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Wednesday, April 30, 2014

Colorado Likely First To Legislatively Authorize Ride-Share Services

As reported by the Denver Post: Colorado is set to become the first state in the country to legislatively authorize ride-sharing services offered by UberX and Lyft.

The Senate on Tuesday approved a House-amended version of Senate Bill 125 that closes the controversial insurance gap, sending the bill to Gov. John Hickenlooper's desk.

Hickenlooper's office has urged lawmakers to pass the much-debated measure because without it, Lyft and UberX would be forced to cease operations in the state, dealing a blow to Colorado's reputation as an innovation hub.

SB 125 officially would authorize the services and place Lyft, UberX and other so-called transportation network companies, or TNCs, under limited state regulation.

Lawmakers in Arizona, California and Illinois also have taken up the issue of regulating ride-share companies. Arizona Gov. Jan Brewer vetoed her state's bill last week because of concerns about insurance coverage and lack of drug testing for drivers.

Ride-sharing drivers use their personal cars for fares and connect with passengers via smartphone apps. Fares generally are lower than taxi service. Taxi officials have argued the TNCs have an unfair advantage because they don't face the same regulations.

The final version of SB 125 requires car-sharing companies, or their drivers, to carry primary commercial insurance coverage for the period when a driver has logged into their Lyft or UberX app but hasn't been hailed. Insurers had threatened to raise rates if they were forced to cover that period with a driver's personal auto policy, arguing that the driver is engaged in commercial activity at that point.

"We were able to address that critical issue in making sure there were no gaps in coverage during the commercial activity, at least for liability coverage," said Kelly Campbell, a lobbyist with Property Casualty Insurers Association of America.

The bill allows TNCs to carry contingent coverage — which kicks in if a driver's personal policy doesn't cover damages — for the gap period until Jan. 15. At that time, the gap coverage has to be primary, either through the driver or the TNC.

SB 125 also requires TNCs to provide primary liability coverage between the time a fare has been hailed and the passenger has been dropped off.

"We look forward to Gov. Hickenlooper signing the bill to secure a future that will allow ride-sharing to grow and thrive in the state of Colorado for years to come," Lyft said in a statement.

Uber, the parent company of UberX, still has some concerns about certain regulatory controls the state will have over the ride-sharing service.

"All in all, it's a very good thing that this legislature cleared the way for TNCs to operate in Colorado," Uber attorney Greg Sopkin said.

Lyft launched service in Denver in September, with UberX following a few weeks later. Lyft has since expanded to Colorado Springs.

"We're the first in the nation to legislatively authorize this," Uber attorney Ray Gifford said. "That should be a point of pride for Colorado."

Sheriffs Crash $250k Drone They're Not Supposed To Be Flying

As reported by ChronDivers scoured the bottom of Lake Conroe in the hope of recovering a controversial $250,000 police drone that crashed into the water Friday.  

The Montgomery County Sheriff's Office confirmed the remote-controlled helicopter drone, which was bought in 2011 with a federal grant, suffered a malfunction and went down during an exercise over the lake.  

The drone is equipped with a camera and an infrared scanning device and is used by MCSO for emergency management, missing-person recovery and operation overwatch, for example filming above SWAT team activities, spokesman Brady Fitzgerald said.
"Divers did go down to look for it. They are still looking. It went down in deep water where there is a rocky bottom. Visibility is also a problem because of sediment at the bottom of the lake," Fitzgerald said.
The mini helicopter, which weighs around 49 pounds, and, in a military setting, could be fitted with a single- or multiple-shot 40mm grenade launcher, 25mm grenade launcher or 12 gauge shotgun, according to Vanguard Defense Industries.
Civil liberties organizations were critical when the ShadowHawk drone was purchased from Vanguard just over two years ago.
At the time, Kirsten Bokenkamp, spokeswoman for the Houston-based American Civil Liberties Union of Texas, said the drones raise concerns because there are not enough safeguards in place to protect citizens from unreasonable search and seizure.
"It's just another example of technology that is outstripping our lives," she said. "What we mean by that, is the technology moves so quickly and the interpretations of the Fourth Amendment are failing to keep up with the technology. That brings privacy concerns."
MCSO officials emphasize that the drone is not used for surveillance.  
Drones or unmanned aircraft are governed by the Federal Aviation Administration, which first authorized their use in the national airspace in 1990.
Fitzgerald said deputies were confident the drone would be recovered and further investigation into the crash would follow.

The Drone is reportedly over the FAA's 25 pound weight limit, so it's likely they shouldn't have been flying it in the first place.  Recently passed Texas Legislature (House Bill 912) also restricts the use of drones to observe private property.

