Is This the End of Net Neutrality?

Privatizing the Public Good
by DAVID ROSEN


On Tuesday, Jan. 14th, the D.C. Circuit Court of Appeals struck down the Federal Communications Commission’s (FCC) Open Internet Order. In its decision, the Court found that the FCC lacked the authority to implement and enforce the order it put forth in 2011.

The FCC’s order was intended to prevent broadband Internet service providers (ISPs) from blocking or interfering with data traffic on the web. This policy – if significantly watered down — is in keeping with the both the open access traditional of U.S. communications services since the 1930s and the spirit of the Internet since its inception three decades ago.

Verizon challenged the FCC’s authority to regulate digital communications. Historically, ISPs must treat all data equally and are barred from slowing down or blocking websites. Verizon claimed that FCC regulatory practice violates its 1st Amendment right to edit, prioritize or block its customers’ access to the Internet. Ironically, the Court’s decision comes after a 2010 ruling that the FCC could not stop Comcast from blocking BitTorrent’s video sharing program.

The Court found that the FCC, having deceptively reclassified the Internet as a “information” services, could not impose the same obligations as traditional “common carrier” telecom services like old-fashion “pots” (plain-old-telephone). Judge David Tatel wrote, “Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the commission from nonetheless regulating them as such.”

The FCC’s effort to reclassify the Internet as an “information” services was part of Bush-era policy to privatize online services. Pres. Obama’s former FCC Chairman Julius Genachowski — in the face of considerable public, activists and high-tech corporate pressure — tried to “square the circle” and maintain net neutrality while classifying the Internet as an information service. The Court’s decision is a rejection this legal fiction.

Over the last decade-plus, there’s been an increasingly close relationship between the FCC and its corporate clients – to the detriment of the public good. This was most graphically displayed in 2011 when Commissioner Meredith Attwell Baker, shortly following her approval of Comcast’s acquisition of NBC Universal, took a well-paying position with the cable giant.

Similar revolving doors are evident in the career paths of some recent chairmen. Kevin Martin, a Bush-II appointee, is now with Patton Boggs, a leading Washington, DC, law firm and lobbyist. Michael Powell, Gen. Powell’s son and appointed by Clinton, now heads the cable industry trade association, NCTA. William Kennard, also appointed by Clinton, previously an executive with the banking firm, Carlyle Group, where he specialized telecommunications and media in investments; he now serves as the U.S. Ambassador to the European Union. And Genachowski took a position at the Carlyle Group.

In November 2013, Obama replaced Genachowski with Tom Wheeler, a true industry insider, long a water carrier for corporate interests. He served as head of the NCTA from 1979 and 1984, and ran the Cellular Telecom and Internet Association (CTIA) from 1992 through 2004. Most recently, was a managing director at Core Capital Partners, a venture-capital firm, and a longtime Obama fundraiser.

Wheeler is likely to continue the FCC’s pro big-telecom policies. Nevertheless, a few days before the Court’s ruling, he came out with a strong endorsement of net neutrality. “Public policy should protect the great driving force of the open Internet: how it allows innovation without permission,” he said. “This is why it is essential that the FCC continue to maintain an open Internet and maintain the legal ability to intervene promptly and effectively in the event of aggravated circumstances.”

However, in 2009, he took a more compromised position:

Rules that recognize the unique characteristics of a spectrum-based service and allow for reasonable network management would seem to be more important than the philosophical debate over whether there should be rules at all. … The wireless industry’s initial reaction to net neutrality was to question its need and warn of “unintended consequences.” Accepting the inevitability of the concept, however, and working to maximize its positive effects – from appropriate network management, to flexible pricing and even new spectrum – could be the opportunity for a big win.

Say goodbye to net neutrality.

Verizon’s challenge to the FCC’s Internet order is only one element of a multi-faceted campaign to further privatize U.S. telecommunication services. A second front is being pushed by AT&T and involves proposed Congressional legislation that would essentially end all regulatory obligations. It insisted, “AT&T believes that this [traditional] regulatory experiment will show that conventional public-utility-style regulation is no longer necessary or appropriate in the emerging all-IP ecosystem.”

A third front is taking place outside the Washington beltway. The American Legislative Exchange Council (ALEC) has been effectively promoting “model legislation” ending traditional telephone company accountability requirements. Such legislation has been adopted by at least 23 states. This legislation removed ”carrier of last resort” requirements, thus telecoms no longer have to serve small rural communities.

Two decades ago, the telecom companies – phone and cable — promised to build Al Gore’s “Information Superhighway.” To incentivize these private conglomerates, the industry were deregulated, permitting increased pricing, decreased service requirements and nearly no public accountability. Since then, they’ve pocketed an estimated $350 billion to build a post-modern digital telecom system. What do we have today? A 2nd-rate communications system! Further deregulations – especially the killing of net neutrality – will only make things worse.

Last year, many within the broad tech, Internet and media communities organized to halt the Hollywood studios and record companies from pushing new “anti-piracy” laws through Congress. The battle against SOPA-PIPA is a model campaign for the next battle against Verizon, AT&T and ALEC to preserve net neutrality and an open Internet.

Washington Slowly Wakes Up from AT&T's Bad Dream

Saturday, July 23, 2011 by Save the Internet

by Tim Karr

 

Congress may be finally waking up to the obvious: that the massive merger of AT&T with T-Mobile just doesn't make sense.

No amount of contributions from AT&T, or visits from AT&T lobbyists, will alter this simple truth.
On Wednesday, the Senate's top antitrust official, Sen. Herb Kohl of Wisconsin, weighed the facts and wrote a letter urging Attorney General Eric Holder and FCC Chairman Julius Genachowski to reject AT&T's proposed takeover.

Sen. Kohl wrote that "the acquisition, if permitted to proceed, would likely cause substantial harm to competition and consumers, would be contrary to antitrust law and not in the public interest, and therefore should be blocked by your agencies."

Sen. Kohl's joined a growing chorus of opposition in Washington to the proposed merger. Reps. Ed Markey (D-Mass.), Anna Eshoo (D-Calif.) and John Conyers (D-Mich.) also submitted a letter on Wednesday stating that they believed AT&T's takeover of T-Mobile "would be a troubling backward step in federal public policy -- a retrenchment from nearly two decades of promoting competition and open markets to acceptance of a duopoly in the wireless marketplace."

Opposition to this unprecedented consolidation is growing, and will only continue to grow once policymakers and the public see that the facts contradict AT&T's propaganda.

In his letter, Sen. Kohl provides a detailed analysis of the deal, and notes that T-Mobile is one of the sectors strongest price competitors, with services costing from $15 to $50 less than comparable plans on AT&T. T-Mobile is a "competitor that disciplines price increases from all three other national cell phone competitors," Sen. Kohl writes, adding that approval of the merger "raises a substantial likelihood that prices will rise."

He also notes that the merger would hand AT&T and Verizon control of 80 percent of the market, Kohl cites antitrust law, which explicitly forbids mergers that "may tend to substantially lessen competition."

Despite a mountain of evidence to support Sen. Kohl's claim, AT&T continues to say, as it did in its filing to the FCC, that "the wireless marketplace will be more competitive" as a result of this merger.

It gets worse. In response to Sen. Kohl's letter, AT&T spokesman Michael Balmoris said that the senator's view "is inconsistent with antitrust law, is shared by few others and ignores the many positive benefits and numerous supporters of the transaction."

Think about that for a second. An AT&T flack is saying that a highly respected leader of the Judiciary Committee, who is considered an expert in matters related to antitrust, knows nothing about antitrust law, or knows less than AT&T's public relations department.

While their claims about competition seem false to everyone, especially those who can count, convincing Washington to question the gospel of AT&T is no easy task.

The phone giant has spent $200 million on lobbyists and campaign contributions over the years. This astronomical sum goes a long way toward explaining why earlier this month a sum a cabal of House Democrats looked the other way and signed a letter stating that the merger would lead to billions of dollars in new investment and create thousands of new jobs.

Never mind that the opposite is true, that the merger will mark a net drop in capital expenditures for network build out and likely result in layoffs for more than 20,000 "redundant" T-Mobile employees.

In Washington, the facts too often don't hold a candle to a phalanx of industry lobbyists and a pile of campaign checks. Until now, this toxic blend of misinformation and cash has hijacked the debate surrounding this merger.

The good news is that the common-sense efforts of Kohl and others are staring to unravel AT&T's fantasy. More people inside Washington have begun to see its lobbying juggernaut for what it is: a well-funded push for a government handout, instead of competing fairly in the free market.

AT&T doesn't need to acquire T-Mobile to serve rural America or improve the quality of its service. And as more members of Congress point out, this merger will kill competition and lead to higher prices, reduced investment and more unemployment.

As Washington separates fact from fantasy, the regulators at the DOJ and FCC simply need to do their jobs. They will surely have no choice but to reject this takeover outright.

