The Broadband Industry Pretends To Be Worried About Your Soaring Bill In Attempt To Undermine Net Neutrality

from the who-can-you-trust-if-you-can't-trust-the-phone-company dept

On the heels of Obama's surprise support of Title II-based net neutrality rules last month, we noted that the broadband industry's anti-Title II talking points (primarily that it will kill network investment and sector innovation) not only were just plain wrong, they were getting more than a little stale. That's a problem for the industry given the increasingly bi-partisan support of real net neutrality rules and the groundswell of SOPA-esque activism in support of Title II. As such, the industry's vast think tank apparatus quickly got to work on new talking points to combat net neutrality rules that actually might do something.

The first product of this renewed effort is this study by the AT&T-funded Progressive Policy Institute. The study's central thesis is that if Title II net neutrality regulations are passed, the nation will be awash in $15 billion in various new Federal and State taxes and fees:

"We have calculated that the average annual increase in state and local fees levied on U.S. wireline and wireless broadband subscribers will be $67 and $72, respectively. And the annual increase in federal fees per household will be roughly $17. When you add it all up, reclassification could add a whopping $15 billion in new user fees on top of the planned $1.5 billion extra to fund the E-Rate program. The higher fees would come on top of the adverse impact on consumers of less investment and slower innovation that would result from reclassification."

Like a well-oiled machine, the cable, phone and broadband industry got to work pushing its study across all the major news outlets over the last week. AT&T CEO Randall Stephenson quickly took to NBC (skip to 1:05) to claim the average household broadband bill would increase by $19 a month under Title II (note amusingly that he got the study numbers his own company helped pay for wrong). The cable industry also not-so-subtly took to using this graphic in ads proclaiming Title II will result in vicious price hikes for everyone: You'll probably be surprised to learn that the broadband industry had to resort to conflation, data cherry picking and a parade of worst-case scenarios to get these numbers. On the state level, Internet access has long received a Congressional exemption that's set to expire December 11 -- an issue totally unrelated to the Title II push. Congress can make sure the exemption is extended, keeping state sales taxes far away from broadband access. If they don't, again, it has nothing to do with Title II. Realize this, and nearly all of the PPI's estimate of $15 billion in new taxes as a direct result of Title II goes up in smoke right out of the gate.

In an e-mail conversation about the study I had with Free Press Research Director Derek Turner, Turner argues that PPI is also predicting a very worst-case scenario on Federal taxation that's simply not going to happen:

"The FCC could decide to forbear from requiring federal USF contributions for one. And whether or not the FCC does that, adding broadband into the USF mix wouldn't impact the overall size of the fund. That is, if broadband revenues were assessed but the fund size stayed constant, consumers would pay on broadband but, as a result, they'd pay less on their other services like wireless and wired voice. PPI asserts that consumers would pay more on aggregate than they do now (i.e. by adding broadband to the mix, their numbers imply that the burden for the fund will shift towards consumers from businesses), but the report out today offers no explanation of why the contribution percentage would tilt that way."

Of course the pretense that the broadband industry cares about how much your bills increase is also laughable, given the industry spends a large part of each day trying to figure out creative ways to pad your bill. This includes rate hikes, usage caps and a wide variety of fees imposed below the line to jack up the advertised rate post sale. These fees range from entirely bogus, non-government mandated "regulatory recovery fees" (pure-profit fees imposed to offset ambiguous government regulation despite a decade of deregulation) to new "broadcast TV fees" that simply bury a portion of programming costs below the line. They're all a variety of false advertising, but they highlight how the biggest increases to below-the-line charges and fees are coming from the industry itself.

The reality the broadband industry doesn't want to acknowledge is that very little changes for it under Title II if carriers aren't engaged in bad behavior. The broadband industry is fighting Title II solely to protect potential revenues generated from abusing uncompetitive markets. That this self-serving behavior is being dressed up as concern about the size of your broadband bill is the industry's best comedic work to date. Perhaps this slightly edited (by Mike) version of the NCTA ad is a bit more accurate:

Filed Under: bills, broadband, faux concern, hal singer, lobbyists, net neutrality, studies, taxes, title ii
Companies: at&t, ncta, progressive policy institute

AT&T Still Pouting About Title II, Continues Bogus Fiber 'Investment Slowdown'

from the when-in-doubt,-pout dept

To try and slow down growing support for Title-II based neutrality rules, AT&T last month engaged in some fairly typical pouting for the telco, insisting the company would be freezing its "GigaPower" branded fiber investments until it gets what it wants (namely wimpier rules under Section 706). Of course as we noted at the time, AT&T has already been cutting back fixed-line network investment for many years to focus on wireless, and what fiber deployments it is engaged in are predominately what I like to call "fiber to the press release" -- or scattered, cherry-picked deployments dressed up to give the illusion the company is honestly and seriously competing with the likes of Google Fiber.

