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.”)

What would the Internet look like today if history had been just slightly different?

Say for example the Internet’s open, royalty-free foundation — protocols, HTML, etc. — hadn’t mostly won out?

Leaving only proprietary solutions or shifting interest groups (and their designates) maneuvering to disadvantage, overcharge, or end-run each other as the only — and underwhelming — drivers of deployment?

Unimaginable?  Improbable?  Hardly.  Welcome to daily life in the chronically-stunted US Interactive TV near-industry, little known outside its own community, which bared its soul this week at the superbly-run TV of Tomorrow Conference.

Don’t get me wrong, the US  interactive TV “ecosystem” — a term that when used at the event sparked discussions of sharks and survival — is as vibrant, passion-filled, and technically gifted as any you’ll find.

And ground-zero relevant, sitting squarely at the multi-industry techno-policy nexus of broadcasting, cable, broadband & wireless.  Multiplatform TV and “over the top” TV — Internet video to the TV without a gatekeeping operator or PC — are yet more cutting edges that the event considered in light of the US interactive TV experience.  But missed boats, like the millions of subsidized US DTV converter boxes which because of overpriced and/or controlled ITV specifications lack interactivity to speak of, merited no discussion.

But as one of the several impressive award winners evoked — the very idea of Interactive TV in the US can seem like a toxic relationship that keeps dysfunctionally drawing back an incredible amalgam of talent.

It may be tempting to write the whole movement off as some cautionary tale of the perils of convergence, a “Tragedy of the Anti-commons“, or a Darwinian techno-niche.

But can America really afford another underperforming, gridlocked opportunity, stalled in the starting gate?  Can’t this gifted, visionary community offer more?

The simple, compelling answer is “go open”.  Embrace a royalty-free, truly open approach.  All of the controlled and/or royalty-bearing specifications are available royalty free, an open video movement is gaining steam, and TV patent-pool lock-ups are under assault.  Even the long industry-captured US FCC may be willing to hear new ideas.

Admittedly, the thought of “going open” at the event seemed beyond the collective imagination of the US interactive ecosystem. The topic was skirted and slammed in a fiesty roundtable at the end of one day on the break-out potential of over-the-top video.

The reasons against going open are easy to list.  Too late/slow/hard.  Too risky.  The powers that be would never allow it, and would crush any dare to try.  “Someone” (usually the proprietary set top I’ve developed or hope to get venture-funded) will provide the industry-opening breakout.  I’ve got, or will get, my crumb, so don’t rock the boat.  I’ll get my own clever path to the TV, and everyone will get on board.  Standards take too long.

Each true in the small, tragic in the large.

ITV-ers unite:  demand a real, and really open, industry!

The FCC has requested comments on the CUT FATT petition (discussed here) to review DTV patent abuses.

Some articles on the FCC request are here and here, the FCC notice (comments due April 27) is here, and filings will be posted here (select “Search for Filed Comments” on right, proceeding 09-23)

A related petition in front of the FTC filed by the American Antitrust Institute is pending, see here.

A related request for relief is here, a settlement of note is here, a proceeding at the International Trade Commission is discussed here, an antitrust and unfair competition lawsuit by VIZIO against Funai over Thomson patents is discussed here and in more detail here.

But more interesting is to pan back a bit for historical context, with emphasis selectively added.

A 1958 article from from Time magazine:

“In a sweeping civil consent decree in one of the biggest Eisenhower Administration Sherman Act suits to date, RCA agreed to 1) put some 100 color TV patents into a royalty-free pool, 2) make available to all comers on a royalty-free basis at least 12,000 other existing radio-TV patents, 3) license all new patents during ‘the next ten years at a “reasonable” royalty rate.”

Maybe 10 years was too short.  Consider a 1989 article from the Heritage Foundation, “High-Definition Television: What the Federal Government Can Do”:

“While the federal government should not subsidize HDTV and other new technologies, neither should it stand in their way. Yet current antitrust laws do just that. Through complex and ambiguous rules governing cooperation between firms, the antitrust laws constrain the ability of U.S. companies to develop new products.”

How about a delightfully dated assessment on HDTV and US trade policy a decade later (1998):

Notably, Prestowitz cited HDTV as an “example of the widening U.S. lag” in high technology. “There are not even any Americans involved in this struggle,” he lamented in 1988. Again, Prestowitz was dead wrong. American firms leapfrogged their Japanese rivals and produced a more technically advanced version of HDTV using digital technology. In December 1996, the FCC approved an HDTV standard developed by a so-called Grand Alliance of U.S. and European producers; Japan wasn’t even in the running.

Interestingly interspersed is a historical back view to periodic calls for FCC reform:

A 1974 “Modest Proposal to Reform the Federal Communications Commission”:

“the one clear problem that must be faced is agency”… over-identification with the industries related…” and by that term, I mean the powerful, entrenched elements of the industries regulated, in contrast to new emerging facets or technologies. This is not just a symptom to be glossed over:  It is the root cause of dissatisfaction.

Itself citing a tradition of calls for FCC reform, one from 1962:

“…the Commission has drifted, vacillated and stalled in
almost every major area. It seems incapable of policy planning,
of disposing within a reasonable period of time the
business before it…”

So the lingo may be updated but sentiment recognizable in a Newsweek article from December 2008:

Reboot the FCC

In sum:  Calls for reform are easy.  Actionable policy is hard.  The above is an interesting slice of repeating themes, but the question is what to do.  So one must tip a hat to Acting FCC Chairman Michael J. Copps, quoted in February 2009:

“We do too little of our own research and have come to rely too much on the data and studies of others—too often from the very parties trying to drive a particular outcome….Too often we spend our days refereeing disputes between powerful interests, with consumers and other non-traditional stakeholders pretty much left outside the loop of discussion and decision.” crying need for Open Video continues to break out from under the radar, as evidenced by the blue-ribbon sponsors and diverse community of the just-announced inaugural Open Video Conference to be held June 12.

Organizers include Yale Law School’s Information Society Project and partners include the Berkman Center for Internet & Society at Harvard — an indication that  the need for a comprehensive open, royalty-free video technology solution strategy is not just about the nuisance of proprietary add-ons in the open Web, there is an important societal and policy dimension.

An excerpt from the announcement web site captures the idea:

“YouTube and other online video applications are rightly celebrated for empowering end-users; however, online video lacks some of the essential qualities that make text and images on the web such powerful tools for free speech and technical innovation. Email, blogs, and other staples of the open web rely on ubiquitous and interoperable technologies that have low barriers to entry; they are massively decentralized and resistant to censorship or regulation. Video, meanwhile, relies on centralized distribution and proprietary technologies which can threaten cultural discourse and innovation.”

The dot to connect here is the policy framework that begat “Digital TV as we know it” and the “Internet as we want it” to an actionable direction forward.

A bright potential is shining for interactive TV in Brazil, which has a unique moment of opportunity to start from a complete, royalty-free specification — Ginga — and avoid the systemic stalling gridlock that has plagued patent-based/industry-segment-controlled interactive TV in the US and elsewhere.

The first developer conference is announced here for April 2.

It is heartening to see the broad mix of participation, including key players in the industry such as Globo (Brazil’s largest TV broadcaster), Intel, Sun Microsystems, CESAR Institut, University of Paraíba and SouJava (Brazil’s largest JUG).