Colorado Residents Wake Up, Vote To Bypass Protectionist State Broadband Laws

from the build-it-and-they-will-come dept

As we've noticed in the past, if there's a place to start fixing U.S. broadband competition, it's the nearly two-dozen state protectionist broadband laws written and passed by the nation's incumbent ISPs. Said laws either hinder or outright ban towns and cities from building and/or improving their own broadband networks, even in cases where local private companies refuse to. In several instances, the laws even prohibit government collaboration with private companies in any way.

The laws are usually passed under the pretense of protecting communities from their own financial missteps, with assorted industry mouthpieces like Marsha Blackburn playing up the failures of a few select municipal broadband projects. Of course, like any business plan, these ventures can be built on solid or rotten frames, and several have been quite successful. In contrast, these protectionist laws take local choice away entirely, replacing it with mechanisms that do little more than insulate the nation's lumbering broadband mono/duopoly from competition of any kind.

Fortunately, in the last year or so, these laws have started to see some renewed public attention as projects like Google Fiber have people clamoring for faster, cheaper broadband service.

Colorado's 2005 state law hindering community broadband bills was pushed for by local incumbents CenturyLink (formerly Qwest) and Comcast, which, like AT&T, have a long and quite sleazy history of passing awful laws, trying to sue such operations out of existence, or engaging in misleading disinformation campaigns (like telling locals their taxpayer money will go toward subsidizing porn). In Colorado's case, the 2005 law fortunately included provisions allowing locals to build networks if they call for an election. Last week, Boulder and six other communities voted to move forward with the idea of building their own networks.

Comcast is busy in Washington trying to maintain a clean facade in order to get regulatory approval of its $45 billion acquisition of Time Warner Cable, so it didn't challenge the efforts, something that helps explain the campaign's success:

"How were they able to secure such a big victory? There might be some factors at work that are bigger than even Colorado. Comcast, the state's largest cable provider, did not fight the referendum, perhaps because it is focused on getting its proposed merger with Time Warner Cable approved in Washington. (Comcast declined to comment for this report.)"

Like so many technology issues (net neutrality springs to mind), this issue of community broadband has somehow been caught in the partisan politics team cheerleading wormhole, even though letting a giant corporation write your state laws and erode local authority simply to protect its mono/duopoly revenues isn't something either Conservatives or Progressives would support in a sane world. Refreshingly, a lot of the community revolt against these laws currently occurring in places like Colorado, North Carolina and Tennessee is being championed by Republicans and Democrats alike, who collectively (though belatedly) seem to have realized that better, cheaper broadband ultimately benefits everybody.

Earlier this year, FCC boss Tom Wheeler stated he'd be using the FCC's authority to ensure "timely" broadband deployment to dismantle portions of some of these laws, though the net neutrality debate appears to have put the issue on the back burner. That's a shame, since we've long pointed out that net neutrality issues are only a symptom of the deeper issue: a lack of competition. Dismantling idiotic laws purchased by ISPs to maintain that status quo is the very first place we need to look if that problem is ever going to be seriously addressed.

Filed Under: broadband, colorado, community broadband, competition, muni-broadband, protectionism, votes
Companies: comcast

Anti Net Neutrality Crowd Reaches Deep For The Craziest Possible Response To President Obama's Call For Real Net Neutrality Rules

from the and-the-competition-is-on dept

Well, we already wrote about President Obama's somewhat surprising decision to come out strongly in favor of Title II reclassification for broadband (with strong forbearance) to setup some real net neutrality rules. We also covered the unhappy response from the big broadband players who are just repeating the same talking points from the past year, claiming that they'll suddenly stop investing in broadband and how this will kill the internet (ignoring that they already rely on Title II for a number of things, including internet infrastructure).

But the real fun is coming from the politicians and the pundits who seem to be trying to out-crazy each other in coming up with the most ridiculous analogy/description of what Title II means for the internet and the world. The one getting the most attention has to be Senator Ted Cruz who declared net neutrality "Obamacare for the internet." It's not, of course. Not even close. Matthew Inman, over at TheOatmeal has penned a fantastic response to Cruz, explaining the basics of what net neutrality is really about, and why it's just ridiculous to claim it's "Obamacare for the internet." You should read the whole thing, because it's much funnier than just this snippet (and you'll also understand the crab taco reference), but here's a snippet: But, honestly, the "Obamacare" line was just one of many crazy comparisons. Here's Fox legal analyst Andrew Napolitano calling it "Orwellian" (I'd embed the video, but apparently MediaMatters still doesn't realize how to use SSL, so we can't) to refer to it as "net neutrality" saying that it's really about taking "the choice of buyers and sellers out of the market." And that's in response to Fox's Stuart Varney claiming (incorrectly) that the President's proposal is "one speed for all, one price for all." Neither of those statements are even close to true. There is nothing in the proposal that involves "one price for all" or "one speed for all." It's just about setting up a system where a broadband provider cannot discriminate and favor their own services over another's. It's the kind of thing you'd think the guys at Fox would appreciate, given that one of their main competitors, MSNBC, is owned by Comcast.

