Wednesday, February 09, 2005

(Enconium on Sticky Notes)

Originally posted: Wed, 09 Feb 2005 19:03:30

I've been told that smart people use sticky notes for annotating their readings. Not sure if I really qualify, but I certainly use sticky notes for everything.

Part of the reason is the embarassing nature of the annotations I've seen in books I check out from the library. Recently I checked out Vygotsky's Thought and Language (2ed) and discovered copious notes in pencil. Bless his/her heart, the previous reader had written notes such as "is Vygotsky trendy right now because of his critique on Piaget?!?" Um, no.

The problem is that annotations -- for me, for this hapless author, and perhaps for others -- are a way to make sense of readings rather than a collection of pronouncements. The reviews I write on this blog are public writings, so I take a minimum of care in writing them and making them coherent. My annotations are spaces where I try out ideas, try to make connections, and look for recurrent themes in the book; they aren't especially coherent, they're often wide of the mark, and I often cringe when I read them a few months later. Do I want them to become a permanent part of the book? Surely not!

In addition to allowing me to cover my tracks, sticky notes do other things. They allow me to find my annotations at a glance. They let me prioritize my insights: I'll star the notes that I think are the best points or the strongest connections. I'll use different colors for different readings. (Right now I'm rereading Medvedev's The Formal Method of Literary Scholarship, this time with dialectics as a special emphasis, so my dialectics-related notes are in hot pink while my other notes are in a pale blue.) And if there's something that relates directly and immediately to a project, I orient the sticky note so that it protrudes from the bottom of the page rather than out the side. Sticky notes, as Clancy implies in her comments, can actually transform the book; as Deleuze and Guattari might put it, they striate the book in ways that let me get a better handle on it. And they've transformed my scholarship so much that I'm frankly not sure what I'd do without them. Keep a journal, maybe.

How do you take notes?>

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Tuesday, February 08, 2005

Reading :: A consumer viewpoint on Texas telephone utilities; report of the chairman

Originally posted: Tue, 08 Feb 2005 11:01:32

A consumer viewpoint on Texas telephone utilities; report of the chairman

Texas. Legislature. Senate. Interim Committee on Public Utility Commissions.

Tracking down the term "universal service" just keeps leading to more and more interesting things. Did you know that Texas was the last state in the U.S. to establish a public utilities commission? Yes indeed. Here it is in black and white, in this interim committee report from 1971. The same year that brought us Led Zeppelin's fourth album also brought these sharp words:

Texas is the only state without a public utilities commission to regulate telephone services. We have, instead, a haphazard system of "local regulation" consisting of negotiations, often one-sided, between the telephone companies and nearly 900 city councils. (p.25)

The PUC, incidentally, was established in 1975. As a result of this report? I'm not sure yet. But it was sorely needed, because the burden borne by Texas citizens was heavier than that borne by the poor fellow on the front of Led Zeppelin IV.

The report continues:

Even if this system functioned with perfect efficiency, it would still leave unregulated two important aspects of telephone service:

(1) Monthly subscription charges in rural areas. No one, under our present system, has jurisdiction to set rates or insure high-quality service in unincorporated, rural areas. Residents of these areas do not even have the nominal protection of a city council to "bargain" with the utilities on their behalf. No governmental agency -- federal, state or local -- has the legal power to intervene and assist them in obtaining fair negotiations.

(2) Intrastate long distance rates. "Local regulation" in Texas extends only to local service in the incorporated areas; it does not -- and legally cannot -- extend to regulation by the city councils of the rates charged by Southwestern Bell for long distance calls made to other points in Texas. The Federal Communications Commission regulates all interstate calls, and in every other state, a state commission does the same for intrastate calls. In Texas, there is no regulation whatever of the rates Southwestern Bell may charge for intrastate calls. The company, indeed, refuses even to disclose its profits on such calls. They have refused to let any governmental body -- federal, state, or local -- see how much they make on this important aspect of their service. (p.25)

Amazing! Southwestern Bell was really allowed to run the table in Texas. Vast swathes of Texas were left entirely unregulated. And the regulated portions were regulated by municipalities, which had neither the information nor the financial resources to regulate telephone service in a thoroughgoing way. "Only Houston and Dallas make even a token effort at regulation. The smaller cities do not have the financial resources to hire the rate experts and attorneys necessary to argue their citizens' case against the numerous specialized, highly-paid telephone company representatives" (p.26). The report goes on to describe Nacogdoches' futile battle against the vast resources of Southwestern Bell (pp.26-27 and Appendix A), using it as a case study in favor of establishing a PUC.