Tuesday, April 29, 2014

FCC Proposes $48,000 Fine To Man Jamming Cellphones On Florida Interstate

From the FCC"An individual who had been jamming cellphone traffic on interstate 4 in Florida was located by FCC agents with the assistance of Hillsborough County Sheriff's Deputies. The individual had reportedly been jamming cellphone traffic on I-4 for two years.

The FCC is now proposing a $48,000 fine for his actions. They say the jamming 'could and may have had disastrous consequences by precluding the use of cell phones to reach life-saving 9-1-1 services provided by police, ambulance, and fire departments.'"  

While the fine is large, it is not unprecedented: last August (2013) a New Jersey man named Gary Bojczak, who worked for a construction company in Northern New Jersey was fined $32K for an illegal GPS jamming device that disrupted the Newark airport system on multiple occasions.  The FAA and FCC spent two years (March 2009 to April 2011) locating the source of the jamming at Newark Airport.

Wireless jamming is considered to be more than an inconvenience or nuisance, and is treated as a significant threat since it can disrupt critical and emergency communications, terrestrial and satellite communication such as GPS tracking systems that are required for everything from aircraft, personal or vehicular location to systems requiring financial trading.  It can also potentially affect military operations.

As GPS can be negatively impacted over a wide area by a relatively small jammer, alternative technologies such as eLoran and MEMS (microelectromechanical systems) are being investigated as a secondary location signal provider.  This will only continue to be more critical as self driving vehicles, commercial drones and intelligent highway system usage continues to expand.

Despite “Framily” Push, Sprint Continues To Bleed Customers

As reported by GigaOm: In January, Sprint launched a major new campaign to lure in new mobile subscribers and keep old ones loyal, but the potential benefits of its “Framily” program didn't show up in its first quarter results. The company shed nearly 400,000 subscribers as it struggles to get its LTE network rolled out nationwide and faces off against mega-carriers AT&T and Verizon as well as a newly resurgent T-Mobile.

Sprint lost a net total of 231,000 postpaid subscribers (which includes contract and non-contract subscribers who aren’t on a pay-as-you-go plans) and 364,000 prepaid subscribers. The bright spot was a gain in 212,000 wholesale subscribers, reflecting Sprint’s growing business in connecting mobile virtual network operators (MVNOs) like Tracfone, FreedomPop, Ting and Republic Wireless. The revenue it brings in from an MVNO subscriber, however, is a fraction of what it sees from a customer who buys mobile service directly from Sprint.

Source: SprintSprint Total SubscribersTotal Period SubscribersQ12012Q22012Q32012Q42012Q12013Q22013Q32013Q42013Q1201453M54M55M56M57M

Sprint executives blamed the subscriber loss on the tumult created by its ongoing network overhaul. Sprint isn't just trying to bring its LTE network coverage on par with its competitors, but it’s also rebuilding its 2G and 3G CDMA networks from scratch. Service disruptions caused by that upgrade work are causing disgruntled customers to leave, Sprint said.

Still, there are some glimmers of light at the end of this tunnel. Sprint’s LTE network now reaches 225 million people in 443 cities, so it’s within spitting distance of its mid-year goal of 250 million people covered. And while Framily didn't stem customer losses this quarter, nearly 3 million subscribers signed up for the new friends and family plan last quarter. That’s significant but those customers are not only more likely to stick with Sprint in the future, but they’re likely to recruit new subscribers into the Sprint fold.

Framily’s incentive structure offers an increasing discount as more people join a particular plan. Since Sprint will bill each subscriber separately, Sprint can use Framily to target customers outside of a traditional family plan. These customers aren't on contract, so they’re free to leave when they pay off their phone, but they’ll lose their accrued discounts. So if a “Framily” loses members it has a lot of incentive to replace them. At a separate event Tuesday, Sprint attempted to amplify the benefits of Framily by offering members discounts on Spotify’s subscription music streaming service.

Sprint now has 54.9 million total subscribers, making it half the size of AT&T and Verizon. It reported a first quarter net loss of $151 million, compared to a $643 million loss in Q1 of 2013, off of revenue of $8.88 billion.

Saudi Arabia Joins the Drone Arms Race

As reported by The Verge: Last week, Saudi Arabia bought its first drone fleet, according to a dispatch from Tactical Reports. Saudi Crown Prince Salman met with Chinese General Wang Guanzhong to sign a contract for a shipment of Chinese Wing Loong drones, also known as Pterodactyls. The drones that make up the shipment are designed to mimic America's Predator drone, with surveillance capabilities and enough lift to carry two matched air-to-ground missiles.