How do you think Fox's Napolitano and Varney would feel about Comcast slowing down access to Fox's videos and websites while pushing those visitors to visit MSNBC instead?

And if that wasn't crazy enough, let's take it up another notch. We got an unsolicited "statement of Roslyn Layton" in response to President Obama's proposal. I have no idea who "Roslyn Layton" is and, and frankly, have no interest in doing the Google search to find out, but I know plenty from the fact that she's actually claiming that this new plan to make sure that the internet is open and free from unfair blocking for all is somehow a victory for the Russians, Chinese and Iranians:

During President Obama’s official visit to China today, the White House issued a statement of support of government regulation of the Internet with the classification of broadband under Title II of the Telecommunications Act from 1934. The symbolism of this statement appearing while President Obama is in China could not be more Orwellian. The Chinese internet is everything that we don’t want in the US: state ownership of the enterprises that comprises the Internet, its infrastructure, content, and connectivity; top-down regulation of every aspect of the Internet experience; and government collusion with industry to create Internet companies. Should the US take the route of reclassifying broadband under Title II as Obama suggests, it would bring the the US dangerously closer to the Chinese model where the internet is “government allowed”.

Title II is not only bad news for the US, but for the rest of world. Indeed foreign authoritarian governments have been looking for justification to monitor networks and users under the guise of net neutrality and the “Open Internet”. Obama’s announcement could not be a better present to the leaders of China, Iran, and Russia.

Except that's the opposite of fact. A plan that specifically calls for "no blocking, no throttling, increased transparency and no paid prioritization." Does that really sound like a plan from China, Iran and Russia? Does Layton think anyone thinks that statement is even within the same area code as the truth? While some others are making similar statements, they at least admit that those countries will use "any action" by the US government as a supposed defense for seeking to regulate the internet.

But that includes any rules that would be put forth, including the rules under Section 706. So the fact that Russia, China and Iran would lie and totally misrepresent what rules under Title II mean doesn't magically mean that Title II would give them any extra cover.

And that's because it's simply wrong that Title II is "regulating the internet." As we've explained many times, there are legitimate concerns about using Title II -- but these complaints above are hysterical and simply wrong. And by being so hyperbolic and apoplectic, they're actually doing their side a disservice. Anyone who actually knows what's going on knows for a fact that rules under Title II aren't anywhere near as problematic as all of these claims are making it out to be.

Taking clear rules that are designed to keep the internet more accessible and more open and less susceptible to interference shouldn't be seen as a partisan issue (a la Cruz) or "regulating the internet." It's not. It's about defining the rules under which underlying infrastructure must agree to operate -- to keep the internet itself free from dangerous interference by gatekeepers who have a long history of interfering. It's certainly not about supporting totalitarian censorship-happy regimes, but the exact opposite. It's about making sure that everyone can get their message or service out there, and not worrying about having a giant broadband player block access over its last mile monopoly.

To take an issue that is about keeping the internet open and free, and pretending it's going to lead to a censored and "Orwellian" internet is just ridiculous and wrong.

Reacting like this just makes everyone making such claims look really, really silly.

Filed Under: andrew napolitano, net neutrality, roslyn layton, stuart varney, ted cruz, title ii

Broadband Industry: Title II Is Bad Because Only A Broken Congress Awash In Our Lobbying Cash Should Guide Net Neutrality

from the you-have-absolutely-no-credibility dept

Not too surprisingly, the broadband industry isn't too happy about the White House's surprise announcement that it appears to have grown a spine and is ready to go to war over reclassifying ISPs under Title II to protect net neutrality. ISPs have repeatedly made it clear that they'd sue any effort to impose real rules, and you could barely hear oneself over the noise of deep-pocketed carriers putting their legal teams, PR firms, and myriad of paid astroturfers, policy mavens, sockpuppets, fauxcademics and think tankers on high alert. The response from this status quo chorus is about what you'd expect, with most of them breathlessly insisting that Title II will kill puppies, ruin your nice dress shirt, totally disrupt your brunch plans, and destroy the Internet as we know it.

Verizon, for one, offered a fairly predictable response, insisting that Title II would destroy the Internet as we know it. To hear Verizon tell it, Title II simply wouldn't survive a legal challenge (pro tip: to avoid a legal challenge, how about you don't sue?):

"Reclassification under Title II, which for the first time would apply 1930s-era utility regulation to the Internet, would be a radical reversal of course that would in and of itself threaten great harm to an open Internet, competition and innovation. That course will likely also face strong legal challenges and would likely not stand up in court. Moreover, this approach would be gratuitous. As all major broadband providers and their trade groups have conceded, the FCC already has sufficient authority under Section 706 to adopt rules that address any practices that threaten harm to consumers or competition, including authority to prohibit ‘paid prioritization.’ For effective, enforceable, legally sustainable net neutrality rules, the Commission should look to Section 706."

