I have filed comments (available here) to the National Broadband Policy Notice of Information (09-51).  Excerpt from the executive summary:

Open standards, and particularly royalty-free standards, are the very foundation of the Open Internet as we know it, and Internet leaders are vocal that open and royalty free standards are essential to its future.

So broadband, and the Open Internet on which broadband is based, is not just about technical and business innovation, it is also about standards innovation.

But the term “royalty-free” is found nowhere in the 59-page Broadband Notice of Information, and “[e]quipment and protocol standards” merits only a single sentence buried in “Other Mechanisms” after “tower siting, pole attachments, backhaul costs, cable franchising and rights of way issues.”  Standards need a bigger voice in America’s broadband dialog.

Broadband means new services, not just faster speeds for existing services.  A prime example is video, a critical element of broadband deployments worldwide, be it in the form of IPTV, “over-the-top” video, online video, or video incorporated into new services like telemedicine and health care records.

It is both ironic and telling that “reasonable and necessary” (“RAND”) licensing practices that have developed through the US DTV experience have done little to nothing to contribute royalty-free video technologies or standards now needed for broadband deployments, which today are essentially captured by proprietary solutions. Convergence means worlds and business models collide, but is this really an acceptable, necessary, or desireable outcome, or foundation for future innovation?

Standards strategy has been integral to broadband policies around the world, and needs to be integral to America’s broadband policy. Standards can be America’s broadband advantage.


A.   “Royalty Free” is Not Mentioned Once in 59-Page Notice
B.   Royalty Free Standards Are a Defining Characteristic of the Open Internet
C.   New Video And Other Broadband Services Need Royalty Free Standards
A.   DTV Licensing Practices Exemplify Standards Issues in Broadband Policy
B.   Current “RAND” Practices Should Not Carry Forward as Broadband Policy
A.   Our Network Age Needs Greater Policy Engagement in Standards
B.   Royalty Free Standards Enable Open Industry Structure
C.   Broadband Policy Should Promote Transparency, A Level Global Playing Field,
Open Value Chains, Ex Ante Disclosure, Proactive IP Analysis and a
Preference for Royalty-Free

The “FATT” is fighting back this week in comments filed at the US FCC against the “Coalition United To Terminate Financial Abuses of the Television Transition” (CUT FATT) proposal to address patent overreaching in the US DTV system.

Filings from Valley View, Philips/LG Electronics, Funai, Thomson, ATSC, Harris, Zenith, MPEG LA, Philips/Qualcomm, and Retire Safe merit future comment by the Reply Comment date of May 27 (see here).

But polemics risk overshadowing a broader and more fundamental point that is skirted in the filings:

ISDB presentation to Philippines, 3/09
ISDB presentation to Philippines, 3/09

The US ATSC DTV system, once touted as a model for US global prowess, has fallen behind rivals DVB and ISDB, priced out of the world market and under-featured, and now if some of these filings are to be taken at face value stubbornly saddled with an uncompetitive process based on lack of transparency and protracted litigation.

Indeed, these filings raise a darker picture that ATSC may at least to some become seen as little more than a cash cow royalty milking opportunity for a small number of foreign vendors at the same time that their home countries promote competing standards to gain market shares in burgeoning DTV markets and opportunities around the world in South America, ASEAN, and elsewhere.

In particular, several of these filings paint the picture that the only viable or appropriate forum to consider and address patent licensing issues are litigation forums like the International Trade Commission or federal courts, and anything else would be unprecedented, unworkable, and so forth.

But this has never been the case — patent and licensing issues have always been a major topic of ongoing concern by standards groups, regulators, vendors, and users in DTV.  The rival European DVB for example, has always played a variety of facilitating roles relating to IPR  — for a long and illuminating discussion on this topic by Carter Eltzroth, Legal Director, DVB Project see here.  If anything, the direction in recent years has been to reexamine, and some cases modify and become more proactive, in these facilitating roles, in light of well-known patent pool disputes like MHP.

And the Japanese-Brazilian ISDB system has recently played effective catch-up with DVB and ATSC by offering royalty free components, trade deals, proactive government-to-government involvement and faster time to market with new features (for background, see here).

So it may be helpful in reviewing these filings to consider a simple question — if you were looking to adopt a DTV system today (as many countries are), would these filings persuade you that the US DTV system, and the process and contentions surrounding it, would be worth adopting today?


“Good technical specifications are not enough
– DVB needs to be more proactive on IPR issues”

“15 years of the DVB Project”, Presentation at DVB World 2008 by Philip Laven, Vice-Chair, DVB (subsequently elected Chair of DVB)

Other notable features of the IPR policy of DVB are arbitration and fostering of patent pooling. This article provides a commentary on the DVB’s IPR policy and on its application. It also describes the work of the DVB in resolving IPR “gateway” issues when the perceived dominance of technology contributors, notably through control over IPRs, risked, in the view of some members, distorting new digital markets. In two cases DVB has created a licensing mechanism to dispel these concerns. In addition to the quality of its technical work, DVB’s success lies in its novel IPR policy and its ability to achieve consensus to resolve gateway issues.

