Tag: "regulation"

Posted May 27, 2012 by christopher

In a recent editorial (May 24 issue), The New Republic argued that the Obama Administration was doing a decent job on Internet policy and obliquely referenced an article discussing carrier opposition to community broadband. The op-ed begins,

Politicians aren’t always especially thoughtful about, or even familiar with, information technology. George W. Bush used the term “Internets” during not one but two presidential debates. The late Alaska Senator Ted Stevens famously referred to the World Wide Web as a “series of tubes.” And John McCain drew ridicule in 2008 when he conceded that he was still “learning to get online myself.”

Much worse than these gaffes, however, are some of the policies that have been promoted by lawmakers and candidates who seem to fundamentally misunderstand the importance of a free and open Internet. In recent years, we have seen politicians accede to the interests of giant telecom companies rather than support net neutrality; propose anti-piracy bills that threaten Internet freedom; and, as Siddhartha Mahanta recently documented at TNR Online, block poor communities from receiving broadband access.

Good to see this issue being discussed outside of the standard tech circles. Especially when outlets like the New Republic explicitly call for more wireless subscriber protections:

There are, of course, ways in which the administration has disappointed. Even when the White House has done the right thing on Internet issues, it has not always acted as speedily or as forcefully as it might have. Moreover, it has not always done the right thing. Particularly striking was the Federal Communications Commission’s (FCC) decision, in late 2010, to exempt mobile carriers from new rules protecting net neutrality. The FCC’s step blocks Internet service providers from slowing down or preventing access to the content of their competitors—but it only applies to wired, not wireless, providers.

While many of us are hopeful that the government will take a stronger hand in preventing carriers from disrupting the open Internet, Vint Cerf (one of the fathers of the Internet) rightly warns us that overall...

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Posted May 16, 2012 by christopher

One of the reasons we so strongly support local, community owned broadband networks over European-like regulations on private companies is that large institutions regularly game the rules. We wrote about this last year, when Free Press called on the FCC to stop Verizon from ignoring the rules it agreed to for using certain spectrum.

Senator Franken, who has taken a strong interest in preserving the open Internet, has just reminded the FCC that creating rules does no one any good if it refuses to enforce them.

Not only has Comcast announced that its own Netflix-like service does not count against its bandwidth caps, some researchers found evidence that Comcast was prioritizing its own content to be higher quality than rivals could deliver. Comcast has denied this charge and proving it is difficult. Who do you believe? After all, Comcast spent years lying to its own subscribers about the very existence of its bandwidth caps.

The vast majority of the network neutrality debate centers around whether Comcast should be allowed to use its monopoly status as an onramp to the Internet dominate other markets, like delivering movies (as pioneered by Netflix). Comcast and many economists from Chicago say "Heck yes - they can do whatever they like." But the vast majority of us and the FCC have recognized that this is market-destroying behavior, not pro-market behavior.

So when Comcast was allowed to take over NBC Universal, it agreed to certain conditions imposed by the FCC to encourage competition. But the FCC has a long history of not wanting to enforce its own rules because it can be inconvenient to upset some of the most powerful corporations on the planet. Plus, many of the people working in telecommunications policy for the federal government will eventually make much more money working for...

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Posted May 15, 2012 by christopher

Susan Crawford on the importance of government policy. People who are concerned about the future of the Internet need to pay attention or the cable and telephone companies will take over the Internet (or at least access to it). Not because they are evil, but because what is best for them (or what they think is best for them in the short term) is not what is best for the rest of us or the vast majority of businesses that depend on access to the Internet.

 

Posted April 24, 2012 by christopher

In most states, telephone companies are required to serve everyone and when there are problems with the service, the state can mandate that the company fix them. But AT&T and ALEC are leading the charge to let these massive companies decide for themselves who should have access to a telephone, taking state regulators out of the loop.

These big companies use several arguments we are well familiar with - that mobile wireless is already available (in many rural areas, it actually is not available) and there is plenty of competition. If only that were the case.

I was thrilled to see David Cay Johnston cover this in a column on Reuters:

AT&T and Verizon, the dominant telephone companies, want to end their 99-year-old universal service obligation known as "provider of last resort." They say universal landline service is a costly and unfair anachronism that is no longer justified because of a competitive market for voice services.

The new rules AT&T and Verizon drafted would enhance profits by letting them serve only the customers they want. Their focus, and that of smaller phone companies that have the same universal service obligation, is on well-populated areas where people can afford profitable packages that combine telephone, Internet and cable television.

What happens when the states hand over authority to these companies? David has an answer:

AT&T and Verizon also want to end state authority to resolve customer complaints, saying the market will punish bad behavior. Tell that to Stefanie Brand.

Brand is New Jersey's ratepayer advocate whose experience trying to get another kind of service - FiOS - demonstrates what happens when market forces are left to punish behavior, she said. Residents of her apartment building wanted to get wired for the fiber optic service (FiOS) in 2008. Residents said, "We want to see your plans before you start drilling holes, and Verizon said, 'We will drill where we want or else, so we're walking,' and they did," Brand told me.

