Internet Provider Sonic's CEO: Title II Is Only A Regulatory Burden If You're Doing Something Bad

from the it's-that-simple dept

A few weeks back, I was a guest on the famed TWiT netcast, on a special episode mostly about net neutrality. You can see it at that link (I tried to embed, but it appears, unfortunately, that TWiT doesn't do HTTPS embeds -- something I hope the TWiT folks will fix in the near future).

However, this post has nothing to do with me being on the show, but rather something that was said by Sonic's CEO Dane Jasper concerning net neutrality and Title II: that Title II is only a "regulatory burden" if you're an ISP that's doing bad stuff to consumers. Much of the first hour was a discussion between Jasper and another small ISP owner, Brett Glass, who has been rather vehement in his dislike of net neutrality or Title II. Glass brought up a key talking point that big ISPs and other anti-Title II people have made repeatedly: that using Title II would be a huge regulatory burden, "burying ISPs in red tape" (as Glass noted). Yet Jasper explained how that's just not true, and, in fact, he's not at all worried about the "regulatory burden" because as long as he's not doing anything to muck up your connection, there's basically no additional regulatory issue (this is from about 27 minutes into the show):

Dane: I think that the more substantial risk is to the Internet and web properties, particularly new innovative web properties. If there isn't some regulation around what carriers who dominate the marketplace can do to that traffic. So that I see, the threat to the Internet is the top priority, and Brett talks about an insurmountable amount of red tape. Today, Internet service providers are required to publish for the FCC a disclosure of traffic management practices. So we publish a disclosure. I think it says we don't touch your bits. We don't modify, we don't filter, we don't engage in deep pack inspection. So, I think from a compliance perspective, if the assumption is that Title II will be by and large gutted, or rather they engage in forbearance of all provisions and begin to re-enable provisions that allow them to assure the traffic is treated equally, my expectation is those of use that treat traffic equally will have a pretty light regulatory burden.

This line has stuck with me, because the argument that Title II is burying service providers in regulation just keeps coming up. It was brought up recently by Mark Cuban in the comments to our post about Cuban's view of net neutrality. And yet, the key parts of Title II that are important for these net neutrality rules are really pretty limited. Sections 201 and 202 are the key ones, and do very little in terms of adding "red tape" to being an ISP. They just talk about not allowing the service provider to engage in unreasonable discrimination.

Yet, as Dane notes, so long as you stick to net neutrality, and you make it clear to the FCC (as is already required) that you don't muck with people's connections, the actual "regulatory burden" will be absolutely minimal. And that's from someone who will clearly have to deal with it. So, that should probably make you wonder: when ISPs argue that there will be a massive regulatory burden associated with Title II, just what sorts of games are they planning to play with your traffic to encounter such a regulatory burden?

Filed Under: brett glass, dane jasper, isps, regulations, title ii, twit
Companies: sonic.net

Yet Another Study Proclaims U.S. Broadband Awesome If You Intentionally Ignore All The Warts

from the damn-lies-and-statistics dept

To be clear, the United States is indisputably mediocre when it comes to broadband. It doesn't really matter if you look at data from FCC, the the OECD, OOkla's Net Index or walk next door and ask your neighbor. We're average or worse on metrics like speed (three quarters of the country has no competitive option at speeds faster than 25 Mbps), penetration, price and adoption, and we're among the worst anywhere when it comes to customer service. In fact U.S. broadband customer service is so bad, people rank the IRS, banking industry, insurance companies and the airlines higher.

That said, it's endlessly amusing to watch the broadband industry (and its varied assortment of fauxcademics, sock puppets, think tankers, lobbyists and PR tendrils) time and time and time again declare that U.S. broadband is secretly incredibly awesome, and the people stuck paying $100 for a sub 3 Mbps DSL connection and mandatory (though unwanted) landline aren't looking at the numbers right.

The latest study of this type comes courtesy of our friends over at the Verizon, Comcast and AT&T funded American Enterprise Institute, whose latest analysis (pdf) compares U.S. broadband to only other G7 countries, since a broader global comparison makes us look worse. Unsurprisingly, the AEI finds we're competitive under this criteria if you look at specific metrics in just the right way, ignore all previous studies, tilt your head just the right way, and ignore the industry's awful customer service. The study resulted in websites like Vox recently running articles with headlines like "American broadband is better than you think." Much of the AEI data is sound, it's just highly selective and selectively re-arranged.

