The famed FCC meeting slated for today hasn't started yet and is unlikely to start at all, not a surprise given the fiasco generated by Chairman Kevin Martin's highly controversial proposal to impose new regulations on the cable industry. One key reason for the delay is that Martin has no support among his fellow commissioners for the cable proposal and the initiative has been scrapped...for now.
Martin has been so roundly rejected by his colleagues that he seemingly can't even get the votes needed for an alternative proposal, one that simply calls for cable operators to submit data to the FCC. Martin's regulatory proposal is premised on his contention that cable now serves more than 70% of homes capable of buying the service and he's been criticized for ginning up numbers to justify his proposal.
Martin's fallback proposal is to order cable operators to submit data to the FCC to generate yet another set of statistics on the industry's penetration rates. Even this stripped-down, face-saving proposal has so far failed to generate support among the remaining commissioners, and for good reason.
As my fellow analyst Bruce Leichtman has said (and as I documented here) it's not remotely possible that cable has surpassed the 70% threshold and "that's what is so appalling about this " So a data collection effort by the FCC would be an absurd, futile exercise.
A clear sign that Martin has suffered a truly humiliating defeat is that he personally briefed reporters this afternoon on his failure to get the necessary votes. As the WSJ's Corey Boles notes:
Mr. Martin has had to pull items before, but he has never personally come down to reporters and admitted that he couldn't find the support for a rule change.
Update: The New York Times (which seems to be the preferred outlet through which Kevin Martin makes policy announcements) has this article in which Martin claims that despite his defeat on the big issue, "he was still able to force action he and some consumer groups maintain could help to make programming more diverse and ultimately reduce cable costs."
Huhh??? Supposedly Martin was able to strike some kind of pact with his fellow commissioners this evening that would force cable operators to charge independent programmers lower rates for leased access to systems.
Nothing about this new deal or new set of rules is up on the FCC's web site. In fact, the FCC's meeting still hasn't started today. And I have a hard time figuring out how Martin did this without first proving that cable had passed the 70% threshold.
It is clear that Martin is spinning and spinning. The NYT article pins Martin's loss on a lobbying "blitzkrieg" by cable operators and claims that the supposed compromise proves that cable didn't win a total victory.
Yeah, I don't think so. It is true that cable pulled out all the lobbying stops. But I've seen the cable industry do this before and lose. This go-around, cable got lucky. Martin just simply lost credibility by making up data.
Posted by Cynthia Brumfield at 1:59 PM | Print | Comments (0)Verizon Wireless leapfrogged ahead of the whole 700 MHz open access debate and changed forever the mobile communications industry in the U.S. by announcing this morning that it will allow customers to use any application and any device on its network. Starting early next year, Verizon Wireless will publish the technical standards that developers need to design products that work on Verizon's network. Verizon hopes to offer the open network to all consumers by year-end 2008.
"We believe this move sets the table for the next big leap in wireless growth and innovation," CEO Lowell McAdam said during a press call following the announcement. "We expect new network capabilities with higher data speed and improved throughouput performance to usher in a new era of broadband wireless services and applications."
Calling this new service a "network-only" option, Verizon will not abandon its existing retail business model that requires consumers to lock into specific handsets and services. This open service is simply another choice for consumers. "The accelerating pace of innovation and the demanding needs of customers require multiple business models," McAdam said. "We're going to continue with a very successful retail model. This [new option] is additive."
Verizon maintains that the controversy over open access requirements in the 700 MHz spectrum auction had little to do with this move. "What goes on on Capitol Hill and with the 700 MHz rules doesn't really play into this," McAdam said.
iPhone owners, however, won't be able to jettison their AT&T subscriptions to jump on board Verizon's far superior network, but not because Verizon Wireless will isn't all for it. Apple's deal with AT&T is exclusive and the phones can't easily be unlocked so that customers can switch to Verizon. Moreover, the iPhone right now is designed for GSM technology and Verizon's network is CDMA-based.
Barring these limitations, however, Verizon would be glad to have iPhones on its network, execs said during the press call. In fact, so long as any application or device passes technical compatibility muster at a lab that Verizon will set up, anything device or application is fair game.
"If someone has the technical capability of building a device in their basement on a bread board...we'll test it and activate it on the network," Verizon Wireless CMO John Stratton said during the press call. This low barrier to launch could foster the development of far more niche services and technologies than are available today.
"With only the testing that needs to be done in Dick's [Dick Lynch, CTO] labs, it doesn’t matter if it [the new technology] sells 500 devices or 5,000 devices," Stratton said.
This radical step by Verizon will no doubt shake up the carrier's rivals and it's only a matter of time before they also follow suit. AT&T, T-Mobile and Sprint will be hard-pressed to cling tightly to their own closed business models in the face of Verizon's innovations.
The advent of an open network option will also likely, as McAdam predicts, accelerate the introduction of a host of new mobile options, including mobile video, particularly as Verizon continues to upgrade its network.
It's going to take some time to digest the ramifications of this development, but the far-reaching impact of Verizon's decision cannot be understated. At long last, the sluggish U.S. mobile carrier system has been jolted into the 21st century and maybe now Americans can start enjoying the wide range of wireless services that many other developed nations have known for years.
Update: No wonder Verizon dropped its legal challenge to the open access provisions in the 700 MHz option. Some folks speculated at the time that Verizon didn't have a strong legal case, which my sources told me wasn't true at all. In fact, Verizon probably came to the realization that open networks are inevitable and just gave up the fight.
Posted by Cynthia Brumfield at 10:12 AM | Print | Comments (0)After a lot of drama, the Republican presidential candidates are finally going to hold their own YouTube-powered debate tomorrow night at 8 pm ET. As of this morning, 4,927 video questions for the candidates were posted on YouTube's site.
Despite the generally button-downed, conservative nature of the Republican Party, I don't see a lot of difference between the questions posed in this debate compared to the ones submitted for the Democratic YouTube debate. If anything the GOP line-up features far more colorful characters than does the Democratic slate, resulting in even more off-the-wall YouTube videos than were submitted for the Democratic debate.
As this Washington Post piece notes, Billiam the snowman is back, joined by Mr. Potato Head and Charlie the Unicorn (which I couldn't find myself...the YouTube debate videos aren't easily searched). But Rudy Guiliani has brought out more than his fair share of eccentrics and Mitt Romney's Mormonism has induced some weird religious questions and videos.
One of my favorites is this guy asking if Romney wears "magic underpants," referring to the sacred undergarments that many Mormons wear.
p.s. Don't miss the Chicken Lady for V.P.
p.p.s. TechPresident is running its own effort at user-generated video questions for the candidates. They want the candidates to answer in video form too.
Posted by Cynthia Brumfield at 9:24 AM | Print | Comments (0)
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