Claiming To Represent 'Tech' Network Hardware Vendors Shockingly Support Their ISP Clients In Opposing Tough Net Neutrality Rules

from the don't-fear-the-investment-bogeyman dept

Tue, Dec 23rd 2014 3:46pm — Karl Bode

By now, we've made it pretty clear that while Title II is being portrayed as a big, scary bogeyman by the nation's largest ISPs, it's really only a regulatory burden if you're doing something wrong. And while ISPs like Verizon, Comcast and AT&T have been making the rounds telling anyone who'll listen that Title-II based rules will stifle industry investment, those same ISPs have been not only regulated for years under Title II without problems, but ISPs like Verizon, Charter and Time Warner Cable have also been admitting to investors that's simply not true.

Enter hardware vendors like Sandvine, Cisco, Intel, IBM and Adtran, who last week joined forces to oppose Title-II based net neutrality rules in a letter (pdf) to Congress and the FCC. Even though the investment-bogeyman mantra has been thoroughly debunked by this point, that didn't stop the companies from upping the rhetoric ante -- and proclaiming that Title II will kill the entire economy:

"While many experts have noted the damage Title II could do to network investment, the harm would cascade out far beyond the provision of broadband service because the Internet is now so entwined with our entire economy...Reversing course now by shifting to Title II means that instead of billions of broadband investment driving other sectors of the economy forward, any reduction in this spending will stifle growth across the entire economy. This is not idle speculation or fear mongering. And as some have already warned, Title II is going to lead to a slowdown, if not a hold, in broadband build out, because if you don’t know that you can recover on your investment, you won’t make it."

Except fear mongering is exactly what it is. Wireless voice has always been regulated under Title II, yet wireless has seen an explosion in network investment over the last decade. Verizon's FiOS services are regulated under Title II for tax purposes, and a quick glimpse skyward should illustrate that the sky didn't fall. Meanwhile, to encourage regulatory apathy, the letter perpetuates the boring falsehood that the broadband market has "flourished" under a decade of ~~deregulation~~ regulatory capture, when the lack of competition, high prices, and horrid customer service clearly shows that's not the case.

The network hardware vendors' letter last week was bandied about as proof positive that "tech" companies oppose Title II rules, ignoring, of course, that in this case we're talking specifically about tech companies that stand to profit handsomely from weaker (or no) net neutrality rules.

Much like the ISPs, it's not really Title II hardware vendors oppose. What they oppose are rules that could potentially hamstring the billions that can be made from abusing the incumbent ISP gatekeeper stranglehold over noncompetitive markets, whether that comes in the form of double dipping, erecting arbitrary new tolls, discriminating against competing traffic, or imposing otherwise "creative" new pricing paradigms. After all, if these companies stand to make billions selling the hardware that makes this bad behavior possible, why on Earth would they want net neutrality rules that prohibit it?

Internet Ecosystem Letter FINAL 12 10 14 (PDF)Internet Ecosystem Letter FINAL 12 10 14 (Text)

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: net neutrality, open internet, telco vendors, title ii
Companies: adran, at&t, cisco, comcast, ibm, intel, sandvine, verizon

20 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

That One Guy (profile), 23 Dec 2014 @ 4:02pm

Who is paying the investment?
And as some have already warned, Title II is going to lead to a slowdown, if not a hold, in broadband build out, because if you don’t know that you can recover on your investment, you won’t make it.

Leaving aside for a moment that even Verizon slipped up and publicly stated that reclassification wouldn't do squat to hinder investment, if we're going to talk about 'recovering' the investment these companies are making, we should also bring up the billions of tax-payer dollars they've been given for their networks, and the massive tax-breaks they've been given for the same reason.

If they're claiming that re-classification would make expanding their networks too 'risky', then it only seems fair to completely eliminate those tax-breaks and subsidies. After all, their purpose is to help the companies expand and maintain their networks for the benefit of the public, if they're doing neither, then they clearly don't need the 'help'.

So no more subsidies, and no more tax breaks, if expanding the networks is too risky, then the public shouldn't be the ones putting their money on the line.

Now, such networks do need to be built and maintained, but if the major players aren't willing to do so, sounds like a perfect opportunity for smaller players to take up the slack. I'm sure they would love to have the perks the major ISP's don't need anymore.
[ link to this | view in chronology ]
Only here in name only, 23 Dec 2014 @ 4:03pm

So...
Chinese manufactures support censoring the internet, I am shocked, let me get my fainting couch..
[ link to this | view in chronology ]
Anonymous Coward, 23 Dec 2014 @ 4:03pm

Vendors are in the same position as a customer of big telcos as grocery stores. If your customer gets pissed he'll go to the competition. Likewise if the big telco gets pissed, it will go to the vendors competition.

So vendors are really strong on what the telco wants as long as it won't cut into their own profits to do so.

The idea that big telcos won't expand is a worthless idea given that most of rural America can't get cable or DSL out in the country unless they lay in close to a city where it is financially beneficial to wire them in.

In this aspect we are in the same place as power companies in the 30s. The REA was formed in 1935 to help finance third party vendors of electricity to basically wire the US for power. Unfortunately, the telcos have been paid to do so and sat on the money, while at the same time fighting any attempts to spread broadband beyond their control.

