Over 100 Internet Companies Call On FCC To Protect The Open Internet

from the don't-fail-us-fcc dept

As the net neutrality debate has kicked into overdrive, over 100 internet companies — including most of the big names such as Google, Facebook, Twitter, Microsoft, Netflix, Amazon, Ebay, Reddit, Automattic, Yahoo, Kickstarter, as well as many smaller names, such as us here at Floor64/Techdirt — have all signed onto a letter to the FCC asking it to actually suck it up and protect the open internet. Consider this a warning shot to the FCC from the internet community. The community knows what’s at stake in this fight and it’s watching closely what the FCC does. Having helped to get some of the companies to sign on, I can say that many leaders at companies are both very informed on the topic, and very engaged about it. If the FCC thinks it can sneak one by the tech community, that may be more difficult than it expects.

Along those lines, one FCC commissioner, Jessica Rosenworcel, has suggested that the FCC should put the brakes on its net neutrality plans to think things through a bit more carefully — though apparently FCC boss Tom Wheeler has rejected that idea and plans to move forward with his rule-making proposal next week.

Filed Under: broadband, fcc, jessica rosenworcel, net neutrality, open internet, silicon valley, tech industry, tom wheeler
Companies: amazon, automattic, ebay, facebook, floor64, google, kickstarter, microsoft, netflix, reddit, twitter, yahoo

How Comcast Is Trying To Turn The Internet Into The Old, Broken Phone System

from the all-while-avoiding-being-called-a-telelcom dept

Each day, the open internet/net neutrality battle gets a bit more interesting. We just covered Tim Lee’s excellent look at how Comcast and other big telcos were effectively using interconnection disputes to get the same result as violating net neutrality, without technically violating the basic concept of what most people believe is net neutrality. And he’s back with an even more important explanation of how Comcast’s ultimate goal is to effectively make the internet more like the old phone system, post AT&T breakup, in which everyone had to pay to access the end points of the network. Ironically, they’re trying to recreate the internet in the form of the old telephone network, while at the same time doing everything to resist being classified as a telephone network by the FCC.

The short version is that, after AT&T was broken up into the baby bells, and you had some amount of long distance competition, the real bottlenecks were the baby bells who had a terminating monopoly. Anyone who wanted to call someone long distance had to pay the terminating baby bell to reach those people, and since they were monopolies, they drove up the prices quite a bit. This is what happens under a sender-party pays system with monopolies on the last mile/termination points. The internet, on the other hand, was built under a very different system, what’s known as “bill and keep”, where by the end users pay for their own bandwidth, and ISPs are expected to work out the transit and interconnections on their own — often with no money changing hands, thanks to what had been mostly informal (and later more formal) peering agreements.

In short: under the old baby bell model, payment mainly went from the “sender/caller” to the terminating provider for access to that end node. Under the internet model, the end nodes paid for access to “the internet” recognizing that part of the deal was that they were getting equal access to everyone else. The shift that Comcast (and now others) have been making, is to try to take their dominant position to recreate the old system, seeking to charge for access to those end nodes as well (effectively, as we’ve been saying for years, double charging for the internet). That is, they’re seeking to have you both pay for your bandwidth and having internet companies pay again to get to you on the bandwidth you already paid for.

And the only reason they can do this is because they have tremendous market power. Comcast pretends that it’s doing this because of differing traffic ratios between peering partners, but as Lee notes, that’s not right:

But that’s not how the internet works. Consumer-facing ISPs have always received more traffic than they send out. Comcast itself sells “unbalanced” internet service to its customers, with download speeds much faster than upload speeds. That makes it inevitable that ISPs like Comcast will receive more data than they send. But in the bill-and-keep model, ISPs generally pay transit providers for connectivity, regardless of traffic ratios.

The traffic ratio rule Comcast advocated in 2010 was a variation on the sender-pays rule. It will create the same kind of terminating monopoly problem that plagued the long distance telephone market. But that might not seem like a bad thing if you own the monopoly.

Again, what’s really happening is that Comcast is trying to quietly recreate the baby bell system of old, in which it has enough power as a terminating monopoly to charge monopoly rents for “access” in a system that was built off of the idea that no one needs to pay to access another end point, you’re just paying for your own connection to the network.

