Tag: "regulation"

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.

Posted November 12, 2011 by christopher

Dane Jasper, the CEO of Sonic.net, one of the few ISPs to survive the death of broadband competition over the past ten years, wrote about "America's Intentional Broadband Duopoly."  It is a short history of how the FCC's flawed analysis (helped along by incredible amounts of lobbying dollars, no doubt).

He starts by asking when the last time anyone offered to sell you broadband over power lines (BPL).  The FCC decided that cable and telephone companies shouldn't have to share their wires (which are a natural monopoly) with competitors (creating an actual marketplace for services) because BPL, satellite, and wireless would put so much competitive pressure on DSL and cable.  FAIL.

Then, in the Brand X decision, they ruled that Cable would not be required to allow competitors to lease their lines either. The FCC did this by reclassifying broadband Internet access as an “information service”, rather than a “telecommunications service”. As a result, common carriage rules could be set aside, allowing for an incumbent Cable monopoly. This decision was challenged all the way to the supreme court, who ruled in 2005 that the FCC had the jurisdiction to make this decision.

To close out Powell’s near-complete dismantling of competitive services in the U.S., the FCC took up the issue of ISPs resale of DSL using the incumbent’s equipment, also known as wholesale “bitstream” access. If Cable is an information service under Brand X, why shouldn’t Telco have the same “regulatory relief”? The result: the FCC granted forbearance (in other words, declined to enforce its rules) from the common carriage requirements for telco DSL services.

For those who are thinking that wireless is finally competitive with cable and DSL, don't forget that while 4G appears much faster (because so few people are using it presently), it still comes with a 2GB monthly cap. So if you want to do something with your connection aside from watching one movie a month, 4G is not competitive with a landline connection.

Posted November 10, 2011 by christopher

Update: The Senate voted against turning the Internet over to Comcast, AT&T, and other major carriers. How did your Senators vote?

The US Senate began debating network neutrality yesterday - the historic governing principle of the Internet that ISPs should not be allowed to tell their users where they may or may not go and should not prioritize some connections over others merely because it generates more revenue for the ISP.

As Al Franken has said several times, this is the 1st amendment for the Internet - protecting everyone's speech. It prevents a few massive companies (or even local governments where they offer access to the Internet) from exerting too much influence over what subscribers are able to do on the Internet.

Unfortunately, many Senators are campaigning against this principle, in part because they have been misinformed as to what it means and in part because they are getting a ton of campaign cash from corporations that recognize how much more profitable they would be if they could charge users extra to go to YouTube.

There will be a vote today on a resolution of disapproval for the mild network neutrality rules proposed by the FCC last December (which the FCC Chairman chose to water down in part because he thought it would be less controversial -- FAIL).

We would like to recognize some of those who have stood up to protect the open Internet, starting with Free Press.

The American Sustainable Business Council authored an op-ed:

The truth is that if we want to make sure small businesses can grow with the assistance of broadband, the Internet must remain open. We must, as the FCC says, “ensure the Internet remains an open platform—one characterized by free markets and free speech—that enables consumer choice, end-user control, competition through low barriers to entry and freedom to innovate without permission.”

Senator Kerry made an impassioned plea for not turning the Internet over to Comcast and AT&T:

So they're...

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Posted October 4, 2011 by christopher

No matter how much community broadband advocates prepare the community and elected officials for the expected difficulty of building a successful local project, in the midst of the deployment, times are tough.

A local paper in Lafayette claims "LUS Fiber [is] at a crossroads" but starts with an admission that these problems were forecast and expected:

Competitors will pay less for programming than you do, and in turn play hard ball by lowering rates for customers. Good luck keeping up with technological advances, expansion needs and growth costs; it's a risky proposition for a public entity used to maintaining rather than adapting. Your opportunities will be limited because you can't provide services outside the city limits. You'll be criticized for offering programming such as adult movies, and you'll be told you really should be focusing on your core business: running power, water and wastewater plants.

Terry Huval delivered that message in 2000, long before Lafayette committed to building their community fiber network -- a network that delivers some of the fastest speeds in the nation at the lowest rates and has already delivered hundreds of jobs.

Nonetheless, LUS Fiber is behind the take rate goals they had set in the business plan. The expenses are higher than forecast because Lafayette was unfairly denied entry to a coop that secures lowers rates for television contracts for members. The only discernible reason for rejecting Lafayette is that Cox joined the coop after Lafayette committed to building its network. There is little doubt that Cox was influential in denying Lafayette's application, likely increasing LUS Fiber expenses for offering cable channels by more than 20%.

This is just one of the many ways that the telecommunications market is rigged to benefit incumbents at the expense of all of us -- residents and small businesses alike. We will not have real choices in competition until government policy treats telecom like the essential infrastructure it is.

