Broadcasters and Aereo: sometimes winning means losing

We have a lottery game here in Texas called “All or Nothing.” The point is that if you get ALL the numbers on your ticket, you win, but you also win if there are NONE of the numbers on your ticket. Hence, “all or nothing.”

I think the Supreme Court’s pending decision in the broadcasters versus Aereo case is a similar proposition for the broadcast TV industry, although the other way around. They will lose even if they win.

Historically, when given the opportunity — which this case does — to come down on the side of culture, the high court cannot resist, and culture — whether we like it or not — is moving to a one-to-one model of communications. There are exceptions, certainly, but the use of government resources, like spectrum, to enable old school thinking is up for grabs in the hands of the high court. What most people don’t realize is that one-to-one can mimic one-to-many in certain necessary situations, but one-to-many cannot mimic one-to-one. This is the essence of Jay Rosen’s “Great Horizontal,” and why this case is so fraught with danger for the status quo. You see, it isn’t about my ability to receive; it’s about my ability to send, and that’s why a whole host of laws have to be modified, including the use of the spectrum that’s owned by the people.

TVNewsCheck’s Harry Jessel published a piece last week that examined the question of what happens if the court sides with Aereo. As informative as the essay is, the comments are not only entertaining but also revealing regarding how broadcasters think in terms of defending themselves in the case. Here are six general themes:

  1. Its “unnegotiable” civil defense mission is what will sustain broadcast spectrum. The Telcos even now are working to develop a new system of civil defense warnings and assisting the government in real time and beyond.
  2. The question before the court can’t produce a loss for broadcasters. Since when has the “question before the court” prevented the Supremes from deviating? Sorry, I don’t view this as protection.
  3. Local bandwidth is too small to permit any significant competition to high quality OTA broadcast delivery. This is the same argument used by broadcasters when cable first came on the scene. Quality follows what culture wants.
  4. The most likely outcome would be for Congress to intervene, revising the Copyright Act to bring systems such as Aereo’s within the purview of the transmit clause. The Supreme Court doesn’t need Congress to make law.
  5. There is a finely balanced economic ecosystem going on here in which everyone thrives. But it’s an ecosystem that can be damaged if something disruptive, like a Supreme Court win for Aereo, took place. Nobody cares about our “finely balanced economic ecosystem,” except where it impacts their wallets, and that is a biggie that the court could impact.
  6. If the Supremes give the decision to Aereo, then broadcasters’ spectrum is safe, because Aereo depends on a broadcast signal in order for its antenna farms to work. Well, yes, and that’s a possibility, but Harry’s piece fully explores how that could be a net loss for broadcasters anyway.

If the broadcasters were to win, however, there’s a significant chance, in my view, that the price of winning will be its spectrum, because there is widespread and significant pressure to shift TV stations to cable in the name of spectrum use for the one-to-one world of the Web.

It is the law that gives broadcasters the spectrum. It is the law that says cable companies MUST carry the broadcast signals. It is the law says that broadcasters have a right to compensation for cable carrying their signals. And now broadcasters want the law again to boost their business model. Live by the law, die by the law, for the Supreme Court is the final arbiter of what is or isn’t law, and that’s why this case was such a crap shoot from the beginning.

Broadcasters are already acting as cable companies, and here’s the rub. If broadcast signals become cable channels, then must-carry laws are irrelevant, and retrains fees become renegotiable. Without the weight of law behind the broadcast companies, there’s little doubt in my mind that the networks will by-pass the local money tree in making their programming available via cable. Hence, the losing even if they win.

The problem for the Supremes — and the key reason I think they took this case — is the profound necessity of rewriting what copyright means, absent the immense Congressional lobbying power of the status quo. “Intellectual property” is an oxymoron created by the entertainment industry to give itself the weight of law in conducting its business throughout the world. It works fine in the one-to-many world of mass media, but it makes no sense in the Great Horizontal, and this is the conundrum for the court. Personal use of products must include sharing in a one-to-one universe, and every one of the old industries that thrived in a one-to-many paradigm must face this reality. It will take something like a court ruling to give the people formerly known as the audience (thank you, Jay Rosen) what they deserve.

The supermarket can’t charge me twice for a meal I share with neighbors, yet this is the absurdity of current copyright inside the network. The network is a cultural shift that’s here to stay, and its advancement is the duty of those in positions to make it so, such as our Supreme Court justices. Neither side in this case gives a ripple chip about consumers, the people, and that’s what the court will be forced to consider.