If the report is true, it means Saudi Arabia may have joined an exclusive club, one of the few nations with armed, unmanned aircraft. It's a group that, to date, includes just the US, Britain, Israel, China, and (depending who you ask) Iran — but beyond those countries, the capability is increasingly available to whoever can pay for it. At the Singapore Air Show earlier this year, both Israel and China were showing off their wares to would-be clients, including the Pterodactyl drone named in the report, and you could find similar displays at dozens of other air shows. With American counterterrorism efforts providing an ongoing test of how valuable the machines can be, there are lots of countries willing to buy.

The US is still responsible for the vast majority of drone strikes, but that may have more to do with politics than capability. A GAO report from 2012 found that more than 75 countries have some form of drone system. Most are unarmed but some, like the systems used in Australia, Japan, and Singapore, could be retrofitted for military purpose. More importantly, the US’ use of drones — more than 50 strikes in 2013 alone — seems to have whetted a global appetite for combat drones. "If you think of this as part of a broader trend of the proliferation of military robotics, then the idea that we were going to have a monopoly on this kind of technology was always a bit far-fetched," says University of Pennsylvania political scientist Michael Horowitz. "The American monopoly on drones is over and probably never really existed."

International trade barriers have slowed down the spread, but they haven’t stopped it. For US companies, combat drones are controlled under the same agreement as cruise missiles, through an association called the Missile Technology Control Regime. But China and Israel aren't part of the group, and the two countries have begun aggressively marketing drone systems to outsiders eager to keep up with US capabilities. One report from the consulting firm Frost & Sullivan estimated that Israel had exported $4.6 billion in drone systems between 2005 and 2012.

Experts also say Saudi Arabia has previously demonstrated both the interest and the budget for this kind of purchase. "Saudi Arabia and smaller countries like the UAE are trying to get their hands on whatever they can, and the US has pretty restrictive export policies," says Cornell University professor Sarah Kreps, who studies drone proliferation. The result leaves China as one of the only sources available in town.

One of the biggest questions is whether the new generation of foreign drones can match US capabilities. "We don't know at all about the quality of the pterodactyl," Kreps cautions, "these aren't combat-tested." Since unmanned aircraft rely so heavily on satellite and communications infrastructure, it’s hard to tell from the craft alone how well it will perform in the field. The Pterodactyl is also typically sold for a fraction of the price of the Predator, which has only fueled skepticism.

But even if China needs help to bring its drones up to US standards, that expertise may not be hard to find. UAVs are built on mostly commercial technology, drawing from the robotics and aviation industries. That’s much harder to keep under wraps than military tech like warheads or missiles. As long as there’s a market, there’ll be an incentive to build cheaper and more powerful drones, and the club of drone-armed countries will continue to grow. As Horowitz puts it, "What we know about the history of military technology suggests it will be really difficult to keep a lid on this."

Google’s Self-Driving Car Logs 700,000 Miles Navigating City Streets

As reported by GigaOm: Google says its self-driving car is now proficient at navigating the hazards of city driving.

In a blog post, Chris Urmson, director of the company’s self-driving car project, wrote that the Google cars have successfully completed 700,000 miles of city driving — around Google’s Mountain View, California headquarters — without incident:
“We’ve improved our software so it can detect hundreds of distinct objects simultaneously — pedestrians, buses, a stop sign held up by a crossing guard, or a cyclist making gestures that indicate a possible turn. A self-driving vehicle can pay attention to all of these things in a way that a human physically can’t — and it never gets tired or distracted.”
As of the last status update in August, the cars had completed 300,000 miles of service without an accident, at least under computer control — an actual person also sits in the car — but those miles were logged in a variety of conditions. Now Google seems to have doubled down on city driving, which presents more variable conditions than highway driving.

While this post is interesting, the comments are even more intriguing. One commenter predicted an increase in unsafe driving practices by human drivers who will now be tempted to cut off the Google cars, if they’re so darned accurate. Another requested  an “On-Board Missile Launcher” option, perhaps to deter or punish such cutoffs and counter road rage.

While negotiating Mountain View roads may be tricky, Google needs talk to me after the cars have mastered the potholes, rotaries and creative drivers of Boston. Now that would really be something.

Monday, April 28, 2014

Developing A Self-Cleaning Car Finish Using Nanotechnology

As reported by Tech TimesDrivers may soon be able to put away their buckets and cleaning rags after Nissan announced that it has developed a car that can clean itself instantly using a special kind of paint.  

Engineers at Nissan's European Technical Center in Bedfordshire, England applied a "super-hydrophobic" and "lipophobic" paint finish called Ultra-Ever Dry, which was developed and patented by UltraTech International, on the new Nissan Note supermini. The ultra-resistant paint can repel water and oils, as well as dirt, dust, mud and grit.

