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The Short Memory of Network Neutrality Sell-Outs

Today, the FCC is poised to pass a half-ass attempt to preserve the open Internet against the interests of massive gatekeepers like AT&T and Comcast. Tim Karr rightly calls it Obama's "Mission Accomplished" moment.

Fortunately, the likely result will be a couple of years in the courts before the rule is thrown out because the FCC has not properly ground its half-ass actions in any authority it has received from Congress. Perhaps when the FCC next has to deal with this, we'll have an FCC Chairperson with a backbone and a stronger interest in what is best for hundreds of millions of Americans than what is best for AT&T and a few other corporations.

The FCC and supporters of this let's-keep-the-Internet-partly-open "compromise" will lump all critics as being extremist looneys. (Okay, the Republicans who oppose this might fit that description as they are literally making things up or totally confused about what is being decided).

But let's look at the crazy looney rhetoric of FCC Chair Genachowski last year:

Genachowski proposed that the FCC formalize its four principles of network openness. To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled:

  • to access the lawful Internet content of their choice.
  • to run applications and use services of their choice, subject to the needs of law enforcement.
  • to connect their choice of legal devices that do not harm the network.
  • to competition among network providers, application and service providers, and content providers.

To these, Genachowski proposed adding two more: The first would prevent Internet access providers from discriminating against particular Internet content or applications, while allowing for reasonable network management. The second would ensure that Internet access providers are transparent about the network management practices they implement.

Not only has Genachowski sold out on what he once stated was absolutely necessary to maintain the Open Internet, he has rolled back the protections instituted by the Bush Administration FCC.

Obama, meanwhile, is now embracing the rules that will lay waste to what he once thought was "one of the best things about the Internet."

Asked in 2007 if he would "make it a priority in your first year of office to re-instate net neutrality as the law of the land" and "pledge to only appoint FCC commissioners that support open Internet principles like net neutrality," candidate Obama responded by saying: "I am a strong supporter of net neutrality," said Obama. "What you've been seeing is some lobbying that says [Internet providers] should be able to be gatekeepers and able to charge different rates to different websites.... so you could get much better quality from the Fox News site and you'd be getting rotten service from the mom-and-pop sites. And that I think destroys one of the best things about the Internet—which is that there is this incredible equality there.... as president I'm going to make sure that is the principle that my FCC commissioners are applying as we move forward."

And now we have learned that Obama's FCC has embraced the cowardly tactic of delaying the publication of these rules until they will be forgotten among the Holidays. To recap: For the past few weeks, AT&T and the FCC Chair have been writing the rules governing the few companies who control access to the Internet for hundreds of millions of Americans. Today, the FCC will vote on those rules. The public will get to see those rules sometime during the Holidays later this week or next week.

This is yet another reason communities cannot trust the federal government to govern the massive companies that control access to the Internet. Most communities can build their own networks, if they choose, and offer fast, affordable, and non-discriminatory access to subscribers. Communities that are preempted by state law should organize to change those laws.

Update: For a less ranty and more informative take on this issue, please read Harold Feld's take at Public Knowledge:

Nor is it that Genachowski himself has any doubt about what an open Internet requires. Genachowski has spoken eloquently about the dangers of creating Internet fast lanes and toll roads. He continues to preach the value of wireless and how there must be “one Internet.” So why, with a majority firmly in hand and no obvious gains from holding back, does Genachowski refrain from taking the last step and defining these things clearly in the rules themselves? Genachowski justifies his decision through what has become the almost de rigueur exercise of invoking competing “extreme” straw-men and placing himself in the mythical center, as if rhetorical geography constituted leadership. Unfortunately, it would seem that Genachowski has not demonstrated Solomonic wisdom, but rather pursued a policy of political expediency by pushing all the truly hard decisions off to some future judgment day.

Comcast, Level 3, Peering, and a Bad Best Case Scenario

So Comcast and Level 3 are in a peering dispute following the Netflix partnership with Level 3 to distribute their streaming movie service. Studies suggest Netflix movie streaming has become a significant chunk of Internet traffic, particularly at peak times.

A quick primer on peering: the Internet is comprised of a bunch of networks that exchange traffic. Sometimes one has to pay another network for transit and sometimes (commonly with big carriers like Comcast and Level 3) networks have an agreement to exchange traffic without charging (one reason: the costs of monitoring the amount of traffic can be greater than the prices that would be charged). (Update: Read the Ars Technica story for a longer explanation of peering and this conflict.)

