Tag: "policy"

Posted December 14, 2010 by christopher

Whenever the discussion of Network Neutrality comes up, we like to remind everyone that when the network is locally owned and accountable to the community, anti-subscriber discrimination is not a problem. That said, we are strong supporters of proper safeguards to ensure massive companies like AT&T cannot abuse their market power and discourage innovation.

As the FCC prepares to discuss a half measure to preserve parts of the open Internet, a number of us have been frustrated that while we cannot read the proposal, AT&T appears to be helping write it. Karl Bode's take:

[T]he question shouldn't be whether or not consumers can now view a neutrality proposal after it was hashed out in private meetings (predominately with only the largest, wealthiest carriers), it should be: why weren't consumers absolutely integral in crafting it? AT&T has met with the FCC half a dozen times in the course of three weeks and likely knows precisely what's in this plan -- do you?

We've written to FCC Commissioners to make it clear that they must not compromise on the future of the open Internet. You should too.

Photo used under Creative Commons license from AdamWillis.

Posted December 1, 2010 by christopher

Barbara Van Schewick, author of Internet Architecture and Innovation, describes the important role of openness on the Internet, what that means, and how to preserve it. Thanks to the New York Chapter of Internet Society for hosting her.

Posted November 30, 2010 by christopher

So Comcast and Level 3 are in a peering dispute following the Netflix partnership with Level 3 to distribute their streaming movie service. Studies suggest Netflix movie streaming has become a significant chunk of Internet traffic, particularly at peak times.

A quick primer on peering: the Internet is comprised of a bunch of networks that exchange traffic. Sometimes one has to pay another network for transit and sometimes (commonly with big carriers like Comcast and Level 3) networks have an agreement to exchange traffic without charging (one reason: the costs of monitoring the amount of traffic can be greater than the prices that would be charged). (Update: Read the Ars Technica story for a longer explanation of peering and this conflict.)

Comcast claims that Level 3 is sending Comcast 5x as much traffic as Comcast sends to Level 3 and therefore wants to charge Level 3 for access to Comcast customers. Of course, as Comcast only offers radically asymmetrical services to subscribers, one wonders how Level 3 could be 1:1 with Comcast…

At Public Knowledge, Harold Feld ties the dispute to network neutrality:

On its face, this is the sort of toll booth between residential subscribers and the content of their choice that a Net Neutrality rule is supposed to prohibit.  In addition, this is exactly the sort of anticompetitive harm that opponents of Comcast’s merger with NBC-Universal have warned would happen — that Comcast would leverage its network to harm distribution of competitive video services, while raising prices on its own customers.

Susan Crawford

Susan Crawford wrote a lengthier piece about Comcast, Netflix, network neutrality, set-top boxes and NBC that is well worth reading (as is just about anything she writes).

However, for the purposes of this post, we will assume the 5x traffic imbalance is true (and unique and...

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Posted November 25, 2010 by christopher

The abstract immediately captured my attention:

Policymakers often tell us that the Internet succeeded because of a lack of government regulation. For instance, FCC Commissioner Robert McDowell recently noted that the “evolution away from government intervention has been the most important ingredient in the Internet’s success.” These views, while widely shared, happen to be inaccurate. In reality, a diverse range of federal regulations, subsidies, and nondiscrimination protections sustained the Internet’s historic growth.

But what if, as many inaccurately assume, these regulations had never existed? What would today’s Internet look like in such a world? In this essay, I provide a fictional alternate history - in form of a satirical book review - to illustrate how differently the Internet might have developed in a truly privatized world. Although the essay below (beginning after this abstract) is fictional, it draws heavily upon both the regulatory history of the Internet and the policy arguments at issue in today’s leading regulatory proceedings.