The Nacogdoches case was an extreme illustration of the rate inflation that had dogged the entire state. Across Texas, "businesses are being burdened with intrastate leased-line charges that are between 200% and 400% higher per-mile than comparable interstate leased lines subject to F.C.C. regulation. The discrimination is obvious" (p.23). And the average monthly rates for consumers were higher in Texas than the national average -- across all sizes of telephone exchanges. "San Antonio, for example, has a monthly rate of $6.40, while San Diego, California, which has a comparable Primary Calling Area, enjoys a rate of only $4.90" (p.3).

Rates weren't the only problem. Rural service was poor. "The constable in the east Texas town of Zavalla reported that his patrol car's two-way radio frequently must serve as the only communications link for telephone subscribers whose equipment has broken down during the weekend" (p.23). And jurisdictional disputes between telephone companies resulted in problems for consumers. "This infighting among utility monopolies reached its most ludicrous extreme at the Ramada Inn in Nassau Bay, where a call from the barber shop to the front desk was a long distance, toll call" (p.23).

The report recommends, sensibly, that statewide regulation be introduced.

Prices and standards of service are regulated in most businesses by competition or the "law of the marketplace." When no such competition exists -- as in the case of most public utilities -- a monopoly situation is created. Government, which has created or preserves the monopoly, has a duty to protect the consumer by insuring that he is getting the service for which he pays. A monopoly per se is not hostile to the public interest; but an unregulated monopoly easily may be. (p.28)

Essentially, the committee is saying that a regulated monopoly becomes a de facto public utility. No more half measures -- Southwestern Bell had to be made to work in the public interest (p.29). This is true in large and small measures. One example the authors use is that of advertising space, which telephone companies routinely charged to their subscribers rather than their stockholders. "They have abused this privilege. Recently, for example, Southwestern Bell spent an undetermined amount of money to send its customers a recipe for 'Virginia Raisin Pie'" (p.30). Sure enough, the report includes a copy of the recipe, which is addressed to wives whose husbands have "a cravin' for raisins." Apparently this didn't fit under the committee's understanding of universal service.

One last thing. The committee suggested that the PUC include an opt-out option for each city and town. If a municipality preferred to regulate telephone service itself, their sovereignty trumped the PUC's authority. I'm interested in whether this provision made it into law.

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Monday, February 07, 2005

Reading :: The Evolution of Universal Service Policy in Texas

Originally posted: Mon, 07 Feb 2005 10:12:44

The Evolution of Universal Service in Texas: A Report

by Lyndon B Johnson School Of Public Affairs

As I've discussed at length elsewhere, in the telecommunications industry, universal service is a very slippery term. It meant radically different things at different times. Charting its evolution can teach us a lot about how the entire sociotechnical system evolved, I think. Since I'm analyzing data from a telecommunications company right now, I've become very interested in looking at some more local instantiations of universal service.

Some context: This 1995 report proceeded by a year the Telecommunications Act of 1996, which overhauled the Communications Act of 1934 to (among other things) set out specific requirements for universal service. What interested me in this report was that it discussed that chimeric term, universal service, as it was enacted in Texas in the years leading up to the Telecommunications Act of 1996. The report does repeat some commonly held and probably wrong notions about the origins of universal service, but it also provides a succinct summary of the history of telecommunications in the US.

And it provides a good breakdown of the current definition of universal service: "Two main features characterize universal service: availability and affordability" (p.26). That is, people should have service in their area and they should be able to pay for it. The first feature is defined in terms of "telephone penetration": the percentage of households with phone service (p.26). Telephone penetration was at 94.2% nationally and 91.5% in Texas in 1993. (Of those without access, 40% reported that they would like phone service but can't afford it (p.75).)

