Court: FCC had no right to sanction Comcast for P2P blocking

The FCC's decision to sanction Comcast for its 2007 P2P blocking was overruled today by the US Court of Appeals for the DC Circuit. The question before the court was whether the FCC had the legal authority to "regulate an Internet service provider's network management practice." According to a three-judge panel, "the Commission has failed to make that showing" and the FCC's order against Comcast is tossed.

When the complaints against Comcast first surfaced, they noted that the company was violating the FCC's "Internet Policy Statement" drafted in 2005. That statement provided "four freedoms" to Internet users, including freedom from traffic discrimination apart from reasonable network management. The FCC decided that Comcast's actions had not been "reasonable network management," but Comcast took to the agency to court, arguing that the FCC had no right to regulate its network management practices at all.

The Internet Policy Statement was not a rule; instead, it was a set of guidelines, and even the statement admitted that the principles weren't legally enforceable. To sanction Comcast, the FCC relied on its "ancillary" jurisdiction to implement the authority that Congress gave it—but was this kind of network management ruling really within the FCC's remit?

The court held that it wasn't, that Congress had never given the agency the authority necessary to do this, and that the entire proceeding was illegitimate. The FCC's "Order" against Comcast is therefore vacated; Comcast wins.

The decision wasn't a surprise; during oral argument earlier this year, the judges pressed the FCC's top lawyer repeatedly. The Policy Statement was "aspirational, not operational," they said; the FCC had not identified a "specific statute" Comcast violated; and the FCC "can't get an unbridled, roving commission to go about doing good."

Comcast pledged some time ago to change the way it handled traffic management, and it has already transitioned to a protocol-agnostic approach to congestion.

Source: Arstechnica.com

FCC photos reveal iPad internals, sculpted aluminum case

The Federal Communications Commission beat iFixit to the punch in publishing the first iPad take-apart photos, although the Commission did have an unfair advantage since it got pre-launch access to the device for its usual RF testing. The photos do give a first look at the iPad's laser sculpted aluminum casing as well as a little detail about how the hardware is put together.

What's not surprising is that most of the internal volume us taken up by two large Li-Ion batteries. The logic board is tiny and appears to be not much bigger than an iPhone. All of the internal components are jammed in there good and tight, as one might imagine. But what's most surprising is that there is actually a good amount of empty space inside.


Lest you think iFixit took this challenge lying down, however, the company craftily removed the FCC's meager attempts to cover up details of the chips that Apple requested the FCC keep "confidential." iFixit analyzed the source of the components, but none of them are major surprises so far. There's an Apple A4 processor, Toshiba flash memory, and Broadcom radio chips. The IPS display panel is also suspected to be made by LG Phillips.

Some of the components are too small to make out in the relatively low-resolution images, and some of the components might be slightly different in the actual shipping version. iFixit promises have a more detailed analysis after receiving its own iPad.

Source: Arstechnica.com

Universal Service Fund: now with less incompetence!

The Federal Communications Commission's Universal Service Fund is cleaning up its act. Yes way—for real. And not only that, it looks like we've been a tad unkind to the benighted program in the past. Turns out that what seemed like a pretty devastating audit of one of the USF's main programs was way off in its calculations.

Here's the short version of that story. The USF, paid for by small tithes on your phone bill, runs four programs: a fund that subsidizes the phone bills of the poor; a program that subsidizes the computer/network needs of schools and libraries; another that underwrites broadband for rural health care facilities; and a division that offers financial support to rural carriers.

That last program is called the "high cost" fund. It helps with the challenges that rural carriers face in trying to provide service to relatively few consumers in spread out areas. Unfortunately, past audits of the fund have concluded that its high cost title has a second, less desirable meaning—a scarily huge error rate in payouts to carrier recipients: 16.6 percent, according to a review that the FCC's Inspector General released three years ago. A subsequent assessment warned that the program overpaid carriers by almost a billion dollars from July 2006 through June 2007.

But the Universal Service Administrative Company's new Annual Report includes a re-check of those numbers that calls them way too high. Not 16.6 percent for that first assessment, USAC says, just 2.7 percent. "USAC anticipates similar results in the final reports on the second and third rounds of the FCC OIG USF audit program," the Annual Report also notes.

Big fixups

Still, the document indicates the company has taken to heart many of the criticisms of the ways that it monitors its four programs. In mid-July of 2008 the Government Accountability Office warned that the FCC has not established meaningful performance goals for the USF. But the GAO reviews' most important finding was that nobody really audits the cost records of these telcos for, well, costs. FCC and USF data collection efforts only peer at a small percentage of recipients, GAO charged, and "generally focus on completeness and consistency of carriers' data submissions, but not the accuracy of the data." This could "facilitate excessive program expenditures," the report very politely concluded.

Now, in 2010, USAC will take a new approach, the company promises, "analyzing data from beneficiaries and from USAC to measure rates of improper payments and using a broad audit program to measure program compliance." The FCC has also established an interim cap on high cost fund payments to competitive carriers. And the low income program is completely revamping itself, with a new cost-tracking system to reduce accounting errors.

All this is good news, because the Universal Service Fund could become a huge engine for the expansion of broadband in the United States. Last year the USF paid out $7.3 billion to its recipients—money going out to 1,865 eligible telecommunications carriers in the case of the high cost program. But the balance of that cash went to phone service providers, not to ISPs.

So the FCC's National Broadband Plan recommends that Congress transitions USF money to two new programs. First, a Connect America Fund to support broadband providers for poor and rural regions. The CAF, as outlined in the Plan, is designed to avoid the errors of High Cost. It will only provide funding in zones "where there is no private sector business case to provide broadband and high-quality voice-grade service." The program will give to no more than one provider per area (as opposed to over a dozen in some present instances). Its recipients will be adequately audited. And, of course, they will have to provide broadband.

