Dear Tom Wheeler: I'm Sorry I Thought You Were A Mindless Cable Shill

from the our-sincerest-apologies dept

Having written about the FCC for most of my adult life, I've grown cynically accustomed to an agency that pays empty lip service to things like consumer welfare and the painful lack of broadband competition. It doesn't matter which party is in power; the FCC has, by and large, spent the lion's share of an entire generation ignoring last mile competitive problems and the resulting symptoms of that greater disease. When the agency could be bothered to actually address these issues, the policies were so tainted by the fear of upsetting campaign contributors (read: regulatory capture) they were often worse than doing nothing at all (see our $300 million broadband map that hallucinates speeds and ignores prices or 2010's loophole-filled net neutrality rules co-crafted by Verizon and Google).

Whether it was former FCC boss turned cable lobbyist Michael Powell's claims that massively deregulating the sector would magically result in telecom Utopia (tip: that didn't happen) or Julius Genachowski being utterly terrified of taking any meaningful stand whatsoever, the broadband industry has spent decades governed by an agency that, at its best, is too timid to do its job, and, at its worst, is an obvious revolving-door lap dog to an industry it's supposed to regulate.

So in 2013 when it was announced that a former lobbyist for both the wireless and cable industries would be the next FCC boss, the collective, audible sighs of disgust unsurprisingly rattled the Internet. I, like many others, believed we were bearing witness to a twisted culmination of decades of regulatory capture, a giant, living, breathing middle finger to a public hungry for a more consumer and innovator-friendly FCC. John Oliver even put Wheeler's name in lights when he infamously compared hiring the former cable lobbyist to employing a dingo as a babysitter:
Most people (with a few notable industry exceptions) believed Wheeler was the final nail in a grotesque, campaign-cash stuffed telecom coffin long under construction. We were painfully, ridiculously wrong.

Since coming into office, Wheeler has raised the base definition of broadband to 25 Mbps to aggressively highlight how three-quarters of the country lack more than one competitive option at that speed. He's started threatening wireless ISPs for using throttling and congestion as bogeymen to make an extra buck. Wheeler also surprised everyone by reclassifying ISPs as common carriers and pushing tougher net neutrality rules. More importantly (I believe), he's spearheaded an effort to kill ISP-crafted, state protectionist laws designed specifically to hinder broadband competition, an issue the FCC had spent the last fifteen years ignoring. Then, last week, Wheeler played the starring role in killing an ugly Comcast merger most sector analysts originally believed would see little regulatory resistance.

In fact, if you read profiles on Wheeler, he's turned out to be a complete 180 from the thinking of a traditional revolving-door regulator, basing his decisions on all available information -- even if that data conflicts with previously-held beliefs (a unique alien indeed in 2015). And while it's true that massive grass roots advocacy helped shift Wheeler's thinking on issues like Title II, his embrace of issues like municipal broadband required little to no shoving, since the lion's share of the public had no idea the issue existed. One of the biggest reasons Wheeler's willing to stand up to the broadband industry? He's 69, and no longer biting his tongue and biding his time for the next cushy lobbyist or think tank gig. Perhaps we should make a rule that all future FCC bosses must be on the brink of retirement to avoid what we'll henceforth call Michael Powell syndrome.

Still, watching Wheeler fills me with cognitive dissonance, as if my frequently-disappointed brain isn't quite sure what to do with an FCC Commissioner capable of objective thought free of AT&T, Comcast and Verizon lobbyist detritus. As a sure sign of the looming apocalypse, last week I watched an FCC Commissioner issue a statement about protecting competition -- and actually mean it:

"Comcast and Time Warner Cable’s decision to end Comcast’s proposed acquisition of Time Warner Cable is in the best interests of consumers. The proposed transaction would have created a company with the most broadband and video subscribers in the nation alongside the ownership of significant programming interests. Today, an online video market is emerging that offers new business models and greater consumer choice. The proposed merger would have posed an unacceptable risk to competition and innovation especially given the growing importance of high-speed broadband to online video and innovative new services."