And the simple fact is that the other large ISPs (including AT&T and Verizon — who understand this deeply, given their own histories) have caught onto what’s happening and are doing the same thing. That’s why the transit players are pointing out that the five biggest US ISPs have all been effectively clogging up the internet in order to effectively hold end internet sites hostage, to get them to pay for access, and to remake the internet’s more open system into something that much more resembles the old telco system with monopoly rents.

And this is also why Comcast is being dreadfully misleading in arguing that its merger with Time Warner Cable won’t impact anything, because the two are not in competitive markets. As Lee notes, Comcast is (purposefully) mis-identifying the market that’s actually important here:

Defenders of the merger have argued that it won’t reduce competition because Comcast and Time Warner don’t serve the same customers. That’s true, but it ignores how the merger would affect the interconnection market. A merged cable giant would have even more leverage to demand monopoly rents from companies across the internet.

A century ago, the Wilson administration decided not to press its antitrust case against AT&T, allowing the firm to continue the acquisition spree that made it a monopoly. In retrospect, that decision looks like a mistake. Wilson’s decision not to intervene in the market led to a telephone monopoly, which in turn led to 70 years of regulation and a messy, 10-year antitrust case.

Obviously, the combination of Comcast and Time Warner would not dominate the internet the way AT&T dominated the telephone industry. But recent events suggest that Comcast is already large enough to threaten competition on the internet. Preventing the company from getting even larger might avoid the need for a lot more regulation in the years ahead.

The interconnection market is where Comcast has tremendous leverage, and Time Warner Cable will only give them much more leverage. And they’re using it to reshape the internet in a very dangerous way, which will make internet connections more expensive, with no direct benefit. On top of that, it will slow down the ability for startups to create new innovations by increasing the cost (potentially massively) to innovate on the network by creating access tolls.

Oh, and the major problem is that the FCC still doesn’t even seem to realize this is the issue, with Tom Wheeler arguing that the interconnection issue isn’t really an issue at all, despite it likely being the issue here. As Lee explains concerning telco regulations around a terminating monopoly system: Unfortunately, while all-knowing perfectly benevolent regulators could make this work, in practice regulators tend to be neither all-knowing nor benevolent. So imagine what kind of internet we’ll have when you recreate the terminating monopoly tollbooths, combined with regulators who still don’t seem to even realize what’s going on.

Filed Under: bill and keep, interconnection, monopoly powers, net neutrality, sender pays, termination monopoly
Companies: comcast

Mozilla To FCC: Hey, There's Another Way To Protect Net Neutrality

from the have-you-thought-of-this? dept

With all the hand-wringing over the FCC and net neutrality, the folks over at Mozilla have jumped into the fray, offering the FCC another possible path. Much of the fight is over whether or not the FCC should “reclassify” broadband providers under Title II of the Telecommunications Act, thereby making them “telco services” (subject to common carrier rules) or leave them under Title I as “information services” (not subject to common carrier rules). The problem is that even though they almost certainly should be telco services, the political shitstorm it would create to reclassify means that no one in the FCC seems to have any interest in kicking off that particular political battle (not to mention that the FCC would be required to have a very good reason for why it’s changing the designation — beyond just “we think it’s better.”)

Mozilla’s plan is a somewhat crafty attempt to avoid the worst of the political mess that reclassification would cause, by arguing that there are two separate markets: the markets for broadband providers to end users (i.e., our own broadband bills) and then a separate market for the relationship between internet companies (what Mozilla is calling “edge providers”) and the broadband providers. Mozilla is saying that since these are separate markets, the FCC could reclassify just the connection between internet companies and broadband providers as telco services, and leave the last mile setup unchanged as an information service. Thus, it’s arguing that the transit market more accurately reflects a telco service, and thus would be much easier to reclassify. In a sense, this would also be a way to attack the interconnection problem, which is where the net neutrality debate has effectively shifted.

As Stacey Higginbotham notes, this is a way that Mozilla is more or less calling FCC boss Tom Wheeler’s bluff concerning his willingness to use Title II reclassification — opening up a way to do so with (just slightly) less political fallout (and probably a more legally defensible argument in court for why it’s reclassifying). Karl Bode is reasonably skeptical that Wheeler or the FCC would ever actually go this route, given the general “lack of spine” the FCC has shown for years on these issues. On top of all that, Wheeler himself still doesn’t seem willing to admit (publicly, at least) that the fights over interconnection and access are related to the net neutrality problem, so he’d have to make that leap before necessarily agreeing to try this path.