After the FCC's DirecTV merger review team uncharacteristically pressed AT&T to see its math, AT&T walked back the statement slightly -- insisting that the company was simply being misunderstood by the FCC. This week AT&T made it clear that no, the "we're going to freeze investment that barely existed in the first place" argument is in fact going to be the cornerstone of its fight against Title II.

A press release by the company announced this week that it would be delivering 1 Gbps "Gigapower" connections to an unspecified number of North Carolina locals in the Winston Salem area. Like most of AT&T's other fiber to the press release announcements, you'd be hard-pressed to find a single detail on the number of customers this deployment will reach, or any specific build locations listed. You will however find a cute little comment about how Title II will be to blame if this ambiguous deployment doesn't wind up being very big:

"President Obama's proposal in early November to regulate the entire Internet under rules from the 1930s designed for voice services injects significant uncertainty into the economics underlying AT&T's investment decisions. As a result, the company has paused consideration of any fiber investments that would go beyond its DIRECTV merger-related commitments, which includes previously announced fiber plans described above, until the rules are clarified."

In short, AT&T's press release says it's pausing all of its fiber investments except for the 2 million additional customers it's promising if the government approves its $48 billion acquisition of DirecTV.

One, that actually contradicts what the company just said to the FCC in a letter -- namely that its threat didn't include the company's 25 Gigapower geographical target markets. Two, because AT&T never actually bothered to say how many users its Gigapower upgrades would cover in the first place, it was able to pull two million of those already planned deployments aside (most affluent development communities or college campuses where fiber is already in the ground) and use them as regulator bait to get its DirecTV deal approved. It's all part of a long-standing shell game where AT&T fiddles with the numbers to create broadband coverage gaps, then promises regulators those gaps will be filled if only it's allowed to buy BellSouth T-Mobile DirecTV.

It's also worth noting that AT&T's offerings in North Carolina are part of the North Carolina Next Generation Network (NCNGN) initiative, an effort spearheaded by six municipalities and four leading research universities to create the kind of next-gen broadband networks AT&T has spent more than a decade fighting against. AT&T was one of eight companies that bid to participate in the program, and its decision to back away from the effort because of net neutrality rules largely only hurts AT&T. Similarly, you're supposed to ignore that AT&T (with the help of Time Warner Cable) was instrumental in passing a 2011 North Carolina state law that hamstrings local town and city efforts to improve broadband in the state (something AT&T's also busy doing in Kansas).

It's all indicative of the kind of blistering hypocrisy AT&T is known for all over the country when it comes to better broadband. Even though Title II only really hinders ISPs engaged in bad behavior, AT&T again and again insists that these kinds of government regulations and consumer protections can only hinder broadband deployment. In reality, AT&T uses and abuses government to hinder broadband deployment on a daily basis, and it's probably the very last company the country should be trusting when it comes to what's best for the Internet. Now if you'll excuse me, I'm going to return that non-existent Bugatti I promised readers willing to say nice things about me in the comments.

Filed Under: fiber, fiber to the press release, net neutrality, open internet, title ii
Companies: at&t

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

Comcast Accidentally Admits It's Unsure Of The Competitive Impact Of Its Own Merger

from the trust-us-we're-the-cable-company dept

While debate over the Comcast merger had hit a bit of a lull for Thanksgiving, it was revived this week with the launch of a group calling itself the Stop Mega Comcast Coalition. Formed by a combination of companies like Dish and consumer advocacy groups like Public Knowledge, the group is lobbying to stop the merger on the grounds it harms competition, price and innovation across a number of markets, including broadband, television, and advertising. Of course, group participants Fairpoint Communications and Dish would likely give a limb to wield the kind of market power Comcast enjoys, but you're apparently supposed to ignore that and just applaud their selfless dedication to consumer welfare.