Folks, there’s much more riding here than the question before the court. In attempting to right what they view as a business wrong, broadcasters have opened Pandora’s box, and the chaos unleashed will likely produce a deleterious result for anything “business as usual.”

BONUS LINK, also via TVNewsCheck: Michael Berg’s legal view of the case (although tilted by an admitted bias towards the NAB).

The “schminternet” doesn’t stand a chance!

Jeff Jarvis word for proposal by Google and VerizonSo Verizon and Google — two enormous, profit-making corporate entities — have a suggestion for the government on net neutrality. Let’s keep the wired Web open but close the mobile Web. It’ll never, ever fly, no matter how much money these two giants can bring to bear, because it’s so transparently obvious that anybody with half a brain can see what’s going on. Jeff Jarvis described it best this morning in a wonderful post “Internet, schminternet,” in which he describes the “schminternet” (guaranteed to become a meme) as “not the Internet.”

So ol, grandpa Internet may chug along giving us YouTube videos of flaming cats, but you want to get that while you’re out of your house? Well, that’s the nonnet. I can hear the customer “service” rep explaining this to us:

“Oh, no, sir. That’s not offered on the Internet. That’s on the schminternet.”

You want something new? Anything created after 2010?

“Schminternet, sir.”

And transparency in essence creates a third carve-out: So long as the phone company tells you it’s screwing your bits, it’s ok.

As Jeff later points out, mobile IS the future Web, so these recommendations/suggestions by Google and Verizon are a very, very big deal.

FCC Commissioner Michael Copps responded in the way a government representative should.

“Some will claim this announcement moves the discussion forward. That’s one of its many problems. It is time to move a decision forward–a decision to reassert FCC authority over broadband telecommunications, to guarantee an open Internet now and forever, and to put the interests of consumers in front of the interests of giant corporations.”

The most intriguing question in all of this is why Google, of all companies, would get in bed with Verizon in an attempt to restore scarcity to the open market. Google has made its fortune on the open Web, and it did so with the operating mantra “Do no evil.”

There’s also the little matter of mobile broadband using spectrum that is owned by the public. Google and Verizon would be happy if broadcasting ceased to exist and was shoved aside as part of the tired, old wired world, so that they could create their schminternet. Those airwaves belong to us, and our duly elected representatives will decide how they are used.

A lot of people ask me what I think the outcome of this kind of thinking will be, and my response is that it isn’t technology that’s “causing” the cultural disruptions about which I write; it’s disgruntled people USING technology. People have always been disgruntled when a privileged élite gets to dictate life, but the hyperconnectivity of the Web sticks a knife in the heart of all that. This new found freedom is not something people will easily release, so I have faith that neutrality will, in the end, prevail.

Meanwhile, though, vestiges of the past will fight it with everything they’ve got. After all, they already have it rather nice, and they’d like to keep it that way, thank you very much.

UPDATE: Here’s a great overview of why Google is involved in this by Ryan Singel at Wired.

Kevin Martin’s sudden love of net neutrality

Net Neutrality advocates are cautiously hailing the FCC Commission Chairman’s sudden interest in the cause. Martin said Tuesday that the FCC would act aggressively to ensure that networks are not blocking access to the Internet. Comcast and AT&T have both had complaints about censoring or restricting access to some.

Both Free Press and Public Knowledge urged Martin to follow through on the investigation and enforcement. “Public Knowledge is pleased to see that the chairman and the commission are willing to stand by their principles to protect American consumers,” the group responded Tuesday. “We look forward to FCC proceedings that will determine what are legitimate uses of power by telecom companies and which are not.”

We are encouraged by the chairman’s statements today about investigating Comcast’s blocking of peer-to-peer traffic,” Free Press said. “We hope the chairman’s statements, made two months after we filed our complaint, will lead to immediate and accelerated action at the FCC on the critical issue of whether Comcast, AT&T and other Internet-service providers can block the services people want to use. The FCC must stop these would-be gatekeepers and fine companies that censor the free flow of information.”

Martin’s position is curious. The FCC is feeling its way around the world of the Web, and would like nothing more than to insert itself in some form of permanent oversight capacity. The question is at what level and how much? Despite a degree of openness in the 700 MHz spectrum auction, many observers didn’t buy the subsequent complaints from the Telcos, because they view Martin as in their pockets. And Martin is a solid supporter and enforcer of the censorship wishes of such staunch conservative groups as the Parents Television Council and others.