Still, that doesn’t mean it’s a bad idea. In fact, by making it just slightly more feasible both politically and (importantly) legally, there’s a chance that maybe, just maybe, the FCC will seriously look at this option. I’ll agree that the probability is still quite low, but it’s not zero. There do appear to be folks in the FCC who have been desperately seeking alternatives to the current, unpalatable options on net neutrality, and Mozilla’s suggestion offers a path that is less politically and legally fraught than full reclassification. It would still be a massive leap, and would require an FCC with a spine (which makes it unlikely), but it’s just that much more likely than full reclassification to make things interesting.

Filed Under: broadband, competition, fcc, interconnection, multiple markets, net neutrality, open internet, title ii
Companies: mozilla

Interconnection: Or How Big Broadband Kills Net Neutrality Without Violating 'Net Neutrality'

from the routing-around-the-problem dept

For years now, every time the net neutrality debate starts getting really confusing, Tim Lee comes along and puts it all into useful perspective. Six years ago, there was his exceptionally useful position paper on net neutrality for the Cato Institute. A couple years ago, he wrote another great piece for National Affairs magazine that deftly explained why the internet wasn’t competitive and why that’s a problem. Now working for Vox, he’s put together a great piece that explains the technical difference between the interconnection fights and the net neutrality battle — but also explains how the end result is basically the same.

There has certainly been plenty of discussion about Netflix’s recent interconnection deals — starting with Comcast back in February, and Verizon just recently. As we noted back in February about the Comcast/Netflix deal, it wasn’t really a net neutrality issue, because it was about interconnection, but we were equally worried about how this really demonstrated the monopsony power of major broadband providers. Lee’s latest Vox piece dives much deeper into that distinction, and highlights some key insights:

1. These are not technically “net neutrality” violations. The animated graphics in the Vox piece do a great job explaining why. Just go look.
2. But that might not matter, because the end result is basically the same.
3. Because of that, this is a really effective way for the big broadband providers to pay lip service to net neutrality, while getting exactly what they want anyway.
4. The real problem, as always, is too much market power by the big broadband players, allowing them to do an “evil” thing almost no one thought they would do.

To explain the first point, you basically have to recognize that with the interconnection issue, Comcast and others aren’t technically “favoring” Netflix (or anyone) on their own network, but are rather setting up deals that favor that content off their network, but right up until it hits the last mile. And they’re doing this by purposely letting their connection to other transit providers pile up. And that’s why the end result is the same, but allows Comcast to technically be correct that they’re not violating net neutrality, while creating the identical end result for most of the major players:

Comcast says it wasn’t deliberately degrading the performance of Netflix traffic, which would have been a violation of network neutrality. But that implies that every website that used the same transit provider as Netflix was experiencing similar performance problems. That’s obviously bad for Comcast customers, and it’s also bad for startups that are trying to become the next YouTube or Netflix. If the only way to get excellent service on America’s largest broadband networks is to negotiate a private connection directly to those networks, smaller companies with less cash and fewer lawyers are going to be at a competitive disadvantage.

In other words, those public transit links that were providing Netflix with subpar service could become the de facto slow lanes on Comcast’s network, while private, direct connections could become the fast lane.

It’s a neat trick. Comcast doesn’t have to favor or disfavor any particular traffic. It just conveniently neglects to do the most basic things to make sure traffic flows smoothly from the various transit players — and then offers to negotiate direct deals with big players to bypass third-party transit providers. Thus, it’s not “favoring” anyone on its network. It’s just creating a situation that favors those who pay up to access its network.

And, again, the FCC doesn’t seem to recognize this at all. Tom Wheeler has been fairly explicit that he doesn’t view the interconnection issue as relevant to this discussion yet. And the various rules that are being fought over won’t have any impact one way or the other on interconnection. And, as Lee’s article describes, part of the reason all the commotion has been focused “over there” on “net neutrality” rather than “over here” on “interconnection” is because the very idea of Comcast doing what Comcast has been doing these past few years just seemed impossible to consider not too long ago:

One reason for this is that Comcast’s hardball tactics are relatively new. According to Wu, “we never thought much about” interconnection issues when the concept of network neutrality was developed in 2002. That was “mainly because it seemed like, ‘Why would anyone do that?'” It was generally assumed that consumer ISPs would always buy enough transit to serve their customers’ needs.