Amusingly, every time Verizon speaks on this issue they not only forget to mention that Title II governs huge swaths of their infrastructure with absolutely no ill effects (and actually some tax benefits for Verizon), but that they were the company that decided to sue over the very Section 706 rules they now profess to support. AT&T similarly ponied up a statement that first pretends that turning telecom regulators into spineless wimps is some kind of bi-partisan miracle accomplishment, then proceeds to insist that relying on a broken, bickering Congress flush with AT&T cash is the only way to move forward:

"Light-touch regulation has encouraged levels of investment unprecedented by any industry and spawned incredible innovation. Today’s action puts all of that at risk – and puts it at risk not to remedy any specific harm that has occurred. Instead, this action is designed to deal with a hypothetical problem posed by certain political groups whose objective all along has been to bring about government control of the Internet. The White House is proposing to put the Internet and our economy at risk as a result of such political pressures."

And by "political pressure," AT&T means the four million people who wrote the FCC annoyed at the fact that AT&T now gets to literally write and purchase all telecom laws. By "government control of the Internet" AT&T means regulators that actually do their job, and by "unprecedented" levels of investment AT&T's referring of course to their fixed-line network investment CAPEX that's been dropping like a stone despite fifteen years of broadband industry deregulation.

Comcast to lobbyist David Cohen (who calls himself the company's "Chief Diversity Officer" to skirt lobbying rules) offered a similar response that trots out ye olde "consumer protection kills network investment" talking point:

"Comcast and cable companies (along with the telcos) have led the broadband revolution, being the first to roll out America’s fastest broadband speeds across the country. As the White House itself acknowledged in its broadband report in 2013, this only happened because we were not subject to the intrusive regulatory regime designed for a different era."

Again though, AT&T and Verizon in particular have almost-entirely frozen any meaningful deployment of "next gen" FioS and U-Verse services (with the exception of a few, scattered, wealthy high-end development communities), and overall network investment continues to decline. You're meant to ignore the fact that this decline happened after fifteen years of dramatic deregulation of the broadband industry. You're also meant to ignore the fact that these policy choices are giving cable a stronger broadband monopoly than ever before in many markets, because phone companies (despite being flush with government subsidies) are refusing to upgrade DSL customers, consciously driving those users to the same cable companies they used to compete with.

But I digress. Like AT&T, the cable industry's top lobbying group, the NCTA (now run by former FCC boss Michael Powell), would similarly prefer it if the FCC left net neutrality to a dysfunctional Congress awash in telecom industry lobbying cash:

"The FCC is an independent agency and it should exercise independent judgment in crafting new rules. This is truly a matter that belongs in Congress and only Congress should make a policy change of this magnitude. Congress can easily unravel the legal and jurisdictional knot that has tied up the FCC in crafting sustainable open Internet rules, without resorting to rules of the rotary-dial phone era. We urge Congress to swiftly exercise leadership of this important issue."

Because when you think about Congress, "easy," "swift," and "leadership" are certainly the very first words that jump to mind. As we've noted quite a few times now, in the absence of meaningful broadband competition (something that's not getting fixed anytime soon), Title II with forbearance is the only sensible way forward if we want neutrality rules that not only protect consumers from aggressive duopolists, but help prevent future iterations of the FCC from over-reaching. Most of the ISP claims about the impact on investment are the same tired talking points they've trotted out for every cocktail party and policy issue for the last thirty years, and they're going to need a new repertoire of scary bogeymen if they hope to keep the latest chapter in the net neutrality saga truly entertaining.

Filed Under: barack obama, broadband, cable, congress, dsl, lobbying, politics, president obama, title ii
Companies: at&t, comcast, ncta, verizon

Surprise: President Obama Calls For Real Net Neutrality

from the boom dept

President Obama has finally stepped up in the net neutrality battle, calling on the FCC to reclassify broadband as Title II, with forbearance, to create strong real net neutrality rules. Here's the key bit:

I believe the FCC should reclassify consumer broadband service under Title II of the Telecommunications Act — while at the same time forbearing from rate regulation and other provisions less relevant to broadband services. This is a basic acknowledgment of the services ISPs provide to American homes and businesses, and the straightforward obligations necessary to ensure the network works for everyone — not just one or two companies.

Investment in wired and wireless networks has supported jobs and made America the center of a vibrant ecosystem of digital devices, apps, and platforms that fuel growth and expand opportunity. Importantly, network investment remained strong under the previous net neutrality regime, before it was struck down by the court; in fact, the court agreed that protecting net neutrality helps foster more investment and innovation. If the FCC appropriately forbears from the Title II regulations that are not needed to implement the principles above — principles that most ISPs have followed for years — it will help ensure new rules are consistent with incentives for further investment in the infrastructure of the Internet.

He also encourages the following setup, while acknowledging that the FCC is independent and can create whatever rules it wants.

