IPUrbia

Ars Technica posted a critique of the whole dual-mode wifi/cellular networks deal that has been creating a lot of buzz around voip circles. To sum it up, it won’t catch on

The company predicts that only two percent of all mobile subscribers in the US—which amounts to less than 5.5 million people—will have subscribed to dual-mode services that enable both cell and WiFi capabilities by the year 2010, indicating that the general US market just isn’t interested in dual-mode technology.

I definitely agree with this. I think the concept and the technology is cool, but there are two problems with the marketability of this concept. First, cellular companies are starting to make a play for leverage their wireless networks to provide broadband Internet access, so they are unlikely to do anything to encourage using wifi technology to supplant their own network. Second, the technology does little to actually help consumers–after all, if the consumer is paying for a network with a great-coverage, it is not the consumers job to provide that network or that coverage. Most customers switch networks or phones to get better coverage, not provide their own.

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It’s a damn shame that no one actually engineered a meaningful end-to-end encryption scheme for the Internet while it was still run by people smart enough to use to use it.

Anyway, MuniWireless posted an interesting writeup about CALEA and Ownerless Networks. CALEA, for those of you who aren’t in the know, is a piece of legislation that mandates that telecommunication providers design their networks to allow surveillance. There is, however, some ongoing discussion as to how this works with community networks that are built on various cooperative models where the concept of “provider” doesn’t have clear application. For example, if I get together with my neighborhood and split the cost of a T1 to power a hodgepodge wireless mesh in sort of a bring-your-own-router and 50 bucks sort of deal, then who, exactly, is the provider?

For my part, I am libertarian-minded enough to generally despise CALEA on a conceptual level, but that is another post or two.

Sascha sums up the problem quite elegently:

The problem is that when the FCC drew up CALEA, they didn’t take into account alternative network infrastructures and business models other than the ISP/end-user one. This is rather stunning since the Internet itself doesn’t follow the ISP/end-user model and simply doesn’t apply for ownerless networks. I’m not saying ignore CALEA, I’m saying that it simply doesn’t apply to these types of networks and technologies and that the only way to do what the FCC is requiring would be to illegally hack into the hardware and ISP accounts of owner less network participants.

Well spoken, and makes sense. The real problem, however, is whether the Department of Justice and the FCC will see it that way in the long run.

CALEA, however, illustrates one of the incompatibilities between an aggressively competitive , innovative free market and a arguably un-democratic mandates such as CALEA (and the mentality behind such nonsense). Simply put, it favors the status-quo and encourages big monopolies in such industries. The first angle is simple–the cost of implementing CALEA drives up barriers to entry, but isn’t really a big deal to large, established companies.

The second angle borders on conspiracy theory. Given that the government has pretensions of wholesale monitoring of Internet traffic–which we know from the whole AT&T/NSA wiretapping affair–then it is a pretty logical jump to say that such pretensions are much easier to realize with a couple of large, heavily subsidized corporations than motley crew of hundreds of entrepreneurs: the latter category is much more likely to tell the government to bugger off and raise a big stink in the press. With this in mind, is it any wonder that the DOJ laid out the red carpet for the AT&T/BellSouth merger considering that they have the most to gain from anyone in an expansion of the AT&T wiretapping program?

On a side note, it was interesting in light of yesterdays post to see yet another haphazard application of the labels telecommunications carriers:

CALEA was intended to preserve the ability of law enforcement agencies to conduct electronic surveillance by requiring that telecommunications carriers and manufacturers of telecommunications equipment modify and design their equipment, facilities, and services to ensure that they have the necessary surveillance capabilities. Common carriers, facilities-based broadband Internet access providers, and providers of interconnected Voice over Internet Protocol (VoIP) service – all three types of entities are defined to be “telecommunications carriers” for purposes of CALEA.

I do really get tired of the random application of data service/telecommunications service terms by the FCC. They apply both definitions at will to the same service–to backup their desired ruling, and make the laws arrived at through some measure of democratic process of no effect. Is DSL a data service or telecommunications service? Make up your mind, Chairman Martin…

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The title says it all. The FCC ruled that rural lecs must terminate voice over IP traffic from their competitors. Over the past couple of years, many of the local telcos had taken the stance that since VoIP is a “data service”, it does not necessarily fall under the same interconnection requirements that apply to traditional “communication services”.

This sort of legal wrangling points to a fundamental problem in the industry today: the last major telecom legislation is over 11 years old, and the industry and technology has radically and fundamentally changed. The result has been legal and political maneuverings over what are “data” services and what are “communication services”; a minute distinction that has made a handful of telecom lawyers a lot of money. The FCC, for their part, has leveraged that distinction to the hilt and has repeatedly used it as a distinction to shape the regulatory landscape to their liking.

In some ways, there really does need to be an overhaul of the regulatory framework. The Telecommunications Act of 1996 is dated to say the least, and many of the programs (ie USF) are generally understood to be broken. The problem is that the players who need the most regulations–the telco and cable (mono|duo)polies–have the most political clout. In the end, there would be little to hope for out of such legislation except for some token, meaningless regulations and an overworking of subsidies to maintain the status-quo. Some new competition would solve a lot of problems, but that is, for reasons previously discussed on this blog, not likely to happen.

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Conveniently soon after spinning off virtually all of their rural telco operations, Verizon is petitioning Congress and the FCC for an overhaul to the Universal Service Fund (USF) which levies taxes to pay subsidies to rural carriers.

Verizon is arguing that the advent of wireless carriers has created a situation where multiple wireless carriers and the rural ILEC are often competing for the same (small) rural market, and the drain on USF funds has lead to a 142% increase in the program over the past 8 years, to a total of $4.1 billion.

While I think that the USF does need to be overhauled, Verizon is definitely trying to leverage the political clout of USF for their own purposes. The facts quoted are, at best, exaggerated. While there are rural areas with “three, four, or even wireless carriers receiving universal funding”, many rural markets have no wireless carriers drawing on USF funding and are still greatly under served. While it is true that the cost of basic telecommunications service has gone down, the aggregate spend of most telecommunications providers has gone up due to new services, chiefly Internet access. Given the Administrations agenda of making broadband as widely available as possible, this argument is especially disingenuous.

The implementational details are mixed:

Tauke said Verizon supports reforms of how funds for the high-cost program are collected and dispersed. The former would be based on telephone numbers, so the fund is supported by all voice customers; the latter would include a “reverse auction,” or competitive bidding mechanism, through which the carrier with the lowest bid would gain the support.

The reverse auction does potentially have some merit, although the need for it is greatly exaggerated. The collection based on telephone numbers, however, shows Verizon’s intent and is just pure regulatory nonsense aimed squarely at undermining voip services who have generally have a much higher DID (telephone number) to subscriber ratio. In the end, Verizon is looking again for Congress and the FCC to fight their competitors for them. The best critique of their strategy was given by their spokesperson regarding the USF but applies much more appropriately to Verizon’s own political wranglings:

“In fact, these programs are often an impediment to the kind of transformation consumers and the marketplace require.”

Indeed they are.

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