Affordability is measured by "a comparison of the annual average rise in the price for telephone service with the average price for all goods and services (represented by the consumer price index)" (p.27), and evidence suggests that telephone service has become more affordable. The authors credit this to the introduction of new technology, which has caused marginal costs to decline.

Beyond these two features, the authors identify three principles underlying universal service:

1. Equality of opportunity. The idea is that citizens must be able to communicate with each other to make reasoned political choices.

2. Quality of life. The telephone is a "lifeline" for disadvantaged segments of the population such as the elderly, poor, and disabled.

3. Economic efficiency. "The rationale underlying this argument is that people place more value on the telephone network the more people are connected to it. But individuals adn companies rarely have enough of an incentive to make sure that different networks are compatible and that complete strangers are hooked up" (p.27). (Compare this reasoning to Mueller's discussion of subscriber universes.)

The authors ask: "If telecommunications services are evolving, how should the notion of universal service evolve? There is no single solution to this puzzle, and as a result universal service has been defined in several different ways" (p.28). Right. Telecommunications services have grown increasingly heterogeneous, and Plain Old Telephone Service (POTS) is arguably no longer an adequate standard for universal service. If (for instance) voice mail or Internet connectivity is an overwhelmingly standard service, then denying it to a segment of consumers violates all three of the principles above. According to the authors, the Texas Public Utilities Commission listed the following as basic services: "voice-grade dial tone service, access to dual party relay service, access to local calling areas, tone dialing service, access to operator services, access to toll services, and access to 911 or enhanced 911 service as requested by local authorities" (p.29).

Universal service used to be funded by AT&T from its profits -- part of the price of being a regulated monopoly. But with its breakup, the universal service burden fell directly to subscribers, who pay a subscriber line charge (SLC), set at $3.50/month in 1995 (p.29).

Okay, this is all good background information. But what was unique about how Texas was implementing universal service in 1995?

Texas is unique in that it has a Universal Service Fund (USF), which is financed by all telecommunications utilities in the state based on toll usage of the telephone network. The USF pays for the Tel-Assistance discount and the Dual-Party Relay Service, a program that allows hearing- and speech-impaired Texans to communicate through specifically trained operators. The fund also covers the costs of the Department of Human Services and the PUC, in addition to any other costs that are necessary to administer the fund. The discount provided under the more recently established Lifeline program is absorbed by the local exchange companies and not the Universal Service Fund. Total monthly gross USF assessments have recently averaged close to $500,000.

More recently, the Texas legislature has included a provision in the Public Utility Regulatory Act of 1995 to allow the PUC to establish rules to expand the USF for local exchange companies that serve fewer than a million access lines. ... The measure also strengthens the eligibility that local exchange companies (LECs) must meet, requiring LECs to offer service to every consumer within its cetified area and render continuous and adequate service within the area or areas. In addition, the pending legislation includes the proposal to establish a Telecommunications Infrastructure Fund. This $75 million fund will be administered by a nine-member board and financed by telecommunications providers. The board will award loans and provide necessary equipment and infrastructure to promote telecommunications services that the board finds are directly related to a distance-learning activity that is or could be conducted by an educational institution in Texas. (pp.30-31)

If these paragraphs seem a little thick to you, read them again, this time asking yourself: how does the concept of universal service get translated into actual policy? The answer is breathtaking. Universal service, which started out as the principle of interconnecting competing networks to form a single subscriber universe, had changed so much that by 1995 it required an increasingly lengthening laundry list of initiatives, agencies, charges, acts, and funds. And since the latest definition of universal service made it a moving target, we can expect to see these multiply in the future. The more telecommunications companies innovate, the more their innovations are likely to become standard, thus basic, and thus the more likely they are to come under the purview of the PUC. What a great illustration of what actor-network theorists like to argue: the inseparability of the social and the technical -- in this case, the technological innovations meant to attract new subscribers, which eventually translate in a fairly direct way into new regulative and legislative activities.