Though his tenure's unfinished, it may not be a stretch to say that a man most of us believed would be the epitome of revolving door dysfunction has proven to be one of the most consumer- and startup-friendly FCC Commissioners in the agency's history. Granted that may not be saying much; caring more about consumers than Martin, Powell and Genachowski is like getting an award for beating a handful of lobotomized ducklings at a hundred yard dash. And none of this is to classify Wheeler as a saint -- the agency's net neutrality rules have some very concerning loopholes and the FCC still refuses to talk much about pricing, whether that's the problems inherent in usage caps, unreliable meters, or sneaky below the line fees.

Still, it's a lesson learned in letting your mind run on cynicism autopilot, and it's a reminder that even our very broken, campaign-cashed soaked government can still occasionally manage to give birth to consumer-friendly policies. So in short, the tl;dr version is this: I apologize to you, Tom Wheeler, for believing you were a mindless cable shill. I was wrong.

Filed Under: consumer interest, fcc, lobbying, surprises, tom wheeler
Companies: at&t, comcast, verizon

Netflix Says Striking Cap-Exempt Deals With Australian ISPs Was A Mistake It Won't Make Again

from the whoops-a-daisy dept

Early last month we noted how Netflix was taking heat for its decision to strike deals with Australian ISPs exempting Netflix's traffic from usage caps ahead of Netflix's March launch in the country. The decision was seen as hypocritical for a company that has been a fierce critic of usage caps and zero rating in the States. You might recall that Netflix CEO Reed Hastings lambasted Comcast on Facebook for exempting its TV services when the Xbox 360 is used as an IPTV cable box, and Netflix executives called it "almost a human rights violation" when discussing the heavy-handed implementation of caps in Canada.

Granted, as we pointed out at the time Australia is a notably different market, where the extremely high cost of transit means that most content companies strike such deals to genuinely save costs across the entire ecosystem. That's in contrast to the States, where transit is relatively cheap and ISPs have grown to use caps arbitrarily to protect legacy TV revenues from internet video. That still doesn't mean cap-exemption is a good business model for lovers of an open internet, and it's notable that Netflix's position on caps wasn't just muted in Australia, it was entirely absent.

Fast forward a month, and Netflix now suggests it regrets having struck the deals at all (or it regrets that people noted the inconsistencies in its position and demeanor on the issue). In a letter to investors (pdf) Netflix briefly touches on the Australian neutrality fracas. After applauding the FCC's decision to embrace Title II and examine interconnection more closely, the company issues an interesting mea culpa:

"Data caps inhibit Internet innovation and are bad for consumers. In Australia, we recently sought to protect our new members from data caps by participating in ISP programs that, while common in Australia, effectively condone discrimination among video services (some capped, some not). We should have avoided that and will avoid it going forward. Fortunately, most fixed-line ISPs are raising or eliminating data caps in line with our belief that ISPs should provide great video for all services in a market and let consumers do the choosing."

We'll have to watch closely if Netflix's regret includes fighting to eliminate caps in Australia, or continuing to bow quietly to the status quo. Meanwhile, Netflix's international expansion plans this year involve reaching 200 countries by the end of the year, so the company will have plenty of opportunities to put this promise to the test.

Filed Under: australia, deals, interconnection, mistakes, net neutrality
Companies: netflix

Cable's Top Lobbyist Just Can't Understand Why People Like Google Better

from the King-Kong-was-misunderstood dept

Trying to justify the cable industry's latest lawsuit over net neutrality, former FCC boss turned top cable lobbyist Michael Powell has offered up an incredibly entertaining interview in which he struggles to understand why Google tends to see higher customer satisfaction ratings than the cable industry, and tries to brush away anti-competitive concerns as the ramblings of the uninformed masses who just don't understand what a sweetheart the cable industry truly is. In fact, Powell claims the entire net neutrality debate is an unfair persecution of an innocent cable industry and the wholesale hallucination of a few rabblerousers :

"There's probably a book we could write on this. A huge element that led to this decision was a well-orchestrated, dynamic movement, launched, housed and managed on the Internet, that created a myth that something was happening that wasn't actually happening. You can go look at all the materials from Free Press and others who said the cable industry is in the middle of setting up tolls on the Internet. But there is no justification that we were ever doing any of things we were alleged. In Mark Cuban's words, this is nothing but big-company bashing--the idea that cable is full of these evil corporate entities who are thinking of ways to screw you over."