So what gives? It’s all politics, folks, and the strange bedfellows it breeds.

Open access benefits everybody

The FCC’s 700 MHz spectrum auction got a little more interesting last week when Google told the world they would bid a minimum of $4.6 billion provided certain conditions were met. This is a very important move that could actually help the people who “lost” the spectrum in the first place — broadcasters.

Before I get into this, a disclaimer: I’m not a spectrum expert, but I have a pretty good bullshit detector. I’ve also commented for years about how Europe and Asia are beating the crap out of us in applications of third-generation cellphone technologies and broadband networks. You need to look no further than our beloved incumbents in the telecom industry to assign blame for that, and these are the same folks who want and need that spectrum to maintain their grip on certain forms of communication. Every claim by anyone in this debate, therefore, is self-serving, with the exception of the small group of voices pushing for open access.

As I reported a couple of weeks ago, FCC Chairman Kevin Martin’s idea of open access really isn’t open at all, but Google’s proposal is. In a truly open broadband network, anybody could play. In the incumbent’s view — and in that of several other entities involved in the auction — they would determine who could play based upon how much money would be involved. This is the same closed-network concept that has driven our wireless systems to the competitive basement worldwide.

If Google is successful, however, broadcast companies will have much more flexibility in creating business models that use spectrum that used to belong to them in the first place. The irony of this is stunning.

For the uneducated about the whole spectrum matter, here’s a nice primer from Om Malik a few months ago. Om provides a 10-step explanation, what he calls “a little cheat sheet.” It’s a good read.

And regarding the Google bid, Michael Arrington at TechCrunch has a terrific summary that includes the four conditions that Google is “recommending.”

  1. Open applications: Consumers should be able to download and utilize any software applications, content, or services they desire;
  2. Open devices: Consumers should be able to utilize a handheld communications device with whatever wireless network they prefer;
  3. Open services: Third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms; and
  4. Open networks: Third parties (like internet service providers) should be able to interconnect at any technically feasible point in a 700 MHz licensee’s wireless network.

But the Arrington piece nails the BS in the incumbents’ response:

AT&T’s response to Google’s letter was breathtaking in its audacity:
Not satisfied with a compromise proposal from Chairman Martin that meets most of its conditions, Google has now delivered an all or nothing ultimatum to the U.S. Government, insisting that every single one of their conditions “must” be met or they will not participate in the spectrum auction. Google is demanding the Government stack the deck in its favor, limit competing bids, and effectively force wireless carriers to alter their business models to Google’s liking. We would repeat that Google should put up or shut up–they can bid and enter the wireless market with any business model they prefer, then let consumers decide which model they like best.

For anyone who doesn’t look too closely at the issue, AT&T’s response seems very reasonable: keep government regulation out of the spectrum let the market decide which services win. But that isn’t really what would happen at all. If fewer government restrictions are placed on the bandwidth the auction winners will be able to extract more profits at the expense of competitors and consumers. So naturally they don’t want to see open access rules like those recommended by Google. The incumbents also don’t want to see Google play in their sandbox and bidding against them — so they have yet another reason to oppose their proposal.

As the leader in the open internet world, Google stands to benefit in a purely open wireless world, but so will we all. Big or small, a level field of play will mean an explosion of creativity and applications that we can’t even imagine today. Just look at what has taken place in the 802.11 spectrum (Wi-Fi) since the FCC made that truly open. From your cordless phone to your home wireless network to hotspots in various public and private locations, all are there using “free” spectrum.

This is an enormous political minefield for Washington with billions of dollars at stake. Thankfully, a lot of extremely well-informed people are paying attention on behalf of the (relatively) shallow pocket folks in the country.

If it walks like a monopoly…

Now that Ma Bell has been put back together, it’s wishing to reinstate itself as the dominant player it used to be. The company is trying to sneak its way to top dog status by garnering exclusive arrangements with major players like Apple, and now its involved in a new, seditious attempt to harness the web and police the behavior of its own customers.

The latest effort involving the web has stirred up a hornet’s nest of negative reaction, especially from those who wish to keep the internet free (like, everybody?). A Los Angeles Times interview with AT&T senior VP James Cicconi reveals that the company is working with movie studios and record companies to create and implement anti-piracy technologies at the network level. As Geoff duncan of Digital Trends News writes, this is a first.