The FCC is an independent agency, and ultimately this decision is theirs alone. I believe the FCC should create a new set of rules protecting net neutrality and ensuring that neither the cable company nor the phone company will be able to act as a gatekeeper, restricting what you can do or see online. The rules I am asking for are simple, common-sense steps that reflect the Internet you and I use every day, and that some ISPs already observe. These bright-line rules include:

• No blocking. If a consumer requests access to a website or service, and the content is legal, your ISP should not be permitted to block it. That way, every player — not just those commercially affiliated with an ISP — gets a fair shot at your business.
• No throttling. Nor should ISPs be able to intentionally slow down some content or speed up others — through a process often called “throttling” — based on the type of service or your ISP’s preferences.
• Increased transparency. The connection between consumers and ISPs — the so-called “last mile” — is not the only place some sites might get special treatment. So, I am also asking the FCC to make full use of the transparency authorities the court recently upheld, and if necessary to apply net neutrality rules to points of interconnection between the ISP and the rest of the Internet.
• No paid prioritization. Simply put: No service should be stuck in a “slow lane” because it does not pay a fee. That kind of gatekeeping would undermine the level playing field essential to the Internet’s growth. So, as I have before, I am asking for an explicit ban on paid prioritization and any other restriction that has a similar effect.

If carefully designed, these rules should not create any undue burden for ISPs, and can have clear, monitored exceptions for reasonable network management and for specialized services such as dedicated, mission-critical networks serving a hospital. But combined, these rules mean everything for preserving the Internet’s openness.

The White House has also released the following video of President Obama discussing this: Make sure not to miss the first few seconds of the video, in which the White House appears to acknowledge the "internet slowdown day" with a mock buffering image: Many people engaged in the net neutrality fight had been annoyed at President Obama for not taking a strong stand on net neutrality -- a promise he had campaigned on. Instead, the White House was pretty quiet about things, and President Obama made a bunch of vague, non-committal statements about it. Making a clear and bold proclamation supporting reclassifying under Title II (with the important forbearance) is a big step forward. It won't sway Republicans who have fought against Title II from the beginning, but it may finally give folks who had been wavering and playing a political game of not fully supporting Title II in the past the political cover they need. And that includes those at the "independent" FCC...

This won't necessarily change the end result here, but this is a big win for net neutrality supporters who had been feeling abandoned, and certainly provides some political support to full reclassification to protect an open internet. It could have and should have come much earlier, but better late than never.

Filed Under: barack obama, broadband, fcc, forbearance, net neutrality, open internet, president obama, prioritization, reclassification, title ii

Without Greater Transparency And Meaningful Net Neutrality Rules, The Netflix Interconnection War Will Get Much, Much Uglier

from the sunlight-is-the-best-disinfectant dept

If you've followed the ongoing feud between Netflix and the nation's biggest ISPs, you'll recall that streaming performance on the nation's four biggest ISPs (AT&T, Verizon, Comcast and Time Warner Cable) mysteriously started to go to hell earlier this year, and was only resolved once Netflix acquiesced to ISP demands to bypass transit partners and pay carriers for direct interconnection. Though the FCC has refused to include interconnection in their consideration of new net neutrality rules, we've noted how it's really the edges of these networks where the biggest neutrality battles are now being waged.

While Netflix's deals did resolve the congestion issues for users on these ISPs this past fall, the debate over this practice has since broken down into two distinct camps. One is Netflix, its transit partners, and consumer advocacy groups, who claim that the nation's biggest ISPs have intentionally let key transit points degrade, intentionally creating significant congestion and forcing Netflix to pay them directly if they want their video services to work. On the other side is the mega-ISPs, their PR folks and a smattering of industry consultants, who argue that Netflix is to blame by choosing Cogent as a cheaper transit link to these carriers.

The problem is that because so much of this data is confidential and ISPs aggressively prevent any meaningful access to raw network data (in part because congestion has always been used as a policy bogeyman to justify anti-competitive behavior and usage caps), clearly illustrating who is at blame here can be (quite intentionally) difficult.

However, as we noted late last month, a new study from M-Labs (an organization ISPs have historically tried to hamstring) clarified at least a few key points in the debate. One, the report put to bed (or should have) the mega-ISP claim that Netflix was intentionally choosing congested partners like Cogent to save a buck, noting that other mid-sized ISPs not pushing for direct interconnection deals (like Cablevision) were seeing no congestion over Cogent connections to Netflix. It also made something very clear: natural congestion wasn't responsible for the degrading of user Netflix traffic: it was a conscious ISP business decision for users to have degraded experiences.

Now to be clear there are no saints here, as Netflix, transit partners and last mile ISPs are all running face-first at the video cash trough. Also to be clear, M-Lab went out of its way to avoid naming ISPs specifically in the report, in part to avoid liability (remember Verizon threatened to sue Netflix for even suggesting the problem could be on Verizon's end), but also because the data proving culpability isn't yet complete.

Now if you've followed the adventures of AT&T, Comcast and Verizon over the years, it's very easy to come to some conclusions based on their long, proud history of anti-competitive behavior. Since most of the data is obscured, intentionally degrading transit connection points is a brilliant way to grab the extra cash from content companies through the kind of troll tolls they've long talked about. The FCC has requested confidential data from all parties and is investigating Netflix's claims, but it's not yet possible to completely prove shenanigans without stepping foot in the very rooms that provide interconnection and examining both the hardware and the data.