The Not-So-Neutral Net

The FCC’s new rules on Net Neutrality open the Internet to corporate discrimination. But it’s not too late to preserve Internet freedom.
Tuesday, January 25, 2011 by YES! Magazine
by Jenn Ettinger

The Internet was created as an “open” or “neutral” platform, and net neutrality is the principle that ensures that Internet providers can’t interfere with a user’s ability to access any content on the Web, whether it’s a community blog, a YouTube video, or a major news site. It’s essentially the First Amendment of the Internet.

In late December, the Federal Communications Commission enacted new rules on net neutrality—rules that are supposed to protect Internet users from discrimination and to prevent Internet providers like AT&T, Comcast, and Verizon from acting as gatekeepers on the Web.

But the FCC missed the mark, and its rules not only fail to protect Internet users, but bolster the big phone and cable companies’ ability to carve up the Internet among themselves. As Net Neutrality champion Senator Al Franken said, the rules are “simply inadequate to protect consumers or preserve the free and open Internet.”

During the presidential campaign, Barack Obama came out strongly in favor of net neutrality, saying he would “take a back seat to no one” on the issue. But in the end, Obama's FCC chairman, Julius Genachowski, failed to deliver on the president’s promise, instead issuing ambiguous rules riddled with loopholes that corporate lobbyists will easily undermine.

Over the past several years, the phone and cable companies have flooded Washington with millions of dollars and hundreds of lobbyists to buy support in Congress and put pressure on the FCC. Public interest groups and a few lawmakers have tried to fight back, and more than two million people have urged the FCC to adopt strong net neutrality rules, but Chairman Genachowski ultimately caved to industry demands and turned a deaf ear to the public.

What Went Wrong: Real vs. Fake Net Neutrality

At its core, real net neutrality is a clear rule of non-discrimination that governs all Internet providers. It means that your provider can’t slow down your service in order to speed up someone else’s. It means that your provider can’t exploit legal loopholes to slow down your access to Netflix while speeding up Hulu because it happens to own Hulu. It means that there’s one Internet, whether you access it from your home computer or your mobile phone.

But the rules that the FCC passed in December are vague and weak. The limited protections that were placed on wired connections, the kind you access through your home computer, leave the door open for the phone and cable companies to develop fast and slow lanes on the Web and to favor their own content or applications.

Worse, the rules also explicitly allow wireless carriers—mobile phone companies like AT&T and Verizon—to block applications for any reason and to degrade and de-prioritize websites you access using your cell phone or a device like an iPad. That means these companies could block something like the music service Pandora, while offering unlimited access to its own preferred applications, like VCast.

We’re already seeing what a world without real Net Neutrality will look like. Just weeks after the FCC’s vote, MetroPCS, the nation’s fifth-largest wireless carrier, announced new plans that would block popular applications like Skype and Netflix while favoring YouTube. This is particularly egregious because MetroPCS serves a lower-income audience that is increasingly moving toward the mobile Web as their only way to get online.

Some companies are already marketing “deep packet inspection” technology that would allow carriers to nickel-and-dime you by charging you every time you visit Facebook or try to stream a Vimeo video. If MetroPCS gets away with its scheme—which appears to violate even the FCC’s weak rules—you can bet that AT&T and Verizon will waste no time in unveiling their own plans, which would mean higher bills and fewer choices on the mobile Web.

Lastly, the FCC’s short-sighted action failed to contend with a series of drastic deregulatory decisions made during the Bush administration that severely hamstrung the FCC’s ability to oversee the phone and cable companies. By failing to restore the agency’s authority over broadband, the FCC risks seeing even these rules tossed out in court.

The FCC rules were designed to appease the phone and cable companies—but even that didn’t work. Verizon has already filed suit against the agency, showing that these gatekeepers will settle for nothing less than total deregulation and a toothless FCC.

Undoing the Damage

The FCC’s new rules are certainly a setback in the quest to protect the Web as an open platform and an integral piece of our communications infrastructure and our democracy. In the absence of clear FCC authority and oversight of the Internet and a strong Net Neutrality framework that protects your right to go wherever you want, whenever you want online, AT&T, Comcast, and Verizon are free to interfere with your Internet experience.

The FCC still has the opportunity to put in place a solid framework that would put the public interest above the profit motive of the phone and cable companies that it is supposed to regulate. And the FCC should take immediate steps to close the loopholes it created, to strengthen its rules, and to include wireless protections. The fight is far from over. We can work to change the rules, demand better oversight and consumer protections and make sure that the big companies can’t pad their bottom lines on the backs of their customers.

FCC chairman seeks conditions on Comcast, NBC deal

Federal Communications Commission chairman seeks conditions for approval of Comcast, NBC deal
JOELLE TESSLER
AP News - Dec 23, 2010 11:11 EST

The head of the Federal Communications Commission proposed regulatory conditions Thursday to ensure that cable giant Comcast Corp. cannot stifle video competition once it takes control of NBC Universal.

The conditions are intended to guarantee that satellite companies, phone companies and other traditional subscription television services can still get access to marquee NBC programming once the transaction closes. FCC Chairman Julius Genachowski also wants to ensure that new Internet video distributors can get the programming they need to grow and compete.

FCC officials, however, wouldn't disclose the specific conditions Thursday as fellow commissioners consider whether to back Genachowski's proposal. The chairman needs the support of at least two of them to get the plan passed. He is likely to modify parts of his proposal to win the backing he needs.

Comcast is seeking government approval to buy a 51 percent stake in NBC Universal from General Electric Co. for $13.8 billion in cash and assets. The deal would create a media powerhouse that both produces and distributes content.

The deal is also still awaiting approval by the Justice Department, which will attach its own conditions. Those are likely to be similar to the final conditions imposed by the FCC.

Approval with conditions is expected early next year.

The combination would give the nation's largest cable TV company control over the NBC and Telemundo broadcast networks; 26 local TV stations; popular cable channels including CNBC, Bravo and Oxygen; the Universal Pictures movie studio and theme parks; and a stake in Hulu.com, which distributes NBC and other broadcast programming online.

Comcast already owns a handful of cable channels, including E! Entertainment, Versus and the Golf Channel. It also has a controlling interest in the Philadelphia 76ers and Flyers, and its SportsNet Philadelphia channel carries Flyers, Phillies and Sixers games.

But for the most part, Comcast has built its business on distributing video programming and providing Internet connections. The company has about 23 million video subscribers and nearly 17 million broadband subscribers. Taking over NBC Universal would transform it into a media giant too — giving Comcast control over major box office releases and a wide range of popular television programming.

Comcast is contributing assets worth $7.25 billion to NBC Universal and paying General Electric Co. $6.5 billion in cash for the majority stake.

Genachowski Wins on Net Neutrality, Sort of

Legal Analysis by Abigail Phillips
 

After a down-to-the-wire push, the Federal Communications Commission this week approved by 3-2 its long-awaited regulatory proposal on net neutrality. We haven’t finished combing through the actual rules document, all 200 pages of which were just released today, but nonetheless the summary documents gave us some important hints about what the rules contain.

The FCC’s Basis for Regulating: Contrary to some expectations, the FCC is offering new theories for its regulatory authority, opting not to re-assert the “ancillary” legal theory rejected by the D.C. Circuit Court of Appeals. Following the ‘throw it against the wall and see what sticks’ approach, the FCC has volunteered a smorgasbord of potential justifications, the sum of which apparently demonstrates that "[b]roadband Internet access services are clearly within the Commission’s jurisdiction." The lead argument appears to be Section 706 of the Telecommunications Act, which requires the FCC to report to Congress and take steps to help create universal broadband availability. We’ll see if the Court agrees that this allows the FCC to create broad rules of the road for the Internet.

The merits of the specific net neutrality proposals notwithstanding, the FCC’s continued attempt to find broad, unfocused basis for jurisdiction is a disconcerting strategy. An ungrounded rationale for regulatory authority is easily abused, opening the door to other, undesirable regulation.

Now to the substance. From what we’ve learned from FCC statements and bulletins, our anticipated concerns were right on target. The rules appear to be riddled with loopholes and exemptions, to the point where the FCC’s declaration that the order represents bright-line rules and a framework for predictability is hard to reconcile. It’s likely there won’t be much clarity around the rules’ application until they get invoked in FCC enforcement actions or otherwise.
The FCC’s release previews several points from the final order. Here’s how EFF’s list-to-watch-out-for compares:

(1) Carve-outs for wireless. The FCC order creates a subset of less restrictive rules that apply exclusively to wireless services: Wireless operators need only ensure that consumers are able to access lawful websites and also apps that compete with the providers’ own services (both requirements subject to ‘reasonable network management’ needs). In addition, the rule against unreasonable discrimination does not apply to wireless services. Similar to past proposals, only a transparency requirement in the current order applies equally to wireless and wireline. This is significantly disappointing. We previously noted that from a consumer perspective, we don’t see a valid distinction between wired and wireless internet use. Unfortunately, our urging for similar treatment has gone unheeded.