The announcement…opens a host of technical, ethical, business, and consumer privacy issues the company will have to deal with even assuming it can develop the type of technology it envisions. In essence, AT&T would assume the role of “copyright cop,” deciding what content can and cannot traverse its networks.

AT&T apparently believes that by engineering a network which is “safe” from digital piracy, the company will gain an upper hand in negotiations and distribution deals with movie studios and record labels as the digital media juggernaut continues to accelerate. If AT&T can make the argument that offering digital media on its network will not contribute to digital piracy, the company may be able to leverage exclusive deals from content providers and possibly charge a premium for distributing media over its network.

Sounds all nice for corporate friends, but what about you and me? I mean, who wants their ISP snooping on their online activity, except those from the same old world of command-and-control?

Doc Searls doesn’t like it a bit, saying “AT&T, please go to hell.“

If I were an AT&T customer today, and I had any other choice of service provider, I’d drop AT&T like a bad transmission. In fact, if you’re an AT&T customer, I suggest you do exactly that. If you can.

Dave Winer has similar thoughts.

If there were a death penalty for corporations, AT&T may have just earned it.

David Weinberger’s assessment is even more pointed.

Putting a cop in the middle of the network and making available content not accessible by other networks means that if the AT&T says it’s offering Internet connectivity, it’s lying.

The Internet is a set of protocols that ensure that bits will be moved across networks (inter-networking) without giving special privileges or control to the carriers.

And Duncan Riley at TechCrunch calls AT&T “American Tracking & Takedown.“

There’s something very, very wrong when a company starts conspiring against its users. Perhaps the days of the customer being always right have passed? Certainly there will be many AT&T customers who will soon (be) looking for internet access from alternative providers

Of course, I’m in agreement with this, and I have AT&T internet experience to back it up.

AT&T is trying to build itself on the products and services of others. I suppose there’s nothing wrong with that, but they offer nothing original. They bought Cingular and now will be the exclusive dealer of iPhones for five years. That alone will keep me from buying one (and I don’t think I’m alone). I’m a Verizon guy.

My apartment complex in Grapevine, Texas has an exclusive deal with AT&T to provide phone, “cable” and internet. The cable comes from DirectTV and Verizon lines provide the DSL. DirectTV would be fine, if I had my own dish, but when the signal is spread out over hundreds of units, all kinds of little annoyances come into play. I’m also not a big fan of DSL, and I’ve had my share of problems.

AT&T “works” only when it is a monopoly, and that’s what it wants once again. Otherwise, people flee the scene like doves scrambling to get away from a Red Tailed Hawk. I’m moving in another couple of months, and the fact that my home entertainment and communications is tied to AT&T is — believe it or not — a big reason why.

I wonder how many of their “customers” are in such forced arrangements.

Turning wireless into pipes

Doc Searls is the leader in trying to get us to see that the web cannot and should not be viewed only as a series of pipes through which pass content.

I’m tired of hearing the Net referred to as a “medium”. Same goes for “social media” such as blogs, wikis and IM. Yes, packets go through the Net. In an almost-literal sense, Senator Stevens is right that it’s a system of “pipes”.

But the Net is pure infrastructure. We work on it, just as we work on the electric power grid, the road system and our water and waste treatment systems, all of which also support the transport of stuff (electrons, cars, water, waste).

The status quo wishes us to see it entirely as a transportation system, because there’s money in offering services in tiers, and you need everybody to accept their understanding in order to pull it off. This is at the heart of the net neutrality debate.

Well, I just got back from a series of meetings in a conference room at a Hilton hotel here in Dallas, during which the hotel wanted us to pay for wireless internet access on a per-user basis. Here’s the scenario:

There were 11 of us in a small conference room with a table that seated 12. Naturally, we all wanted access to the net, but the charge for that was $175 per person! That’s $1,925 for internet access for the group. We (I) pitched a fit, and they agreed to cut it significantly, but it was still far more than what we were willing to pay.

Access in a room at the hotel is $12, but $175 for the same access in one of the conference rooms. “It’s standard in the industry,” I was told by the frightened girl I confronted in Conference Services (this challenges the meaning of that word). Can anybody say rip-off?

In order to get away with this kind of “service,” the hotel needs to convince everybody that internet access must be charged on a user basis, because each user requires a separate pipe. This is nuts, and it’s why Doc and many others are fighting for control of the lexicon that is being written rewritten daily.