The unveiling of the group resulted in Comcast penning a blog post in which it slammed the new group for trotting out complaints that "weren't found to be credible" in the company's past transaction reviews (like when Comcast acquired NBC, then ignored the merger conditions crafted by itself). To hear Comcast tell it, the company found at least 600 "thoughtful and positive" people who think Comcast getting immensely more massive is a great idea:

"While it’s no surprise that the same competitors and special interest groups who’ve gone after Comcast in the past are at it again, the record tells a very different story. Over the last several months, the FCC has received an outpouring of nearly 600 thoughtful and positive comments about the transaction from a wide range of supporters. Unlike most of the criticism, the support has been very transaction-specific.

This support includes more than 100 Chambers of Commerce and business organizations, as well as a wide array of small businesses, start-ups, and technology companies. It includes more than 20 programmers, nearly 200 diversity groups and community partners, and over 150 state and local leaders of both parties."

Did we mention we pay most of these people for their support? I think we might have forgotten to mention that.

Kind of amusingly, Kate Cox at the Consumerist noticed that when Comcast originally blasted telecom reporters and analysts with an e-mail copy of its blog post, the company apparently forgot to proofread it and actually included some internal editing notes. Comcast has proudly and repeatedly stated that because Comcast and Time Warner Cable don't directly compete, the merger can't possibly be bad. Except, in its accidentally-included blog note, Comcast indicates that it wasn't entirely sure of this fact:

"We are still working with a vendor to analyze the FCC spreadsheet but in case it shows that there are any consumers in census blocks that may lose a broadband choice, want to make sure these sentences are more nuanced."

That's essentially Comcast accidentally publicly admitting that, even after a year of merger prep and defense, that it doesn't actually fully understand the impact of its own deal proposal. The note suggests Comcast had to pay an outside vendor to double check FCC data (provided to the FCC by Comcast), and then would have softened its rhetoric depending on what the analysis found. In a follow up e-mail to me, Comcast denies that it doesn't understand its own $45 billion mega-merger, but then adds to truly do so would take actually visiting some neighborhoods:

"Karl, our filings have detailed this issue in the past. It would literally take someone walking the streets or going down to a house by house map to find out if there is any actual overlap - and this would be if any likely in only a very very small number of homes."

Perhaps you should maybe go do that before repeatedly insisting there's no competitive overlap? Sure, it's true that the merger is more about vertical integration, programming leverage and monopsony concerns than direct market competition, but that doesn't make Comcast's stumbling, bumbling defense of the deal any less entertaining.

Filed Under: admissions, competition, fcc, honesty, mistakes
Companies: comcast, time warner cable

AT&T's Regulatory Hypocrisy On Proud Display In Kansas, Where It's Fighting To Keep The State A Broadband Backwater

from the do-as-we-say-not-as-we-do dept

Like any giant, pampered duopoly, AT&T claims to loathe regulation when it has even the remotest potential to hamstring anti-competitive behavior (like Title II on the net neutrality front), but is perfectly fine with it when it protects the company's long-standing stranglehold on the United States broadband market. One of many glaring illustrations of this is in Kansas, where the company recently wrote but failed to pass SB 304, which, like nearly two dozen similar laws around the country, would prohibit towns and cities from wiring themselves for broadband -- even in cases where nobody else will. From the bill:

"Sec. 4. Except with regard to unserved areas, a municipality may not, directly or indirectly offer or provide to one or more subscribers, video, telecommunications or broadband service; or purchase, lease, construct, maintain or operate any facility for the purpose of enabling a private business or entity to offer, provide, carry, or deliver video, telecommunications or broadband service to one or more subscribers."

Like many of these bills, if you then look closer at the bill's definition of "unserved," you'll find it includes very expensive and capped satellite and wireless broadband, making it incredibly hard to gain approval:

"Unserved area” means one or more contiguous census blocks within the legal boundaries of a municipality seeking to provide the unserved area with video, telecommunications or broadband service, where at least nine out of 10 households lack access to facilities-based, terrestrial broadband service, either fixed or mobile, or satellite broadband service, at the minimum broadband transmission speed as defined by the FCC."