Wu worked in Silicon Valley prior to 2002. And he says he remembers that “solving a joint technical challenge” — that is, making the internet work as well as possible — “was the predominant motivation of the engineers.” That’s still true in most parts of the internet. But some of the largest ISPs now seem to view declining network performance not as a technical problem to be solved so much as a source of leverage in business negotiations.

That last line is worth repeating: Big ISPs view declining network performance as a source of leverage, rather than a technical problem.

And the only reason they can do this is because of the tremendous market power they have. And, once again, as we’ve argued for over a decade, that demonstrates the real heart of the problem: the lack of real competition in the broadband space. Either way, it’s yet another must read if you’re trying to understand the state of play today.

Filed Under: broadband, fast lanes, interconnection, monopoly power, net neutrality, power
Companies: cogent, comcast, level 3, netflix

What Inefficient Airline Boarding Procedures Have To Do With Net Neutrality

from the more-than-you-might-think dept

Search the internet and there are tons of articles about more efficient ways to board airplanes. Many will point to the work of astrophysicist Jason Steffen who algorithmically tested a variety of boarding methods to come up with his optimized version. The best demonstration of this particular method is in this YouTube video where the Steffen method was tested.

The short version is that you board alternate rows at a time, starting with the window seats on one side first, then on the other, then a similar process with middle seats and aisle seats.

What does any of this have to do with net neutrality? Well, Vox.com recently had an article about the Steffen method, along with a variety of other airplane boarding methods, and notes that the way we board airplanes makes absolutely no sense. In fact, the report suggested that (other than Southwest Airlines — which lets passengers just pick their own seat) most airlines pick the absolute worst ways to board, massively increasing the time needed for the boarding process.

So here’s the question: why haven’t airlines adopted these better methods, instead sticking with what are clearly the worst methods? Everyone seems to agree that speeding up turnaround times could save airlines a tremendous amount of money. Steffen himself has estimated that faster turnaround could save the airline industry over a billion dollars. So you’d think they’d do that. But…they don’t. And Vox points out why:

One possible answer is that the current system actually makes them more than they’d save by switching. As Businessweek pointed out, airlines often allow some passengers to pay extra to board early and skip the general unpleasantness. If the entire boarding process was faster to begin with, many people might not pay extra to skip it.

For passengers, though, this makes no sense. Most of us are waiting in line longer than necessary, and those who pay extra are sitting on planes longer than necessary. No one is getting to their destinations any faster, and everyone is paying higher base prices for tickets, because airlines have to pay extra to the crew for their time used during these delayed turnarounds.

In fact, that same BusinessWeek article notes that boarding times are getting much longer over time, and also details how various airlines seem to revel in making the whole process as confusing and annoying as possible — while offering fees to folks who want to “upgrade” to a better experience.

And that, finally, takes us to the net neutrality connection. Broadband providers insist they need to do things like prioritize some traffic in order to deal with network congestion, but that’s bogus. It’s only the non-technical management who makes those claims. Ask the technology guys, and they will quickly say that basic upgrades can easily accommodate all traffic. But the broadband providers are now like the airlines. They could very easily offer a better overall service, but they’re quickly recognizing that by offering a crappy service, they can charge more to get a select few to pay up for a “fast lane” approach. So the incentives are totally screwed up. There’s little incentive for airlines to improve the boarding process, so long as having such a crappy process leads people to pay extra fees to avoid the crappy process.

In the broadband space, it’s even worse, because there’s even less competition, so there are even fewer incentives for the broadband providers to actually do the necessary upgrades. Instead, they have all the incentive in the world to make their broadband connections purposely inefficient, to pressure people into paying more. Is it really any wonder that Netflix streaming quality was so terrible until Netflix suddenly agreed to start paying up.

Just like the airlines, broadband providers have little incentive to actually build what’s best, and plenty of incentive to degrade the general experience.

Filed Under: airplane boarding, inefficiency, jason steffen, net neutrality, tolls

Some Good News: FCC's Wheeler Claims FCC Will Preempt State Laws Blocking Broadband Competition

from the now-make-it-so dept

We’re still fairly skeptical about FCC boss Tom Wheeler’s claims that (1) his new open internet rules will actually protect net neutrality or (2) he’s ready to go even further if they fail. However, in his latest attempt to claim that he’s really a defender of an open internet (at a cable lobbying event, of all things), Wheeler also said that he’ll have the FCC preempt state laws blocking municipal broadband competition. If true, this actually could be a big deal. The big broadband players have fought hard against municipal broadband for years, pushing bills in many states. It’s so obvious that these bills are written by the broadband players, that some politicians don’t even hide it.