For example the study is quick to point out that the United States has done a better job at deploying the latest DOCSIS 3.0 cable network upgrades than other G7 countries. That's not particularly surprising. The predominant connectivity option overseas is DSL, which costs significantly more to upgrade to fiber to the home, while U.S. cable networks were relatively inexpensive to upgrade to DOCSIS 3.0 (Comcast is on record stating DOCSIS 3.0 upgrade costs were "the kind of money we can find in the sofa cushions"). The fact that we're leading in a highly specific metric certainly makes a very lovely chart:The fact the United States leads in DOCSIS 3.0 deployment becomes less sexy when you realize that two-thirds of U.S. consumers still only have one competitive choice when it comes to speeds above 25 Mbps. That one choice is thanks to (you guessed it) DOCSIS 3.0 upgrades, which while an improvement still lag on the upstream side of the equation, which is why your cable speeds tend to be so top heavy (say 30 Mbps downstream, 2 Mbps upstream). But while the United States has more cable in the ground than Europe sounds nice, it's kind of like observing that Europe has different trees. It's perhaps notable, but doesn't refute U.S. broadband mediocrity. Also worth noting (since the study doesn't): companies like AT&T and Verizon in the U.S. are simply giving up on DSL in many markets, leaving cable the only game in town.

Similarly, the study makes a big deal out of the fact the United States leads many G7 countries when it comes to the number of total fiber based connections, a metric that includes fiber to the home connections like Google Fiber, and the slower and much less costly fiber to the node connections like AT&T U-Verse. Of course, all G7 countries (sans Japan) have struggled with broad fiber deployment, since it's very fashionable to throw subsidies at your regional incumbent telco for fiber, then hope for the best. According to the Fiber to the Home Council website, there are now 640,000 North American households receiving fiber to the home service with connection speeds of at least 100 megabits per second after a generation of broadband subsidies. Hooray for us, I guess?

The study makes light of all price studies that came before it, arguing that every earlier study and stat firm in the world managed to get their broadband price calculations wrong, but a think tank employed in part by the nation's largest ISPs has cornered the market on sound broadband pricing analysis. AEI appears to be largely fixated on a recent study by the Open Technology Institute, which noted that U.S. cities are falling behind when it comes to broadband pricing (with the exception of cities that build their own networks like Chattanooga):

"Our findings show that the average cost of plans in nearly every speed tier we selected is higher in the U.S. than in Europe, and seven of the nine U.S. cities surveyed for the report have average prices that are higher than the median for plans offered between 25 and 50 Mbps download speeds...We found similar results when comparing the average speed of plans ranging from $35 to $50, and the average data cap for mobile broadband plans ranging from $35 to $45."

U.S. incumbent broadband pricing has long taken a particular beating when compared to places like Paris, where regulators took our discarded idea of local loop unbundling (opening up the incumbent networks to third party competition) and made it work. The result? Stories like this, where people visit Paris and are shocked to learn that Parisians can get 100 Mbps broadband, 250 cable channels, home phone service and a wireless phone with 3 GB of data -- for $63 a month. Yet to hear the AEI study author tell it in a blog post, France got it wrong, and the U.S. (where those same services will likely run you $250 or more a month) has it oh so right:

"In reality, the nations that have treated broadband networks as public utilities are high on promises and low on results. France and Italy are the truest examples of the utility model for broadband; wired broadband in France is no faster than mobile broadband, and Italy has the slowest networks in the G7. Both Italy and France have promised heavy subsidies to broadband carriers for upgraded networks, but austerity measures and other budget constraints have prevented the subsidies from materializing. Overall, broadband users in the US, Japan, and Canada have the best services, and those in Germany, France, and Italy have the worst among G7 nations. Careful examination of the data shows that the US is fundamentally on the right track; policy makers are well advised to stay the course."

Stay the course! Maintain the status quo! Ignore the lumpy fat man behind the curtain! The study takes the very long way home to ultimately conclude that America's actually doing a really good job at broadband, and therefore the sector should be deregulated even further. Obviously you can manipulate any data set with enough elbow grease and pie charts. That certainly works for broadband, at least until you actually go visit some of these duopoly markets (like my former hometown of Binghamton, NY) where your only choice is aging, over-priced DSL, or slightly faster, over-priced cable service -- both with an extra helping of abysmal service and disdain for the customer.

Everybody all together now: we're number one! We're number one! We're number one!

Filed Under: broadband, cost, g7, selective reasoning, speeds, study, us