Canadian network equipment manufacturer Sandvine reported a $7 million loss for the quarter ending February 29th, the first "disappointing" quarter in the company's history according to CEO Dave Caputo. The company makes network management equipment such as the deep packet sniffers Comcast was accused of using to throttle file sharing protocols such as BitTorrent. Caputo assured investors that the debate over ISP traffic management and network neutrality is "cooling somewhat." I'm not so sure — I'm expecting the rescheduled public hearings on Comcast's traffic management policies at Stanford next Thursday to be rather charged. Sandvine's stock is trading at a quarter of it's one year high.

Bell Canada, the largest Internet service provider for our neighbors to the north, has admitted to using "deep packet sniffers" [Ed's note: Sounds intriguing, am assigning Melissa to look into these people] to throttle peer-to-peer protocol transfers such as BitTorrent downloads. Executives there obviously hadn't spoken to peers at national broadcaster CBC, which recently started legitimately distributing shows via P2P, as has American network NBC and musicians like Trent Reznor of Nine Inch Nails. The company also throttled traffic from ISPs that buy bandwidth wholesale from the company. Net neutrality groups are lobbying Canadian officials to regulate Bell Canada into submission. But Minister of Industry Jim Prentice is opposed to any further regulation, and the Conservative Party-led government has been in favor or easing current regulations on telcos. Meanwhile, here in the states, Comcast has cozied up to BitTorrent and the FCC has proven more amenable to arguments in favor of net neutrality.

Google's public stance: Shucks, it never wanted to win the FCC's airwaves auction. The company just wanted to bid the auction's reserve and thereby force the winner into opening the spectrum, Google lobbyist Richard Whitt told the New York Times. The plan almost failed.

· Atta boy, Fox! The network flatly refuses to pay an FCC fine of $91,000 for Married by America (is that the one with the midgets? Or the fake prince?), for the 2003 reality show's depiction of "contestants licking whipped cream off strippers." Fellow networks stand in quiet solidarity, with Ben Silverman observing that "the fine sets a dangerous precedent, not to mention potentially ruining our sweeps week My Dad is Better Than Your Dad father-daughter whipped-cream surprise!" [Variety]
· Smashing Pumpkins sue Virgin Records for cheapening their name by using their music and likeness in a crass Pepsi Stuff promotion. Billy Corgan also wants everyone to check out "1979," and "Tonight, Tonight," both to appear on Guitar Hero IV! It'll be Smashsational! [Variety]
· In a reverse-engineered comic-book-movie-making miracle, Hugh Jackman teams with Virgin Comics to create Nowhere Man, a new comic specifically designed to then be adapted for Jackman to star in on the big screen, and featuring the first superhero to harness the power of showtunes to defeat evil. [Variety]

The Fox Network: freedom fighters, or the anchor around American pop culture's neck as it plummets down to the inevitable lowest common denominator in all forms of entertainment? Could be both! Fox is refusing to pay a $91,000 indecency fine from the FCC for a 2003 episode of the execrable show "Married By America" that featured guys licking whipped cream off strippers and being spanked [Variety]. On one hand, screw the uptight fascists at the FCC and their enforced moralizing! On the other hand, we know Fox is fighting this just so they don't set any precedents that would hinder their rush towards programming that will culminate in live executions of the poor on TV. So it's hard not to be torn on this issue. Below, what appears to be the only clip on YouTube of "Married By America' (not the stripper one). This was a justifiably unpopular show.

Google PR's party line: Even though Verizon Wireless and AT&T mostly won the FCC"s 700-Mhz spectrum auction, Google got what it wanted out of the bid by forcing the carriers to agree to "open" their new airwaves to any wireless device, including the still-mythical Googlephone. Google's latest actions speak otherwise: Google telecom lawyer Richard Whitt has moved from talking about 700 Mhz to new spectrum, formerly used by TV channels, that will become available next year. Some suspect Google's top management was always bluffing with its spectrum bid. If so, we're guessing they never let the team working on the project in on the secret.

"I don't think people anticipated an incumbent would purchase the spectrum with an open-access provision." — FCC chairman Kevin Martin, on why he's not disappointed that Verizon and AT&T got more of the nation's airwaves in an auction meant to spur new wireless competition. [Creative Capital] (Photo by AP/Jeff Roberson)

The FCC has announced that it will hold a second hearing on "net neutrality" — the debate over whether broadband providers can favor some kinds of Internet traffic — at Stanford University on April 17 (PDF). We wrote back in February that FCC chairman Kevin Martin was considering a "do-over"; the FCC's first hearing at Harvard was deemed botched after Comcast was caught packing the room with seatwarmers hired off the street. Now, Comcast has to deal with a hostile crowd and Professor Lawrence Lessig, a strong proponent of net neutrality. Lessig v. Comcast at Stanford? Sign me up!

The FCC's auction of the 700MHz spectrum, soon to be abandoned by analog television broadcasters, is over. Bids totaled $19.6 billion for licenses across the country. But it may be weeks until the winners are announced publicly. Among the big bidders, AT&T and Verizon are the most likely, and the most boring. Google tried to shape the debate over access to the spectrum with a promised bid, and have been acquiring infrastructure over the years. And there's a chance an unknown or three might make a splash. Valleywag is, of course, all ears at tips@valleywag.com.

Federal Communications Commission chair Kevin Martin reiterated the FCC's position on Comcast's file-sharing misdeeds. Giving a speech at Stanford Law School, Martin said the commission is "ready, willing and able" to take action against the company. But this is the exact same wording he used at the first net neutrality hearing at Harvard several weeks ago. The FCC remains "ready" — but it isn't doing anything. Mr. Martin, sir, as my grandmother would say: "Shit or get off the pot."