One, if you're using Mark Cuban as an example of someone with a solid grasp on what the net neutrality debate is about, you're doing it wrong. Two, dismissing the entire net neutrality movement as the incoherent ramblings of Free Press is dismissive and obnoxious given the millions of individuals and companies that have made their position on the issue very clear. Three, the cable industry absolutely was engaged in bad behavior, ranging from throttling all upstream BitTorrent traffic (and lying about it repeatedly) to imposing usage caps to hinder internet video (and lying about the fact it was necessary to battle the network congestion bogeyman). That's before you even touch on the obnoxious behavior of the wireless industry, and its endless efforts to block competing technologies, apps and services.

It's clear while reading the interview that Powell has an absolutely devastating case of Google envy, caused in large part by Google's disruptive efforts related to Google Fiber. In trying to explain away Google's higher customer satisfaction ratings, Powell tries to argue that this is because the cable industry has to actually bill you and occasionally come to your house to drill holes:

"We come into your house and do the difficult work of running wires and drilling holes. And unlike Google, we have to send you a bill--a bill to pay for the broadband infrastructure that Google and others profit handsomely from, but don't support directly. Yes, they have ways they support the network, too, but they don't have to directly bill their customer for tripling and quadrupling speeds. A lot of those fantastic companies that don't have to bill you may be selling your identity up, down and sideways, which we may come to regret. But Google has an 80 percent approval rating."

Ignored in Powell's statement is the fact that the cable industry does an incredibly shitty job at billing and home installs. In fact, NCTA members Comcast and Time Warner Cable not only have the worst customer satisfaction ratings in telecom, but in any American industry. Only the cable industry finds itself in the news constantly for employees that fall asleep at customer homes, murder people, dig up the wrong yard, torture kittens, or blow up laptops, dishwashers or entire homes. Meanwhile, Powell forgets Google is now doing installs and billing under Google Fiber -- and the search engine company is doing a notably better job of it than the cable industry has despite a several-decade head start. That's just embarrassing, however Powell would like to paint it.

From there, Powell works hard to claim that it's Facebook and Google that are the diabolical "gatekeepers," and that the cable industry is just the little guy trying to make ends meet:

"Many of these tech companies are dramatically bigger than us. Comcast and Time Warner Cable pale in size when compared to Google, Facebook and Amazon. These are not multinationals. They're domestic American companies. In fact, there not even national companies--Comcast doesn't serve every customer in the United States ... We're called 'the gatekeepers' when companies that control 90 percent of the search market are not. I think this is misguided in ways that don't lead to constructive outcomes, but rather bad policy outcomes like net neutrality."

Well for one, someone forgot to give Powell the memo that Google and Facebook were notably absent from the last round of net neutrality support. Meanwhile, the fact that Google and Facebook have massive international footprints and a spotty history on privacy doesn't magically explain away why the cable industry is notably more disliked than either company. Three, Powell ignores the fact that people have the choice to use Google or Facebook. The lack of competition in broadband means that consumers are stuck with their cable provider, whether they like it or not.

Look, the reason the cable industry is so hated isn't rocket science. It's because the industry has consistently cut corners on customer service to improve quarter-over-quarter earnings, resulting in most consumers having a miserable experience every time they interact with their cable company. Meanwhile, the one-two punch of napping regulators and the lack of serious broadband competition ensures this orchestra of apathy and dysfunction never really changes. That's not really complicated. If Powell and the cable industry really care about being well-liked, they simply have to pony up the cash to provide better customer service. Of course they'd much rather put that money in the bank, then whine like a giant, wealthy baby about how nobody likes them as much as Google.