Although Ultra-Ever Dry has been used in other fields, Nissan claims that this is the first application of the special paint on automotive bodywork.
The paint uses nanotechnology to create a thin air shield above the surface of the car that makes rain, road spray, frost, sleet and standing water roll off the car without tainting its surface at all.
"By creating a protective layer of air between the paint and environment, it effectively stops standing water and road spray from creating dirty marks on the car's surface," explains Nissan in a press release.
So far, initial tests conducted on the self-cleaning Note were effective. Nissan engineers used Ultra-Ever Dry to paint one side of the car and regular paint on the other side. A video below shows how the side of the Note coated with Ultra-Ever Dry did not accumulate mud or dirt.
"The Nissan Note has been carefully engineered to take the stress out of customer driving, and Nissan's engineers are constantly thinking of new ways to make families' lives easier," says Nissan chief marketing manager Geraldine Ingham.
"We are committed to addressing everyday problems our customers face and will always consider testing exciting, cutting edge technology like this incredible coating application," she continues.
Nissan says it has no plans of making the special paint job a standard on factory models. It will, however, consider offering the self-cleaning paint as an aftermarket option. The company also promised to continue testing the technology in its European testing center.
This is not the first time Nissan introduced a self-cleaning function. The company has already developed a smart rear-view mirror that provides a better back view using a camera piped on the rear windshield. This camera is equipped with its own "wash and dry" function that uses water and air to keep the lens free from dust and dirt, allowing the driver a clear view of what's behind the car at all times.

Scale Is Increasingly The Name Of The Game In Cloud Computing

As reported by GigaOm: Resistance to cloud computing might not be futile, but it’s at least beginning to look foolish — especially as services from the top providers such as Amazon Web Services keep getting cheaper while their performance gets better. It’s also looking like smaller-scale or “enterprise” cloud platforms will have to promise some serious differentiation in order to justify their higher costs.

To highlight this trend, here’s a chart from publishing analytics startup graphing its IT spending from inception until early 2014.

The long story made short — you can read the whole thing up through September 2013 here — is that started off using Rackspace primarily and AWS for backup and a variety of ad hoc workloads (e.g., Hadoop jobs). In 2012, it opted to cut costs by switching its primary analytic database to physical servers in a co-location center while continuing to run its cloud workloads primarily in Rackspace. In late 2013, it began transitioning more workloads to AWS and completed an entire transition to AWS in late February 2014.

After paying double (to both Rackspace and AWS) during the transition, is now paying less than monthly than it was before making the move. Its spending patterns might be unique because of the workloads it’s running, but they’re compelling nonetheless.

And, Co-founder and CTO Andrew Montalenti told me, there’s icing on this cake, as well: “What’s crazy is we got a speed-up and saved money.” The company’s primary analytics database is now running significantly faster on AWS SSD-backed instances than it did on bare metal (albeit hard-disk-backed) servers.

If recent claims from Google about adjusting its pricing in accordance with Moore’s Law come true — and if its unique strategy around price reductions on long-running instances catches on — we should be in for continually lower prices on basic cloud computing services. AWS is the cloud king, but Google and Microsoft are positioned as strong contenders, and if low costs are what wins users, they’ll all play along to ensure no one else owns that story. The same goes for improved performance and rapid feature updates.

More and more, it looks like the future of cloud computing will be renting the infrastructure that lets users operate like, well, Amazon, Google and Microsoft but at a fraction of the cost (and scale). We’ll hear a lot more about where the industry is heading at the Structure conference, which takes place June 18 and 19 in San Francisco, and features, among many others, Google’s Urs Hölzle, Amazon’s Werner Vogels and Microsoft’s Scott Guthrie.

T-Mobile Has Started Building A More Resilient LTE Network

As reported by GigaOm: T-Mobile has begun upgrading its LTE network with a new kind of antenna technology that will help fix one of the biggest problems in mobile: the inconsistent signals and connection speeds our phones see as we move through the mobile network.

Anyone who has ever had five bars and a rocking data link to the tower, only to lose it 20 yards later, can attest to this. But starting in Chicago, Dallas and San Antonio, T-Mobile users will soon see those peaks and valleys become plateaus.

The technology is called 4-by-2 multiple input-multiple output, or 4×2 MIMO. You may already be familiar with MIMO if you’re familiar with how LTE or Wi-Fi works: multiple antennas send multiple parallel transmissions from the transmitter to the device. While nearly all LTE systems today use 2×2 MIMO — two antennas at the tower connecting to two antennas in the phone — T-Mobile is doubling up on spatial streams being transmitted over the network.