This article covers decisions like Carterfone, the FCC's Computer Inquires, giving control over TCP/IP to the National Science Foundation rather than AT&T, and the intentions of the 1996 Telecommunications Act. It also includes a reminder of the difference between open systems and closed systems:

One important way that open policies achieve this goal is by reducing various types of transaction costs. In open networks, new market entrants can completely avoid negotiating with companies who have “gateway control” over the network. The aspiring entrants do not have to pay—nor seek permission from—the network owners for access. Accordingly, these policies encourage vastly more experimentation and amateur “tinkering.” Closed networks, by contrast, produce relatively less innovation because they rely on centralized network owners to introduce—or at least approve—innovation before it becomes available.

This is a fantastic read (really riveting telecom reading -- how often do you get that?) and a good history lesson for people who were not there to see it firsthand over the years.

Posted October 15, 2010 by christopher

In all the talk of the need for competition in broadband (or in the mobile space), there is remarkably little attention paid to the difficulties in actually creating competition. A common refrain from the self-interested industry titans (and their many paid flacks) is: "keep the government out of it and let the market decide."

Unfortunately, an unregulated market in telecom tends toward consolidation at best, monopolization at worse. Practicioners of Chicago economics may dispute this, but their theories occur in reality about as frequently as unicorn observations. In our regulatory environment, big incumbents have nearly all the advantages, allowing them to use their advantages of scale to maintain market power (most notably the ability to use cross-subsidization from non-competitive markets to maintain predatory pricing wherever they face even the threat of competition).

The de-regulatory approach of telecom policy over the past 10 or more years has resulted in far less competition among ISPs, something Earthlink hopes to change with a condition of the seeming inevitable NBC-Comcast merger. Requiring incumbents to share their lines with independent ISPs is one policy that would greatly increase competition - but the FCC has refused to even entertain the notion because big companies like AT&T and Comcast are too intimidating for the current Administration to confront.

In the Midwest, Windstream is cutting 146 jobs as part of its acquisition of Iowa Telecom. When these companies consolidate, they can cut jobs to lower their costs... but do subscribers ever see the savings? Not hardly. The result is less competition, which leads to higher prices. Consider that Comcast is the largest cable company, but they are known better for their poor record of customer service than low prices enabled by economies of scale.

We need broadband networks that are structurally accountable to the community, not private shareholders located far outside the community. The solution is not more private companies owning broadband infrastructure, but more private companies offering competing services over next-generation infrastructure that is community owned by coops, non-profits, or local governments.

Photo by...

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Posted October 13, 2010 by christopher

In a TNR Review, Larry Lessig uses The Social Network to explain why we must maintain an open Internet. This fits exactly into our recurring theme on MuniNetworks.org that rules and structure matter greatly.

The full review is excellent and worth reading, but this is the key for our purposes (it comes toward the middle of the article):

Instead, what’s important here is that Zuckerberg’s [Founder of Facebook] genius could be embraced by half-a-billion people within six years of its first being launched, without (and here is the critical bit) asking permission of anyone. The real story is not the invention. It is the platform that makes the invention sing. Zuckerberg didn’t invent that platform. He was a hacker (a term of praise) who built for it. And as much as Zuckerberg deserves endless respect from every decent soul for his success, the real hero in this story doesn’t even get a credit.

Too few appreciate how revolutionary the Internet is because one does not have to ask permission to create content and distribute it via the Internet. However, there is a lot of money to be made and power to be had by forcing creators to ask permission -- this is what big companies like Comcast and AT&T want to do. They want more control over the Internet to further their interests.

The tragedy—small in the scale of things, no doubt—of this film is that practically everyone watching it will miss this point. Practically everyone walking out will think they understand genius on the Internet. But almost none will have seen the real genius here. And that is tragedy because just at the moment when we celebrate the product of these two wonders—Zuckerberg and the Internet—working together, policymakers are conspiring ferociously with old world powers to remove the conditions for this success. As “network neutrality” gets bargained away—to add insult to injury, by an administration that was elected with the promise to defend it—the opportunities for the Zuckerbergs of tomorrow will shrink. And as they do, we will return more to the world where success depends upon permission. And privilege. And insiders. And where fewer turn their souls to inventing the next great idea.

