==================================================== ################ ############# ################ ## # ## ############# ## ### # ### ### # # # ## # ### ### ## # # # # # # # # ## # # # # ## ## # ## # # # ## ## ## # # ### # ## # # # # # # # ## # ## # # # # ## ### ### ### ### # # # ## # ### # ==================================================== Free Speech Media, LLC Computer Professionals for Social Responsibility June 1, 1996 Number 26 ==================================================== Compiled, written, and edited by Coralee Whitcomb Please direct comments and inquiries to cwhitcom@bentley.edu. ==================================================== For more information on Computer Professionals for Social Responsibility, please write CPSR@CPSR.ORG or call 415-322-3778. ==================================================== The Telecom Post is posted to several distribution lists and is also available from the CPSR listserv. To subscribe, send to LISTSERV@CPSR.ORG with the message SUBSCRIBE TELECOM-POST YOUR NAME. Unsubscribtion requests should be sent to the list from which you receive the Telecom Post unless you purposely subscribed to it through CPSR in which case you would write to LISTSERV@CPSR.ORG with the message UNSUBSCRIBE TELECOM-POST. ===================================================== The Telecom Post is posted more or less weekly. My apologies for cross-posts. Archived issues are now available at http://www.cpsr.org/dox/telecom-post/ ====================================================== TOPICS 1. Pricing and Interconnection 2. Antennas 3. Free TV 4. The Public Voice 5. As Libraries Turn 6. Customer Proprietary Network Information PRICING AND INTERCONNECTION In the days before the Telecommunication Act, LECs provided a bundled set of services. The Act requires that these services be set free to encourage competition at every level. According to _The Economics of Advanced Public Communications Networks by Bruce Egan, a Local Exchange Carrier, ( LEC) plant provides the following services. 25% of costs come from local distribution - service from the area feeder (SAI) to the customer. This is the area of delivery that will become competitive last. As the last bastion of monopoly power, look to this rate as the equalizer for the LECs. 19% of costs come from the feeder, or the plant between the central office and the serving area interface (SAI). 40% of costs come from switching 11% of costs come from inter-office and 5% are other The Regional Bell Operating Companies (RBOC)s cannot move into long distance before the FCC and the Department of Justice (DOJ) approve that they have succeeded in complying with a competitive checklist. Each of these layers of service will undergo negotiation. The FCC is currently considering how involved it should be in establishing the negotiating framework that will be used as LECs begin to bargain with would-be competitors. At the moment the RBOCs hold all the cards for entry into the local market. They are highly motivated to appear willing and anxious to negotiate interconnection agreements and pricing with newcomers. However, the disparity in the size on either side of the negotiating table is so vast that some have suggested interim negotiation rules through strict FCC regulation. A struggle is developing between RBOCs and the DOJ. The RBOCs want the FCC to allow them to negotiate freely with newcomers for interconnection and set prices as they wish. They argue that FCC regulatory interference in negotiations will set national standards that may not be optimal in every case. They maintain that negotiation details concerning unbundling and pricing should be overseen at the local level. The DOJ has submitted comments that fall on the opposite side. It recommends national minimum requirement standards for interconnection points and the level of unbundling services. States could then enhance those requirements. It also suggests moving away from the access charges imposed on long distance carriers for the delivery of their calls through the local phone system. DOJ feels that rates should be based on "total-service, long-run incremental costs (TSLRC) - moving away from basing rates on joint and common costs - and because they felt we needed a new acronym. With the dismantling of the cross-subsidy system traditionally used to keep high cost, rural rates down, and a mandate for the development of competition in local phone delivery wherever possible, whole new approaches to pricing must be developed. The current jargon for this cost juggling is "rebalancing". The communication industry argues that in order to attract competition to rural areas, higher rates must be charged in those areas. They feel that rates in the $18-$20 range should be charged across the board - raising some rural areas by as much as $11. This increase is justified, claims industry, because competition should affect long distance rates shortly, therefore a raise in local rates will make the transition "revenue-neutral". This increase would still fall short of covering the cost of service to some areas, therefore a universal service subsidy would be funded by the difference in the cost of delivering service and the $20 price point. (It appears to me that RBOCs have won so many battles they've become complacent over the quality of their logic.) Bradley Stillman of The Consumer Federation of America argues that the nature of the telecommunications industry is falling costs. With service costs decreasing, "revenues are going through the roof". He reports that currently monopoly carriers are seeing returns of 