Tag: "regulation"

Posted June 30, 2010 by christopher

Bruce Kushnick, a telecom analyst, has long pushed for telcos to live up to the bargains they struck with individual states and federal agencies over the years as part of deregulation policies. They were deregulated and (surprisingly enough) failed to make good on their promises. For the most part, governments have refused to punish them or even learn the lesson that companies like AT&T and Qwest simply cannot be trusted.

If you have ever stared at an incomprehensible telephone bill and wondered just how badly you were getting ripped off, you will be interested in this article discussing the many ways we are ripped off by these companies. Small wonder these companies are so profitable and can afford their legions of lobbyists.

But that is that, and what's done is done, right? Well, Kushnick has another article about the Obama Administration's FCC and approach to expanding broadband.

Long story short, the proposed changes will increase the costs most of those with the least ability to pay and the least likely to benefit from the spending. This approach of expanding broadband is awful - more subsidies to terrible telephone companies that have poor service in rural areas because they are structurally incapable of meeting the infrastructure needs of communities. Massive companies like AT&T and even smaller big companies like Qwest are strangling rural communities while they lobby for bills to prevent those communities from solving their own problems.

Expanding broadband access and availability has costs and some taxes may need to be raised. But those funds should be used responsibly by expanding broadband coverage from entities that are dedicated to serving the community (munis, coops, nonprofits) rather than simply padding the corporate profits of companies that provide terrible service to communities and upgrade far too slowly.

Posted June 21, 2010 by christopher

Though we certainly support the FCC's reclassification of broadband to ensure companies like Comcast do not interfere with the open Internet, we focus on policy at the community level. We fully support the efforts of organizations and people in DC to work at the federal level.

But for those who are utterly baffled at the questions being raised the the last 15 years of Internet policy, I strongly recommend a recent op-ed by Wally Bowen: "FCC needs to rethink broadband regulation."

The stakes are high. The Internet's explosive growth – and the spectacular innovation it spawned – were enabled by common-carrier rules that still govern the nation's dial-up telephone networks.

Before 2002, online users were at the center of the Internet and World Wide Web, free to choose among competing ISPs, and free to roam and innovate. With the removal of common-carrier rules, the cable and telephone companies occupied the center of a broadband-driven Web, free to pick winners and losers among innovators (e.g. AT&T's exclusive iPhone deal with Apple) – and free to dictate when and where broadband access will be deployed.

In short, the definitive battle for the future of the Internet is underway.

Posted May 27, 2010 by christopher

Bill Schrier, Seattle's Chief Technology Officer (informally, Chief Geek), recently explored the ways in which limited competition in broadband has kept prices too high for many Americans and suggests high prices should be a cause for concern on the level of network neutrality. He is right not only in noting the problem, but noting that there is no solution to it forthcoming from the states or feds.

However, communities can take control of broadband prices by building their own networks. Not only can they guarantee lower rates, they effectively force lower rates from incumbents (and often increased investment) by merely increasing local competition.

Due to limits in law and FCC policy, building a network is really the only power of local governments to ensure the community has the broadband access it needs to succeed.

I have long found it amazing that local governments have the power to set a limit on the lowest tier of cable TV prices but no ability to require a basic tier of Internet. What is more important to communities? Cable TV or broadband?

The City of Seattle – and other cities and counties – can regulate cable TV to a limited extent. Therefore we can demand cable companies provide a low cost basic service – $12.55 in Seattle for Comcast, for example, and there’s even a discount to that low rate for low-income residents – more details here.

The State of Washington – and other States – can regulate telephone service, and require telephone companies to provide a low cost basic phone rate, e.g. $8 a month for 167,000 households.

But NO ONE regulates broadband/Internet access. Consequently ISPs can charge whatever the market will bear. So in our present monopoly or duopoly environment throughout the nation – that is little choice for most of us – prices are at $30, $40 or more for even moderate speed access. Higher speed access is $100 or more. And that means low-income, immigrant, seniors and other households cannot afford access to the Internet. So they and their children are denied what is probably the most important pathway to education, information, jobs and higher income – access to the Internet. Even middle income households or neighborhood businesses cannot get affordable truly fast (e.g. 5 megabits per second symmetric) broadband.

Bill's post is well-linked and worth reading in its entirety....

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Posted April 13, 2010 by christopher

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...

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Posted July 31, 2009 by christopher

The American Recovery and Reinvestment Act of 2009 directed the Federal Communications Commission (FCC) to develop a national broadband strategy. FCC invited comments and then invited replies to those comments in summer 2009. The Free Press Reply Comments deserve to be singled out for revealing some of the lies of large telecommunications companies like Verizon, AT&T, Comcast, Qwest, and others. It also describes many of the ways that these companies harm the communities that are dependent on them for essential services. I've highlighted some passages below that show the ways in which these companies put profit above all else. These companies claim that regulation discourages investment and deregulation (allowing a higher degree of concentration or larger monopolies) encourages increased investment in better networks - an incredibly self-serving claim that Free Press shows to be false on pages 13-29.

Competition -- meaningful and real competition -- and not regulation is the primary driver behind investment decisions. Where meaningful competition exists, incumbents are compelled to innovate and invest in order to maintain marketshare and future growth. Where competition is lacking -- such as it is in our broadband duopoly -- incumbents will delay investment, knowing full well they can pad their profits on the backs of captured customers who have no viable alternatives. (Page 14)

Regulations like open access and non-discrimination encourage competition and should be strengthened. Free Press offers an in-depth explanation of how Verizon has dumped millions of customers on other companies that clearly could not handle the burden.

Verizon began the purging of less lucrative areas with the sale of Verizon Hawaii to the Carlyle Group in 2005, a company that had no previous experience in operating telecommunications services. By Dec. 2008, the company, now called Hawaii Telecom, had lost 21% of customers and filed for bankruptcy. (Page 26)

Verizon then sold most of their New England lines to Fairpoint, which is currently heading for bankruptcy. Fairpoint's customers are not the only ones suffering - the independent companies that resell services over that infrastructure are also suffering because Fairpoint is utterly unable to meet its obligations.

Most recently, Verizon announced that it intends to sell-off mostly rural areas in...

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Posted May 1, 2009 by christopher

The propaganda says Network Neutrality is about treating every packet exactly the same, but the Internet has never done that. The propaganda says that Network Neutrality is about regulating the Internet, but we know that the Internet exists thanks to the government's ArpaNet, and subsequent wise government regulation.

Look who's calling for regulation anyway! The only reason telcos and cablecos exist is that there's a whole body of franchises and tariffs and licenses and FCCs and PUCs keeping them in business.

Posted April 29, 2009 by christopher

Local governments do not favor themselves on taxes or right of ways or otherwise compete unfairly with incumbent telecommunications and incumbent cable companies. To the contrary, private incumbents enjoy a wealth of state and federal subsidies, guaranteed rates of return, regulated rates for pole attachments, etc. In addition, local telephone companies enjoyed years of regulated monopoly status to build positions of dominance they continue to enjoy. To pretend that these local incumbents, with their subsidies and regulated access, need to “level the playing field” to protect a “free market” against local government systems flies in the face of reality.

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