If the M-Lab study pushes the needle in any direction, it's indisputably toward the ISPs being at fault. Still, it has been entertaining to see some folks on the ISP side of the argument continue to declare Netflix the villain. Though that M-Lab study pretty clearly illustrates that Netflix's choice of Cogent wasn't the core problem (again because Cablevision saw no Cogent congestion), Frost and Sullivan analyst Dan Rayburn magically comes to the complete opposite conclusion. When Cogent this week acknowledged that the company had utilized some traffic management to try and improve Netflix streaming issues earlier this year, that was enough evidence for Rayburn to again declare Netflix the bad guy:

"This morning, Cogent admitted that in February and March of this year the company put in place a procedure that favored traffic on their network, putting a QoS structure in place, based on the type of content being delivered. Without telling anyone, Cogent created at least two priority levels (a ‘fast lane’ and ‘slow lane’), and possibly more, and implemented them at scale in February of this year. What Cogent did is considered a form of network management and was done without them disclosing it, even though it was the direct cause of many of the earlier published congestion charts and all the current debates.

In short, everything is Cogent and Netflix's fault. Again, nobody disagrees that there's too much secrecy in these agreements. But to hear Cogent tell Ars Technica their side of the story, the QOS (quality of service) implemented was only necessary because of intentional ISP failures to upgrade network hardware on their end of the equation:

"The system was put in place only because Internet service providers refused to upgrade connections to Cogent to meet new capacity needs, Cogent Chief Legal Officer Bob Beury told Ars. "The problem was, after years of upgrading connections as necessary to accommodate the flow of traffic as necessary at these peering points, Comcast, Time Warner Cable, Verizon, and AT&T refused to do so and let their customers be hurt,” he said.

It's worth noting that Cogent has been in more than a few major disputes over the years when it comes to settlement-free peering, and hasn't made a whole lot of friends in the process. It's also worth noting Cogent does appear to have been caught in a lie, its website proudly proclaiming it doesn't engage in prioritization of any kind. Since then, both Rayburn and a number of Comcast employees have been making the rounds, proclaiming this is, again, proof positive that Cogent is the bad guy in this entire affair. Except it's not.

The problem is that the idea that ISPs are neglecting basic upgrades to create a problem isn't just the opinion of Cogent, it's also the suspicion of nearly every consumer group in existence, smaller independent ISPs (like Sonic.net) as well as Cogent competitors like Level3. Level3 VP Mark Taylor made the compelling case back in July that Verizon was to blame for the Netflix streaming slowdown on Verizon's network:

"We could fix this congestion in about five minutes simply by connecting up more 10Gbps ports on (Verizon's) routers. Simple. Something we’ve been asking Verizon to do for many, many months, and something other providers regularly do in similar circumstances. But Verizon has refused. So Verizon, not Level 3 or Netflix, causes the congestion. Why is that? Maybe they can’t afford a new port card because they've run out – even though these cards are very cheap, just a few thousand dollars for each 10 Gbps card which could support 5,000 streams or more. If that’s the case, we’ll buy one for them. Maybe they can’t afford the small piece of cable between our two ports. If that’s the case, we’ll provide it. Heck, we’ll even install it."

Another, earlier Level3 blog post claimed that all of the biggest ISPs were engaged in this behavior. Netflix too has numerous times now claimed that while the big ISPs insist these are all just run of the mill transit debates, what's happening with this latest debate is very, very different. Netflix has repeatedly insisted that ISPs are using their mono/duopoly control over the last mile to effectively charge for functional access to their customers, imposing arbitrary tolls to offload network operation costs to other companies.

Now it's possible that Netflix, Cogent and Level3 are all lying (something Comcast engineers have been telling telecom reporters), but you can't ignore historical context. If you've been paying attention, using monopoly power to impose arbitrary and unnecessary new tolls on content companies is precisely what the biggest ISPs have spent the last decade promising they would do. AT&T, Verizon, Comcast and Time Warner Cable have spent the last decade engaging in some of the most anti-competitive behavior in the history of any technology market, whether that's writing laws prohibiting cities and towns from deploying their own broadband, to using astroturf and propaganda to push anti-consumer policies. The discussion of their current behavior can't simply exist in a context-free vacuum.

This week, Rayburn's contrarian, vacuum-sealed analysis of the issue resulted in an interesting Twitter exchange between himself and Netflix's David Tempkin. While Rayburn is busy claiming he has confidential but unpublishable knowledge from the industry that somehow proves Netflix is the villain in this equation, Temkin, in turn, accuses Rayburn of engaging in "biased conjecture," arguing that only the FCC currently has all of the data they need to validate Netflix's claims that ISPs are up to no good:



And there's the rub. As somebody who has written about and studied Verizon, AT&T, Comcast and Time Warner Cable behavior for fifteen years, my gut tells me that yes -- they probably are intentionally degrading transit connection points, knowing that the resulting cacophony of often dull engineering analysis would act as cover for their bad behavior. Hiding anti-competitive shenanigans under intentionally over-complicated technical analysis is status quo for incumbent ISPs (again, see the usage cap debate or the wireless carrier blocking of disruptive tech for just two examples). But even if Level3 and and M-Lab's data confirms part of my suspicions, I can't claim to fully prove it without direct access to transit connection points and a close look at ISP hardware and traffic data -- no matter how many compelling charts I post. Neither can Dan Rayburn, Susan Crawford, or anybody else. Not quite yet.