What that means is that there will be a lot more signals flying at your T-Mobile 4G phone, tablet or mobile hotspot, ensuring you can get a better downlink connection even if you’re at the fringes of the network or their obstacles between you and the tower. The biggest benefits will be on the return trip, though. With more antennas at the tower to pick up your phone’s generally weaker signals, you’ll get a big boost in your uplink connection.

Gigaom first got the scoop on T-Mobile’s plans last June, when one of its vendors Nokia Solutions and Networks confirmed to me T-Mobile planned on deploying the antenna array technology. At the time, T-Mobile wouldn’t even acknowledge that it was using 4×2 MIMO, but this week T-Mo VP of Technology Mark McDiarmid confirmed to me that T-Mobile is in the process of rolling it out in multiple cities across its network this year as part of a larger LTE upgrade.

“We do see the benefits 4×2 MIMO offers and will be deploying this in many cities in 2014 as part of our Wideband LTE rollout,” McDiarmid said in a statement to Gigaom. “All of T-Mobile’s available devices currently support 4×2 MIMO and we’ll ensure that new devices will as well. We believe this will be one of the first deployments by a top carrier network in the US.”
Source: Flickr / swruler9284

Sprint is performing trials of a similar technology called 8T8R, which actually creates eight transmit paths as opposed to T-Mobile’s four, and will incorporate it into future upgrades to its new tri-band Spark network.

Historically T-Mobile has always trailed its competitors when it comes to launching new generations of network technologies. It was the last to get 3G and the last to start rolling out LTE, but once it had gotten started it took advantage of its newer network equipment to surpass its rivals. It built the fastest 3G network in the U.S. in 2011, and with 4×2 MIMO its now among the pioneers in one of the latest advancements in 4G networking.

T-Mobile wouldn’t offer any details as to where the network is now live, but Gigaom’s favorite network tracker Milan Milanovic found evidence of 4×2 in the wild in Chicago, Dallas and San Antonio by polling fellow network testers on Howard Forums. This screenshot supplied by forums user besweeet shows iPhone in engineering mode in San Antonio with the arrow indicating four transmit signals from the tower.

Source: Howard Forums user besweeet

What does this mean to me?

So if you’re a T-Mobile subscriber with an LTE handset, 4×2 MIMO basically means you’re going to get a more resilient connection as you move throughout the network. You won’t actually see your peak speeds improve, but you’ll be able to maintain a fast, consistent connection far more often, even when the network starts getting crowded.

According to Nokia networks’ Head of Technology for North America Petri Hautakangas, at the cell edge – those fringe areas of the network where your connection often suffers the most — you could see a 50 percent to 60 percent boost in download speeds and as much as 100 percent increase in upload speeds.

That boost provides a lot of advantages to T-Mobile as well as its customers. By connecting more customers throughout its network with faster speeds it increases its overall data capacity considerably, meaning it will take a lot more traffic to make its network congested.

As for where the network heads next, the location of the three sightings we've had so far provides a hint. They’re all Nokia-built networks. Nokia’s systems are concentrated in the interior of the U.S. Ericsson holds T-Mobile’s contract for most east and west coast cities. If Nokia has the jump on Ericsson for this new technology, then it might take a while before it arrives in New York or San Francisco.

In any case, this technology is an important step for mobile networking, demonstrating the subtle shift away from building faster networks, to building better networks. The 5-10 Mbps speeds we typically see on a smartphone today is plenty fast. But providing a consistent 5-10 Mbps connection no matter where you go in the network? That’s where the mobile industry should be heading.

Sunday, April 27, 2014

FTC Comes Out In Favor Of Tesla Direct Sales, Against Dealer-Backed Bans

As reported by Green Car Reports:  The ongoing fight between Tesla Motors and car dealers across the country has spilled from the headlines into the legal system, but so far, the outcome is far from certain. Will Tesla be allowed to sell its cars directly to consumers? Or is there some state interest in forcing Tesla into the dealer franchise model America's major carmakers use?

The Federal Trade Commission (FTC) weighed in through its "Competition Matters" blog, making it plain that the agency supports the Tesla direct sales approach, likening it to past technological advances in consumer-business relations.

"In this case and others, many state and local regulators have eliminated the direct purchasing option for consumers, by taking steps to protect existing middlemen from new competition. We believe this is bad policy for a number of reasons," wrote Andy Gavil, Debbie Feinstein, and Marty Gaynor in the FTC's "Who decides how consumers should shop?" posting to the Competition Matters blog.