(2) Loopholes for "unlawful content." As we feared, the FCC’s "no blocking” requirement exempts ISPs that discriminate on the basis of “unlawful content," paving the way for traffic discrimination that is clothed in claims that it is protecting against copyright infringement or other illegal activity.

(3) "Reasonable network management" exceptions. Under the order, 'no blocking' and 'no unreasonable discrimination' rules may be superseded where there are "reasonable network management" requirements. While the order defines reasonable network management in what appears to be a content neutral way, it remains to be seen whether this will be the case in practice or whether, as we have warned, the exception may swallow the rule.

(4) Allowances for "managed" or "special” services." Consistent with our concerns, the order leaves room for non-neutral “specialized services” immune from nondiscrimination rules, without clear boundaries on what those encompass. The rules state that this exemption will be monitored by the FCC for discriminatory and anticompetitive practices. We’ll be monitoring it, too.

(5) Pay for priority. The FCC statement notes that commercial pay-for-priority business arrangements are not likely to pass muster under the "no unreasonable discrimination" rule. This is the main element excerpted from the current order that was not on EFF’s list of concerns. It’s another one that will require close monitoring, however, and may be especially difficult to detect in the midst of complex peering and other relationships between various internet entities.

With the caveat again that we haven’t reviewed rules themselves in entirety, it appears that Chairman Genachowski is dodging resolution on the more difficult determinations, leaving them to future enforcement actions and underscoring our speculation that he may be pursuing political image first and substantive change second, if at all, since the regulations are certainly going to be challenged in court.

So despite the best intentions of many people, we may end up with a lose/lose world in which the regulations not only fail to help combat actual network neutrality problems, but also, like the Trojan Horse, undermine our ability to stop counterproductive FCC regulation of the Internet by this or a future FCC. Let’s hope not. EFF will continue to monitor the situation and watch for ways to help ensure that real net neutrality happens.

Not Neutrality

December 23, 2010 by Save the Internet
by Timothy Karr

On Tuesday FCC Chairman Julius Genachowski gave AT&T a decision that was gift-wrapped for the holiday season. By a 3-to-2 vote, the FCC passed a rule that, in the chairman’s words, “protects Internet freedom.”

If only that were true.

After a year of promises to deliver on President Obama's pledge to protect Net Neutrality, this chairman has pushed through a rule that favors the very industry his FCC is supposed to regulate, leaving Internet users with few protections and putting the future of the open Internet in peril.

The chairman chose to ignore the voices of more than 2 million people who have urged Washington to support real and lasting Net Neutrality protections. His rule, for the first time in history, allows discrimination over the mobile Internet, paving the way for widespread industry abuses.

Now, the chairman is trying to spin the media that this toothless decision is a win for Obama and for Internet users. Free Press and our allies are not going to let him get away with that.

The FCC rule doesn't do enough to stop the phone and cable companies from dividing the Internet into fast and slow lanes. It doesn't stop them from splitting the Internet into two -- one Internet for those who can pay to access special sites and services, and another neglected network for the rest of us.

The rule fails miserably to protect wireless users from discrimination, a prospect that's especially troubling for African American and Latino communities who increasingly access the Internet via mobile devices.

Rep. Maxine Waters (D-Calif.) underscored this point. "Although the new rules bar fixed broadband Internet providers from 'unreasonable discrimination' against Web traffic," she said on Wednesday. "They exempt mobile broadband providers -- leaving millions without critical consumer protections and leading to a fractured Internet."

The FCC vote is a textbook example of industry capture of a federal agency. Chairman Genachowski gave AT&T veto power over this rule. What he's now characterizing as a "reasonable compromise" looks, to anyone who compares his order to his earlier promises, as a near total capitulation to industry.

By failing to protect the open Internet, Genachowski has put at risk one of the essential needs of any healthy democracy: our right to freely access information, engage in political discourse and govern ourselves.

We’d be lying if we didn’t tell you that this vote was a major setback. But this bad rule is not the end of the story. Free Press and our many allies are going to keep fighting to secure your right to an Internet without gatekeepers.

The Most Important Free Speech Issue of Our Time

tuesday, December 21, 2010 by The Huffington Post
by Sen. Al Franken

This Tuesday is an important day in the fight to save the Internet.

As a source of innovation, an engine of our economy, and a forum for our political discourse, the Internet can only work if it's a truly level playing field. Small businesses should have the same ability to reach customers as powerful corporations. A blogger should have the same ability to find an audience as a media conglomerate.

This principle is called "net neutrality" -- and it's under attack. Internet service giants like Comcast and Verizon want to offer premium and privileged access to the Internet for corporations who can afford to pay for it.

The good news is that the Federal Communications Commission has the power to issue regulations that protect net neutrality. The bad news is that draft regulations written by FCC Chairman Julius Genachowski don't do that at all. They're worse than nothing.

That's why Tuesday is such an important day. The FCC will be meeting to discuss those regulations, and we must make sure that its members understand that allowing corporations to control the Internet is simply unacceptable.

Although Chairman Genachowski's draft Order has not been made public, early reports make clear that it falls far short of protecting net neutrality.

For many Americans -- particularly those who live in rural areas -- the future of the Internet lies in mobile services. But the draft Order would effectively permit Internet providers to block lawful content, applications, and devices on mobile Internet connections.

Mobile networks like AT&T and Verizon Wireless would be able to shut off your access to content or applications for any reason. For instance, Verizon could prevent you from accessing Google Maps on your phone, forcing you to use their own mapping program, Verizon Navigator, even if it costs money to use and isn't nearly as good. Or a mobile provider with a political agenda could prevent you from downloading an app that connects you with the Obama campaign (or, for that matter, a Tea Party group in your area).

It gets worse. The FCC has never before explicitly allowed discrimination on the Internet -- but the draft Order takes a step backwards, merely stating that so-called "paid prioritization" (the creation of a "fast lane" for big corporations who can afford to pay for it) is cause for concern.

It sure is -- but that's exactly why the FCC should ban it. Instead, the draft Order would have the effect of actually relaxing restrictions on this kind of discrimination.

What's more, even the protections that are established in the draft Order would be weak because it defines "broadband Internet access service" too narrowly, making it easy for powerful corporations to get around the rules.

Here's what's most troubling of all. Chairman Genachowski and President Obama -- who nominated him -- have argued convincingly that they support net neutrality.

But grassroots supporters of net neutrality are beginning to wonder if we've been had. Instead of proposing regulations that would truly protect net neutrality, reports indicate that Chairman Genachowski has been calling the CEOs of major Internet corporations seeking their public endorsement of this draft proposal, which would destroy it.

No chairman should be soliciting sign-off from the corporations that his agency is supposed to regulate -- and no true advocate of a free and open Internet should be seeking the permission of large media conglomerates before issuing new rules.

After all, just look at Comcast -- this Internet monolith has reportedly imposed a new, recurring fee on Level 3 Communications, the company slated to be the primary online delivery provider for Netflix. That's the same Netflix that represents Comcast's biggest competition in video services.

Imagine if Comcast customers couldn't watch Netflix, but were limited only to Comcast's Video On Demand service. Imagine if a cable news network could get its website to load faster on your computer than your favorite local political blog. Imagine if big corporations with their own agenda could decide who wins or loses online. The Internet as we know it would cease to exist.

That's why net neutrality is the most important free speech issue of our time. And that's why, this Tuesday, when the FCC meets to discuss this badly flawed proposal, I'll be watching. If they approve it as is, I'll be outraged. And you should be, too.

Net Neutrality Advocates Decry FCC 'False' Solution and 'Squandered Opportunity'

Statements by Free Press and ACLU
Tuesday, December 21, 2010 by CommonDreams.org

WASHINGTON - The media advocacy group Free Press released the following statement in response to actions by the FCC today:

By a 3-2 vote Tuesday, the Federal Communications Commission approved new rules intended to prevent Internet providers like AT&T, Comcast and Verizon from acting as gatekeepers on the Web. The rules, however, heavily favor the industry they are intended to regulate, and leave consumers with minimal protections. Democratic Commissioners Mignon Clyburn and Michael Copps voted with Chairman Julius Genachowski, while Republican Commissioners Robert McDowell and Meredith Attwell Baker voted against.

Free Press Managing Director Craig Aaron made the following statement:

“We are deeply disappointed that the chairman chose to ignore the overwhelming public support for real Net Neutrality, instead moving forward with industry-written rules that will for the first time in Internet history allow discrimination online. This proceeding was a squandered opportunity to enact clear, meaningful rules to safeguard the Internet’s level playing field and protect consumers.

“The new rules are riddled with loopholes, evidence that the chairman sought approval from AT&T instead of listening to the millions of Americans who asked for real Net Neutrality. These rules don't do enough to stop the phone and cable companies from dividing the Internet into fast and slow lanes, and they fail to protect wireless users from discrimination. No longer can you get to the same Internet via your mobile device as you can via your laptop. The rules pave the way for AT&T to block your access to third-party applications and to require you to use its own preferred applications.