That means there are two things we need here if we care at all about network neutrality and the future of Internet video. One is significantly more transparency across the board, from Netflix, transit partners, and last-mile ISPs, something Rayburn is spot on about. To that end, Jon Brodkin at Ars Technica filed a FOIA request with the FCC earlier this year in an attempt to to get a better look at the data behind this debate, and ran into a brick wall thanks to all of the companies involved in the fight:

"Verizon, Netflix, and Comcast filed requests for confidential treatment of the agreements in their entirety," the FCC's response to Ars said. "In support of its request for confidential treatment, Comcast asserts that, if its agreement were disclosed, competitors would gain valuable insight into the parties' business practices, internal business operations, technical processes and procedures, and information regarding highly confidential pricing and sensitive internal business matters to which competitors otherwise would not have access."

In other words, Comcast wants to quietly accuse everybody of lying, but neither they (or Netflix) want to release the data that proves it. Hiding ISP data from the public has also long been a favorite FCC hobby. Take for example the FCC's $300 million broadband coverage map, which took ISP claims of speeds and locations as gospel, but also completely omits any data on pricing at ISP behest. That lack of data pricing has allowed ISPs for years to claim that the broadband market is more competitive than it actually is. Without transparent access to hard data, most telecom policy discussions wind up being little more than verbose games of patty cake.

The other thing desperately needed is for the FCC to wake up and acknowledge that the debate over net neutrality has very intentionally been immeasurably more complicated, shifting from concerns about throttling or simple service blocking, to issues like interconnection and usage caps (and all the dangerous business models under consideration therein). If the FCC's new rules (hybrid or otherwise) don't incorporate both of these concerns (and so far Wheeler has stated they won't), they're going to fall well short of protecting consumers from the mega-ISPs with a noncompetitive stranglehold over the last mile.

Filed Under: business models, congestion, dan rayburn, fcc, interconnection, transit
Companies: at&t, cablevision, cogent, comcast, level 3, m-lab, netflix, time warner cable, verizon

Verizon Now Pleads For Bogus Net Neutrality Rules Under 706 Promising It Won't Sue This Time, Ignoring That Others Will Sue

from the nice-try dept

One of the points that we've made a few times concerning the whole net neutrality fight is that whatever rules are put in place, someone is going to sue. As we noted in that post, Verizon's original filing on the net neutrality plan the FCC announced back in May (based on Section 706) suggested that Verizon would sue over those rules if they were put in place (in contrast to Comcast and AT&T who both said they'd be fine with rules under 706). Since then, it's become clear that lots of other ISPs have made it clear to Verizon that it should shut up and sit tight, because its own lawsuit that kicked out the 2010 rules now seem likely to lead to much stricter laws.

So it's fairly amusing to see Verizon put out a blog post effectively now pleading for the May rules under 706 -- rules that it didn't initially support -- now that it's come out that the FCC is considering this new "hybrid plan." Suddenly, according to Verizon, rules under 706 are unassailable and won't lead to a lawsuit, while everything else will. First, Verizon attacks the full Title II plan, insisting that ISPs will "have no choice" but to sue, and even that consumer groups would sue if the FCC forbears too much:

If the FCC reclassifies Internet access as a Title II service, the hyper-regulatory group will be happy, but may sue anyway if the FCC forbears from too many arcane common carrier rules for their taste (and to keep their fund raising pipeline flowing). As well, the ISPs, and perhaps some in the tech industry, will have no choice but to fight the sudden reversal of two decades of settled law. By departing from the judicially sanctioned Section 706 approach, the FCC will have increased both the likelihood – and the likelihood of success – of any legal challenge.

I've seen no indication that anyone on the consumer advocacy side of things would sue if the FCC forbears too much -- in fact, most of the proposals ask for forbearance from nearly all Title II requirements, leaving just a few in place. But, yes, everyone knows that Verizon and others would sue over Title II rules.

And, of course, if the hybrid plan is put in place, folks from both sides may sue:

Recently we’ve heard press reports that the FCC might embrace a “hybrid” model – one that splits Internet access apart (at least in metaphysical terms), and reclassifies the content-provider portion as a Title II service, but bases customer-facing rules on section 706. Both the utility regulation crowd and the ISPs have pushed back hard on this approach. Here the FCC has opened itself to credible challenges by all parties. Again, by departing from the safe harbor of Section 706, the FCC will face strong challenges on the partial move to Title II from those investing in networks. And because the FCC will have to describe why the partial move was necessary, it will open itself to challenge by the utility regulation camp about why a wholesale move to Title II wasn’t equally necessary. Like a full move to Title II, the hybrid approach also fairly guarantees litigation.