However, since the Supreme Court said that it was okay to ban muni broadband a decade ago, broadband lobbyists have had a field day, passing such bans in 20 states. For years, we’ve been arguing that the threat against net neutrality is a symptom, not the real problem. It’s a symptom of the lack of competition. And one way to attack the competition problem is via municipal broadband. Yes, some muni broadband projects have failed, but many have been quite successful — and opening up the possibility of competition tends to do amazing things in making the incumbents actually sit up and realize that they need to do a better job.

Given all that, it is a fairly big deal to see Wheeler flat out say that he’s going to knock down those muni broadband bans:

[F]or many parts of the communications sector, there hasn’t been as much competition as consumers and innovation deserve. Given the high fixed costs and consequent scale economies, this isn’t especially surprising. But that makes it all the more important that we knock down public and private barriers to competition and avoid erecting new ones. It is equally important that we encourage competition wherever it is possible.

One place where it may be possible is municipally owned or authorized broadband systems. I understand that the experience with community broadband is mixed, that there have been both successes and failures. But if municipal governments—the same ones that granted cable franchises—want to pursue it, they shouldn’t be inhibited by state laws. I have said before, that I believe the FCC has the power—and I intend to exercise that power—to preempt state laws that ban competition from community broadband.

We’ll see what actually happens. As Jon Brodkin at Ars Technica notes (in the link above), there is still wiggle room, since many of those 20 state bans aren’t technically “bans” — but rather put up huge, impenetrable obstacles to muni broadband. Still, if Wheeler is serious about creating competition this is a very good place to start (though, not nearly enough on its own). Of course, doing so will require fighting the broadband players who, given how much they spent on getting those laws in place, will fight back hard.

Filed Under: bans, broadband, competition, muni broadband, net neutrality, state laws, tom wheeler

FCC's Wheeler Says That If These Lame Net Neutrality Rules Don't Work, He'll Implement The Real Rules Next Time

from the oh-really? dept

Following his weak attempt to diffuse concerns about his bogus “open internet” rules, FCC boss Tom Wheeler has decided to try again, by basically repeating what he said last week with slightly stronger language about how he won’t let broadband providers violate net neutrality. Of course, as many people have explained, the problem is that the new rules clearly aren’t strong enough, and leave open all sorts of ways to kill off basic neutrality online. Of course, the real problem is that the original 2010 “open internet” rules (which were really crafted by the telcos in the first place) didn’t really protect net neutrality in the first place, and the new rules are basically an even weaker version of those rules. But, have no fear, claims Wheeler, if these rules don’t work, he promises he’ll actually pull out the big gun, Title II, and reclassify broadband players as telco services rather than information services, allowing the FCC to put them under common carrier rules.

…all regulatory options remain on the table. If the proposal before us now turns out to be insufficient or if we observe anyone taking advantage of the rule, I won’t hesitate to use Title II. However, unlike with Title II, we can use the court’s roadmap to implement Open Internet regulation now rather than endure additional years of litigation and delay.

There is some truth in what he’s saying. Basically, the appeals court ruling that rejected the previous rules did lay out a roadmap for rules that would be deemed more acceptable under the current classification, and Wheeler’s plans appear to be to do exactly what the court suggested. And, to some extent he’s right that this is the fastest way to get some kind of rules in place. But considering that they’re even more watered down than the original, with the new “required” language leaving enough loopholes to make them meaningless, it almost seems like why bother. The best we could hope for is that Wheeler is actually trying to use the Ed Felten-like concept of “the best form of net neutrality” being one where there aren’t any actual rules, but a constant threat of rules being enforced if the broadband providers stray too far.

But there’s a problem there… in that the broadband providers have already started going too far, and they seem to keep pushing the boundaries further and further each time, without the FCC doing anything, (and in ways that don’t directly impact those “open internet” rules). Also, while Wheeler is right that going the Title II route would create a legal (and political) shitstorm leading to many years of litigation and delay, the same may be true of his new rules. After all, he’s only putting them forth after a four-year legal battle over the old rules.