Facing an immensely uncompetitive duopoly between AT&T and former Washington Post run CableOne, the city of Chanute, Kansas has been looking to build a citywide fiber network capable of offering 1 Gbps speeds at around $40 per month. After defeating AT&T's attempt to pass new regulations hamstringing the project, Chanute now finds themselves face to face with a 1947 ma-bell era law that requires companies get permission from the Kansas Corporation Commission to sell bonds to fund such telecom projects. With the KCC likely to approve the request, AT&T lawyers have jumped in to intervene, according to the Wichita Eagle:

"Any decision made by the KCC could impact AT&T’s business operations in the area, which is why we asked to intervene in the proceeding," the company said in a written response to questions from The Eagle. “AT&T remains interested in both broadband issues and the work of the KCC."

As I've noted previously, AT&T's also in the process of going state by state paying asking state lawmakers to gut any and all remaining consumer protections (like laws requiring they continue offering 911 to the elderly) so it can back away from aging DSL markets it doesn't want to upgrade. In Kansas specifically, AT&T has promised locals they'll be awash in all manner of miracle broadband improvements, if only they eliminate the Kansas Corporation Commission’s consumer protection regulations and minimum quality-of-service standards. Well, at least the ones that apply to AT&T.

Again, just so we're clear, this is the same company that insists that absolutely any regulatory effort to protect consumers from duopoly power is the very worst sort of government over-reach, but has absolutely no qualms about using government over-reach and regulation to make sure broadband prices remain high and service quality continues to suck.

Filed Under: broadband, chanute, kansas, muni-broadband
Companies: at&t

Rep. Latta Urges Congress To 'Preserve An Open & Free Internet' By Preventing The FCC From Doing So

from the your-ideas-are-intriguing-to-me-and-i-wish-to-subscribe-to-your-newsletter dept

Earlier this year, we wrote about Rep. Bob Latta -- whose campaigns have been bankrolled by basically every big broadband player -- introducing laughably misleading legislation designed to block the FCC from putting in place net neutrality rules. As we noted at the time, nearly every claim that Latta made in his announcement about the legislation was flat out false. Laughably so. The worst was just the fact that he argued that his bill -- which would directly block the FCC from putting in place rules that would keep the internet "open and free" is described as legislation that would "ensure the internet remains open and free." He's not just co-opting the language of the other side, he's making a mockery of it.

And, apparently, having been called out on spewing pure bullshit, he's not backing down. On Monday he sent out a "Dear Colleague" email to all other members of the House, asking them to co-sponsor his legislation (HR 4752), once again claiming that it was necessary to "preserve a free and open internet."

Dear Colleague:

Please join me in becoming a co-sponsor of H.R. 4752, a bill to limit the authority of the Federal Communications Commission (FCC) over providers of broadband Internet access service.

As you know, the Internet has flourished under a light-touch regulatory framework that has long governed its operation and functionality. However, the FCC is considering reclassifying broadband from an information service to a public utility under Title II of the Communications Act and regulating it using laws based on the monopoly telephone era of the 1930s. This proposal would go against the FCC’s long-standing precedent on broadband classification and stall the growth and innovation we’ve seen over the past two decades. Reclassification would add unnecessary regulation on broadband providers and restrict their flexibility to innovate and stunt their ability to make robust investments.

H.R. 4752 would prevent the FCC from regulating broadband Internet access as a Title II service, which would ultimately benefit consumers by providing the certainty that Internet Service Providers need to continue investing in expansive broadband networks without fear of excessive regulation. Most importantly, it would uphold the very regulatory structure that has enabled the Internet to remain open and free.

Once again, almost everything stated here is wrong or misleading. First of all, cable was only classified under Title I as an information service as of 2002 and DSL as of 2005. Before that, DSL especially was recognized as being classified under Title II as a common carrier service and had its highest levels of investment prior to the FCC decision to go with Title I, rather than Title II. So arguing either that there is "long-standing precedent" or that the "past two decades" of internet growth and investment is due to Title I, rather than Title II, is flat out false. It's a lie. Congressional Reps shouldn't be allowed to get away with lying, even if they do so regularly.

Second, it's a flat out lie to claim that the current "regulatory structure" is what "has enable the Internet to remain open and free." Nothing of the sort is true. In fact, the big broadband players for years have been threatening to put up tollbooths and to break with the past concerning the open and free internet. AT&T's Ed Whitacre kicked it all off back in 2005 by saying he wanted big successful companies like Google to pay him extra to be able to reach his users. The only thing that has stopped that from happening has been the ongoing effort by the FCC to block any such attempt with a variety of net neutrality rules. And, yes, the courts have struck down the FCC's previous attempts, but to argue that the existing regulatory structure stopped the big broadband players from putting up tollbooths on the internet is clearly wrong.