“Chairman Genachowski ignored President Obama's promise to the American people to take a 'back seat to no one' on Net Neutrality. He ignored the 2 million voices who petitioned for real Net Neutrality and the hundreds who came to public hearings across the country to ask him to protect the open Internet. And he ignored policymakers who urged him to protect consumers and maintain the Internet as a platform for innovation. It’s unfortunate that the only voices he chose to listen to were those coming from the very industry he’s charged with overseeing."

The American Civil Liberties Union released this statement:

The Federal Communications Commission (FCC) today passed a new rule clarifying the legal authority of the FCC to enforce network neutrality principles. Network neutrality principles protect free speech online by prohibiting the owner of a network from prioritizing some content on the Internet while slowing other content.

The rule approved today by the FCC includes full network neutrality protections for the wired Internet, which includes cable and DSL service to homes and businesses, but provides lesser protections for wireless broadband service and may allow wireless broadband providers to block certain applications and services that compete with their own applications and services. The American Civil Liberties Union has called for network neutrality protections on both the wired and wireless Internet as important safeguards for free speech.

"Network neutrality principles are essential to protecting the First Amendment rights of Americans who rely on the Internet as a forum for free speech. While the new FCC rule creates stronger network neutrality protections for Americans who use the wired Internet, it fails to provide adequate protections for Americans who rely on wireless broadband service," said Chris Calabrese, ACLU Legislative Counsel. "By creating two sets of regulations – one for the wired Internet and one for wireless broadband – and failing to ground them in the strongest legal protections available, the FCC has failed to protect free speech and Internet openness for all users. The ACLU will continue to fight for full network neutrality protections. Internet openness is key to protecting our First Amendment rights."

The rule passed by the FCC today does not reclassify wireless broadband service as a telecommunications service, which the ACLU and other proponents of network neutrality have long urged. Treating broadband access as similar to phone service would have allowed the FCC to rely on its broader regulatory authority under Title II of the Communications Act to enforce network neutrality principles.

How Comcast and Huge Telecom Players' Latest Gambit Could Destroy the Internet as We Know It

The telecom wars are heating up and the American Internet user is the proverbial pig on the spit.
By David Rosen, AlterNet
Posted on December 21, 2010

On December 21st, the Federal Communications Commission issued new rules governing Internet transmission. In essence, they effectively divide broadband content distribution between wireline and wireless transmission, providing nominal “net neutrality” protection over content distributed over telephone and cable lines, but deregulating such content sent through the airwaves.

As Timothy Karr of FreePress wrote in the Huffington Post:

“The rule is so riddled with loopholes that it's become clear that this FCC chairman crafted it with the sole purpose of winning the endorsement of AT&T and cable lobbyists, and not defending the interests of the tens of millions of Internet users.”

While Karr and others are focusing on the front story and the FCC’s capitulation to corporate interests, there is a more compelling back story as to how this regulatory farce came about. It is this story that maps out the underlying fictions that provide the rationale for the FCC’s actions and the likely long-term consequences for telecommunications in America.

* * *

As the telecom wars heat up, the American Internet user is the proverbial pig on the spit. A series of recent developments have drawn public attention to major challenges that are redefining the Internet. And it doesn’t look good for those championing Internet freedom, meaningful competition, improved quality of service or an end to conglomerate integration. Sadly, the fix is in.

In May, the DC Court of Appeals handed down a decision to what is popularly know as the BitTorrent case, Comcast v FCC. Originally, Comcast had blocked BitTorrent transmissions over its network and BitTorrent complained. The FCC investigated Comcast's traffic management of BitTorrent and ordered it to end its "discriminatory" practices. However, the Court ruled that Comcast has the right to limit the Internet connections of its customers who were using BitTorrent’s peer-to-peer (p2p) services on the grounds that such limiting falls under the role of network maintenance. More critical, the Court raised serious questions as to whether the FCC has the ability to regulate broadband Internet access altogether.

A few months later, Level 3 Communications drew the public’s attention to an effort by Comcast to impose a new pricing tier or “toll booth” on its transport of Netflix’s streaming video. This comes amidst deliberations by the FCC and Justice Department over Comcast’s bid to acquire NBC-Universal and a string of other questionable actions, including censorship charges, leveled against the company.

The BitTorrent and Level 3 actions were trial balloons pointing to deeper issues related to the future of broadband Internet. On one level, they reveal how key players in “content” – and especially video content – delivery are lining up against one another over, what else, money, or how the fees they charge are to be allocated.

More significantly, the battle puts into stark relief the issues of who controls the wires and wireless spectrum, the backbone of America’s communications infrastructure. Internet traffic, whether that of BitTorrent, Netflix or your email, is transmitted over the primary wires and spectrum controlled by AT&T, Comcast, Verizon and other networks and wireless services. The Internet rides over these wires and airwaves, and these companies control the access points.

The battle lines are being drawn over three key issues. First, will the current distribution model known for an open Internet, with “net neutrality” safeguards, persist – in other words, will all data continue to travel over telecom networks at the same rate and remain uncensored by Internet Service Providers (ISPs), excluding “illegal” content like child pornography?

Second, will the current consolidation of ISPs persist with giant, integrated conglomerates like Comcast and Time Warner controlling both the network and the content -- or will there be a renewed commitment to “open architecture,” to an Internet promoting meaningful competition among multiple access and content providers on the basis of services offered and prices charged?

Third, will the FCC further extend its 2002 reclassification of broadband service as an “information service,” thus further removing data transport from traditional “common carriage” obligations? Will it further collapse the difference between the Internet as a distribution network from the content or applications it supports?

FCC chairman Julius Genachowski December 21st announcement is a fictions compromise, like Obama’s plan to extend the Bush-era tax give-a-ways, and will only serve to further commercialize Internet traffic. His support for "usage-based pricing" will permit wireline ISPs to charge extra fees to heavy Internet users, like Level 3, who transport lots of video or videogames. And, in keeping with the Obama spirit of compromise, he opposes ISPs from “throttling” or slowing data traffic, thus protecting one aspect of net neutrality.

The FCC proposal is another example of how Washington politicians and their dutiful bureaucrats capitulate to big capital to the determinant of ordinary Americans and the long-term erosion of the U.S. economy. The FCC’s plan will set the stage for another round of federal give-a-ways to the giant telecoms, accompanied by an increase in customer charges and a further erosion of service.

* * *

At the heart of the FCC proposed new pricing models for the Internet is the shibboleth of network data traffic congestion. It is an alarm being raised by many within the telecommunications industry and is based on the false assumption that, as video becomes an increasing larger proportion of data traffic on the Web, the network is in jeopardy of collapse. The myth of congestion provides the rationale for a new pricing model as well as the need to end net neutrality and restrict ISP competition.

The Internet and Web consists of four interlinked components: (i) the phone or cable company that provides the “last mile” facilitating the consumer’s broadband connectivity through the residential telephone company’s digital subscriber line (DSL) or cable modem fiber line; (ii) the ISP that connects the customer to the PoP (point-of-presence) on the Internet and World Wide Web, (iii) the “middle mile” provider that links the customer to wider network; and (iv) the provider of long distance, high-speed connections to the network “backbone.”

While the middle mile and backbone utilize high-capacity fiber networks, the crunch comes at the last mile. And it is this piece of the grid that reflects the telecom trust’s failure to upgrade its networks. They have pocketed billions of dollars in subsides and tax breaks and have little to improve their networks. As with most American industrial sectors, the demands for short-term profits makes telecommunications providers unable to meet long-term market demands. No wonder the U.S. ranks 15th among developed counties in terms of broadband utilization.

According to a recent report from Cisco Systems, by the end of 2010, worldwide global online video users are projected to surpass 1 billion and video is projected to account for 40 percent of consumer Internet traffic. The traffic includes Internet video from YouTube, TV programs from Hulu, video-on-demand like Netflix movies and p2p sharing like BitTorrent. Enhanced video quality like 3D and HD only further compounds the video signal.

Online traffic grew 45 percent during 2009 to 176 exabytes per year (an exabyte consists of a million trillion bytes) and is projected to reach 767 exabytes per year by 2014. According to Cisco, this means: “The average monthly traffic in 2014 will be equivalent to 32 million people streaming Avatar in 3D, continuously for the entire month.”

Determining U.S. Internet video traffic is much trickier. Sandvine, an Ontario-based network services company, found that in the August-September 2010 period, North Americans gobbled up only one-third as much broadband video as users in the Asia-Pacific region; North Americans consumed an estimated 4 Gigabytes per month of Internet bandwidth whereas those in Asia-Pacific region used 12 Gigabytes. Sandvine also found that Netflix, with nearly 17 million subscribers, accounted for more than 20 percent of downstream Internet traffic during the primetime TV viewing hours of 8 to 10 p.m.