“IPR Policy of the DVB Project: Commentary on Article 14 of the DVB MoU”, Carter Eltzroth, Legal Director, DVB Project, http://www.dvb.org/membership/ipr_policy/

Royalty-free standards, the very foundation of the Open Internet, are not even mentioned in the FCC’s 60-page Broadband Plan notice of inquiry.

Surprising?  Not really.

Bridging even first principles of the Internet era to the realities of telecommunications policy since 1934 is a high order challenge for communications policy scholars, regulators, and network practitioners.

But boiling down, there are three basic foundations/themes/policy tools that underpin network infrastructures and their regulation, and no serious policy consideration should agnostically treat them as co-equals:

  1. multiple proprietary solutions: think of the metric “market share”
  2. franchise/royalty-bearing standards: think of the metric “profit share”
  3. royalty free standards: think of the metric “deployment share”

Each is perhaps as millennial as common carriage; each has its merits, proponents, and detractors (and stimulus-response regulatory challenges); and each can claim to fit under the umbrella of the four principles of the recent, bare-bones FCC Internet Policy Statement (excerpted below).  Some might consider 2 and 3 as just variants of the same theme, but even a cursory look at the Digital TV standards debacle should highlight the fundamental difference.

Of note, Kevin Werbach, co-lead of the Federal Communications Commission Agency Review for the Obama-Biden Transition Project, maps the grey-area gaps of Internet policy regulation in an upcoming article, “Off The Hook”.

And at a symposium last fall on the legacy of the 1968 Carterfone decision, often invoked as the start of modern telecommunications regulation, Werbach also touched on a Carterfone-is-not-enough theme,  articulating the perspective that although “Carterfone established a principle of interconnection”, the decision alone produced “[n]o significant or game-changing competitive entry” without subsequent implementation standards.

Werbach went on to note “[s]tandards define industry structure … [c]rucial in network industries”, and to allude to the potential of the “FCC as a catalyst for open standards” and of “Reinvigorating Standardization”.

A suggested next step:  consider the critical role of royalty-free standards (as opposed to an easy vague acknowledgment of standards in general, which may devolve into captured, segment-favoring “franchise specifications”) and the need for a policy preference that recognizes and leverages royalty-free standards.


“Broadband Recovery Needs A Policy Preference for Royalty-Free Standards”

Werbach, Kevin D.,Off the Hook(March 31, 2009). Cornell Law Review, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1371222

“Copps: FCC needs fifth net neutrality principle”, http://arstechnica.com/tech-policy/news/2009/04/a-pre-history-of-the-fccs-fifth-internet-rule.ars

“Beyond Liberalization II: The Impending Doom of Common Carriage”, Eli M. Noam, http://www.columbia.edu/dlc/wp/citi/citinoam11.html

From FCC Internet Policy Statement, http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-151A1.pdf:

“To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to …

… access the lawful Internet content of their choice.

… run applications and use services of their choice, subject to the needs of law enforcement.

… connect their choice of legal devices that do not harm the network.

… competition among network providers, application and service providers, and content providers.”

Recovery Act § 6001 (emphasis added)

Concurrent with the issuance of the Request for Proposal for grant applications pursuant to this section, the Assistant Secretary shall, in coordination with the Commission, publish the non-discrimination and network interconnection obligations that shall be contractual conditions of grants awarded under this section, including, at a minimum, adherence to the principles contained in the Commission’s broadband policy statement (FCC 05-15[1], adopted August 5, 2005).”

47 USC 256, Coordination for interconnectivity:

(b) Commission functions
In carrying out the purposes of this section, the Commission –

(2) may participate, in a manner consistent with its authority and practice prior to February 8, 1996, in the development by appropriate industry standards-setting organizations of public telecommunications network interconnectivity standards that
promote access to –
(A) public telecommunications networks used to provide   elecommunications service;
(B) network capabilities and services by individuals with  disabilities; and
(C) information services by subscribers of rural telephone  companies.

Yesterday’s kickoff of the FCC’s Broadband Plan proceedings were broadcast over the Internet in a proprietary video format.Standards "a key element in broadband deployment"

Worse, it was likely converted from a standards-based format to a proprietary format before it was put on the Internet! (The tip-off is that the closed-captioning overlay was already composited in).

Clearly, a proprietary broadband internet would not be, borrowing one Commissioner’s phrase, an “enlightened public policy” for America’s Broadband Plan.  The FCC’s notice of inquiry states (emphasis added):

“We also note that the development of equipment and protocol standards is a key element in broadband deployment and seek comment on the appropriate role of the Commission in facilitating the development of such standards.”