Freakishly boyish FCC chairman Kevin Martin isn't exactly denying our earlier report that his commission was considering a "do-over" hearing on net neutrality. The first hearing, held at Harvard, dealt with regulations on what Internet service providers can do to privilege some kinds of Net traffic over others. It was marred by a seat-packing scandal: Comcast paid people to hold spots in line for Comcast employees who never showed up. A FCC representative gave News.com this unhelpful quote on the subject of a new hearing, which we've heard could be held at Stanford:

Vitally important issue alert: The Supreme Court may finally take up the case of when the words "fuck" and "shit" are allowed to be broadcast on network television. The justices could decide as early as today [LAT] to hear a case on whether it's okay for the occasional drunk celebrity to say "Fuckin A-right!" at an awards show, or if that should land the network a hefty fine. The FCC is like, fine the fuckers! But the networks are like, fuck that! It's a true shit storm.

The FCC is considering holding a fresh hearing on net neutrality, with Comcast and Verizon again in attendance — and this time it may be at Stanford. The do-over comes after a mini-scandal erupted over the first hearing, held at Harvard; Comcast flacks confessed they'd paid people off the street to act as seatwarmers. Let this be a lesson to you all: If you're going to meddle in politics, do it skillfully enough not to get caught.

Comcast spokeswoman Jennifer Khoury admitted that the cable giant paid some people to arrive early for an FCC hearing on network neutrality. The purpose? Supposedly to hold places for Comcast employees who wanted to attend the hearing. Some of those lineholders didn't just wait in line — they attended the meeting, taking spots which would otherwise have gone to members of the public. Some even fell asleep. Comcast says it didn't intend to block anyone from the hearing, but it doesn't really matter. What Comcast did wasn't illegal, just bad PR, done on the cheap. Next time, ply the seatwarmers with extra-shot Starbucks so they don't get caught napping. That seems easier. (Photo by AP/Stephan Savoia)

At a Congressional hearing, Comcast executives said the company needs to filter some traffic to keep the flow of data constant on its networks — like blocking BitTorrent file-sharing, as it was caught doing last fall. Federal Communications Commission head Kevin Martin is having none of it. "I think it's important to understand that the commission is ready, willing and able to step in if necessary to correct any (unreasonable) practices that are ongoing today," he said today. Martin wants Internet service providers to be more "transparent." Network operators have the right to manage data traffic, but that "does not mean they can arbitrarily block access to particular applications or services," he added. Translation? If you're going to block file sharing, stop lying about it.

· 24 co-creator/primetime-torture advocate Joel Surnow is leaving the series to follow his muse, having previously ceded day-to-day control of the show to fellow executive producer Howard Gordon. Surnow explains his decision to officially pass on Jack Bauer's interrogation-speeding belt-sander to his colleagues: "I've done seven years, almost eight years at the same place with the same great group of people. During the strike I started thinking about different things I'd like to do independently, and decided it was time to see if there were other opportunities I wanted to pursue." [Variety]
· Hoping to pressure SAG leaders into opening negotiations with the studios long before the June 30th expiration of their contract, "several top stars" may launch a public campaign in hopes of preempting a second industry-crippling work stoppage, possibly in the form of a series of "Don't Be Fucking Crazy. No One Wants Another Strike For At Least Three Years" ads in the trades featuring actors like George Clooney, Ben Affleck and Teri Hatcher hugging moguls such as Peter Chernin and Les Moonves. [Variety]

Cynical-C has posted some complaints that the FCC has gotten about various television programs. One of my personal favorites, about the Oprah Winfrey show: "The talk show host, Miss Oprah Winfrey is illegally invading my privacy to promote show ideas on the Oprah Winfrey Show. Further, each time I gather evidence of proof, she pays people with her talk show earnings money to bribe them to destroy evidence." Many of the others are terrifically scary/wonderful. [Cynical-C via Kottke]

The C Block, a chunk of wireless spectrum currently being auctioned by the FCC, just hit its reserve price of $4.6 billion. We've known this would happen for months now. Google promised it would at least bid $4.6 billion if the FCC promised the auction winner would have to open the spectrum to any legal device or software — rules that favored Google, not the established carriers. This milestone signals that Google has gotten its way — so far. [NYT]

When the FCC proposed fining 50 ABC affiliates $1.4 million for nudity in a five-year-old NYPD Blue Episode Friday, it reasoned that the exposed body parts were "titillating" even though the derriere is not (technically) a sexual organ and even though the scene in question involved a young boy. This week, broadcasters will have their say about an FCC Supreme Court appeal on indecency, so a brave squad of bloggers has taken it upon themselves to review the graphic evidence in the NYPD Blue case. After the jump, one of the "shocking" shots with "a "small portion" of breast, and links to more photos and commentary. You're welcome, in advance, for this important contribution to the national dialog. Also, NSFW, but barely.

The FCC's brand of puritanical justice may not be swift, but it is severe: this afternoon, the Guardians of Primetime Morality suggested $1.4 million in fines for ABC's transgressions against federal anti-sideboob statutes committed in a 2003 (!) episode of NYPD Blue that "dwelled" upon a "small portion of one side of [an actress's] breasts" in "shocking and titillating" fashion. (Also, an unacceptable display of partially revealed buttocks were mentioned.) ABC has already responded: "When the brief scene in question was telecast almost five years ago, this critically acclaimed drama had been on the air for a decade and the realistic nature of its story lines was well known to the viewing public," a nod to the series' envelope-pushing early days, when weekly scenes of a seminude Dennis Franz helped cement its hit status. [B&C]