The report also discusses the history of Texas telecommunications regulation:

Before the mid-1970s, the State of Texas did not formally provide guidance or oversight over the telecommunications industry. Private utilities were unregulated by the state. In 1975, the Texas Legislature created the Public Utilities Commission. The PUC has had regulatory authority over telecommunications utilities in Texas since this creation. The PUC sets rates for all local exchange companies (LECs). The PUC regulates in accordance with the Public Utility Regulatory Act (PURA). Traditionally, PURA has required that telephone rates be dependent upon a rate-of-return scheme. This scheme provides for quarterly PUC monitoring of LEC earnings. LEC rates are then based on the cost of providing service. LECs are allowed a rate of return, or earning, based on this estimated cost. (p.44)

If memory serves, Texas was the last state in the nation to establish a PUC. (I'll have to check that.) Anyway, the PUC explicitly adopted universal service as a policy goal in 1995 (p.47), using similar language and essentially the same principles discussed earlier in the report. What interests me is how Texas handled universal service earlier, and I don't think the report is entirely clear on that point. How did the term become introduced and how did it evolve?


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Reading :: Universal service obligations in a competitive telecommunications environment

Originally posted: Mon, 07 Feb 2005 23:41:32

Universal service obligations in a competitive telecommunications environment

by Patrick Xavier

Continuing my investigation of the slippery term universal service (see my review of Muller's Universal Service), I skimmed this thin monograph on universal service policy. The monograph was published in France by the Organisation for Economic Co-operation and Development -- an indication, I hasten to note, of how broadly the term "universal service" has traveled. Bear in mind that the term originated in a 1907 AT&T annual report as a way of articulating the company's new strategy for crushing its competition. So it's fascinating to see that the term has been translated (in Latour's sense) across the Atlantic and Pacific into "non-commercial objectives" (p.13)!

What are these objectives?

The so-called 'Universal Service Obligations' of telecommunication operators, which has been a common feature of telecommunication regulation in most countries, is an example of such a requirement. Usually these obligations constitute a requirement to provide basic telephone service to all who request it at a uniform and affordable price even though there may be significant differences in the costs of supply. (p.13)

Individual countries pursue additional means to provide universal service, and these means are by no means identical (pp. 13-14). In any case, however, the author notes that universal service has traditionally been maintained by cross-subsidies (e.g., keeping local costs low by charging more for long distance costs). But "recent rapid changes in telecommunication technology and policy which has liberalised markets in an increasing number of countries have given rise to concerns about the sustainability of universal service policies based on cross-subsidisation" (p.14). No kidding. When cross-subsidies support universal service by borrowing from other segments, competition in those segments will destroy cross-subsidies by charging market rates rather than inflated rates (pp.14-15). So countries that attempt to offer universal service are caught in a bind. If they liberalize markets and continue to finance universal service through cross-subsidies, they risk the cratering of the whole enterprise. But if they impede competition, they give up all the benefits that come with it -- and "since competition can yield significant benefits for at least some aspects of universal service, prohibiting competition could serve, in fact, to impede progress toward universal service" (p.15). The author goes on to advocate competition rather than monopoly, as long as "appropriate arrangements" are in place (p.15).

Let's skip forward to some interesting discussion. I've noted elsewhere that universal service is a moving target, certainly in the United States. Universal service refers to basic telephone service, but the definition of "basic" changes based on what features are widely available. In Texas, for instance, basic service encompasses "plain old telephone service" (POTS), but also other services such as 911 and relay services, and regulations state that the definition can expand in the future. But this monograph points out that in certain cases and along certain dimensions, the definition of universal service has narrowed:

In some instances, the contraction of the basic service definition has occurred largely at the instigation of the telephone companies as a means of creating revenue. The introduction of separate charges for operator services, directory assistance, special number assignment, and time-measured charges for local calling fall within this category. In other instances, the contraction of the basic service definition happened in connection with changes in regulatory policy. The unbundling of customer premises equipment and inside wire (both investment and maintenance components) from basic services are examples of this latter case. (p.28)

On the same page, the author thoughtfully includes a table showing the components of basic service in the US from the 1900s to the 1990s.

Later on, the author notes that BellSouth decided to declare victory on universal service in the 1990s. Citing the industry's 93% penetration rate nationwide, it argued that universal service had been accomplished and "argued that the remaining households fail to subscribe by choice, not due to a lack of availability" (p.39).

This policy monograph can be dry at times, but for me, it's fascinating to see how the term "universal service" has evolved over time and become articulated in so many different contexts. >

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