policy

FCC Chair: We Need Network Neutrality

The Chair of the Federal Communications Commission has taken a stand for network neutrality - the founding principle of openness of the Internet. In short, network neutrality means the entity providing you access to the Internet cannot interfere with the sites you choose to visit - it cannot speed them up or slow them down in order to increase their profits. See video at the bottom of this post for a longer explanation.

FCC Chair Julius Genachowski recently spoke at the Brookings Institution [pdf] on the importance of an open Internet. He started by noting many of the ways we depend on services delivered over the Internet:

Even now, the Internet is beginning to transform health care, education, and energy usage for the better. Health-related applications, distributed over a widely connected Internet, can help bring down health care costs and improve medical service. Four out of five Americans who are online have accessed medical information over the Internet, and most say this information affected their decision-making. Nearly four million college students took at least one online course in 2007, and the Internet can potentially connect kids anywhere to the best information and teachers everywhere. And the Internet is helping enable smart grid technologies, which promise to reduce carbon dioxide emissions by hundreds of millions of metric tons.

However, because most Americans get access to the Internet from large, absentee-owned profit-maximizing companies who are often de facto monopolies, we have to beware the gulf between community interests and the narrow interests of these companies.

A second reason [for network neutrality rules] involves the economic incentives of broadband providers. The great majority of companies that operate our nation’s broadband pipes rely upon revenue from selling phone service, cable TV subscriptions, or both. These services increasingly compete with voice and video products provided over the Internet. The net result is that broadband providers’ rational bottom-line interests may diverge from the broad interests of consumers in competition and choice.

For this reason and others, the Chair suggested adding two new "freedoms" to the four Internet freedoms [pdf] already recognized by the FCC (freedom to access content, use applications, attach personal devices to the network, and obtain service plan information).

The fifth freedom expands on the first two - to access content and applications. Under these rules, providers will be explicitly prohibited from interfering with legal content - something that is currently less clear (which is why Comcast is suing the FCC over its power to enforce this rule).

The fifth principle is one of non-discrimination -- stating that broadband providers cannot discriminate against particular Internet content or applications. This means they cannot block or degrade lawful traffic over their networks, or pick winners by favoring some content or applications over others in the connection to subscribers’ homes. Nor can they disfavor an Internet service just because it competes with a similar service offered by that broadband provider. The Internet must continue to allow users to decide what content and applications succeed.

And the sixth freedom expands on our previous freedom to obtain service plan information - it expands the required transparency of Internet Service Providers.

The sixth principle is a transparency principle -- stating that providers of broadband Internet access must be transparent about their network management practices. Why does the FCC need to adopt this principle? The Internet evolved through open standards. It was conceived as a tool whose user manual would be free and available to all. But new network management practices and technologies challenge this original understanding. Today, broadband providers have the technical ability to change how the Internet works for millions of users -- with profound consequences for those users and content, application, and service providers around the world.

Note that these are not yet rules, they are potential rules that have to go through the FCC process - something that should be a given as 3 of the 5 FCC Commissioners support Genachowski on the matter and even President Obama has praised the idea.

The LA Times also endorsed the idea, further explaining why it is necessary:

Lobbyists for phone and cable TV companies argue that there's little evidence of ISPs playing unfairly or violating Powell's four freedoms. Yet when the FCC moved to stop Comcast from surreptitiously interfering with a legal file-sharing application last year, Comcast sued, claiming the commission had no power to enforce the principles. It's paradoxical that the government should have to regulate the Internet to preserve its unregulated essence. But with so little competition in broadband service, the major phone and cable companies have the power and the incentive to stop worthy but disruptive innovations in the name of "managing congestion." The FCC should set clear rules that enable ISPs to keep data flowing from all legal services and applications, not just favored ones.

Network Neutrality is a necessary but insufficient rule to protect subscribers. Service providers must not be allowed to interfere with user freedom to boost corporate profits but this is just a small part of the problem outlined by Genachowski above: the divergent interests of profit-maximizing companies and the communities that depend on broadband infrastructure. Community networks are far less likely to interfere with subscriber freedoms, something that will not change even as corporate lobbyists chip away at regulations protecting subscribers from companies like AT&T and Comcast.

Photo used under Creative Commons license from AdamWillis.

Video: 

Verizon Actions Show Carriers Will Not Wire Rural America

In a recent post the NY Times Bits Blog, Saul Hansell reports "Verizon Boss Hangs Up on Landline Phone Business" - something we have long known. Nonetheless, this makes it even more official: private companies have no interest in bringing true broadband to everyone in the United States.

Verizon is happy to invest in next-generation networks in wealthy suburbs and large metro regions but people in rural areas - who have long dealt with decaying telephone infrastructure - will be lucky to get slow DSL speeds that leave them unable to participate in the digital age. These people will be spun off to other companies so Verizon can focus on the most profitable areas.

For instance, Verizon found it profitable to spin off its customers in Hawaii to another company that quickly ran into trouble before unloading most of its New England customer on FairPoint, moves that enhanced Verizon's bottom line while harming many communities (see the bottom of this post and other posts about FairPoint).

Isen has been writing about it recently - picking up on FairPoint immediately breaking its promises to expand broadband access in the newly acquired territories. No surprise there.