The strong statement of policy is not a change to any law or regulation, but it does clearly indicate the FTC's stance on the matter. Gavil is the director of the FTC's Office of Policy Planning, Feinstein is director of the Bureau of Competition, and Gaynor is director of the Bureau of Economics.

The post continues, "Dealers contend that it is important for regulators to prevent abuses of local dealers. This rationale appears unsupported, however, with respect to blanket prohibitions of direct sales by manufacturers. And, in any event, it has no relevance to companies like Tesla. It has never had any independent dealers and reportedly does not want them."

Tesla CEO Elon Musk has explained why Tesla doesn't want conventional car dealers in the past. Though noting that it would be an easier path for Tesla, Musk thinks that conventional car dealers would have a conflict of interest in conveying the benefits of electric cars, since they would still rely on conventional (gasoline-burning) cars for the majority of their sales and profits.

Tesla's battle for direct sales is framed by existing franchise laws that prohibit anyone not licensed as a car dealer from selling vehicles to the public. Laws vary from state to state, but in all, 48 states have some version of the restriction.

The FTC appears to take issue not with those laws, but with how they're being used, and with the direct-sales bans being passed in several states.

"Regulators should differentiate between regulations that truly protect consumers and those that protect the regulated," the post continued.

Tesla now has more than 50 stores and galleries in the U.S., with six more due to open soon. Over 40 service centers are also currently in operation, with another 23 planned.                                         

Verizon, AT&T Will Face Bidding Limits In Incentive Auction

As reported by GigaOm: Last week the Federal Communications Commission laid out all of its proposed rules for next year’s controversial broadcast airwave incentive auction, save one. It didn't address the most contentious rule of them all: whether the countries’ two mega-carriers AT&T and Verizon will have free rein in the auction or face restrictions on how many airwaves they can buy.

The FCC is now taking a whack at the political piñata, and AT&T and Verizon aren't going to be pleased with what comes out. On Thursday, FCC Chairman Tom Wheeler began circulating proposed rules for low-band spectrum auction — of which the incentive auction is most definitely one — that would limit Verizon and AT&T’s ability to bid on all licenses in markets where competition for frequencies is particularly  intense.

What that means is that in areas where there’s the most demand for mobile broadband airwaves, such as the big cities, the FCC will set aside up to 30 MHz of airwaves for carriers that don’t already own a lot of low-band spectrum. The rules aren’t exactly a surprise since Wheeler has been leaning in this direction for months, though they’re likely to get overshadowed by the FCC’s controversy du jour, net neutrality.

The reason low-band spectrum is valuable is because of its propagation — it can reach out long distances in rural areas and punch through walls in dense metro areas. Most of the low-band spectrum in use in the U.S. today is owned by, you guessed it, Verizon and AT&T, both of which have tapped 700 MHz for the backbones of their LTE networks.

Wheeler elaborated in the FCC’s blog:
“… two national carriers control the vast majority of that low-band spectrum.  This disparity makes it difficult for rural consumers to have access to the competition and choice that would be available if more wireless competitors also had access to low-band spectrum.  It also creates challenges for consumers in urban environments who sometimes have difficulty using their mobile phones at home or in their offices.
To address this problem, and to prevent one or two wireless providers from being able to run the table at the auction, I have proposed a market based reserve for the auction.”
The nitty gritty
The way the auction would work under the FCC’s proposal is that in any given market, all carriers would bid freely for these 600 MHz airwaves. But after bidding hits a particular trigger point indicating high demand for those licenses, the FCC would basically split the auction in two, creating a reserve chunk of airwaves up to 30 MHz that only smaller carriers like Sprint, T-Mobile and regional operators could bid on. The unreserved portion would remain open to all bidders.

Verizon and AT&T wouldn’t necessarily face restrictions in every market. It all depends on the extent of their low-band holdings in any given region. There are even a few geographical cases where regional carriers like U.S. Cellular hold enough 700 MHz spectrum that they would be excluded from the reserve camp, FCC officials said.

FCC Commissioners (L to R): Commissioner Ajit Pai, Commissioner Mignon Clyburn, Chairman Tom 
Wheeler, Commissioner Jessica Rosenworcel and Commissioner Michael O’Rielly (Source: FCC)

The rules certainly aren't final. In May they go before the full commission, which will decide on specific mechanisms such as which auction stage reserve bidding would be triggered and what percentage of licenses in any given market could be reserved. It could also change up the rules entirely, easing restrictions on AT&T and Verizon, or toss them out entirely. Those carriers are putting a lot of political pressure on the FCC and Congress for an entirely open auction, and AT&T even threatened to sit the whole auction out.