30-40%. Clearly, a reduction of long distance costs is not the fairest remedy for making up for this windfall for local carriers. The enormous gap between these two views shows just how much is left to be resolved and what drastically different outcomes are possible. ANTENNAS A closer look at the issue of the growing population of antennas needed to provide the whiz bang wireless services we're all looking forward to tends to muddy the waters a bit. The Medina case in Washington State was settled in favor of the City of Medina retaining the right to prevent Sprint Express from locating an antenna for PCS there. The Act appeared to pre-empt a city's jurisdiction over antenna sitings and other rights-of way issues. This is the essence of the battleground around wireless services. Future economic growth may well depend on the availability of wireless communication services yet no one wants their pristine view to include a forest of antennas. This tension is probably going to peak in hilly communities since views play a greater role in land value yet those hills are more suitable to antenna performance. This could open the door to a higher level of citizen participation in the local regulatory process. FREE TV The complicated yet ferocious contention over spectrum allocated to the broadcast mediA is taking on a new angle. It is widely believed that we have not benefited as well as we might have from the offerings broadcast TV has produced. But at the same time, we have generally accepted that free broadcast TV is a given and must be protected aS a right. I don't know about you, but I haven't had the ability to "enjoy" the major networks for free for years. By now most of the country has become aware of the dust churned from the broadcasters claim on a 6 MHz of spectrum that was promised to them in order to develop HDTV. The Act included a provision for "spectrum flexibility" which would have allowed broadcasters to use that chunk of spectrum for other kinds of wireless services. The uproar over this massive give-away in the light of budget crises and surprisingly huge returns from the auctioning of other spectrum almost killed the Act. When Senator Dole agreed to table the situation until after the vote, did the Act pass. The question is - given the fare of on our broadcast TV stations and the potential for use of the spectrum it now requires (and enjoys for free) - do we really need it? Broadcast TV has always been required to adhere to the public interest standard. Problem is - what is that standard? Usually it is thought to be good quality programming and we all know just how well that has worked. But might it also include free, universal, and diverse service? If the cost of providing this form of service must be the current fare of programming, what does that say? It's an interesting dilemma. THE PUBLIC VOICE - WHERE WILL WE FIND IT? The citizen's voice begins its search for the vehicles available to it after the passage of the Act. Public access TV managed to survive the bill in tact. Cable companies will continue to be required to contribute something toward the community and that will often take the form of PEG (Public, Educational, Governmental) access. Currently the Supreme Court is deciding on the level of control over content PEG access channels will have. The Cable Act of 1992 gave cable companies their own CDA with the ability to censor indecent material on PEG channels. Open Video System (OVS) now threaten that setup. The OVS status was created so telephone companies could begin delivering video. Under OVS, the telephone company acts as a mix of cable operator with control over programming and common carrier with the obligation to supply access on a first come first serve basis. The catch is that OVS systems do not have the same public requirements for providing PEG access and cable companies can morph into OVS status - and do away with their franchise obligations. A third and little known vehicle for the public voice is leased access. Cable TV must provide space on their systems for lease. The FCC supposedly regulates the rates cable charges for leasing. FCC oversight has never been very effective and cable companies have never taken to the leasing concept - so most of us know nothing about this. You may remember the demise the 90's Channel. This was an instance of TCI exponentially multiplying the leased access rates intentionally beyond their means. More recently a local Houston programmer attempted to target certain portions of the market in exchange for a lower rate. Time Warner and the FCC refused to allow such a concept, insisting that the leased programming be delivered to all households in the market - making it unaffordable to the programmer. Imagine the potential of affordable carriage to specific populations? The activist community now has a vehicle through which its opinions can be more widely distributed to print media. The Progressive Media Project is inviting the submission of op-eds from journalists, academics and grass-roots activists for wide distribution to the nation's newspapers. For more information on how to submit an op-ed, call 608-257-4626, fax to 608-257-3373, or email pmp@igc.apc.org. The Progressive Media Project is located at 409 E. Main St., Madison, WI 53703. And, of course, we anxiously await the Court's determination on the Communication Decency Act and the future of the Internet. AS LIBRARIES TURN The traditional role of the public library is at the very heart of our sea change to digital information. The policy arm of the American Library Association has had to address