Filed Under: broadband, cable, michael powell
Companies: comcast, google, ncta

Telco Trade Group USTelecom 'Supports' FCC Neutrality Rules, Just Not The FCC Actually Being Able To Enforce Them

from the I-support-you,-except-for-when-I'm-trying-to-kill-you dept

Despite the endless, breathless proclamations about "outdated, utility-style regulation" or the death of innovation, there's really only one reason ISPs don't want to be reclassified as common carriers by the FCC: the billions to be made by abusing the uncompetitive broadband last mile. The very threat of a regulator actually doing its job and establishing what are relatively thin consumer protections (just ask ISPs like Frontier, Cablevision, Sprint or Sonic.net) is really only a problem if you plan to make money off the backs of a captive audience that can't vote with its wallet.

Not too surprisingly, "we want the absolute right to aggressively abuse an uncompetitive U.S. broadband market" isn't a very sexy or compelling sales pitch. As such, ISPs have worked very hard to paint Title II as a bogeyman of mammoth proportions; an implementation of outdated regulations that will utterly demolish an amazing, hyper-competitive broadband landscape that doesn't actually exist. We've debunked these claims time and time again, but expecting to find a middle ground with lobbyists paid to be intractable is a bit like playing whac-a-mole with an army of invincible undead.

Enter USTelecom, an AT&T-dominated trade group that filed one of five lawsuits last week against the FCC's net neutrality rules. Trying to justify the group's lawsuit to the media, USTelecom boss Walter McCormick this week proclaimed that the group really was ok with the FCC's rules -- it just wasn't ok with the agency having the ability to enforce them:

"US Telecom President Walter McCormick says his association supports the substance of the FCC's new open Internet rules as outlined by the FCC and President Obama, which is no blocking or throttling or paid prioritization. He suggested in an interview on C-SPAN's Communicators series that that was not a heavy lift because his industry operates under those standards already."

Right, well, I adhere to the "standards" stopping me from claiming I'm a magic, sentient fire truck, too (do I need to mention such rules don't exist?). And as we've noted repeatedly, ISPs are smart enough to know that outright blocking of content or websites is PR seppuku, which is why ISP attention has shifted toward things like interconnection and zero rated apps -- areas where ISPs can extract their pound of flesh -- without obviously looking like they're trying to extract their pound of flesh. "We're uh, just getting our fair share from Netflix and trying to help the poor!"

Most of USTelecom's talking points are staler than three-month-old crackers, including this idea that broadband ISPs really want Congress to tackle net neutrality:

"McCormick said the government had a role in protecting the Open Internet, but he said that role should be defined by the U.S. Congress, which has not provided guidance in 20 years. "It is time for Congress to provide the commission with clear authority to guarantee an open Internet, but to prevent the commission from having to redefine the entire Internet..." McCormick insisted he was optimistic that Congress could act. "There is absolute consensus on the problem," he said, and that there is not clear authority, and that the solution is for Congress to supply that clear authority."

Of course, this burning desire to punt the issue to Congress is fueled by the knowledge that, slathered in lobbying cash, Congress either will pass bad laws that benefit USTelecom's members, or do nothing at all after being intentionally bogged down in obnoxiously-simplistic partisan discourse over an issue that isn't really partisan. Neutrality opponents Senator John Thune and Representative Fred Upton have been putting on an adorable pony show claiming they want a "bipartisan" solution to net neutrality, when all they're really trying to do is codify a law that will keep wolves in charge of policing the hen house.

The great irony, of course, is that (after fifteen years of deregulation, it should be noted) the FCC's rules don't actually change all that much -- and they certainly don't get to the core of the broadband industry's great disease -- a lack of broadband competition. The agency has made it clear it intends to forbear from the lion's share of Title II utility regulations, and if you pay attention, FCC boss Tom Wheeler has given every indication that he doesn't see things like zero rating as a big deal. Most people, and a growing number of ISPs, acknowledge you'd have to engage in some particularly idiotic, ham-fisted abuses to even get on the FCC's radar.

Still, the very notion that the FCC might shrug off lobbyist influence and do the bare minimum to actually protect consumers is the kind of "disaster" USTelecom and AT&T feel they simply can't ignore.