So here is a clear, actionable role for the Commission — use standards.   Just say no to proprietary formats.

Statements by Commissioners echoed the historic policy importance and high stakes of this proceeding (emphasis added):

Broadband can be the great enabler that restores America’s economic well-being”…

…. “the most important public policy initiative affecting broadband since the landmark Telecommunications Act of 1996” …

…. “it is critical that our plan be competitively and technologically neutral … our plan must not favor one particular technology or type of provider over another, even inadvertently”

Please do not inadvertently favor turning the open Internet into a proprietary one in the name of broadband policy.

The American Recovery and Reinvestment Act of 2009, the “Recovery Act”, has allocated an unprecedented $7 Billion to broadband and has launched a new chapter of broadband policy in the US.

Let's not build another infrastructure on the sand of unknown ownership of the underlying technologies".The coming months will inspire an accelerated debate and consideration of what this can, and should, mean, on many levels from tactical grant-making to broader economic policy.  Already, the lead US government agencies have geared up public consultations and fast-track proceedings.

In the Recovery Act, Congress assigned grant and loanmaking responsibilities to the Department of Commerce’s National Telecommunications and Information Administration (NTIA) and the Department of Agriculture’s Rural Utilities Service (RUS). NTIA will administer the Broadband Technologies Opportunities Program (BTOP), which will provide grants for developing and expanding broadband services, and RUS will continue to administer its programs of broadband loans, loan guarantees, and grants with additional funds.

Congress has assigned a key consultative role to the Federal Communications Commission in defining the foundational terms of “broadband” and “unserved” and “underserved” areas and in establishing the non-discrimination and network interconnection obligations that will be contractual conditions of BTOP grants.

So here is a straightforward proposition:

“Broadband recovery needs a policy preference for royalty-free standards”

Although straightforward on its face, this proposition of a needed broadband recovery policy preference for royalty-free standards contains “what”, “why”, and “how” aspects.

Starting with the “what” aspect, this proposition contains four elements, each of which will merit a longer elaboration:

  • Policy – Of course, the Internet is based on royalty-free standards, originally funded by government research, so it may seem that a “policy” of preferring the lowest cost approach that enables a pro-competitive market dynamic is so obvious as to scarcely merit articulation.  But unlike DARPA and the generation that inspired the Internet and Web revolutions,  the FCC has favored royalty-bearing approaches, particularly in the pivotal broadband crossover enabler of digital television.
  • Policy Preference – the term “preference” may seem a soft concept, but standards gridlock is real, perhaps nowhere more so than in the challenge of sorting out royalty-bearing and royalty free (and ex post facto v. ex ante) standards processes — just putting all approaches in the same standards group fails to recognize the business models of standards thickets.
  • Royalty-Free – Not maybe royalty-free, not let’s hope royalty-free.  Royalty free. It bears noting that the FCC, a regulatory body, was never the actual end customer of these DTV standards, in the same way that the military was of the original Internet work, so the self-interested incentive to prefer a lower cost or royalty free approach was perhaps not as immediate, so these distinctions might seem academic — but they are not to anyone paying the bills.  Broadband recovery requires different thinking on this topic.
  • Royalty-Free Standards – Standards, not specifications owned or controlled by individual companies or industry segments.

From rural broadband related initiatives like IPTV and telemedicine to open video on the Web, the need for royalty-free, uncaptured broadband standards is a pressing issue that needs consideration now, rather than later. Let’s not build another infrastructure on the sand of unknown ownership of the underlying technologies.

Selected References

“Hey Obama: Rethink Digital Television”

Why the Digital TV Delay May be a Good Thing

American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, 123 Stat. 115 (2009) (Recovery Act).

§ 6001(a):

“The [Assistant Secretary at NTIA], in consultation with the Federal Communications Commission . . . shall establish a national broadband service deployment and expansion program . . . .”

§ 6001(b)(1):

“The purposes of the [BTOP] are to . . . provide access to broadband service to consumers residing in unserved areas of the United States.”)

Recovery Act § 6001(j):

“Concurrent with the issuance of the Request for Proposal for grant applications pursuant to this section, the Assistant Secretary shall, in coordination with the Commission, publish the non-discrimination and network interconnection obligations that shall be contractual conditions of grants awarded under this section, including, at a minimum, adherence to the principles contained in the Commission’s broadband policy statement (FCC 05-15[1], adopted August 5, 2005).”

Conf. Rep. 111-16, at 776:

“The [Recovery Act] does not define such terms as ‘unserved area’ ‘underserved areas’ and ‘broadband.’ The Conferees instruct the NTIA to coordinate its understanding of these terms with the FCC, so that the NTIA may benefit from the FCC’s considerable expertise in these matters.”)