Mike Stagg, a long time supporter of the network is quoted in the article, challenging LUS Fiber to improve its marketing:

Can they do better? Probably so. Part of it is the fact that, just from a mindset standpoint, LUS is a utility and utilities generally do not compete," Stagg said. "I...

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Posted August 8, 2011 by christopher

You can now read this post at Huffington Post also.

As a condition of its massive merger with NBC, the federal government is requiring Comcast to make affordable Internet connections available to 2.5 million low-income households for the next two years.

In promoting the program, Comcast's Executive VP David Cohen, has made some unexpected admissions:

“Access to the internet is akin to a civil rights issue for the 21st century,” said David Cohen, Comcast’s executive vice president. “It’s that access that enables people in poorer areas to equalize access to a quality education, quality health care and vocational opportunities.”

It was only after the federal government mandated a low-cost option for disadvantaged households that Comcast realized everyone could benefit from access to the Internet. Sadly for Comcast, it has done a poor job of reaching those disadvantaged communities, by its own admission:

"Quite frankly, people in lower-income communities, mostly people of color, have such limited access to broadband than people in wealthier communities."

This is why so many communities are building their own next-generation networks - they know that these networks are essential for economic development and ensuring everyone has "access to a quality education, quality health care and vocational opportunities." And they know that neither Comcast nor the federal government are going to make the necessary investments. They need a solution for the next 20 years, not just the next 2.

Community Networks Map

Comcast has a de facto monopoly in many communities. Modern cable networks offer much higher capacity connections than...

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Posted July 27, 2011 by christopher

When Verizon won an auction to use the 700MHz band of the spectrum to deliver mobile broadband, it promised to adhere to a set of openness rules that included allowing customers to use applications and devices of their choosing. But Verizon is now blocking "tethering" apps that allow us to use our cell phones as a modem for our computers.

Wendy Davis at MediaPost offered more context:

Whether it's legal for a wireless carrier to cripple tethering services is unclear. Verizon agreed to follow open Internet principles as a condition of acquiring the spectrum that it uses for 4G wireless phones. One interpretation of that condition is that the company shouldn't attempt to restrict tethering on its 4G network -- though apparently it's still free to do so on the 3G network.

But aside from neutrality issues, Verizon's move clearly seems hard to justify from a pricing standpoint. Given that the company is already going to charge new users based on the amount of data they consume, there's no reason for it to also impose a surcharge for tethering.

Free Press filed a complaint with the FCC to investigate:

Free Press Logo

Free Press will file a complaint today with the Federal Communications Commission against Verizon for violating the rules that govern the licenses for its LTE network. Licensees of the C Block of the upper 700 MHz block, over which Verizon runs its LTE network, may not “deny, limit, or restrict” the ability of their customers to use the applications or devices of the customers’ choosing.

Recent reports reveal that Verizon has been doing just that by asking Google to disable tethering applications in the Android Market. Tethering applications, which allow users to make their phones into mobile hot-spots, implicate the customers' ability to use both the applications and devices of their choice. Free Press argues that by preventing customers from downloading tethering applications from the Android Market, Verizon is restricting not only the applications available to them, but also limits use of tethered devices such as laptop...

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Posted July 13, 2011 by christopher

The net is buzzing about Comcast's data caps after a Seattle resident ran afoul of them. I found it particularly interesting given Seattle's recent decision to use its assets to further Comcast's monopoly following a poorly considered RFP.

This story highlights many of the frustrations and injustices that come with companies as massive as Comcast effectively monopolizing an essential utility, with practically no oversight locally or federally.

When Comcast enacted is 250GB monthly transfer cap years ago, many thought it was sufficiently high that few would run afoul of it. But the smart folks noted that if it did not increase as natural usage increases, it would hurt legitimate users (as opposed to those who run servers constantly trafficking in file sharing that violates copyright).

I made very clear to the gentleman I spoke with that I thought Comcast’s data cap policy was arbitrary, unfair, and extremely irritating… and that if I had any decent competitive options in the neighborhood I’d dump Comcast in a heartbeat. Since I don’t, I listened to him read his canned warning that if I exceeded their cap again I’d be cut off again.

Bear in mind that when you fill up the fuel tank in your car, you are at a gas station that is regularly inspected by the state to ensure it is correctly measuring the volume of gas dispensed. Comcast is not similarly regulated and we have to take Comcast's word on how much traffic we use. Most of the time I have visited Comcast's meter to see what my household usage is, I have been unable to even access it.

But back to the story, our Seattle friend later found that he had unintentionally violated the cap again, despite taking precautions not to:

The Customer Security agent was polite, and after the standard identification questions notified me I was cut off for a year due to exceeding Comcast’s Acceptable Use Policy limits on their bandwidth cap. I asked for details on what had been using bandwidth, and again, Comcast would not share. In a sudden brainstorm, I then asked whether the 250 GB bandwidth cap applied to just downloads (which I had assumed, as the majority of most bandwidth used in households is downstream bandwidth), or download and...

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