Filed Under: authority, broadband, fcc, net neutrality
Companies: ustelecom

Facebook's Zuckerberg Thinks Aggressively Violating Net Neutrality Is Fine...If You Just Mean Well

from the open-your-ears-and-listen dept

As we noted last week, India is in the midst of a heated conversation about net neutrality, as the government puts out feelers to determine how best to define an "open internet." As part of this conversation, Facebook's Internet.org initiative has come under particular scrutiny; the platform offering users in some countries walled gardens to a limited crop of zero rated apps and content. While Facebook consistently emphasizes the philanthropic nature of this effort, content companies have been dropping out of the project in droves, arguing that they don't like the idea of Facebook (or an ISP) determining who does and doesn't get cap-exempt treatment (and therefore a leg up in the market).

Facebook CEO Mark Zuckerberg has since posted an interesting blog post in which he pretends to address these criticisms, but actually winds up showing he's not actually listening to what critics of the initiative are saying. As Facebook has done previously, Zuckerberg first highlights his philanthropic motivations for the Internet.org initiative with a short anecdote:

"First, I’ll share a quick story. Last year I visited Chandauli, a small village in northern India that had just been connected to the internet. In a classroom in the village, I had the chance to talk to a group of students who were learning to use the internet. It was an incredible experience to think that right there in that room might be a student with a big idea that could change the world — and now they could actually make that happen through the internet."

And that's great! If you're in a philanthropic mood, give poor nations help connecting to The Internet. But as Susan Crawford and others have pointed out repeatedly, what these zero rated efforts by Facebook and Google offer is a selective, walled garden governed by the ad-delivery ambitions of a handful of large companies. That's not the internet -- it's a fractured, tiny, Facebook-dominated version of AOL. And it's one in which innovative startups can't compete, because they can't pay off the internet access tollman. So it's a case where big players are able to pay up to effectively keep out the competition.

Zuckerberg proceeds to argue that zero rated systems are ok because some internet is better than none at all:

"We’re proud of this progress. But some people have criticized the concept of zero-rating that allows Internet.org to deliver free basic internet services, saying that offering some services for free goes against the spirit of net neutrality. I strongly disagree with this.

We fully support net neutrality. We want to keep the internet open. Net neutrality ensures network operators don’t discriminate by limiting access to services you want to use. It’s an essential part of the open internet, and we are fully committed to it. But net neutrality is not in conflict with working to get more people connected. These two principles — universal connectivity and net neutrality — can and must coexist.

To give more people access to the internet, it is useful to offer some service for free. If someone can’t afford to pay for connectivity, it is always better to have some access than none at all."

Well, no. You don't get to claim you support the open internet while at the same time building a system that is indisputably anything but. And claiming people have to choose between no internet and Facebook's vision of what its expanding international ad ambitions want the internet to look like is a false (and frankly insulting) choice. Again, if Facebook really wants to help -- help by offering the actual internet -- and all the freedom and opportunity that entails.

Zuckerberg then proceeds to take this bad logic further, by arguing that if you're fighting against zero rated apps, then you're the one hurting poor people:

"Arguments about net neutrality shouldn’t be used to prevent the most disadvantaged people in society from gaining access or to deprive people of opportunity. Eliminating programs that bring more people online won’t increase social inclusion or close the digital divide. It will only deprive all of us of the ideas and contributions of the two thirds of the world who are not connected."

While Zuckerberg claims to be fully supportive of net neutrality, someone should tell him that this bogus argument is the exact same one that anti-net neutrality folks from the big broadband companies have been making, and Zuckerberg's statement plays right into their hands. They've been arguing (incorrectly) that pro-net neutrality forces are depriving the poor of internet access. And now they can quote supposedly "net neutrality supporter" Mark Zuckerberg making their argument for them. Over and over again, the big broadband players just keep arguing that they need to violate net neutrality to provide service to people in need, and Zuckerberg is advancing that argument for them, while claiming to be supportive of the other side.