Verizon confirmed that because of the disagreement Brand's building is not wired. And there's nothing Brand can do about it. Verizon reminded me the state Board of Public Utilities no longer has authority to resolve complaints over FiOS.

Better broadband is not just about...

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Posted January 26, 2012 by christopher

I recently stumbled across a great point regarding the spectacular failure of the US (mostly the FCC, but Congress should certainly share some of the blame) to properly regulate broadband connections to the Internet. US policy results in a few massive providers dominating the market. Fred Goldstein, a principal of Interisle Consulting Group, wrote the following:

In truly competitive markets that display some degree of commodity-like characteristics, large and small vendors tend to coexist. I'm drinking coffee right now, which is a good example. Maybe Maxwell House and Folgers (and their parent companies) have a large share of the market, competing on price for their swill. But there is plenty of room for others to differentiate their product. Dunkin and Starbucks have built huge chains on their own style of semi-premium product, while another couple of niches of premium and superpremium beans are easy enough to find. Food markets tend to be like this; check out any Whole Foods (a/k/a The Museum of Modern Vegetables) for a supply of priced-above-commodity products. I feel foolish for selling most (not all, thankfully) of my Whole Foods stock when it was in the dumps a couple of years ago.

The same thing happens in many fields. Apple itself sells computers above commodity price levels. There's a whole "high end" audio business catering to those who like to show off how much they can afford to spend. The automobile industry has mass-market commodity cars and several premium tiers.

Internet access in the US lacks that because the natural monopoly on outside plant is not properly regulated. If it were treated here by EU norms, then any number of ISPs could access the wire. Some would just be cheap; some would offer premium help desks among their services. That doesn't happen, however, when the usual number of "competitors" is two. Even more so when those competitors agree that they should divide up markets between themselves rather than overbuild, or (heaven forbid) let outside information providers onto their facilities.

The wire should be regulated. ISPs shouldn't.

Amen. Physical connections are a natural monopoly. Even if the economics supported many physical providers, having so many would be terribly inefficient. Much better to have networks that are owned by the community and have independent service providers competing to deliver services -- just like the roads.

Posted January 10, 2012 by christopher

One of the reasons community broadband networks face so many unique hurdles (often created deliberately by states in response to cable/dsl lobbying) is because of the many ways in which campaign finance corrupts our national and state governments.

Community broadband networks are focused on meeting community needs, not sending lobbyist armies into Washington, DC, and state capitals (though one of things we do at the Institute for Local Self-Reliance is offer help to those that do push pro-community agendas in these areas).

To understand why DC is so focused on furthering the corporate agendas of AT&T, Comcast, Time Warner Cable, and others, is to understand the revolving door. (Also, understanding capture -- which we have explained previously.)

In short, many of the people who make decisions about telecommunications policy in DC have worked, will work, or are presently working for the massive companies that effectively control access to the Internet in most of America's communities.

The good folks at Geke.US have created the following Comcast Venn Diagram illustrating a small piece of the DC revolving door.

Comcast and DC's revolving door Venn Diagram

Reforming this system is a deep, seemingly intractable problem. But for those looking for answers, a good place to start is with the work of Lawrence Lessig. I just finished his Republic, Lost, which offers a grand tour of the problems resulting from the present system of campaign finance.

You can also see a number of his presentations here.

His organization, the Rootstrikers aim to get to the root of problems rather than being distracted by trying to fix symptoms of deeper problems. This is precisely what we do with our focus on community networks.

Many focus solely on resolving digital divide issues, improving rural access to the Internet, lowering the cost of broadband, or the various other problems that result from narrowly-focused private corporations owning and controlling essential communications infrastructure with...

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Posted January 3, 2012 by christopher

It's a new year, but most of us are still stuck with the same old DSL and cable monopolies. Though many communities have built their own networks to create competition and numerous other benefits, nearly half of the 50 states have enacted legislation to make it harder for communities to build their own networks.

Fortunately, this practice has increasingly come under scrutiny. Unfortunately, we expect to see massive cable and telephone corporations use their unrivaled lobbying power to pass more laws in 2012 like the North Carolina law pushed by Time Warner Cable to essentially stop new community broadband networks.

The FCC's National Broadband Plan calls for all local governments to be free of state barriers (created by big cable and phone companies trying to limit competition). Recommendation 8.19: Congress should make clear that Tribal, state, regional and local governments can build broadband networks.

But modern day railroad barons like Time Warner Cable, AT&T, etc., have a stranglehold on a Congress that depends on their campaign contributions and a national capital built on the lobbying largesse of dominant industries that want to throttle any threats to their businesses. (Hat tip to the Rootstrikers that are trying to fix that mess.)

We occasionally put together a list of notable achievements of these few companies that dominate access to the Internet across the United States. The last one is available here.