But the biggest issue is that the FCC still doesn’t seem to realize how the broadband providers have been increasingly chipping away at net neutrality anyway, without any pushback at all. As DSL Reports details, the FCC seems to think that all network neutrality violations are big and obvious, when the reality is quite different:

…the problem is that these days — net neutrality violations are significantly more clever, and usually come dressed up as market innovation or security or network integrity efforts. Historically, if the FCC can’t simply and cleanly prove without a shadow of a doubt that an ISP is acting anti-competitively, the agency simply doesn’t bother doing much of anything (see Verizon Wireless’s anti-competitive behavior on any number of issues or AT&T’s ability to block legitimate video services as prime examples).

What’s considered “commercially unreasonable” is also going to be open to immense ambiguous interpretation. Wheeler for example seems perfectly ok with the increasingly ugly interconnection and peering fights arising between Verizon, Comcast, AT&T and Netflix, and has stated these won’t be included in the rules. He also seems similarly tone deaf to the potential pitfalls facing wireless courtesy of concepts like AT&T’s Sponsored Data, which critics charge will result in deep-pocketed companies (like ESPN) getting a huge leg up on smaller companies that can’t afford AT&T’s toll to be listed as “cap free” content.

Wheeler’s comments to date strongly suggest his threshold for what’s going to be considered anti-competitive behavior will be stratospherically-high, and as is the case now — carriers will still be able to get away with anti-competitive behavior provided they’re relatively clever about it.

Promising to pull out the Title II gun is talking big for a government agency that has been big on talk, but has little history of action. And thus, it’s a threat that doesn’t seem to have much weight.

Filed Under: fcc, net neutrality, open internet, title ii, tom wheeler

How The FCC Plans Neuter The Net, Even As The FCC Insists Everyone's Got It All Wrong

from the from-net-neutrality-to-a-neutered-net dept

So, we already wrote about why Tom Wheeler’s “open internet” proposal is problematic, but Wheeler and the FCC are hitting back on everyone who’s arguing that — telling everyone to calm down, insisting that nothing has changed, and that they’re actually trying to preserve the old “open internet” rules from 2010 that a court tossed out earlier this year.

The problem is that this is absolutely misleading — and either the FCC doesn’t realize this or it’s not being honest. And, I’m not sure which one is more bizarre. Wheeler is, indeed, correct in saying that under the court ruling from earlier this year, in order to be able to do anything under Section 706 of the Telecom Act, they had to shift from talking about “unreasonable discrimination” (which they can’t regulate under 706) to “commercially reasonable” activities (which they can regulate). So, in effect, Wheeler is trying to argue that by basically shifting the basis for the rules and substituting in the “commercially reasonable” standard as opposed to blocking “unreasonable discrimination” (which can be done under common carrier rules, but since the FCC reclassified broadband service as not being a telco service, that’s not available), they’re now back in proper legal territory under the law.

Perhaps Wheeler and his friends at the FCC think that this subtle shift in phrases to abide by the blueprint the court set out really does leave the existing rules in place. But, it’s not that simple. As Stacy Higginbotham points out, even if the FCC doesn’t want to destroy net neutrality, this subtle shift will do so anyway. To understand why, the best article to read is the one by Marvin Ammori, who has been fighting this fight for years. He argues that, unlike the CNET article above that says to “calm down,” we should actually be even more worried. Because even if the FCC thinks it can stop net neutrality violations, companies are still going to get screwed. Basically, the FCC can only act after the fact, and then it’s going to come down to a fight between a big telcos’ lawyers… and a tiny startups’ lawyers. Guess who wins?

The FCC will propose an incredibly vague and complicated multifactor test, one that takes into account the market conditions, technology, alternatives available to each side, competitive dynamics. This is the kind of stuff that requires very expensive expert witnesses in very expensive legal proceedings. There may be up to 16 factors listed, plus a catch-all for “other factors.”

So, according to the FCC, when Verizon discriminates against a startup, we shouldn’t be alarmed, because (while being discriminated against), this startup can hire a lot of expensive lawyers and expert witnesses and meet Verizon (a company worth more than $100 billion) at the FCC and litigate this issue out, with no certainty as to the rule. The startup will almost certainly lose either at the FCC or on appeal to a higher court, after bleeding money on lawyers.

He’s not basing this on some theoretical crystal ball. It’s already happened — and it’s obvious from the Court’s ruling earlier this year:

Back in January, the D.C. Circuit struck down the FCC’s last attempt at net neutrality, saying that Section 706 does not permit the commission to stop nondiscrimination. It pointed to another legal decision, concerning data roaming, in which the FCC adopted a 16-factor test like the one I explained above. Based on an earlier case, the FCC can probably ban one or two specific practices, such as blocking certain websites or applications. That’s about it.