Again, there's nothing stopping Facebook from helping to finance real internet access in developing nations -- even deals in which Facebook's services and ads play a starring role (provided the internet access itself remains open). Instead, Facebook is pushing a walled garden where only Facebook exists (ridiculously under the name "internet.org" when it's anything but). Remember, Facebook's facing this backlash because India is trying to define what an open internet looks like, and consumers and content companies are making it pretty clear to Zuckerberg and the Indian government that an open internet doesn't involve Facebook deciding which services and content consumers get to view. If Facebook cares as much about an open internet as Zuckerberg breathlessly claims, he'll stop for a moment and actually listen. Internet.org can be a part of the solution, by helping to provide actual internet access, not limited walled gardens where only wealthy companies' services are available.

Filed Under: broadband, india, internet access, losers, mark zuckerberg, net neutrality, walled gardens, winners
Companies: facebook, internet.org

Presidential Hopeful Carly Fiorina Displays Astounding Ignorance In Slamming Net Neutrality

from the that's-not-going-to-win-the-tech-vote dept

Carly Fiorina, whose claim to fame was basically presiding over HP while the company's value dropped in half, has made it clear that she's planning to run for President, despite her sole political experience being losing a Senate race in California against Barbara Boxer. To get ready, Fiorina has been ramping up her public opinion-spewing. She's gotten plenty of attention for blaming environmentalists for California's current water problems and accusing Apple's CEO Tim Cook of hypocrisy in his response to Indiana's controversial Religious Freedom Restoration Act. Feel free to debate those claims all you want. The one that interests me is Fiorina's confused and ignorant take on net neutrality -- which seems to involve making a bunch of claims that are flat out false. I recognize that, as a Republican candidate, she apparently is duty-bound to hate on net neutrality (despite the fact that Republican and Democratic voters alike both overwhelmingly support net neutrality -- and Republicans who actually understand technology support it as well). It still remains a mystery to me why this is even a partisan issue, but it is. Still, if you're going to attack net neutrality, you should at least do so on a factual basis. Fiorina can't even muster up the effort to do that.

Crony capitalism is alive and well. If you need proof, look no further than the Federal Communication Commission's new Title II regulations imposed in the name of "net neutrality" under pressure from President Barack Obama, and the big businesses that benefit.

Um, no. The crony capitalism was on the other side, as nearly all of the pressure against net neutrality came from the giant broadband players, Comcast, AT&T, Time Warner Cable and Verizon. There was almost no actual public support. Meanwhile, the push for Title II was driven heavily by public interest groups and the public itself. While there were some companies that got involved, most of the "big" businesses seemed to sit things out until late in the process and it was clear which way the wind was blowing. The companies that actually made a big difference were the startups (mainly in New York and San Francisco) that mobilized to talk about the harm that the FCC would do to the open internet if it didn't stop the broadband companies from messing things up. Kickstarter, Etsy, Tumblr and others played a really big role. Those companies are growing, but they're nothing like the big broadband companies.

Net neutrality proponents did a masterful job of marketing it with the help of late-night hosts and political spin, arguing that it would level the Internet playing field. The truth, however, is that it will insert Washington bureaucracy and control into the 21st century's greatest success story. The Internet, which has empowered hundreds of millions of Americans in so many aspects of life, will now be subject to the same types of regulations that governed telephone service in the 20th century.

This is a massive exaggeration and is incredibly misleading. First of all, the rules are not the "same regulations," but rather they're just built off the same authority (Title II), but with clear forbearance on the parts of Title II that everyone agrees are problematic. The rules are not about treating the internet as a utility, but in preventing duopolists and monopolists from abusing their position. On top of that, if you talk to a lot of people, they actually remember when telephone service was super reliable, unlike broadband service today.

As someone who led a $87 billion company for six years, I know this: Only big companies can deal with vast, sweeping regulation like the 313 pages imposed by the FCC. This administration has had a habit of identifying a particular problem and then convincing the voters that we require enormous new swaths of government control to fix it.

Almost everything in this paragraph is misleading. First of all, "leading" an "$87 billion company" -- well, here's the chart of HP's stock price during Fiorina's tenure: As you can see, the valuation fluctuated a bit during Fiorina's "leadership," but it seemed to go mostly downward...