More and more we are looking at a repeat of history with broadband replacing electricity as the issue.
[ link to this | view in chronology ]
Anonymous Coward, 23 Dec 2014 @ 4:04pm

hes right its not idle speculation or fear mongering
its
idle speculation, fear mongering and crystal ball reading

So sickening that they value their wallet above the well being of the internet. This is basically a list of people I will never give money to, Thanks!
[ link to this | view in chronology ]
Scott Dunn, 23 Dec 2014 @ 4:17pm

Even if investors flee...so what?
Community broadband will step in to take up the slack.
[ link to this | view in chronology ]
- Anonymous Coward, 23 Dec 2014 @ 4:37pm
  
  Re: Even if investors flee...so what?
  Not if ALEC has anything to say!
  [ link to this | view in chronology ]
- That One Guy (profile), 23 Dec 2014 @ 4:46pm
  
  Re: Even if investors flee...so what?
  Assuming they can manage to get around the 'No-one but major ISP's are allowed to offer service in this area' laws that scatter the country that is.
  [ link to this | view in chronology ]
  - Christopher (profile), 23 Dec 2014 @ 5:30pm
    
    Re: Re: Even if investors flee...so what?
    There should have been a lawsuit against those laws already on the basis of limiting competition.
    I understand that the incumbents don't want to actually compete but it is time to MAKE them compete.
    [ link to this | view in chronology ]
    - clemahieu (profile), 23 Dec 2014 @ 8:11pm
      
      Re: Re: Re: Even if investors flee...so what?
      People have brought lawsuits and they lost. The problem stems from government intervention in infrastructure.
      [ link to this | view in chronology ]
Whoever, 23 Dec 2014 @ 5:06pm

Sales, sales, and more sales
Deep packet inspection and filtering represents an opportunity to sell more boxes at higher prices. That's all this is about.
[ link to this | view in chronology ]
- Christopher (profile), 23 Dec 2014 @ 5:31pm
  
  Re: Sales, sales, and more sales
  Right in one. This is all about these companies looking at selling DPI equipment and filtering equipment and SALIVATING at the thought of selling that, really unnecessary, equipment.
  [ link to this | view in chronology ]
  - clemahieu (profile), 23 Dec 2014 @ 8:05pm
    
    Re: Re: Sales, sales, and more sales
    I think it's more likely this is why hardware vendors don't want government intervention. http://arstechnica.com/tech-policy/2014/05/photos-of-an-nsa-upgrade-factory-show-cisco-router-gettin g-implant/
    [ link to this | view in chronology ]
- clemahieu (profile), 23 Dec 2014 @ 8:05pm
  
  Re: Sales, sales, and more sales
  Throttled traffic means lower traffic which means fewer boxes.
  [ link to this | view in chronology ]
Anonymous Coward, 23 Dec 2014 @ 5:27pm

Not surprising
Each new creative way to break net neutrality is an upsell opportunity for these hardware vendors.
[ link to this | view in chronology ]
clemahieu (profile), 23 Dec 2014 @ 8:00pm

I'm reading the Title II and I see "different charges may be made for the different classes of comunications" can anyone explain how Title II reclassification prevents charging different rates for different classes of communication?
[ link to this | view in chronology ]
- Anonymous Coward, 24 Dec 2014 @ 1:39am
  
  Re:
  The different classes date back to the origins of phone systems, and refers to voice and fax. That is the same wires being used for different form of communication. The Internet is a single class of communication.
  [ link to this | view in chronology ]
  - clemahieu (profile), 24 Dec 2014 @ 7:21am
    
    Re: Re:
    " and such other classes as the Commission may
    decide to be just and reasonable" seems to indicate that new classes can be created at any time. A class for flash traffic that peaks and consumes 1/3 of all internet traffic each day http://appleinsider.com/articles/13/05/14/netflix-accounts-for-13-of-nightly-home-internet-traffic-a pples-itunes-takes-2 seems a easy candidate for a new class.
    
    Again, let me know if anyone can find how Title II prevents class-based traffic charging because as far as I can see this is the biggest misconception about Title II reclassification out there.
    [ link to this | view in chronology ]
Anonymous Coward, 24 Dec 2014 @ 7:38am

"Claiming To Represent 'Tech' Network Hardware Vendors Shockingly Support Their ISP Clients In Opposing Tough Net Neutrality Rules"

I get the feeling there should be a comma in there somewhere...
[ link to this | view in chronology ]
Anonymous Coward, 27 Dec 2014 @ 2:17pm

Lets not forget about the Trade in Service agreement and TPP.

Please help wikileaks get the info by donate them on this

http://org.salsalabs.com/o/1439/content_item/freetpp
[ link to this | view in chronology ]
Sheogorath (profile), 28 Dec 2014 @ 9:27am

"And as some have already warned, Title II is going to lead to a slowdown, if not a hold, in broadband build out, because if you don’t know that you can recover on your investment, you won’t make it."
Indeed. That's why, because of the lack of investment and build out under Title II regulations, phone services are landline only, and they're priced so highly that only rich people can afford them. Amirite?
[ link to this | view in chronology ]