So here’s the issue: the old rules were incredibly weak and nearly pointless in the first place. They didn’t apply to wireless (nor, apparently, will the new rules) and they didn’t really protect net neutrality. They were crafted, in part by the telcos, through a long-drawn out process, in which the former FCC boss tried to keep everyone happy and ended up pleasing no one. That’s why we were a little perplexed at the outrage over those rules being thrown out earlier this year in the first place. Those rules were nothing great.

The problem is that this new proposal isn’t just “those same old rules” as the FCC would like you to believe. Instead, they’re the same old rules, made weaker at the critical juncture by the necessary legalese change to “commercially reasonable” and by the clear nature of what the court says the FCC is able to do under Section 706. And while some think the answer is to shift broadband back under Title II and put them under common carrier rules, that’s almost certainly a political impossibility — which is why Wheeler is trying to thread this needle.

As we’ve said for a decade now, the underlying problem is a lack of competition. These kinds of rules, including things like transparency into the crap that the telcos are pulling only matter if you have options. When you don’t, then they can be transparent as to how they’re screwing you over, and there’s really just not much you can do. And that’s kind of the situation we’re in today. Wheeler claims this is no change and people are overreacting, but what they’re realizing is that the existing rules in 2010 were kind of a joke anyway, and what little power they had to keep the internet open and non-discriminatory back then is now pretty much gone with this new wording. So, Wheeler may not want to be killing off the open internet, but the end result may be exactly that.

Filed Under: commercially reasonable, discrimination, fcc, net neutrality, open internet, tom wheeler

Weasel Language In Proposal For FCC's New 'Open Internet' Rules Actually Opens The Door To An End To Net Neutrality

from the fast-lane dept

Yesterday reports started leaking about how FCC boss Tom Wheeler was getting ready to release his proposal for “new” net neutrality rules, to be voted on in a few weeks. They’ve now been introduced — and Wheeler insists that all the whining and hand-wringing from yesterday was wrong. Except that’s not true.

These new proposed rules are a response to a court tossing out the FCC’s 2010 rules for not actually falling under the FCC’s mandate. We pointed out that if the FCC were serious (and it’s not), it should be focusing on increasing competition (which it’s not). Congress certainly isn’t going to do anything. Like previous FCC bosses, Commissioner Tom Wheeler has made it pretty clear that he’s too timid to do anything serious, and instead will seek to find some sort of weak middle ground. Because there seems to be a rule that, if you’re to become FCC Commissioner, you can’t take a solid stand, but instead have to take a weak middle ground position and pretend it’s a strong stand.

But what’s currently being suggested may actually be worse. Because this opens the door to killing off net neutrality while pretending it’s supporting net neutrality. As Stacey Higginbotham points out, even if Tom Wheeler believes this proposal makes sense, it’s pretty ridiculous to claim it’s net neutrality or about protecting an open internet. Wheeler should step up and admit what he’s doing: killing off net neutrality to create a system that lets the big broadband providers double charge — and then explain why he thinks that’s necessary. Pretending this is net neutrality is a joke. Here’s the basic proposals:

1. That all ISPs must transparently disclose to their subscribers and users all relevant information as to the policies that govern their network;
2. That no legal content may be blocked; and
3. That ISPs may not act in a commercially unreasonable manner to harm the Internet, including favoring the traffic from an affiliated entity.

The key issue is that last one, in which the FCC claims it will still have the ability to stop “commercially unreasonable” activities by broadband providers, while refusing any attempt to explain what commercially unreasonable means. At the same time, it makes it pretty clear that “commercially reasonable” (again, undefined) rules will be allowed — and it’s likely this means allowing ISPs to create “fast lanes” by which they can charge more, so long as anyone with a lot of cash can also pay more.

This is not net neutrality. Yes, the 2nd rule means that no ISP will get away with the outright banning of access to websites, but no ISP was seriously considering that anyway. This bans a practice no one was going to do, meaning it doesn’t ban anything. But by opening up “commercially reasonable” discrimination, it’s allowing ISPs to create privileged “fast lanes” by which large internet players can “pay” to have preferred access to users. If you have a fast lane, by definition you also need a slow lane. So the (reasonable) fear here is that smaller entities, who can’t pay for the fast lane, basically start out with degraded service compared to the big guys who can (and will) pay.

That means that services that don’t pay up are throttled. By definition.