Second, the rules are not "313 pages." They are 8 pages. You can see just those 8 pages right here. The rest of the document (which is actually 400 pages) consists of legally required supplemental material and the dissents.

Next, remember, that it was mostly small companies pushing for these rules and big companies fighting against them. As small ISP Sonic made clear, the rules are only a problem if you're trying to do something bad. So if the small companies are clamoring for this, and the big companies are against it, it defies basic common sense to argue that the new rules are good for big companies and bad for small companies. You either have to be woefully misinformed, or blatantly lying. I'm not sure which is the situation here, but neither looks for for Fiorina.

Title II regulation gives the Federal Communications Commission nearly unlimited authority to micromanage how, when and where Internet companies innovate.

This isn't even close to true. It only gives limited authority in how it makes sure that internet access providers handle their traffic. That's it. Not "internet companies." It's a cheap trick to conflate internet access providers and the internet companies that rely on an open internet, but that's the best Fiorina can do. And then she takes it to another level of ridiculousness:

Whereas the old Internet was "permissionless," the new Internet will require bureaucratic approval for the most mind-numbing minutiae and create huge areas of uncertainty . Major companies such as Google, Facebook, Amazon, eBay and Netflix now have a government-conferred advantage over start-ups because they can afford the lobbyists and lawyers necessary to navigate the new Title II landscape. When influence trumps innovation, big entrenched companies benefit.

This isn't true. The new rules do not require anything of internet companies. They don't need lobbyists or lawyers to navigate anything. The rules are directed at internet access providers, and startups offering services on the internet do not have to deal with the rules -- only those offering internet access.

And, really, let's just repeat this line for its sheer insanity:

When influence trumps innovation, big entrenched companies benefit.

Yes, that line is true, but if you look at the past two decades, you'd see that the companies with the most powerful influence have been AT&T, Comcast and Verizon which have some of the most powerful lobbying operations in the world, and have driven broadband policy almost entirely on their own whims for the past two decades. This has resulted in less competition, terrible service and a variety of bad policies.

Who does Fiorina think she's fooling?

One, the Internet economy will no longer benefit from the competition that has steadily driven prices down over the past two decades.

What? Has Fiorina looked at internet bills lately? They have not been going down. It's true that the prices of other things on the internet have gone down, but she is once again conflating internet services with internet access. And, in fact, under the new rules it looks like there may be more competition because it will make it easier to get pole attachments. Furthermore, because of the FCC's other big ruling we may finally see some real municipal competition. And, as AT&T has made clear, when there is real competition, then its prices go down. But it has spent years actively blocking competition, using its political influence.

Two, companies will devote more of their resources to lobbying and regulatory compliance, passing the costs of these activities directly on to consumers.

Again, the rules only impact internet access providers and only if they're doing bad stuff to consumers. If they treat traffic neutrally, there are no compliance issues to worry about.

Ah, wait. It appears we left out a bit of Fiorina's bio. Before she took the helm at HP... she spent her career at AT&T and AT&T spinoff Lucent. Perhaps that has more to do with her position than anything. But if she thinks she's going to court the tech vote, directly misleading the public about an important issue like net neutrality isn't going to do her any favors.

Filed Under: carly fiorina, competition, fcc, innovation, net neutrality, open internet, permissionless innovation
Companies: hp

Facebook, Google's Supposed Love Of Net Neutrality Notably Absent In India

from the don't-be-evil dept

With it now relatively clear that nobody will tolerate outright throttling or blocking of services, we've noted repeatedly how ISPs have turned their gaze toward other, more subtle ways of abusing their gatekeeper mono/duopolies on the net neutrality front. The most notable being interconnection -- or intentionally degrading service to extract new tolls from content companies, and zero rated apps -- or letting some content bypass the cap if a content or service company is willing to pay ISPs a premium. Both battlefields obviously benefit the ISPs and content companies with the deepest pockets.