But... Verizon insists, suddenly the original proposal under 706 that Verizon itself didn't initially want -- well, that won't lead to litigation in Verizon's fantasy world:

Finally, there is the original section 706-based proposal. In this instance all of the major ISPs and their trade associations have conceded that the FCC can lawfully prohibit harmful paid prioritization on this basis – effectively waiving their ability to challenge the FCC’s authority to do so and taking them out of the litigation path. For their part, the utility regulation camp cannot appeal an FCC decision to rely on 706 as a basis for prohibiting paid prioritization without arguing that those rules are invalid, which they would be loath to do. Their only possible appeal is to argue that the FCC should have regulated even more heavily, and reclassified under Title II to impose legacy common carrier regulations. The Title II advocates will have a very hard time finding a solid basis on which to challenge what they believe is the “under regulation” of this route: the statutory basis is already blessed, and the record will likely support the regulations proposed.

Of course, this ignores the fact that the 2010 rules were under Section 706, and Verizon sued and won. Yes, these new rules try to take into account the specifics of the court's ruling, but still. Section 706 rules can and do lead to lawsuits. In fact... while Verizon would like to pretend everyone would be happy with rules under Section 706, that's clearly not true. The American Cable Association (ACA), in its filing to the FCC (pdf), made it fairly clear that its members would, in fact, sue over the use of Section 706 if (as is expected) the FCC makes it clear that the rules only apply to internet access providers and not online service providers (i.e., Netflix, YouTube, etc.):

In addition to recognizing that asymmetrical application of open Internet rules to only broadband ISPs would be bad policy, it would also be an arbitrary and capricious application of the Commission’s authority since the record soundly shows that ISPs are not the only Internet actors capable of undermining the goals of the proposed open Internet rules. In its comments, ACA argued that not only would failure to apply open Internet rules on all Internet actors that have the ability to block or degrade fail to achieve the primary open Internet goals of the Commission, but asymmetric regulation that constrain the business behavior of a single class of platform providers (i.e., fixed broadband ISPs that are also MVPDs) would distort market incentives....

[....]

Should the Commission adopt new open Internet rules on ISPs as part of this proceeding, the Commission must broaden the scope of its rules to apply equally to all forms of Internet blocking and degradation that interfere with the virtuous circle of innovation, consumer demand, investment and broadband deployment that it is charged to protect, or else it severely risks reversal in the courts. The prolonged uncertainty such a situation would create would do no one – not edge providers, nor access providers nor consumers – any good.

This is the poison pill effort that some broadband providers were trying early on with net neutrality rules, basically telling the FCC if it's going to put any kind of rules on internet access providers (who often do represent a monopoly/duopoly situation), they must also saddle the same rules on internet companies, despite the situation being entirely different. The goal here was to try to scare internet companies into supporting the broadband players' position, but it also shows the thinking of these ISPs and the fact that the basic rules under 706 are almost certainly going to lead to litigation too, contrary to Verizon's new attitude that rules under 706 are universally loved and adored by all.

So, again, key point: no matter what rules the FCC puts in place, someone is going to sue. Given that, the argument that the FCC should choose plan A, B or C based on a lawsuit avoidance strategy makes little to no sense. There will be a lawsuit from someone. You can make reasonable arguments that one or another legal position may be more defensible, but in talking to a lot of different people on all sides of this debate, I'm fairly convinced that no one has a legitimate idea of which plans are more defensible than others. They can all make credible arguments that any of the three plans will win in the courts or lose in the courts. I've seen convincing arguments that the 706 plan can survive the courts, the hybrid plan can survive the courts and the Title II plan can survive the courts. Similarly, I've seen credible arguments that all three would fail in court.

Given all that, if the plan is going to get challenged no matter what, and there will be the dreaded "years of uncertainty" no matter what -- why not just pick the absolute best plan there is to accomplish what the FCC is trying to do?

Filed Under: fcc, litigation, net neutrality, open internet, rules, section 706, title ii
Companies: american cable association, verizon

FCC Tests The Waters On A 'Hybrid' Net Neutrality Solution That Almost Everyone Hates

from the trying-to-find-a-compromise-that-pisses-everyone-off dept

Gautham Nagesh at the Wall Street Journal (who was also the first to reveal many of the details of Tom Wheeler's original net neutrality proposal) had a story last night confirming the buzz over the last few weeks that Wheeler is now exploring a new set of "hybrid" net neutrality rules that appear, on their face, to take parts of the plans that consumer groups want and parts of what the broadband players want... and comes out, in the end, with a plan that almost no one wants. There is something to the old saying that a good compromise leaves everyone a little unhappy, but it appears that the rules being contemplated right now might leave nearly everyone really unhappy. It's not clear that's a good result.

First, it's important to note that the WSJ article only describes the plan in slightly vague generalities, and the specifics matter a lot in these situations. It's tough to know exactly how good or how bad this is without those details, but there are some broad brush strokes of what the FCC is leaking now to see what sort of reaction there is.