It’s exactly what the big ISPs have wanted all along, which is a system to double charge big companies, who will now have to pay for both their own bandwidth and a portion of your bandwidth. If you think “hey, I already pay for my bandwidth,” you’re right. And now you’ll likely have to pay much more, because the big companies who pay are going to pass the costs on to you. And, you’ll have fewer interesting new services because the barriers to entry will be higher. So, the end result is the immensely profitable duopoly of internet service providers get more profitable and you pay more. Big internet companies pay off the broadband providers to stay fast, while startups and innovation are basically more difficult to create, because they’re going to have to set aside a huge chunk of money to pay for some of the bandwidth that you’re already paying for (and probably not getting anyway).

The Comcasts and AT&T’s and Verizons of the world are going to parade up and down about how this will let them invest in better networks and provide better services, but there is absolutely no incentive here for them to actually do so. In fact, they have every incentive in the world to degrade service in the “slow lane” to make it less useful, driving more companies to need to pay for the fast lane.

These aren’t rules for an open internet or for net neutrality. These are rules to kill that off.

“Commercially reasonable” are the weasel words here that effectively sell out the internet. The old rules were dreadful, and these rules are still just in proposal stages, but Wheeler’s first foray into net neutrality is a joke. He’s doing the same thing as his predecessor in refusing to stand up and say what he actually means, because he knows that what he’s proposing is bad news.

Filed Under: broadband, commercially reasonable, commercially unreasonable, fast lane, fcc, net neutrality, open internet, slow lane, throttle, tom wheeler

Protests Mount Against Mexico's Proposed Telecommunications Law, Which Would Bring In Censorship, Allow Real-time Surveillance And Kill Net Neutrality

from the toxic-mix dept

Many people will be familiar with the name Carlos Slim as intermittently the richest person in the world, generally vying with Bill Gates for that title. Some will probably be aware that his huge fortune — currently listed as $69.67 billion in his Wikipedia entry — is derived from a business empire based on telecommunications. But as this article in the Los Angeles Times points out, ordinary Mexicans have paid a high price for his success — literally:

telephone service, both land-line and cellular, is dominated by companies owned by Mexican tycoon Carlos Slim, one of the world’s richest men, who has grown his businesses throughout Latin America. That means Mexicans pay some of the world’s highest prices for some of the spottiest phone service.

Nor is that the only sector in Mexico where business power is highly concentrated:

For years, most of Mexican television has been dominated by a single company, Televisa, the largest broadcaster in the Spanish-speaking world. (Most of the rest is controlled by another single company, TV Azteca.)

On the face of it then, a new Mexican telecoms law that aims to loosen the grip of those dominant companies should be a good thing. But increasingly people are worried that its bad elements may outweigh the good, as Global Voices explains:

Billed as an effort to break up Mexico’s notorious telecommunications and broadcast monopolies, the law covers a broad range of electronic communications issues — and treads heavily in human rights territory. At the behest of the “competent” authorities, the law authorizes telecommunications companies to “block, inhibit, or eliminate” communications services “at critical moments for public and national security.” The law also authorizes Internet service providers to offer service packages that “respond to market demands” and differentiating in “capacity, speed, and quality” — a measure that could preclude protections for net neutrality in the country. To top it off, security measures in the law would allow authorities to track user activity in real time using geolocation tools, without obtaining prior court approval.

That’s a pretty toxic mix — censorship, real-time surveillance and no net neutrality. The good news is that Mexicans are starting to mobilize against the proposed measures:

ContingenteMX, a nonprofit collective consisting of Human Rights, environmental and social network activists and citizens, hereby demands a guarantee that the inalienable right of free Internet access — established on the Constitution — be clearly spelled out in Mexico’s Telecommunications and Broadcasting Law. It also requests that the constitutional citizen initiative “Internet Libre para Todos” (Free Internet For All), signed by over 223 thousand duly identified citizens and delivered to Congress in 2013 as a proposal to guarantee the right of Internet access become law.

According to a report on vice.com, people have already taken to the streets in protest against the new law. In addition:

Mexico’s human rights commission has already denounced the legislation for violating basic constitutional rights including the right to privacy and freedom of expression. In the coming weeks the legislation will go before the senate and Internet freedom activists are hoping it will get voted down.

Let’s hope so too.

Follow me @glynmoody on Twitter or identi.ca, and +glynmoody on Google+

Filed Under: censorship, mexico, net neutrality, telecom law