One of the major reasons Facebook and Google were so quiet during the latest round of the net neutrality fight is because they were happy with the original 2010 rules, given they didn't cover wireless whatsoever. But they were also happy about the loopholes regarding zero rated apps, which play a starring role in the companies' future global ambitions. Zero rating is particularly important to the companies overseas, where both offer free, walled-garden internet access where their services get preferential treatment from wireless carriers (see Facebook Zero or Google Free Zone).

With the neutrality debate taking root globally, both Facebook and Google are taking increased criticism for "supporting net neutrality in the US" (though, as we've noted, they really haven't) while pushing for zero-rated models that trample neutrality overseas. In India for example, regulators are now being bombarded with comments from a public that's realizing just how badly these models tilt the entire massive playing field toward the gaping maws of industry giants, whether that's the regional wireless company, Facebook, or both:

"Reliance’s deal with Facebook, called Internet.org, effectively gives you one social network at no cost, while forcing you to pay for others like LinkedIn. It might seem like the company being generous, but it only works because Facebook and Reliance were able to strike a deal. A smaller social networking firm that doesn’t have Facebook’s resources or influence would find it harder to build an audience, because they’re competing with a free service....Pahwa pointed out that this strategy could result in dominance of major players in the market and crowding out of others who can’t afford to “strike deals or pay up for getting access to the fast lane".

Indian Internet users aren't alone in realizing the problems inherent in zero rated apps. A growing chorus of Internet content companies have started backing away from zero rated efforts like Airtel Zero or Facebook's Internet.org deal with Reliance. The Times Group, India Today, NDTV, IBNLive, NewsHunt, and BBC have all pulled out of the initiatives citing the bad precedent set in cherry picking which content gets a free ride. Flight, hotel and travel price tracking website Cleartrip also dropped out, posting to their blog that such exclusionary practices are against the company's DNA:

"...the recent debate around #NetNeutrality gave us pause to rethink our approach to Internet.org and the idea of large corporations getting involved with picking and choosing who gets access to what and how fast. What started off with providing a simple search service has us now concerned with influencing customer decision-making by forcing options on them, something that is against our core DNA."

While the neutrality debate in India may be fresher, the public and industry there are already more in tune to the threat posed by zero rated apps than many U.S. customers and companies are. And the U.S. and India are obviously seeing more conversation on this issue than, say, markets in Africa. There, in many markets, users are happy to get access no matter what it looks like, and Google and Facebook are aggressively jockeying for pole position over billions in new advertising eyeballs. These services in particular are a two-sided coin. On the one side, both companies are correct in noting that the services deliver limited web access (and all the great things that entails) to those who currently don't have service. On the other hand, as Susan Crawford highlighted a few years ago, what these users are getting is a notable bastardization of the internet:

"For poorer people, Internet access will equal Facebook. That’s not the Internet—that’s being fodder for someone else’s ad-targeting business," she says. "That’s entrenching and amplifying existing inequalities and contributing to poverty of imagination—a crucial limitation on human life."

If you're building internet access from the ground up dominated by a few ISPs and a few content gatekeepers, it certainly makes you wonder what kind of strange monstrosities these models evolve into. When the internet starts from a place of openness, companies have a steeper uphill climb. Here in the States, both AT&T and T-Mobile have struggled to convince the public that these models heavily benefit consumers. AT&T has been setting a horrible precedent by allowing deep pocketed companies to bypass usage caps, pitching the concept as "1-800" or "free shipping" for data. T-Mobile's had better luck convincing users that exempting only the biggest music services is a consumer boon for the ages (it's not, because it puts non-profits, independents and smaller companies in an immediate competitive hole).

While zero rated apps are now banned by net neutrality rules in a growing list of countries (Chile, Slovenia, The Netherlands and Canada), the FCC's new rules appear to take a hands off approach to zero rating. That's a decision you can be sure Facebook and Google -- both still frequently praised in the media as champions of net neutrality -- had notable input on.

Filed Under: favoritism, india, internet, net neutrality, picking favorites, zero rating
Companies: airtel, facebook, google, internet.org, reliance, wikipedia