Isen also delved deeper into Verizon's actions, with "Verizon throws 18 states under the progress train." He is right to push this as a national story - the national media focused intently on the absence of major carriers in the broadband stimulus package but they seem utterly uninterested in major carriers running away from broadband investments in rural areas.

Though Frontier likes to position itself as a company focused on bringing broadband to rural areas, it offers slow DSL broadband and poor customer service to people who have no other choices - more of a parasite than angel. As long as we view broadband as a vehicle for moving profits from communities to absentee-owned corporations rather than the infrastructure it truly is, we will farther and farther behind our international peers in the modern economy.

Perhaps the most frustrating angle of these transactions are the many ways in which Verizon benefits from stranding thousands of communities. West Virginia is one of the states most impacted by the proposed Verizon-Frontier swap and has generated in-depth coverage of the story.

She [Elaine Harris of Communications Workers of America (telephone employees union)] believes the payoff for Verizon is it cannot only make money selling off its assets, but it can take advantage of a federal tax loophole that allows tax-free mergers between companies. The smaller companies are left saddled with debt and, as a result, can't make the necessary upgrades to existing infrastructure, turning off customers and ultimately leading to work force reductions as dissatisfied customers turn somewhere else.

Trying to figure out how to force absentee-owned, profit-maximizing corporations to bring true broadband to everyone ignores the reality of our market system: we are trying to force the square peg through the round hole. These companies may well invest in urban and suburban areas (though these areas continue to fall behind major cities elsewhere in the world) but they have no reason to invest in rural America. To get the job done, we need smart public investments to ensure everyone benefits from the communications revolution.

When we expanded telephone and electrical infrastructure to everyone, everyone in the United States benefited because networks always become more valuable as they increase in size. More people on the network means increased markets, increased productivity, and a higher quality of life.

Ensuring everyone has quality broadband is not charity for rural folks, it is in all of our self-interest. The narrow self-interests of Verizon, Frontier, and FairPoint (this is not a shot at them, companies are designed to have a narrow self-interest for legitimate reasons) do not line up with our larger national interest - something that too few people understand when dealing with broadband policy.

This is a video offering good coverage of the FairPoint problems:

Photo by Derek Jensen, used under creative commons license.

Indeed, FCC, Stop Ignoring Muni Broadband!

Geoff Daily recently put up "Hey FCC: Stop Ignoring Municipal Broadband!" It is a sentiment I wholeheartedly echo and amplify. If the FCC is going to chart a course for where America is heading, it should start with some communities who are already there - Burlington, VT and Lafayette, LA. These communities have built (Burlington) or are building (Lafayette) that networks that everyone will need if America will retain is leadership position in the 21st century.

There are communities across the country that have found success building and operating their own broadband networks. Despite the caricature that municipal broadband invariably leads to boondoggles, that's just simply not the reality.

That's part of the reason why I think the FCC needed to include municipal representation on these panels. There's a lot of fear, uncertainty, and doubt that's built up around municipal broadband that the FCC needs to be addressing on a factual basis. By not including municipal broadband on these panels I couldn't help but wonder if either the FCC was buying into these falsehoods or if they just didn't think municipal broadband was a significant enough player to include.

The current FCC approach is akin to starting the Interstate Highway system with a series of workshops featuring horse breeders.

In the meantime, the Economist has recognized the need for US regulators to get with the times. Fiber is the future - if it weren't for profit-maximizing companies and their lobbyists, talk of DSL would be followed by laughs.

With broadband networks, the role of the state has less to do with limiting handouts than increasing choice. Fibre-optic networks can be run like any other public infrastructure: government, municipalities or utilities lay the cables and let private firms compete to offer services, just as public roadways are used by private logistics firms. In Stockholm, a pioneer of this system, it takes 30 minutes to change your broadband provider. Australia’s new $30 billion all-fibre network will use a similar model.

Broadband Policy: Beyond Privatization, Competition, an Independent Regulation

Publication Date: 
April 6, 2009
Author(s): 
Larry Press, California State University, Dominguez Hills

Larry Press takes a rather quantitative approach to demonstrating that the deregulatory telecommunications policies of the past few decades have failed to produce the desired outcomes. We are currently at a key turning point in history: the policies we enact today will have repercussions throughout the entire decade. Fiber is replacing copper, the question is who will own it because owners make rules.

During the last 25 years, telecommunication has moved away from government–owned or regulated monopolies toward privatization with competition and oversight by independent regulatory agencies — PCR policies. We present data indicating that PCR has had little impact on the Internet during the last ten years in developed or developing nations, and discuss the reasons for this. We then describe several ways government can go beyond PCR, while balancing needs for next generation technology, decentralized infrastructure ownership, and immediate economic stimulus. We conclude that there is a need for alternatives to the expedient action of subsidizing the current Internet service providers with their demonstrated anti–competitive bent. The decisions we make today will shape telecommunication infrastructure and the industry for decades.

Universal Service History

Keywords:

For three quarters of a century, the Communications Act has defined a successful communications policy as fostering ubiquitous, affordable service available on a nondiscriminatory basis in competitive markets. The penetration of phone service of over 90% for a quarter of a century in this country, as compared to penetration rates in most of the rest of the world, was widely touted as an example of our success as a nation and as critical to maintaining a unified society in which all had access to a technology critical for health, safety, and economic advancement.

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