Finally, there's nothing in his bill that would actually encourage an "open and free internet," nor does Rep. Latta (or his financial backers) actually want that. They want the reverse. They want a lack of barriers or rules from the FCC so they can break the open internet, allowing them to put up tollbooths that charge successful companies (like Netflix, Google and others) extra just to reach their end users, because they know they have terminating access monopolies, and as such can act as gatekeepers.

There are real debates to be had about the rules and the authorities that the FCC is looking at using. But that's not what Rep. Latta is doing. He's cynically trying to block the FCC from doing anything meaningful on protecting an open and free internet, while pretending that his solution (let the broadband guys do whatever the hell they want) will magically keep the internet free and open even as those very same broadband players have made it clear they would like nothing more than to end the open and free nature of the internet, so they can charge more and block out competition.

Filed Under: bob latta, fcc, net neutrality, open internet, title ii

FCC Commissioner Spearheads Flimsy Attempt To Shame And Discredit Netflix For Its Title II Support

from the faux-outrage dept

Given Netflix's rather vocal opposition to usage caps and support of Title II (pdf), the company is unsurprisingly public enemy number one for many major broadband and TV companies (and their various PR, lobbying and policy folk) at the moment. There's a pretty apparent attempt on some fronts to paint Netflix as the villain in the recent interconnection feuds, in which Netflix (and companies like Level 3 and Cogent) insist incumbent ISPs are intentionally letting interconnection points degrade to extract new fees from content and service companies.

This week, Netflix's supposed villainy was highlighted by FCC Commissioner Ajit Pai, who penned a letter (pdf) to the company complaining that Netflix had abandoned its net neutrality principles and had been hypocritically encouraging the creation of Internet "fast lanes":

"Netflix has been one of the principal advocates for subjecting Internet service providers (ISPs) to public utility regulation under Title II of the Communications Act, arguing that this step is necessary to prevent the development of so-called "fast lanes" on the Internet. "The basic argument," you have said, “is that we're big believers in the free and open Internet." For this reason, I was surprised to learn of allegations that Netflix has been working to effectively secure "fast lanes" for its own content on ISPs' networks at the expense of its competitors.

What is Pai's evidence that the company is being a hypocrite on neutrality? Exhibit A appears to be Netflix's refusal to join a new coalition called the Streaming Video Alliance, whose founding members include two of the biggest players in the cable and broadband industry: Comcast and Charter Communications. One of the group's other founding members is Frost and Sullivan analyst Dan Rayburn, who has spent much of the last year telling anyone who'll listen that incumbent ISPs with thirty years of anti-competitive behavior are just misunderstood, and it's Netflix that's to blame for most of the modern era's Internet video problems.

That Netflix didn't feel the overwhelming need to join this coalition of BFFs isn't particularly surprising.

Pai's other example of Netflix's fast lane hypocrisy appears to be simply the fact that Netflix runs its own content delivery network, Netflix Open Connect. Open Connect is a free-to-join CDN that involves ISPs hosting Netflix caching hardware on their network, something that reduces Netflix's costs, but also reduces overall ISP traffic load, improving video delivery efficiency all around. To hear Pai tell it however, Netflix's CDN is a big, bad bogeyman:

"Some have suggested that Netflix has taken these actions because the company is currently installing its own proprietary caching appliances throughout ISPs' networks as part of its Open Connect program. If ISPs were to install open caching appliances throughout their networks, all video content providers—including Netflix—could compete on a level playing field. If, however, ISPs were to install Netflix's proprietary caching appliance instead, Netflix's videos would run the equivalent of a 100-yard dash while its competitors' videos would have to run a marathon."

You might recall that AT&T, Verizon and Comcast refused to participate in Netflix's CDN, instead forcing Netflix to pay them new interconnection fees to keep streaming performance from foundering. Meanwhile, Netflix makes the company's peering locations, guidelines, hardware design and the open source software components largely open to inspection, so while you can't go build Netflix CDN hardware yourself, we're not exactly talking about state secrets. It's also worth noting that small and mid-sized ISPs (usually with much better track records on consumer issues than their larger brethren and no TV revenues to protect) have wholeheartedly supported Netflix's efforts. Dane Jasper, CEO of Sonic.net, for example called Netflix's Open Connect "brilliant." George Mitsopoulos, COO of independent ISP Ikanos/DSLExtreme, also similarly notes that Open Connect is of great benefit to ISPs.