ComScore, a Reston, VA, market research firm, offers a different take on Internet video usage. It found, in May 2010, that 183 million U.S. Internet users watched nearly 34 billion online videos. Google sites, especially YouTube, account for 14.6 billion videos, representing 43.1 percent of all videos viewed online. Hulu, a joint venture of NBC and FOX and aggregating videos from nearly 200 content providers, came in second with 1.2 billion videos (3.5%), with other sites trailing behind.

Champions of the telecom trust rallied to the Sandvine findings as proof of network congestion and the basis to impose a new pricing model. This model goes by a variety of names, "usage-based pricing,” "paid prioritization" and “pay-as-you-go Internet access,” among others. Kyle McSlarrow, president, Nation Cable and Telecommunications Association, a trade group, recently wrote that the cable industry backs the new pricing model: "A usage-based pricing model, for instance, might help spur adoption by price-sensitive consumers at the lower end of the socioeconomic ladder," he wrote. Craig Moffett, an analyst at Bernstein Research, chimed in with an investor’s glee: "Usage-based pricing will preserve, and even enhance, the economics of cable's infrastructure . . . even if consumers eventually get some, or even all, of their video content over the Web."

Peter Burrows, of Bloomberg Businessweek, takes the argument one step further. Drawing upon research from Juniper Networks, he insists that, based on a "revenue-per-bit" model, the big telecom conglomerates like AT&T and Comcast “will see [their] Internet revenues grow by 5 percent a year through 2020,” but traffic will “surge by 27 percent annually.” “By this math,” he insists, “the carriers' business models break down in 2014.” Or does it?

* * *

Freud once famously noted, “"Sometimes a pipe is just a pipe." And sometimes it isn’t. This is the same with Internet traffic congestion.

The Internet has evolved through three phases and each has been defined by “congestion.” The first phase, during the pre-1990s when the Internet had yet become a mass-market phenomenon, congestion was experienced in email delays, limits to bulk file transfers and low bit rate interactive sessions. The second phase of the 1990s saw rapid Internet adoption with dial-up accounts offering 56.6 kb/s rates and congestion taking the form of a slow system with only intermittent connectivity. In a famous 1995 case, the phone companies attempted to block companies offering the new service, Voice-over-Internet-Protocol (VoIP), on the base of, yes, congestion; companies like Vonage would not exist today had the telecoms had their way. The third phase began around 2000 and saw the wide-scale adoption of broadband. It eliminated the dialup bottleneck with complementary advances in “upstream” capabilities (e.g., more powerful multimedia-capable PCs) and downstream content delivery (e.g., “rich” and interactive media content).

Internet traffic has grown due to four principal factors: (i) an increase in the number of online subscribers, (ii) the amount of time each subscriber spends online, (iii) the growing mix of wireline and wireless distribution options and (iv) the differences and complexity of applications (especially video-based apps) carried online.

However, as Andrew Odlyzko, a professor at the University of Minnesota and former AT&T Labs researcher, argues, “there is no evidence of wireline Internet traffic growing so fast as to require intrusive traffic interference to control it. … traffic growth rates have been declining, to levels slower than the rate of improvement of latest transmission equipment.”

Adding to this critique, three MIT scholars, Steven Bauer, David Clark and William Lehr, recently released an invaluable study on web traffic, “The Evolution of Internet Congestion,” and offer the following warning: “It is certainly possible that network operators, under the guise of managing congestion, may exploit their control over the network pipes in ways that are socially undesirable ….” Their warning should be the starting point for linking alleged congestion to changes in pricing and overall control of the Internet.

Comcast, like AT&T, Verizon or other dominant controller of distribution, has gained ever-increasing control over access by and to its subscribers. In order for a subscriber to reach the Internet, and for content providers to reach the consumer, they have to pass through an ISP's last-mile network, whether over the phone line or airwaves. The ISP is the gatekeeper. This situation gets more troubling when one recalls that in addition to being a last-mile gatekeeper serving residential, business and wholesale customers, Comcast, like the others dominant players in the telecom trust, also operates a powerful backbone network and is now moving in to content.

Comcast is seeking, like other dominant carriers, to be both “vertically” integrated, i.e., control connectivity from the last-mile to the backbone, as well as “horizontally” integrated, i.e., control available content or applications like NBC-U. Its two-dimensional system of integration pushes beyond the iPhone “walled garden” model by which Apple controls the applications available to the consumer. This two-dimensional integration suggests the real, long-term danger that the FCC and Congress refuse to recognize.

The real drama being played out in terms of Internet congestion and changing pricing models needs to be seen as part of a more profound and systemic change in the control of the nation’s telecommunications infrastructure, especially the Internet. Comcast and other conglomerates that make up the telecommunications trust, like the trusts that dominate the oil and gas sector, health care or financial services, are aggressively pushing to control all aspects of the market sector. Unless the debate over congestion and pricing is opened up, refocused to the larger question of industry consolidation, the FCC December 21st proposal will only make the problem worse.

Stay tuned – the worst is yet to come.

Did the FCC just bless a capped, two-tier Internet?

By Nate Anderson | ArsTechnica

You like the idea of Internet data caps and overage charges, right? And the prospect of paying your ISP separate fees for "the Internet" and for "managed" IP services like voice, video, VPN, telehealth, and smart grid applications, even when these directly compete with similar Internet-delivered services?

Okay, you probably don't—if you're a business or home Internet user. But if you're a major Internet provider, you love both of these ideas a lot... and you found support for both of them in Wednesday's "net neutrality preview" from the Federal Communications Commission.

"Broadband rationing"

When FCC Chair Julius Genachowski previewed his net neutrality proposal this week, he mentioned "usage-based pricing" and failed to mention "managed services." Neither item was accidental, and it didn't take long for interested observers to read the tea leaves.

Craig Moffett, an influential Wall Street tech analyst, said after the speech that "broadband rationing is now the order of the day" once Genachowski gave his support to the idea. It's something of a strange comment, since usage-based pricing has not been either regulated or illegal, and in fact data caps are now common even though many are high (such as Comcast's 250GB/month limit). Still, the FCC's endorsement of the idea should provide a bit of cover to wireline ISPs who want to try it.

Moffett added, "We would expect the introduction of UBP [usage-based pricing] plans from major cable [ISPs] to follow in short order, and we would expect that their stocks will respond well to such introductions."

NCTA, the influential lobby for the major cable operators, today quoted Moffett and expressed its own support for UBP as a way to "focus on what best serves consumers." CEO Kyle McSlarrow says he doesn't support any particular model (and likes flat-rate himself), but that ISPs need the flexibility to experiment in order to help "price-sensitive consumers at the lower end of the socioeconomic ladder."

In response to Moffett's quotes, a senior FCC official sent us a statement making clear that data caps, overage charges, and the like would be watched carefully for signs of price gouging in the limited-competition wireline ISP market.

"Usage-based pricing can create more choice and flexibility for consumers," said the official. "But practices that are arbitrary, anti-consumer, or anti-competitive would cause serious concern. The FCC will be a cop on the beat for consumers."

But Genachowski does support the idea, and the ISPs are glad of that explicit support. There's nothing wrong with the idea, in our view, when implemented fairly, but it's not popular with the public in large part because past attempts to implement it have correctly been viewed as a massive cash grab by ISPs that already make insanely high profit margins.

When the cable companies roll out $5 data-capped Internet access to make it easy for poor families to get online, it's hard to envision much opposition. But of course, that's not what we've seen.

We're excellent "managers"

Imagine that you are Netflix boss Reed Hastings. You're busy trying to eat the cable companies' collective lunch by offering on-demand Internet streaming video; sure, you're not there yet, but it's clear this model has a bright future… except for one little worry.

The cable companies and telcos you rely on to deliver your bits also compete with you, offering profitable video services of their own that don't come through "the Internet" but are increasingly based on IP and use the exact same pipe. Should those companies be allowed to offer managed quality of service enhanced video streams over a segregated section of the last-mile Internet pipe to directly compete with your own best-effort Internet offering? And how could this possibly be a fair fight?

We don't need to imagine Hastings worrying about this scenario, though, since Netflix has made its concerns clear in writing. Back in January, the company warned the FCC about letting "managed services" swallow up the open Internet.

"The fact that network operators control the delivery pipes and generate significant revenue from content that travels over those pipes provides both the means and motive for discriminating against new ventures that might threaten revenue sources of the network operators," Netflix warned. These developments "exacerbate the growing concern that [video providers] will use their control over programming networks to stifle competition, including the growing competition from online video providers like Netflix."

Therefore, according to Netflix, the FCC should apply its open Internet principles to "managed services," too, possibly by requiring that such services could never consume more than a set fraction of the Internet pipe, reserving the rest for the "open Internet."

The FCC itself recognized the potential for these kinds of problems when it issued its call for comment on the open Internet (PDF), but it also didn't want to hinder genuine innovation in a nascent market.