new Congressional initiatives to alter its role on practically a daily basis. The following are just few of the challenges facing our library system as we know it. The Copyright Law As reported on before in the Telecom Post, bill HR2441 is currently making its way through the House. The library community is completely opposed to this law Federal Depository Libraries The Federal Depository Library Program is the method through which government information is distributed throughout the country. Designated libraries receive copies of all government information for local citizen use. As the government gets more and more familiar with the beauty and low cost of electronic information, it sees the obvious efficiencies of transitioning to digital formats. A recent report to Congress from the Government Printing Office proclaims a lengthy set of high-minded principles and objectives declaring a commitment to insuring the most possible government information exist within the public domain and become available to the citizen on a timely basis. The goal is to transition to 50% electronic media by the fall of 1998. While it's hard to argue with these objectives, an impossible dilemma is being presented to the libaries involved. New equipment is needed to receive, store, and retrieve electronic information. Whole new skill sets must be developed within the staff. And the cost of developing this infrastructure will be bourne on the backs of the libraries themselves - as federal funding comes under the knife. Library of Congress The mission of the Library of Congress has traditionally been to serve as the library of the nation and the world by collecting all written works. A recent report prepared by Booz-Allen Hamilton and Price Waterhouse at the request of Congress suggested that the mission of the LOC be downsized to serve more as a broker of information than repository. The Library's collection would be split up and distributed among other institutions. The library would refer requesters to those institutions and perform other brokerage functions. This change is, not surprisingly, opposed by the ALA since it will fundamentally alter the nature of service the nation has come to expect from this national resource. Library Tax Check-off Rep. Jose Serrano (D-NY) is looking for co-sponsors to his bill, H.R.2248. This bill would put a $1 check-off box on our income tax returns to develop a trust fund for library materials for public and school libraries. Criteria would be developed to insure that funds are used strictly for the purpose requested. If this idea interests you, you might give your representative a call. Co-sponsorship is generally at the behest of constituents. CUSTOMER PROPRIETARY NETWORK INFORMATION - HEADS UP The FCC has recently released a notice of proposed rulemaking (NPRM) concerning the use of customer proprietary network information (CPNI). This phrase refers to that very telling and personal set of data you create every time you make a phone call. The data includes time, length, and destination of call and establishes calling patterns that could be very useful to marketers. Traditionally CPNI has been strongly protected under the law for consumer privacy reasons. If competition is to enter the market, however, exclusive use of this data by the LEC puts other players at a tremendous disadvantage when trying to woo customers. The Act requires written permission from the customer before a carrier can use the CPNI for anything other than delivering service. Consumer advocates support the written permission approach. The telecommunications industry is fighting hard for "written permission" to become "oral approval". This rulemaking appears to open the possibilities for a clear change in the traditional premise of the law - in order to satisfy industry's data jones. Personal behavior data, such as the calls you make or the books you check out of the library, was once seen as extremely confidential. In kinder, gentler days the organizations that collected that data were required to protect it on behalf of the customer. Since the marketing industry's discovery of electronic databases, however, all that has changed. It seems everyone who brushes by us tries to accumulate as much data as possible. Why? To improve their services to us? Perhaps, but more likely it is to develop a mailing list and consumer profile that another organization will pay for. This issue is not a minor one. There is a quantum change taking place in the tracking and surveillance systems that are developing around every moment of our day. Data collected to sell you something can also be used to blacken your character in a courtroom. Our phone calls may soon be public record, as will much of our Web browsing, and which red light our car was stopped at yesterday at 10:05 am. What will we do as a nation when every breath is recorded? Will our legal and social systems incorporate enough tolerance that an electronic log documenting our every move is not considered the primary proof of our character? Or will we become a nation of sheep, fearing the implications of each move we make each day. Will we teach our children to constantly monitor their behavior so as not to stand out in a crowd? Personally, I see this as the crucial issue of the Information Age. Through the guise of marketing and better service we are building a citizen's surveillance system that makes the KGB and Gestapo look like child's play. Whether there is a conscious effort to do so or not is immaterial. Once built - its use relies entirely on the ethical character of those in power.