AT&T may just be bluffing, but the threat has to give the FCC some pause. A major bidder sitting out the auction wouldn’t just mean less revenue for the government, it could cause the entire auction to fail. The way this complex auction is structured (I spell out all the details here), the broadcasters currently using the UHF band would agree to part with their TV channels, but only if their selling prices are met. The fewer bidders there are to buy those repurposed airwaves, the less likely the auction will meet those prices.

We’re still a year away from the first bids being placed, and it’s becoming increasingly clear there’s no way the FCC is going to be able to make happy all the various broadcasters, carriers, politicians and public interest groups involved. It’s just a question of whether it can make enough of them happy to actually pull the auction off.

Musk’s SpaceX to Sue Over Lockheed-Boeing Launch Monopoly

As reported by Bloomberg Businessweek: Elon Musk’s space company will sue the U.S. Air Force to protest a Lockheed Martin Corp.-Boeing Co. team’s monopoly on Pentagon satellite launches, the billionaire said today.

“These launches should be competed,” he told reporters at the National Press Club in Washington. “If we compete and lose, that is fine. But why would they not even compete it?”
Musk’s Space Exploration Technologies Corp., known as SpaceX, is trying to break the joint venture’s lock on U.S. military satellite launches, which have an estimated value of $70 billion through 2030. He has said competition in that market may save taxpayers more than $1 billion a year.

Video: SpaceX's Musk News Conf.: Falcon 9, Launch Lawsuit

SpaceX, based in Hawthorne, California, plans to file its suit Monday in the U.S. Court of Federal Claims. It seeks to reopen competition for a military contract to joint venture United Launch Alliance LLC for 36 rocket cores, said Ian Christopher McCaleb, senior vice president at Levick, a public relations firm representing SpaceX.

Taxpayer Cost
The Air Force agreed to the bulk purchase of the main rocket components last year in an attempt to hold down costs.  “This contract is costing U.S. taxpayers billions of dollars for no reason,” said Musk, who earlier today made a presentation at the U.S. Export-Import Bank’s annual conference.

Mark Bitterman, a spokesman for United Launch Alliance, said the military’s “robust acquisition and oversight process,” as well as the company’s improved performance, led to $4 billion in savings compared with prior acquisition approaches.

The joint venture recognizes the Pentagon’s “plan to enable competition and is ready and willing to support missions with same assurance that we provide today,” Bitterman said in an e-mail.

Matthew Stines, an Air Force spokesman, said in an e-mail that the service has “no formal statement” on Musk’s announcement of the SpaceX lawsuit.

Russian Engines
SpaceX will require three successful launches as part of the process to win U.S. certification, the service has said. Technical reviews and audits of the proposed rockets, ground systems and manufacturing process also are needed, according to the Air Force.

Musk, also chairman and chief executive officer of Tesla Motors Inc., told U.S. lawmakers last month that the Lockheed-Boeing venture’s Atlas V rockets uses engines from Russia, posing supply risks following the country’s invasion of Crimea in Ukraine.

The U.S. and Europe have been considering a possible expansion of sanctions against Russia.

Pentagon officials have asked the Air Force to review whether the use of Russian engines for the military launches poses a national security risk. 

Friday, April 25, 2014

The FCC Doesn’t Want To Destroy Net Neutrality, But It’s Going To Anyway

As reported by GigaOm: The Federal Communications Commission doesn't want companies like Netflix or Viacom to have to pay to get their content to end users of broadband networks, but it doesn't see a way (or maybe even a reason) to ban the practice.

In a call with reporters on Thursday, FCC officials laid out the agency’s thinking on new network neutrality rules and tried to address concerns that the internet as we know it is broken.

The agency’s hope is to have new rules in place by the end of this year, and it plans to release a public document called a Notice of Proposed Rule Making (NPRM) outlining its thinking and asking questions about the new rules. It plans to release this NPRM in three weeks at its May 15 open meeting. Once the documents are released, the public will have a chance to comment on them.

What was once unreasonable discrimination now becomes commercially unreasonable

Since some of the content of that document was released Wednesday, the media and public interest groups have been concerned about what the new network neutrality framework would allow — namely, how the agency planned to ensure that ISPs won’t discriminate against the packets flowing across their networks. The answer? The agency will replace the “unreasonable discrimination” clause from the original net neutrality rules that were defeated in court this year with standards associated with “commercial reasonableness.”

It’s a subtle shift, but an important one. When the U.S. Court of Appeals gutted the Open Internet Order that set forth the net neutrality rules in January, it did so on the basis that the agency didn’t use the right justification for its rules. It tried to turn ISPs into common carriers and regulate them that way, but the court declared that the FCC couldn’t put that burden on the ISPs without changing the law or going through regulatory process that was bound to cause a fight.  