"We recognize that these managed or specialized services may differ from broadband Internet access services in ways that recommend a different policy approach," it said at the time, "and it may be inappropriate to apply the rules proposed here to managed or specialized services. However, we are sensitive to any risk that the growth of managed or specialized services might supplant or otherwise negatively affect the open Internet."

The ISPs were aghast at the idea that the FCC might limit them from setting up priority access deals both on the Internet and through these separate managed services. While selling an increasingly fast raw pipe to the 'Net (with neutral congestion management and even customer-directed QoS) might sound like a boon to consumers, ISPs dread the thought of becoming mere bit haulers. The real money comes when you can charge people once for the open Internet, once more for IP voice, a third time for IP video, and another five or six times for various smaller IP services.

They've been lobbying against the idea for months, almost always insisting that "managed services" are about "telehealth" or "smart grids." And you don't hate healthy people, do you?
In the end, the ISPs got their way. Despite the many questions raised by the FCC about managed services, Genachowski's speech didn't mention it once. That was no accident.

Our understanding is that the proposed open Internet rules include nothing about managed services, leaving it entirely unregulated. The FCC has apparently decided—and this is certainly a legitimate point—that no one really knows what services will develop and that it's just too early in the game to lay down any sort of detailed rules. Such rules might, in fact, be counterproductive if offered too early and could squelch a nascent market.

We know the FCC has such concerns because Genachowski stated them explicitly in relation to wireless, where he also accepted the ISPs' arguments that "wireless is different" and doesn't need neutrality rules (transparency is good enough). Instead, the FCC will "monitor" the situation in this young market and act if needed.

The ISP industry has been lobbying for a "light touch" when it comes to open Internet regulation, and they got it; if the touching here were any lighter, it would be nonexistent. The cable industry sees things the same way—and they love it.

"We further understand that the rules do not preclude or inhibit our ability to innovate and deploy new and specialized services," said NCTA after the speech. "Importantly, they appear to reflect Chairman Genachowski’s previously stated position that such rules will not and should not result in price regulation and to recognize the value of flexible business models such as usage based pricing."

Of course, the ISPs aren't in the managed services game because "telehealth" and "distance education" are going to butter their bread, though there is certainly some cash in these services. (Looking for a fun drinking game this weekend? Dig up public references to "managed services" by CEOs and lobbyists and do a shot whenever you see "telehealth" trotted out.)

No, they're in it in order to do things like earn cable-TV-style fees from millions and millions of users, as Google and Verizon at least had the decency to admit earlier this year. ISPs should be free to manage their networks, the two companies said, and "they should also be free to offer managed network services, such as IP television."

Like usage-based pricing, this isn't necessarily a bad idea—who wants their Sunday football games to buffer or glitch out?—but we continue to have real worries about how this affects competition and how it might be implemented. (And this isn't all speculative, either; AT&T already reserves part of its U-Verse connection for IP video and can squeeze Internet traffic when home users are watching more HDTV. Is that good for home TV watchers, bad for innovation at the network edge, or both?)

Arms merchants love an arms race

The FCC has its concerns, too, but it won't act, at least not now. Instead it will "monitor." Those who own the last-mile pipes have permission to continue their experimentation with managed services.

Fortunately, though wireline broadband isn't as competitive as many would like, the major ISPs remain susceptible to public and political pressure that will place constraints on their ability to do anything too outrageous—at least in one giant step. (See the flood of anger at Time Warner Cable's pricing plan experiments in 2009—anger that reached Congress—for a good recent example.)

But what will happen by slow degrees as ISPs condition Internet content providers and the public to pay for more and more services, and to accept certain forms of usage-based pricing?
Verizon already knows—the "open Internet" will take a back seat to the managed "broadband platform."

As the company's top lobbyist, Tom Tauke, put it this summer, "Certainly nobody believes that the promise of broadband is Internet access and video, which is what we have today." No, the future is "'other services' that should be available over the broadband pipe. They need unique creativity and partnerships to make them work. It’s the communications company partnering with the power company to do the smart grid. It’s the communications partnering with the health care provider to do heart monitoring at home. [Editor's note: drink up!] That requires a different set of rules than the rules that govern the best-efforts Internet."

It's a model where ISPs extract rents on every service they can imagine. The danger, of course, is one that Google warned about in a slightly different context: "creating incentives to monetize scarcity rather than build capacity, to generating an 'arms race that benefits only the arms merchants' (where broadband providers increase their income but not overall speeds), to fashioning an Internet where only those who can 'pay to play' will fare well and others will be relegated to a slow lane."

Will that happen? ISPs say no. We're about to find out.

Rep. Henry Waxman Pushes Bill to Kill 'Net Neutrality,' After Committing to It

Waxman's legislation, under the banner of mandating network neutrality, would prevent the govt. from requiring broadband providers to treat all web traffic equally.
By Stephen Webster, Raw Story
Posted on September 29, 2010

Legislative text put forward by Rep. Henry Waxman (D-CA) under the banner of mandating network neutrality would instead prevent the government from requiring broadband providers to treat all Internet traffic equally.

Waxman, who has vowed that he would support the so-called 'Net Neutrality' policy proposals favored by most Democrats and progressives, has instead put forward an as-yet-unsettled legislative framework that explicitly prohibits the Federal Communications Commission from regulating broadband Internet under Title II of the Communications Act: a caveat key to implementation of what's been called the Internet's First Amendment.

Should the president sign a bill containing Waxman's language, it would effectively kill 'Net Neutrality' efforts and make key parts of a hotly contested proposal by Google and Verizon the law of the land.

While the bill [PDF link], first published by National Journal blog Tech Daily Dose, carries language that speaks of preventing ISPs from "unjustly or unreasonably" discriminating against "lawful traffic," the spirit of the rule is completely undermined by text that follows.

For today's fast-growing wireless networks, largely seen as the future dominant mode of Internet access, it makes a provision allowing for "reasonable network management," but prohibits blocking "lawful Internet websites."

It's unclear whether this prohibition would even be enforceable, since the bill states that it gives the FCC no new authority to regulate providers unless the company actually elects to be regulated. Violations of rules, which would be investigated only on a case-by-case basis, would incur a maximum fine of $2 million.

Critics of Waxman's bill say that $2 million is almost nothing compared to the potential profits that could be generated by engaging in questionable network traffic management practices. Another concern expressed by 'Net Neutrality' proponents is that bloggers or whistle-blowers publishing content the network providers object to could simply be deprioritized, leaving their material in a gray zone devoid of traffic, which many Internet users cannot easily access.

The legislation also purports to prevent wireless providers from blocking "lawful applications that compete with the provider’s voice or video communications services," but it again makes an allowance for "reasonable network management."

That term, "reasonable network management," is defined as "a network management practice that is appropriate and tailored to achieving a legitimate network management function". Waxman's text goes on to explain that "appropriate and tailored practices to reduce or mitigate the effects of what it calls "traffic that is harmful to or unwanted by users" are permissible.

The catch: "Users" includes "premise operators, [...] the provider’s network, or the Internet".

Stated in plain language, under Waxman's proposal, traffic that is unwanted on a provider's network may still be subject to "management." Instances of traffic shaping which can be construed as "unreasonable" pose only a minor inconvenience to ISPs, as the FCC is only investigating individual claims.

From an Internet user's perspective, traffic shaping and discriminatory practices are impossible to prove without the service provider's own admission that it is occurring.

"In determining whether a network management practice is reasonable, the Commission shall consider technical requirements, standards, or best practices adopted by one or more independent, widely-recognized Internet community governance initiative or standard-setting organization," the bill continues. "In determining whether a network management practice for wireless broadband Internet access service is reasonable, the Commission shall also consider the technical, operational, and other differences between wireless and other
broadband Internet access platforms, including the need to ensure the efficient use of spectrum."

In other words, "[the bill] allows blocking over wireless broadband any peer-to-peer activity or even applications, and merely forces 'transparency' rather than a ban on discrimination of lawful traffic," David Dayen summarized, blogging for FireDogLake.

Even lacking full consensus from fellow members of the House Energy and Commerce Committee, Waxman's text "seems to have enough support to pass the House," The Hill noted, citing three unnamed aides to the California Democrat.

Waxman, at one point, was a proponent of the Internet Freedom and Preservation Act, which would have truly enshrined network neutrality as one of America's emerging broadband policies. It was referred to the Energy and Commerce Committee in July, 2009, where it still lingers at time of this writing.

Here's what Waxman said about 'Net Neutrality' on Sept. 17, 2009:

The fears some have professed that Net Neutrality rules will stifle network investment have proven unfounded over the years. Most recently, over 2,200 public and private entities applied for broadband grants and, in so doing, opted-in to Net Neutrality rules. Industry will benefit from clarity, consistency and predictability with regard to Net Neutrality. 

As a member who has worked hard to protect the intellectual property rights of our creative communities, I do not believe Net Neutrality and strong copyright protection are mutually exclusive goals. In fact, clear Net Neutrality rules should help broadband network operators explore innovative steps designed to stop the theft of online content. I know our new FCC Chairman shares my perspective on the importance of achieving both goals.