Prior to an important decision in 1968, one had to ask...

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Posted October 11, 2010 by christopher

David Rosen and Bruce Kushnick discuss the ways in which telephone companies have bilked Americans for over $300 billion - increasing their profits while failing to deliver the services they promised.

The scam was simple. Starting in 1991, Verizon, Qwest and what became AT&T offered each state -- in true "Godfather" style -- a deal they couldn't refuse: Deregulate us and we'll give you Al Gore's future. They argued that if state Public Utility Commission (PUCs) awarded them higher rates and stopped examining their books, they would upgrade the then-current telecommunications infrastructure, the analog Public Switched Telephone Network (PSTN) of aging copper wiring, into high-speed and two-way digital optical fiber networks.

State regulators, like state politicians, are seduced by the sound of empty promises -- especially when sizable campaign contributions and other perks come their way. Hey, what are a few extra bucks charged to the customer every month for pie-in-the-sky promises? And who cares about massive tax breaks, accelerated depreciation allowances and enormous tax write-offs? The promises sound good on election day and nobody, least of all the voter, reads the fine print.

Few have the expertise necessary to decipher the many scams these companies have pulled as ineffective public utilities commissions do little to safeguard the public interest. This is the larger problem with embracing regulation as a solution for ensuring essential infrastructure benefits the many rather than the few. PUCs are inevitably "captured" by the industries they are supposed to regulate (think BP Gulf Oil Spill). Public ownership is a structural solution that offers fewer opportunities for massive companies to game the system to their exclusive advantage.

The article offers some in depth examples of how this regulation system has failed.

New Jersey state law requires that by 2010, 100 percent of the state is to be rewired with 45-mbps, bi-directional service. To meet this goal, Verizon collected approximately $13 billion in approved rate increases, tax break and other incentives related to upgrading the Public Switched Telephone Networks. To cover its tracks, Verizon submitted false statements year after year, claiming that it was close to fulfilling its obligations. For example, in its 2000 Annual Report, it claimed that 52 percent of the state could receive "45-mbps in both...

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Posted October 5, 2010 by christopher

Tim Wu, a professor and long time champion of network neutrality, discusses why getting these policies right is so important.

Perhaps more interesting is the reaction from David Isenberg and Tim Wu's comment to that reaction.

The take-home lesson? Network neutrality is important, but is less of a permanent solution than networks that are structurally designed to work in the public interest rather than primarily manufacturing private profits.

This video is no longer available.

Posted October 4, 2010 by christopher

In an editorial for the October, 2010 issue, Scientific American explains "Why broadband service in the U.S. is so awful, and one step that could change it." This is an excellent shorthand explanation for the poor decisions of the FCC during the Bush Administration. Unfortunately, these decisions are being carried forward by the Obama Administration's FCC.

It was not always like this. A decade ago the U.S. ranked at or near the top of most studies of broadband price and performance. But that was before the FCC made a terrible mistake. In 2002 it reclassified broadband Internet service as an “information service” rather than a “telecommunications service.” In theory, this step implied that broadband was equivalent to a content provider (such as AOL or Yahoo!) and was not a means to communicate, such as a telephone line. In practice, it has stifled competition.

And the solution?

Yet, puzzlingly, the FCC wants to take only a half-step. Genachowski has said that although he regards the Internet as a telecommunications service, he does not want to bring in third-party competition. This move may have been intended to avoid criticism from policy makers, both Republican and Democrat, who have aligned themselves with large Internet providers such as AT&T and Comcast that stand to suffer when their local monopolies are broken. It is frustrating, however, to see Gena chowski acknowledge that the U.S. has fallen behind so many other countries in its communications infrastructure and then rule out the most effective way to reverse the decline. We call on the FCC to take this important step and free the Internet.

Well said. Read the whole the piece.

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.

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