Instead we get a compromise by which the FCC attempts to honor the original intent of the 2010 Open Internet Order with a new test for discrimination. That test is the “commercial reasonableness” standard. Here’s how the FCC wants to do it.

If the devil is in the details, here are the details

First, the net neutrality rules that were gutted by the courts made a distinction between wireline broadband and wireless broadband. For a history on why, check out this post or this one. The FCC plans to keep those distinctions intact for the new rules. With this understanding, let’s hit the three main topics the FCC plans to cover, saving the most complicated element for last.

Transparency: Both the original and the new Open Internet Order make a provision for transparency, namely that network operators must share how they are managing their network traffic with the consumer. This applied to both wireline and wireless networks, so if your ISP is treating certain traffic differently, it has to tell you. The FCC’s upcoming documents also ask if this transparency could go further.

When asked if the order could require greater transparency about company networks such as how congested they might be or if ISPs are charging for prioritization or access because the market is uncompetitive, an FCC official said, “The answer is yes.” He added that the agency believes that greater transparency will help consumers and the commission determine how the broadband networks are functioning. That’s a pretty exciting promise if the FCC can wrangle that type of data from ISPs. Right now, ISPs view that data as competitive and proprietary.

An AT&T network operations center. How much transparency is enough?

Blocking: The courts struck down the original order’s anti-blocking provision that said ISPs on wireline networks couldn't block lawful traffic and wireless ISPs couldn't block competing over-the-top calling and texting services. The new FCC documents will make the case that because blocking traffic interrupts the “virtuous cycle” of broadband access — namely that people use broadband because it gives them access to a variety of services, and because broadband access is beneficial, anything that makes people less inclined to use broadband would cause harm.

This new reasoning would allow the FCC to implement a no-blocking position without resorting to calling ISPs common carriers. Another interesting tidbit here is that the FCC plans to ask about establishing a baseline of broadband service and view anything that goes below this baseline as blocking. This might seem esoteric, but in 2007 when Comcast was interfering with the delivery of BitTorrent packets, it argued that it wasn't actually blocking them. Instead it was delaying delivery so the routers in effect dropped the packets and customers couldn't access their files.

Commercial reasonableness: Here is the heart of last night’s controversy and where the FCC is walking its finest line. The agency wants to ensure that the spirit of network neutrality lives on, but legally it has to use a standard that opens the door to prioritization. The FCC even seems okay with prioritization in certain cases, with an agency official offering up the example of packets coming from a connected heart monitor as a protected class that could be prioritized over other traffic.

However, it will seek to avoid the obvious examples of Netflix having to pay an ISP to see its traffic priorititzed over another content provider’s. It will do this using the standards the FCC set forth in a 2011 cell phone roaming order that has been tested in court. As part of that order, which dictated that mobile carriers have an obligation to offer roaming agreements to other such providers on “commercially reasonable” terms, the agency created a class of behaviors that were commercially unreasonable.
  • Does this practice have an impact on future and present competition?
  • How does vertical integration affect any deals and what is the impact on unaffiliated companies?
  • What is the impact on consumers, their free exercise of speech and on civic engagement?
  • Are the parties acting in good faith? For example is the ISP involved in a good faith negotiation?
  • Are there technical characteristics that would shed light on an ISP practice that is harmful?
  • Are there industry practices that can shed light on what is reasonable?
  • And finally, a catch all that asks if there are any other factors that should be considered that would contribute to the totality of the facts?
FCC Commissioners (L to R): Commissioner Ajit Pai, Commissioner Mignon Clyburn, Chairman Tom Wheeler, Commissioner Jessica Rosenworcel and Commissioner Michael O’Rielly (Source: FCC)

Of course, one challenge with this format is that it requires an ISP to behave badly before the FCC can act. The agency said it will be on the lookout for such violations, it will accept formal complains and that it will accept informal complaints. Once a problem is registered the FCC the agency will ask about how it should handle the complaint, and whether a time limit should be imposed for a resolution.

Finally, the official acknowledged that the agency asks in its documents if there is ever a reason for a flat prohibition against certain behaviors even if an ISP isn’t a common carrier. The agency would have to make the case that paid prioritization is such a consumer or industry harm that it should be prohibited altogether. But based on the thinking and attention devoted to the commercial unreasonableness standard, as well as the heart rate monitor example, it feels like the FCC isn't keen to walk this path.

So these are the topics and questions on which the FCC will vote on May 15 and, if approved, pass for public comment. At that point the agency typically offers a 30 or 90-day comment period.

So get ready, internet: the FCC does want to know your stance on this issue.