Tag: "regulation"

Posted August 24, 2012 by lgonzalez

In 2010, the Institute for Policy Integrity at the New York University School of Law released a report titled Free to Invest: The Economic Benefits of Preserving Net Neutrality. The report, authored by Inimai Chettiar and J. Scott Holladay, is a great resource - substantial and very digestible - on what net neutrality really is, how it is (or is not) regulated, and the economic possibilities policy makers must consider when moving ahead.

The Institute looks at the economic relationships between content providers, ISPs, and consumers. In addition to the current economic structure, the report examines possible alternate pricing models that are contrary to our current net neutrality policies. We have extracted just a few excerpts and encourage you to get the full report.

There are five main findings that are examined in depth:

Internet Market Failure: The report explains how ISPs lose potential dollars under today's market structure. There is ample motivation for them to find a way to charge content providers based on delivery, and open up a whole new market far beyond our net neutrality policy.

The FCC’s nondiscrimination rule would prohibit an ISP from treating any content, application, or service in a “discriminatory” manner, subject to reasonable network management. This clearly bans pure price discrimination (charging different content providers different prices to access their subscribers). The regulation also bans ISPs from offering content providers a “take it or leave it” offer on access to their users. For example, an ISP like Verizon could not charge a website of a company like The New York Times a certain price for access to its subscribers by threatening to block the website from its network and therefore from its Internet subscribers.

Smart Policy Can Help: The authors of the report stress how the Internet must be viewed as a two pronged market - infrastructure to deliver the content and the content itself - and how both are equally important. Effective policy must recognize the delicacy of that balance.

The goal of any policy should be to maximize the value of the Internet, which means choosing a policy that addresses both the quality of broadband service and the quality of Internet content....

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Posted August 7, 2012 by christopher

We have watched in growing horror as AT&T and other telco lobbyists have gone from state to state gutting telecommunications oversight. In several states, you no longer have an absolute right to a telephone - the companies can refuse to serve you if they so choose.

We tip our hat to Phil Dampier at Stop the Cap, who alerted us to this story. AT&T convinced Mississippi legislators to remove consumer protections for telecommunications.

Northern District Mississippi Public Service Commissioner Brandon Presley is unhappy with a new state law that will strip oversight over AT&T. Presley plans to personally file suit in Hinds County Circuit Court against the law, calling it unconstitutional.

“It violates the state constitution,” Presley said of the bill during an interview with the Daily Journal. “There’s no doubt AT&T is the biggest in the state, and this bill will allow them to raise rates without any oversight at all.”

House Bill 825 strips away rate regulation of Mississippi landline service and removes the oversight powers the PSC formerly had to request financial data and statistics dealing with service outages and consumer complaints. The law also permits AT&T to abandon rural Mississippi landline customers at will.

As we've seen elsewhere (as in California), AT&T worked with ALEC to push this through - though Rep Beckett (R-Bruce) doesn't think AT&T will raise its rates or abandon parts of the state. Time will tell - but Beckett won't be the one to suffer when the inevitable occurs. Thanks to AT&T and ALEC, he already got his.

Posted July 31, 2012 by christopher

Our sixth episode of the Community Broadband Bits podcast features a discussion with Cheryl Leanza, broadband consultant with Progressive States Network. Cheryl has been very active in legislative battles at the state level, where she has helped to defend the public against anti-consumer deregulation led by AT&T, CenturyLink, and cable lobbyists.

We touched on the effort in Georgia to revoke local authority as well as once again noting the bad bills in North Carolina in 2011 and South Carolina in 2012.

We also spent time talking about the state-by-state effort to kill consumer protections, including the basic right to have a wireline telephone in your home.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.

This show is 14 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment!

Listen to previous episodes here. You can download the Mp3 file directly from here.

Read the transcript of this episode here.

Find more episodes in our podcast index.

Thanks to Fit and the Conniptions for the music, licensed using Creative Commons.

Posted June 21, 2012 by lgonzalez

Sean McLaughlin from the New America Foundation and Access Humbolt alerted us to HB 1161, an AT&T and ALEC driven bill to scale back state regulation of Internet services. Sen. Alex Padilla (D-SD20, San Fernando Valley) is a co-author of the bill, introduced in February and moving steadily forward.

Sean tells us:

On Monday, the bill passed CA Assembly's Committee on Utilities and Commerce with only one brave NO vote (Asm. Huffman is also leading candidate for US House for the new CA-2 district).  Next stop is Assembly Appropriations Cte. but it will quickly move to the Assembly Floor - NOW is the time to alert all Assembly Members in California to stop this juggernaut.

Access Humbolt's press release is an excellent analysis and tells us why this bill needs to be stopped:

"While the Bill strives to be self-limiting and makes hopeful assumptions about the benefits of unfettered industry, it neglects to address three profound and overarching realities:

1. In the future all telephone or voice service will be IP enabled communication service;

2. Federal oversight over IP enabled communication services including Internet access services remains highly uncertain; and,

3. Competition is not sufficient in IP enabled communication services to protect consumers, nor to ensure universal access to an open internet.

SB 1161 removes State expertise and local knowledge from public policy making that is necessary to secure universal access to an open internet. And further, this Bill will impede State and local efforts to develop broadband services for public safety, public education, public health, public works and public media. Clearly, a more thoughtful approach is needed.

If the Bill is adopted as proposed, local community investments to support broadband deployment and adoption will suffer, causing increased costs and reduced benefits from State and Federal universal service programs for remote, rural, low income and other people in our community who are least served.

By prohibiting independent...

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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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