Second, the FCC wants Congress to launch a "mobility fund" to help various states get up to speed in 3G wireless.

All this could take a while for the House and Senate to get out the door. The FCC says this transition needs to happen by 2020, with reforms of High Cost and disbursements from Connect America both beginning in 2012. But the agency isn't waiting for Capitol Hill to get started. The Commission's next meeting, scheduled for April 21, will propose "common-sense reforms to the existing high-cost support mechanisms to identify funds that can be refocused toward broadband"—plus a Notice of Inquiry that asks for input on "the use of a model to determine efficient and targeted support levels for broadband deployment in high-cost areas."

Let's see how far the USAC and FCC can get on their own while waiting for Congress to take the big steps. Hopefully they won't have to tread water for too long.

Source: Arstechnica.com

Comcast in full salesman mode to FCC over NBC Universal deal

Everybody's favorite cable company filed a public interest statement with the Federal Communications Commission on Thursday, explaining why Comcast's proposed joint venture with NBC Universal (NBCU) will be, well, just a beautiful thing for everyone.

"By bringing together NBC's high-quality content with the technology and innovation of Comcast's technology platform, the new venture will increase the amount, quality, variety, and availability of content more than either company could on its own, which will promote diversity," declared Comcast's Public Policy Veep David Cohen on his policy blog. "The new venture will also provide more and better local programming, including local news and information programming, advancing localism."

To which Josh Silver over at the reform group Free Press had these choice words: "Comcast's reputation for customer service ranks about one rung above Enron and Blackwater. The idea that it is magically going to be consumer friendly after it gets bigger doesn't pass the laugh test."

Perhaps we should all calm down just a bit here. Say what you want about Comcast (as we at Ars do quite often), but last time we checked, Enron helped trigger power blackouts across the west coast, then went down in financial flames, wrecking the portfolios of tens of thousands of small investors. As for Blackwater, the White House just announced that the government is appealing a court's dismissal of charges that its security guards bumped off over half a dozen Iraq civilians in 2007.

So as HAL the computer said to Dave in 2001: A Space Odyssey, let's take a stress pill, then keep in mind that we're talking about cable TV and ISP service in this instance. We'll be checking in on what the critics say as the FCC's public interest review goes forward. For now, here's what Comcast is offering the agency at this point in the process.

The case for the merger
Comcast's argues that its 51 percent acquisition of NBCU (General Electric will own 49 percent) is in the public interest because it will enable the company to provide better service in a highly competitive video landscape. All-in-all, the new entity will control just 12 percent of all cable network ad and affiliate revenue, behind Time-Warner, Viacom, and Disney-ABC, the cable giant estimates. And the venture will be surrounded by online, non-cable video distribution services.

Sure, Comcast acknowledges, NBCU owns a 32 percent interest in Hulu.com. But the video site only enjoys a "single-digit share" of online traffic. "Even if one restricts the analysis to 'professional' online video content, the combined entity will still have a small share of an exceptionally dynamic and competitive field," the company argues.

On top of that, investments in the new venture and lower costs will allow NBCU/Comcast to provide a wider range of programming. "This includes content of specific interest to minority groups, children and families, women, and other key audience segments," Comcast writes. "The new venture will also be able to provide more and better local programming, including local news and information programming."

So here's what Comcast is offering in specifics via David Cohen's blog and its public interest commitment summary to the FCC.

Free over-the-air
Comcast promises that Comcast/NBCU will continue to provide free over-the-air via its broadcast stations and local affiliates. For the next three years, Cohen pledges, NBC's owned and operated broadcast outlets will provide "at least the same amount of local news and information programming as today—and will not cut the amount of news programming." In fact, the venture will kick in 1,000 more hours of local news and informational fare.

The FCC filing is a little cagier about this. "As Comcast negotiates and renews agreements with its broadcast affiliates," it explains, the company will foster a "cooperative dialogue" towards a business model to sustain free over-the-air "that can be workable in the evolving economic and technological environment."

You can translate this in a variety of ways. Here's one possible parsing. 'We think that over-the-air TV is on the way out, but one never knows what the landscape will look like in 2013, so we'll keep our options open.'

Better programming for kids, more options for parents
Comcast also pledges to add an "additional 1,500 programming choices for children and families within three years" on video on demand, plus an extra hour of children's programming per week, over and above the three hours required by the FCC's Children Television's Act rules.

Plus Comcast promises to triple duration of program-rating data that appears on TV screens to 15 seconds during commercial breaks, and making the information box bigger. And the company will work with Common Sense Media (on whose board FCC Chair Julius Genachowski used to sit) "to creatively incorporate CSM information on its emerging On Demand and On Demand Online platforms."

More indie fare
In addition, the new venture will boost Telemundo VOD programming, launch a new over-the-air multicast with Telemundo fare, and ensure "that the two new independently owned and operated cable networks we have committed to add to our digital line-up each year for the next three years are truly independent—i.e., networks that are not currently carried by Comcast Cable, and are not affiliated with Comcast, NBCU, or any of the top 15 owners of cable networks as measured by revenues."

Not sure whether that last sentence translates into much more than "we promise to do what we've already promised to do" in the first public interest commitment statement the cable company made back in early December.

If you are a bit underwhelmed by these commitments, here's that summary again, which also talks about Comcast maintaining public, educational, and government [PEG] channels on any cable system until it has gone all digital (AT&T's handling of this conversion via its U-VERSE IP-TV service is hated by community media groups). But our guess is that this is just the beginning of a set of negotiations with the FCC about what Comcast must offer in exchange for merger approval—assuming that the Commission chooses to bless the proposed marriage at all.

And don't forget that the Department of Justice is also reviewing the deal.

Source: Arstechnica.com