None of this is to say Netflix is a saint. Everyone is running blindly toward the Internet video cash trough, and all of them want everyone using their preferred solutions, with meaningful transparency an ongoing problem. To be sure, Netflix's ISP rankings system is also a bit of a ham-handed attempt to name and shame ISPs that don't use its CDN (Open Connect partners unsurprisingly seeing better positioning), and the company's initial decision to restrict higher-quality "Super HD" streams to just these partners was thankfully reversed. That said, at some point you have to ask yourself based on history and experience: which do you trust more on consumer issues: Comcast or Netflix?

You also have to wonder why an FCC Commissioner that has no problems with rampant media consolidation, net neutrality violations or the lack of broadband competition is just so very concerned about such a curiously specific issue. Of all the pressing consumer issues facing the telecom and TV market (usage caps, neutrality, lack of competition, sneaky fees, cramming, etc.) Pai's greatest concern is Netflix's free, entirely voluntary content delivery network? If one didn't know any better, one might get the impression that the legacy TV industry and its loyal politicians and pundits are putting on a political dog and pony show to punish Netflix for standing up to companies with thirty years of anti-competitive behavior under their belts.

Filed Under: ajit pai, content delivery networks, dan rayburn, favoritism, fcc, net neutrality, open internet, standards, streaming
Companies: charter communications, comcast, netflix

The EFF Takes The Contentious, Sometimes Bizarre Effort To Define Net Neutrality Global

from the tomato,-tomahto dept

While Tim Wu originally coined the term net neutrality in a 2003 paper, it was former AT&T CEO Ed Whitacre's 2005 proclamation that he wasn't going to let the Googles of the world "ride his pipes for free" that truly ignited the net neutrality debate. AT&T made it clear that it was (and continues to be) eager to use its power as a gatekeeper in uncompetitive markets to impose arbitrary and unnecessary troll tolls on content and service companies.

Whitacre's entitlement attitude in turned spawned the misleading argument that service and content companies (that already pay for bandwidth and own much of their own infrastructure) somehow get a "free ride," and therefore should start paying phone companies their "fair share." Though wrong, the argument was infectious, and we soon had telcos worldwide crying that they too deserve an extra payment for doing absolutely nothing. In short, it was AT&T's flimsy justification for double dipping that took net neutrality global.

Building on this bedrock of nonsense we've been trying to properly define net neutrality ever since. That job has grown more difficult as attempts to impose these troll tolls have grown increasingly clever (fixed-line usage caps, AT&T's Sponsored Data and the Netflix interconnection feuds being just the latest), but at its heart net neutrality is not complicated: create rules that protect consumers from bad ISP behavior in the face of limited competition.

Despite a decade of efforts to educate the public (with no thanks to the mainstream news media, pollsters or politicians), a recent Pew survey (pdf) indicates that only 61% of the U.S. public knows what net neutrality is. Based on personal anecdotal experience (glassy eyed stares at dinner parties when discussing the subject), I'd wager that number is too high and many of the survey participants guessed or used multiple choice contextual clues.

As the battle to educate consumers on the benefit of net neutrality goes global, the EFF says it's joined forces with 34 groups in 19 countries to create a new global coalition on net neutrality aimed at solidifying the definition of net neutrality at the ground floor. They've started with this shared definition, translated into 11 languages:

"Net neutrality requires that the Internet be maintained as an open platform, on which network providers treat all content, applications and services equally, without discrimination."

Highlighting the problems inherent in trying to nail down specific neutrality language over the better part of a decade, the EFF of course then has to proceed to point out its definition isn't actually complete, and the group doesn't mean to prohibit reasonable network management:

"This definition doesn't imply that Internet providers can't use reasonable methods to manage their networks, for example to ensure that all applications from voice calls to downloads run smoothly, or to secure their networks from malicious uses like denial-of-service attacks. Neither does it mean they can't offer users different tiers of service at different price points, such as a residential-level service and a business-level service."

And that's historically where the conversation has gone off the rails. Whether you're concerned about government over-reach or you just want the most effective rules possible without loopholes, it's often impossible to come to a consensus on basic language when neutrality is involved (define equal? define discrimination? what's reasonable?). That confusion is compounded by a broadband industry that has a vested interest in keeping confusion and hyperbole set to 11, whether that's claiming that neutrality rules will keep the deaf from using helpful technology or that net neutrality will somehow harm the poor.