FCC Logo

As you read this, remember that the FCC's National Broadband Plan largely places the future of Internet access in the hands of these corporations. On the few occasions the FCC tries to defend the public from their schemes to rip-off...

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Posted December 9, 2011 by christopher

If you aren't familiar with SOPA - the "Stop Online Piracy Act" or its companion in the Senate (called PIPA or Protect IP), you should be. This is legislation that would allow the US government to require Internet Service Providers block web sites without due process. Sascha Meinrath and James Losey from the New America Foundation explain the threat in Slate:

The interconnected nature of the Internet fostered the growth of online communities such as Tumblr, Twitter, and Facebook. These sites host our humdrum daily interactions and serve as a public soapbox for our political voice. Both the PROTECT IP Act and SOPA would create a national firewall by censoring the domain names of websites accused of hosting infringing copyrighted materials. This legislation would enable law enforcement to take down the entire tumblr.com domain due to something posted on a single blog. Yes, an entire, largely innocent online community could be punished for the actions of a tiny minority.

If you think this scenario is unlikely, consider what happened to Mooo.com earlier this year. Back in February, the Department of Justice and Department of Homeland Security seized 10 domains during a child-porn crackdown called “Operation Protect Our Children.” Along with this group of offenders, 84,000 more entirely innocent sites were tagged with the following accusatory splash page: “Advertisement, distribution, transportation, receipt, and possession of child pornography constitute federal crimes that carry penalties for first time offenders of up to 30 years in federal prison, a $250,000 fine, forfeiture and restitution." Their only crime was guilt by association: They were all using the Mooo.com domain.

From our point of view, what is most interesting is not who is pushing this bill (Hollywood and the usual suspects that tried to kill the VCR because it would obviously destroy the movie industry) but who is not resisting. After all, whenever the issue of network neutrality comes up, the big telecom companies pay a bunch of organizations like Americans for Prosperity to create astroturf movements to oppose a "government takeover of the...

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Posted December 8, 2011 by christopher

Susan Crawford published an excellent essay in the New York Times presenting her Looming Broadband Monopoly argument as a discussion of the coming digital divide between those with access to next-generation networks and those without.

These numbers are likely to grow even starker as the 30 percent of Americans without any kind of Internet access come online. When they do, particularly if the next several years deliver subpar growth in personal income, they will probably go for the only option that is at all within their reach: wireless smartphones. A wired high-speed Internet plan might cost $100 a month; a smartphone plan might cost half that, often with a free or heavily discounted phone thrown in.

The problem is that smartphone access is not a substitute for wired. The vast majority of jobs require online applications, but it is hard to type up a résumé on a hand-held device; it is hard to get a college degree from a remote location using wireless. Few people would start a business using only a wireless connection.

She identifies the problem as a lack of competition in the market while highlighting the role of lobbying from the wealthy cable companies to keep it that way:

The bigger problem is the lack of competition in cable markets. Though there are several large cable companies nationwide, each dominates its own fragmented kingdom of local markets: Comcast is the only game in Philadelphia, while Time Warner dominates Cleveland. That is partly because it is so expensive to lay down the physical cables, and companies, having paid for those networks, guard them jealously, clustering their operations and spending tens of millions of dollars to lobby against laws that might oblige them to share their infrastructure.

In this essay, her preferred solution is better federal regulation that would require companies that own networks to share parts of their infrastructure with competitors (to significantly reduce the problems of natural monopoly). Unfortunately, she did not explicitly discuss the solution of the communities building their own networks - a topic she has discussed at great length elsewhere in very positive terms. Her essay ties in nicely with the paper we...

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Posted November 19, 2011 by christopher

If you want to predict the future, it helps to understand the incentives that guide action. Unsurprisingly, if a corporation has the option of being more profitable by investing less, it will do so. This is the smart conclusion of Bill Snyder at InfoWorld:

To understand their logic, consider this thought experiment: Imagine that you own a freeway -- say, Highway 101 through Silicon Valley -- and you had the power to pluck a car from a traffic jam with a helicopter and deposit it on a clear stretch of the road. Naturally, drivers who could afford the service would be happy to sign up.

"That highway is like the Internet, and the individual cars are the packets of data. The ISP is essentially the gatekeeper that controls the flow of cars on the highway. If the ISP is allowed to snatch any car from the back of a very long line and put it in front of everybody else when the driver of the car pays a priority delivery fee, would the ISP have an incentive to keep the road congested or to expand the road capacity?" they wrote.

The answer is pretty obvious: If you can make more money by keeping your network congested, why would you invest money to make it less crowded?

He was riffing on a paper, "The Debate on Net Neutrality: A Policy Perspective" by H Kenneth Cheng, Subhajyoti Bandyopadhyay, and Hong Guo.

I think many of us view this as a "well, duh" paper, but it is good to see a rigorous academic paper verifying our gut instincts.

There is a very real danger to letting a few massive corporations control access to the Internet, which is one major reason we see so many communities building their own networks. They want to ensure everyone has fast, reliable, and affordable access to the Open Internet.

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