Comcast claims that Level 3 is sending Comcast 5x as much traffic as Comcast sends to Level 3 and therefore wants to charge Level 3 for access to Comcast customers. Of course, as Comcast only offers radically asymmetrical services to subscribers, one wonders how Level 3 could be 1:1 with Comcast…

At Public Knowledge, Harold Feld ties the dispute to network neutrality:

On its face, this is the sort of toll booth between residential subscribers and the content of their choice that a Net Neutrality rule is supposed to prohibit.  In addition, this is exactly the sort of anticompetitive harm that opponents of Comcast’s merger with NBC-Universal have warned would happen — that Comcast would leverage its network to harm distribution of competitive video services, while raising prices on its own customers.

Susan Crawford

Susan Crawford wrote a lengthier piece about Comcast, Netflix, network neutrality, set-top boxes and NBC that is well worth reading (as is just about anything she writes).

However, for the purposes of this post, we will assume the 5x traffic imbalance is true (and unique and that Comcast has no ulterior motive for charging Level 3 (and its partners like Netflix) a fee for anti-competitive reasons (like its own TV Everywhere service). I want to explore the world in which Comcast has pure motives to explain why even in that world, policy should address the market power of Comcast.

Comcast wants to charge Level 3 for access to their customers, which means that content distributed by Netflix has a disadvantage relative to content distributed by Comcast. Even before buying NBC (does anyone really expect the Obama Administration to halt this terrible merger?), Comcast owned content creators. In fact, it has long used its market power as a massive cable distributor to acquire a stake in channels -- as detailed here and here.

As a Comcast customer, it becomes harder and harder for me to choose content not owned by Comcast. Even if Comcast does not act anti-competitively, the content it owns is simply easier for me to find and access. This creates a barrier for new content providers (and encourages Netflix to give Comcast a stake in the company).

These inevitable barriers to entry, even when Comcast is not abusing its power exemplify the problems of massive scale for a company that owns both content and the (increasingly sole) means of transmitting it.

A far better arrangement is structural separation, where the network owner has no stake in the content transferred. This observation informs our preference for community owned networks -- ideally open access networks with a multitude of independent service providers. Even if Comcast behaves itself, it has too much control over the future of content -- from web sites to television programming.

FCC and Network Neutrality - A Quick Take

A quick reaction to the court decision that the FCC cannot currently prevent Comcast from telling subscribers where they can and cannot go on the Internet: This is what happens when private companies own infrastructure.

Comcast owns the pipes so it makes the rules. The FCC, authorized to regulate "all interstate and foreign communication by wire or radio" by Congress, most assuredly is supposed to have the authority to ensure Internet Service Providers cannot arbitrarily block some websites to subscribers. Whether it really has the power or not is determined by courts - and the courts are massively swayed by the arguments of Comcast, related trade associations, and powerful organizations like the US Chamber of Commerce. So long as Comcast and other massive corporations own the infrastructure, they will make the rules. We can attempt to fiddle at the edges by responding via the FCC, or we can build public infrastructure (over which they can provide services without making the rules) and avoid this entire problem.

On this particular issue, though, I found the following bits helpful in understanding the decision and how it changes federal policy.

Cecilia Kang of the Washington Post posted a video interview with Ben Scott of Free Press that is well worth watching to understand what is at stake and what is not. For instance, the FCC is not proposing to regulate the Internet so much as the wires and transmissions that allow the Internet to run. As long as Comcast can decide what bits it wants to transport (as in, it will transport bits from CNN but not Fox News, for instance), the open Internet is at risk. Ben Scott also appeared on the excellent Diane Rehm show that asked Who Controls the Internet?

If you really want to get into the nuts and bolts of what the Court said, you never go wrong by starting with an analysis by Harold Feld, who notes (with more authority than I when yelling back at my radio at misinformed tech reporters) that lots of folks are talking about this decision (including a certain FCC Commissioner) without understanding what the ruling actually said.

The FCC does not require an additional grant of power from Congress to enforce network neutrality, as noted by Public Knowledge:

The real tragedy of today’s ruling is that this entire issue is a self-inflicted wound by the FCC. When it decided not to regulate broadband Internet under Title II (by placing cable broadband into Title I and moving DSL broadband from Title II to Title I), it turned its back on a specific delegation of powers from Congress. There would be no debate about ancillary authority if the FCC were to recognize that broadband Internet is a Title II “telecommunications” service. The FCC has the statutory power it needs if it chooses to use it.

Photo used under Creative Commons license from AdamWillis.

Broadband - An Ecology, Not a Market

Harold Feld at Public Knowledge created another five minute video on broadband policy - embedded below - that I heartily recommend. This video fits in nicely with my recent posts discussing comments submitted to the FCC on the definition on broadband, and more recently, on why the definition matters. If you want to dig in deeper to Harold's comments, I recommend his blog.

If you take one thing away, remember that broadband is not a simple market of sellers and buyers, it is an ecology - impacting everything from energy efficiency to education to entertainment ... and those are just some of the e's.

Video: 
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