Watch:

FCC Chairman Julius Genachowski, a former FCC attorney selected by President Obama to lead the agency, has said he would like to reclassify broadband Internet as a universal service, subjecting it to the enforcement of network neutrality rules. He enjoys the support of the president on the issue, as Obama promised that his administration would usher in non-discrimination policies for Internet traffic.

However, given that Waxman's bill explicitly allows network management on every level -- including the blocking of content "unwanted" by users that include the network's providers -- it would appear the one-time advocate of enforceable network neutrality has completely abandoned the principle.

"Interestingly, the draft proposal has a sunset at the end of 2012," FDL's Dayen wrote. "That’s probably a good idea with all Internet-related legislation, given the fast pace of innovation. But it means that the FCC wouldn’t be able to do anything on reclassification until the next election, and I think the timing is pretty profound."

Net Neutrality: We're Still Waiting

by Timothy Karr - Tuesday, September 21, 2010 by SavetheInternet.com

Exactly a year ago, Federal Communications Commission Chairman Julius Genachowski made a major promise to deliver on Net Neutrality. "If we wait too long to preserve a free and open Internet, it will be too late," he told an influential audience in Washington.

We're still waiting.


Instead of doing what's right for Internet users, Genachowski has dodged, dithered and delayed. But it's not too late to turn things around. And Genachowski's legacy as chair of the FCC - either as a champion of openness or as a toothless bureaucrat - rests on what he does now.


The path forward seemed much clearer on September 21, 2009, when Genachowski went to the Brookings Institution to deliver his first major speech as head of the FCC. Genachowski didn't mince words. He declared that without Net Neutrality protections, "We could see the Internet's doors shut to entrepreneurs, the spirit of innovation stifled, a full and free flow of information compromised."


He continued:

"The fact that the internet is evolving rapidly does not mean we can or should abandon the underlying values fostered by an open network or the important goal of setting rules of the road to protect the free and open internet. Saying nothing and doing nothing would impose its own form of unacceptable cost."

"Doing nothing" didn't seem to be an option. He had a majority of the votes at the FCC and support from the president and leaders of Congress.


But what a difference a year can make.


Since his September 2009 Brookings' speech, Genachowski has made little progress to protect Net Neutrality. He started a rule making process last October but hasn't made any rules.


To be fair, things got more complicated when a federal appeals court ruled the FCC lacked the authority to regulate broadband because of some bad decisions during the Bush administration. But instead of seizing the opportunity to restore the agency's ability to protect consumers, Genachowski wavered and retreated.


He eventually came up with a "Third Way" proposal, then immediately started backing away from his own idea, ducking questions from the media regarding his commitment to the proposal.


Then his top deputy tried to broker a disastrous closed-door deal with industry that virtually ignored overwhelming public outcry in favor of a strong Net Neutrality standard. And when Google and Verizon came forward with a vastly unpopular proposal of their own, the chairman sputtered some more.


His only response has been to solicit more public input on questions that have already been asked and answered.


Obama's Waffler


Remember, this is the man whom President Obama put into office with the explicit understanding that his first priority was to protect Net Neutrality. "I am a strong supporter of Net Neutrality," Obama pledged in 2007. "As president I'm going to make sure that that is the principle that my FCC commissioners are applying as we move forward."


It's clear from his own statements that the FCC chairman knows what meaningful rules should look like.
The first thing he must do is restore the FCC's authority to protect Internet users by "reclassifying" broadband under the law. Next, the FCC must enact Net Neutrality rules that safeguard the open Internet for all users, no matter how they get online.


Genachowski has been swamped with public support for the move but seems intent on inaction - and doing nothing that would upset the powerful special interests that make up the phone and cable lobby.


Genachowski now has a choice. He can make a decisive and principled move to protect Net Neutrality and be remembered as a hero of the Internet, or he can continue to waffle and be remembered as the FCC head who stood idle as our online freedoms were handed over to the likes of AT&T, Comcast and Verizon.

Google Wants to Destroy the Internet That Made It So Rich

Google is pushing to place tollbooths on the Internet that are in nobody's interest but Verizon's and other decrepit companies like AT&T.
By Adam Green, AlterNet
Posted on August 9, 2010

Yesterday I went on a media conference call with Google CEO Eric Schmidt and Verizon CEO Ivan Seidenberg.

They announced a new policy recommendation that would kill the Internet as we know it, if implemented by FCC Chair Julius Genokowski and other policy makers.

The Google/Verizon deal (also posted online) basically says:

• The old "wireline" Internet that will be irrelevant in a few years? We propose a "new, enforceable prohibition against discriminatory practices" on that.
• New "wireless services" (aka the entire future of the Internet)? No equivalent nondiscrimination rules for that, but we'll "create enforceable transparency rules." That way, as Americans lose access to the free and open Internet, they can visibly watch it go away.
• Just in case "wireless services" doesn't encompass the entire future of the Internet, a new class of "new services" is envisioned, which Schmidt and Seidenberg actively differentiated from "the public Internet." Basically, through private contracting, big corporations could deal directly with the Verizons and AT&Ts of the world to create the next YouTube, maybe dangle it without discrimination to the public just long enough for us to be hooked, and then discriminate like hell over it. But don't worry, the FCC will "monitor the development of these services."

Google, a company that I've long admired and currently hold thousands of dollars of stock in, just "went evil."

That's why over 300,000 Americans have signed an open letter telling Google "don't be evil" -- protect Net Neutrality and the Internet's level playing field. You can sign here.

This letter was launched last week by 5 groups that use the Internet to organize millions of Americans around issues, and are now using the Internet to save the Internet itself -- Free Press, the Progressive Change Campaign Committee, MoveOn, Credo Action, and ColorOfChange.

Why did Google cut this absurd deal, one that dramatically hurts its credibility in the online space?

We know why Verizon did it. Verizon is a decrepit old company that made massive investments in old landline technology and is coming face-to-face with market irrelevance. In a properly functioning marketplace, Verizon would soon crumble and die and be replaced by modern-day innovators. The only way for them to stay in business is to block innovation and to put tollbooths on the Internet that are in nobody's interest but Verizon's and other decrepit companies like AT&T.

There is no reason in the world for Google, which has made smart investments in the future, to find common ground with Verizon on the issue of Internet openness. None. Zero. Zilch. The deal is unneeded, uncalled for, and incompatible with Google's "don't be evil" mantra.

Google's decision to cut a deal with Verizon wreaks of either impatience or fear. Either Google wasn't willing to wait for the Verizons of the world to crumble and die -- and therefore moved it's own business development timeline up 5 or 10 years at the expense of the entire American public. Or, Google feared doing the dirty work that comes with being a leader -- despite launching a "Google Fiber for Communities" program that competes head-to-head with the decrepit incumbents, Google feared actually having to fulfil their potential to defeat the bad guys.

So, they cut a deal with the bad guys. And they're now asking the public to accept two Internet experiences -- a great experience for the old Internet that will soon cease to exist, and an experience filled with discrimination and lack of a level playing field for the entire future of the Internet.

FCC to Seek Net Neutrality by Regulating Internet Service Providers

FCC to Seek Net Neutrality Using New Legal Framework
by Tony Romm

Federal Communications Commission Chairman Julius Genachowski on Thursday announced his agency would seek to regain its lost grip on broadband by applying some of the rules that govern phone companies to Internet providers.

Federal Communications Commission Chairman Julius Genachowski testifies in Washington, DC, in March 2010. (AFP/Getty Images/File/Chip Somodevilla) One month to the day since a federal court stripped the FCC of that authority, setting back the agency's dual goals of expanding broadband access and instituting tough rules to ensure open Internet, Genachowski took the first steps in restoring what he described as "the shared understanding" that the FCC should protect broadband consumers.

Genachowski's announcement is sure to satisfy net neutrality proponents -- from public-interest groups to companies like Google and Skype, which have long called on the commission to enforce open Internet rules. But the move will likely put Genachowski, the FCC and the Obama administration on a collision course with broadband providers -- like Comcast, AT&T and Verizon -- which have long questioned the FCC's authority to regulate broadband using its internal, rule-making process.

Those companies and others could choose to challenge Genachowski's proposed "third way" forward in court, setting up a protracted legal fight that only Congress could end with new telecommunications legislation. Comcast, however, noted in a statement on Thursday that it is "prepared to work constructively with the Commission" over the next few months.

The best outcome, Comcast added, would be a series of "limited but effective measures to preserve an open Internet and implement critical features of the National Broadband Plan, but does not cast the kind of regulatory cloud that would chill investment and innovation by ISPs."

The FCC's new legal framework addresses a federal court ruling in April that found the FCC only had chief jurisdiction over Title II, or "telecommunications services," and did not even have "ancillary" authority over Title I, or "information services."