Meanwhile, carve out exceptions for "security" and "network integrity," and ISPs just used those definitions to mask anti-competitive behavior. For example fixed-line network caps are necessary because of congestion (when no congestion exists), or we can't launch a competing service or platform because it's an ambiguous security threat. It's a very deep well, and in the States a decade of bickering and misinformation started by old Ed Whitacre has resulted in a mountain of muddy, unproductive discourse that sometimes seems to make even less sense as we tunnel deeper into it.

It's at that point one begins to wonder if the term net neutrality itself hasn't outlived its usefulness, given that at the end of the day we're really talking about stopping ISPs in uncompetitive markets from engaging in bad behavior. Make sure countries have functional, competitive markets, and net neutrality itself becomes less of a worry. Once that fails, you're down the rabbit hole of hyperbole, and if the United States is any indication, there's simply no bottom.

Filed Under: broadband, definitions, net neutrality
Companies: eff

FCC Gives T-Mobile A Talking To For Exempting Speedtests From Caps, Preventing Users From Seeing They'd Been Throttled

from the just-deliver-our-bits-and-get-out-of-the-way dept

While T-Mobile has been doing a lot of consumer friendly things lately, we've noted repeatedly that many of these behaviors are somewhat superficial, despite oodles of press adoration for the company's admittedly highly entertaining CEO John Legere. Under the surface, some of what T-Mobile is up to isn't that different from the companies T-Mobile ridicules (AT&T, Verizon). Not only has the company not really been eager to compete on price, it has shown repeatedly that it doesn't think much of net neutrality or Title II reclassification, despite being a self-professed consumer BFF.

In addition to not understanding (or not caring) how the company's Music Freedom plan sets a horrible precedent, T-Mobile found itself under fire earlier this year for its decision to exempt speedtests from the company's arbitrary usage caps. Why? Unlike the overage fees charged by AT&T and Verizon, T-Mobile throttles users to 64 or 128 kbps after users reach their monthly allotments. Groups like Public Knowledge complained back in July that by exempting speedtests from T-Mobile caps, throttled customers weren't able to tell that they were throttled:

"By exempting speed tests from the throttling, T-Mobile is effectively preventing consumers from learning exactly how slow their throttled connections are. Under the new policy, T-Mobile customers who exceed their data caps will not be able to gauge the actual speeds available to them for the vast majority of their daily usage."

T-Mobile responded by claiming that the carrier was only trying to help consumers by making speedtests (which don't use much data to begin with) cap exempt. But that logic is a slippery slope and a cop out. If you're setting arbitrary caps and then exempting music services and speedtests, why not Techdirt podcasts? Why not TurboTax? Why not city municipal services? Government websites? Again, it sets a bad precedent for a wireless carrier to erect artificial, arbitrary barriers, then begin fiddling with what specific services can (or can't) more easily bypass these hurdles.

The FCC appears to have heard Public Knowledge's concerns, and this week announced (pdf) that the agency had worked with T-Mobile on an agreement requiring the carrier to clarify its throttling practices. According to the FCC, T-Mobile has sixty days to clarify throttling practices on its websites, provide access to speedtests that show a user's throttled state, and begin sending clear text messages to consumers alerting them when they've reached their monthly data allotments. Says the FCC:

"The FCC is committed to ensuring that broadband providers are transparent to consumers. I’m grateful T-Mobile has worked with the FCC to ensure that its customers are better informed about the speeds they are experiencing," said FCC Chairman Tom Wheeler. “Consumers need this information to fully understand what they are getting with their broadband service."

Of course, ensuring companies are "transparent" is one thing, and protecting the integrity of a neutral network is something else entirely. The FCC has made it repeatedly clear they see efforts like T-Mobile's Music Freedom and AT&T's Sponsored Data as "pricing creativity" during the neutrality rulemaking process, which should concern anybody interested in a healthy Internet. Meanwhile, T-Mobile wants to be seen as the ultra-hip, fun cousin of the telecom scene, but it apparently hopes nobody will notice that many of its behaviors aren't all that different from its dodgy, drunk uncles, AT&T and Verizon. If T-Mobile really wants to be seen as truly consumer friendly? Just deliver our bits and get the hell out of the way.

Filed Under: broadband caps, data caps, exemptions, fcc, net neutrality, open internet, speedtest
Companies: t-mobile