 per month price tag for stand-alone basic high-speed Internet service and a promise for the next two years to adhere to specific Network neutrality rules. …

Specifically, it agreed “not to provide or to sell to Internet content, application, or service providers, including those affiliated with AT&T/BellSouth, any service that privileges, degrades or prioritizes any packet transmitted over AT&T/BellSouth’s wireline broadband Internet access service based on its source, ownership or destination.”

On PublicKnowledge.org, Herald Feld calls the conditions a “huge victory” for network neutrality; all the same, the NN debate is far from over. These merger conditions are only temporary and will not apply to other companies, so network neutrality proponents will still be calling for legislation in 2007.

NFL Network v. cable companies: Fans lose

In an effort to create ever-greater profits, the NFL is now running 8 live games per season on the NFL Network.

Just 40 million households will be able to see the Broncos-Chiefs game on Thanksgiving. As an NFL fan generally and a diasporic Broncos fan in particular, I find this arrangement particularly objectionable.

Living out of market, I already miss most of their games because I refuse to spend (insert ridiculous sum here) per month for a dish so that I can get NFL Sunday Ticket. I loathe 99% of what’s on TV, so I’m not getting cable or a dish any time soon. I just settle for the games that are broadcast in my local market. I was excited to see that the Broncs will play on Thanksgiving again this year, but then I was disappointed to learn that economics (okay, greed) will keep me from seeing it.

I’m glad that Congress has taken up this issue as an antitrust concern. Personally, I will go out of my way to avoid any product advertised during any NFL games until the NFL reverses this anti-competitive behavior.

Foreign antitrust concerns nudge Vista toward openness

In response to European and South Korean antitrust concerns, Microsoft has made several changes to its forthcoming operating system.

The new OS, Vista, will now feature less lock-in for its search, file formatting, and security features, the company has announced. So far, security firms are skeptical; the company has promised but not yet produced the technical means to facilitate interoperability.

Unfortunately, there are as yet no antitrust concerns that can leverage MS away from their excessively anti-consumer End-User License Agreement.

Let’s hear it for OS X, produced by a company that treats its customers like customers–and not thieves.