"The opinion therefore creates a serious problem that must be solved so that the Commission can implement important, commonsense broadband policies," Genachowski said of the ruling, which favored Comcast, noting the FCC still hopes to carry out much of the proposals it introduced as part of its National Broadband Plan.

But rather than simply taking broadband and re-designating it as a telecommunications service, as some groups thought the FCC might do, Genachowski's plan would use a procedure called "forbearance" to pick and choose aspects of long-standing phone company rules to broadband providers.

Not all of those regulations that govern telecommunications companies would apply to the Web. For example, some of the "common carrier" restrictions on rates, and others that require phone lines to be shared, would not be imposed on the broadband community. But the bulk of rules that allow the FCC to enforce competition and determine how companies can manage their networks would, ultimately, now target Internet providers too.

However, Genachowski's statement on Thursday does not immediately usher that new broadband regulatory framework. Rather, the FCC must embark on public comment periods, hold hearings, consult with stakeholders and vote on the proposals first. That latter element should prove easiest, as the FCC is comprised of three Democrats who have signaled previously they would support reclassification.

"The Comcast decision has created a serious problem," Genachowski said. "I call on all stakeholders to work with us productively to solve the problem the Comcast decision has created in order to ensure a solid legal foundation for protecting consumers, promoting innovation and job creation, and fostering a world-leading broadband infrastructure for all Americans."

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FCC will seek to regulate Internet providers
By Cecilia Kang
Washington Post Staff Writer
Thursday, May 6, 2010

The chairman of the Federal Communications Commission plans to seek clear-cut powers to regulate Internet service providers, redefining the government's role over at least parts of the fast-growing industry.

The proposal, to be announced Thursday, is expected to be opposed by broadband network operators such as AT&T, Comcast and Verizon, whose Internet access businesses are becoming their main source of revenue as consumers rely on the Web as a primary communication tool.

Internet companies such as Google and Skype and public interest groups are applauding the move because it would allow the FCC to carry out policies to expand broadband access nationwide. The groups also support the commission's efforts to create a regulation that would force broadband service providers to treat all applications equally over high-speed Internet networks, a concept known as net neutrality.

A senior FCC official said Wednesday that Chairman Julius Genachowski's move would be a "third way," between the industry's current state of deregulation and a more comprehensive regulatory approach. Broadband is now defined as an information service with weak FCC oversight. The proposal would put Internet service providers in a category with telephone service, which is more clearly under the agency's authority.

However, the move would stop short of subjecting Internet providers to the full range of requirements imposed on telecom companies, such as oversight of price and billing practices or a rule that would force network providers to share lines with competitors. It also would govern only the companies that own the networks, not the services they transmit.

Last month, a federal court cast doubt on the FCC's authority over the Internet, ruling that the agency overstepped its bounds when it sanctioned Comcast in 2008 for blocking an Internet application that the company said was slowing broadband service.


"The Chairman will seek to restore the status quo as it existed prior to the court decision in order to fulfill the previously stated agenda of extending broadband to all Americans, protecting consumers, ensuring fair competition, and preserving a free and open Internet," the FCC official said in a statement.

Sources said Genachowski appeared to have shifted from late last week, when The Washington Post reported that it looked like he was inclined to keep broadband services deregulated.

Two sources with knowledge of the discussions in the FCC this week said a letter that Sen. John D. Rockefeller IV (D-W.Va.) and Rep. Henry A. Waxman (D-Calif.) sent to Genachowski on Wednesday provided political support for the agency to shift Internet lines to a more regulatory framework. The lawmakers said they could support defining broadband as a telecommunications service if the FCC stripped Internet access providers of some of the rules that apply to phone companies.

The sources spoke on the condition of anonymity because of the sensitive nature of the topic and because Genachowski hasn't officially commented on his decision.

Corporate opposition is sure to be fierce to what some view as a strong move to regulate Internet companies.

"If the goal is maximizing broadband deployment and adoption . . . new regulations such as these will not help," said Bruce Mehlman, co-chairman of the Internet Innovation Alliance, an industry group. "This sounds more like a political solution likely to imperil investment than a policy initiative that tackles actual challenges in the marketplace."

Susan Crawford, a law professor at the University of Michigan and a former economic adviser to President Obama, said the move would be a good middle ground for the commission.

"The FCC has clearly thought through all the implications of using its regulatory authority to provide for a level playing field for innovation and job creation in America," she said. "The FCC has reached the right result."

Genachowski's office and general counsel briefed officials Wednesday on his decision. Michael Copps and Mignon Clyburn, Democratic members of the commission, have said they would support a proposal to reclassify broadband, which would give Genachowski enough votes to move forward on the plan.

The proposal must be opened to public comment and then would need three out of five FCC votes to be approved.

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New U.S. Push to Regulate Internet Access
05-06-2010

WASHINGTON—In a move that will stoke a battle over the future of the Internet, the federal government plans to propose regulating broadband lines under decades-old rules designed for traditional phone networks.

The decision, by Federal Communications Commission Chairman Julius Genachowski, is likely to trigger a vigorous lobbying battle, arraying big phone and cable companies and their allies on Capitol Hill against Silicon Valley giants and consumer advocates.

Breaking a deadlock within his agency, Mr. Genachowski is expected Thursday to outline his plan for regulating broadband lines. He wants to adopt "net neutrality" rules that require Internet providers like Comcast Corp. and AT&T Inc. to treat all traffic equally, and not to slow or block access to websites.

The decision has been eagerly awaited since a federal appeals court ruling last month cast doubt on the FCC's authority over broadband lines, throwing into question Mr. Genachowski's proposal to set new rules for how Internet traffic is managed. The court ruled the FCC had overstepped when it cited Comcast in 2008 for slowing some customers' Internet traffic.

In a nod to such concerns, the FCC said in a statement that Mr. Genachowski wouldn't apply the full brunt of existing phone regulations to Internet lines and that he would set "meaningful boundaries to guard against regulatory overreach."

Some senior Democratic lawmakers provided Mr. Genachowski with political cover for his decision Wednesday, suggesting they wouldn't be opposed to the FCC taking the re-regulation route towards net neutrality protections.

FCC Chairman Julius Genachowski, whose authority over broadband lines has been questioned by a federal court, plans to use regulation on traditional phone networks to establish rules for Internet providers.

"The Commission should consider all viable options," wrote Sen. Jay Rockefeller (D, W.V.), chairman of the Senate Commerce Committee, and Rep. Henry Waxman (D, Calif.), chairman of the House Energy and Commerce Committee, in a letter.

At stake is how far the FCC can go to dictate the way Internet providers manage traffic on their multibillion-dollar networks. For the past decade or so, the FCC has maintained a mostly hands-off approach to Internet regulation.

Internet giants like Google Inc., Amazon.com Inc. and eBay Inc., which want to offer more Web video and other high-bandwidth services, have called for stronger action by the FCC to assure free access to websites.

Cable and telecommunications executives have warned that using land-line phone rules to govern their management of Internet traffic would lead them to cut billions of capital expenditure for their networks, slash jobs and go to court to fight the rules.

Consumer groups hailed the decision Wednesday, an abrupt change from recent days, when they'd bombarded the FCC chairman with emails and phone calls imploring him to fight phone and cable companies lobbyists.

"On the surface it looks like a win for Internet companies," said Rebecca Arbogast, an analyst with Stifel Nicolaus. "A lot will depend on the details of how this gets implemented."

Mr. Genachowski's proposal will have to go through a modified inquiry and rule-making process that will likely take months of public comment. But Ms. Arbogast said the rule is likely to be passed since it has the support of the two other Democratic commissioners.

President Barack Obama vowed during his campaign to support regulation to promote so-called net neutrality, and received significant campaign contributions from Silicon Valley. Mr. Genachowski, a Harvard Law School buddy of the president, proposed new net neutrality rules as his first major action as FCC chairman.

Telecom executives say privately that limits on their ability to change pricing would make it harder to convince shareholders that the returns from spending billions of dollars on improving a network are worth the cost.

Carriers fear further regulation could handcuff their ability to cope with the growing demand put on their networks by the explosion in Internet and wireless data traffic. In particular, they worry that the FCC will require them to share their networks with rivals at government-regulated rates.

Mike McCurry, former press secretary for President Bill Clinton and co-chair of the Arts + Labs Coalition, an industry group representing technology companies, telecom companies and content providers, said the FCC needs to assert some authority to back up the general net neutrality principles it outlined in 2005.

"The question is how heavy a hand will the regulatory touch be," he said. "We don't know yet, so the devil is in the details. The network operators have to be able to treat some traffic on the Internet different than other traffic—most people agree that web video is different than an email to grandma. You have to discriminate in some fashion."

UBS analyst John Hodulik said the cable companies and carriers were likely to fight this in court "for years" and could accelerate their plans to wind down investment in their broadband networks.

"You could have regulators involved in every facet of providing Internet over time. How wholesale and prices are set, how networks are interconnected and requirements that they lease out portions of their network," he said.