The plan looks to be loosely based on a proposal Mozilla submitted back in May, in which the FCC sets up rules that sort of split the baby, by separating out the relationships directly between various internet providers, classifying that under Title II (common carrier rules), while leaving the last mile sections (the part delivered to you at your home or office) regulated under 706 as an "information service." But then, it sets up very loose rules on top of that structure, that potentially have massive loopholes for the broadband players -- and that's where the specifics matter. The end result could be that the broadband players could still make deals for "differentiated services" to the end connection -- which is what many fighting for net neutrality were most worried about. Here's how the WSJ describes Wheeler's current thinking:

The plan now under consideration would separate broadband into two distinct services: a retail one, in which consumers would pay broadband providers for Internet access; and a back-end one, in which broadband providers serve as the conduit for websites to distribute content. The FCC would then classify the back-end service as a common carrier, giving the agency the ability to police any deals between content companies and broadband providers.

But, yes, the plan would still allow for paid prioritization:

People familiar with the FCC’s thinking say the agency remains skeptical of a flat ban on paid prioritization, noting that even common carriers are allowed to charge for certain specialized services. Mr. Wheeler suggested in December that he would be open to some such arrangement. He has been careful since then to emphasize that the FCC won’t tolerate harmful discrimination, though hasn't called for a flat ban.

[....]

The proposal would leave the door open for broadband providers to offer specialized services for, say, videogamers or online video providers, which require a particularly large amount of bandwidth. The proposal would also allow the commission to explore usage-based pricing at some point, in which consumers are charged based on how much data they use and companies are able to subsidize traffic to their websites or applications.

In an attempt to deal with the concerns of such paid prioritization, Wheeler's plan apparently would put the burden on the telcos to have to "prove that the arrangements would be beneficial to consumers and equally available to any company that would like to participate."

If this is the actual plan, it's definitely better than Wheeler's original May plan, which would have allowed such prioritization if it were "commercially reasonable." Having a combination of it being "beneficial to consumers" and with a non-discrimination component is a clear step up.

But -- and here's the important bit -- it's unclear what benefit this hybrid proposal really buys. Anything that touches on declaring any part of the network Title II is going to lead to lawsuits from the broadband players, as Verizon made clear just yesterday. In fact, it potentially gives them another legal argument in saying that not only is using Title II improper, but so is the attempt to slice and dice what parts of the network get Title II.

And, the consumer advocate groups may (in a funny way) be with them on that argument. In a statement Free Press put out in response to the WSJ article, they also declare the splitting the baby solution to be legally dubious:

The FCC is supposed to protect our communications, period. Chairman Wheeler can't wave a wand, change the law, and pretend to break the Internet in two. But these schemes suggest just that: dividing the Internet to protect corporations sending information, but not the people receiving it. Such an untested, too-clever-by-half approach is bad law and a bad idea. It will not survive in court, and it is clearly inferior to reclassifying broadband under Title II of the Communications Act.

It's also unlikely to buy Wheeler any political support from Congress. The anti-net neutrality crowd in Congress which has been so revved up to be against anything that even hints at Title II will immediately condemn this plan, and supporters from the other side will find it equally distasteful in allowing the broadband guys to mess around with the last mile connections.

Still, the end result here seems like a plan that may be noticeably better that the original proposal, but which angers almost everyone, and possibly kicks off a more aggressive set of legal challenges that may be more complicated (and potentially even less likely to survive a legal challenge). While I recognize and appreciate the goal of trying to find a "compromise," it seems that coming up with one that is even less likely to survive a legal challenge is a risky proposition, because it means in another three to five years, we'll be right back here again after a court tosses out these rules and a different FCC has to try again.

This definitely is a shift towards stronger rules, but the devil is in the details, and many people seem to be wondering, if the FCC is willing to go part way towards Title II and strong net neutrality rules, why not go all the way. The political opposition will likely be the same, as will the legal challenges. A compromise solution always sounds nice, but it's not entirely clear what this buys in the long run. And, if this plan (again, details matter) still leaves a way for big broadband players to pick winners and losers, that's a problem. And, again, that's what this all comes down to. When the big broadband players get to act as gatekeepers who can set up tollbooths for internet services, there's a real risk of massive chilling effects and a worse overall internet experience.

Filed Under: broadband, fcc, hybrid solution, interconnection, net neutrality, open internet, title ii, tom wheeler

Verizon: 'Title II Is Not The Answer... Except When It Gives Us Massive Subsidies, Then It's Totally The Answer'

from the read-the-fine-print dept

Oh, Verizon. When all the big broadband providers filed their original comments with the FCC concerning its net neutrality/open internet proposal, Verizon's comments were a little different than the others. Comcast and AT&T were pretty effusive in supporting FCC boss Tom Wheeler's proposal to rely on Section 706 rather than Title II. Verizon, however, seemed to push back against any new rules, even under 706. Verizon noted that it wanted to do whatever the hell it wanted, even if it meant "differentiated services" (i.e., paid prioritization, fast lanes, slow lanes, etc.):

...consumer welfare is best protected if the Commission allows broadband Internet access service providers to manage their networks and—if they so choose—offer differentiated services or implement sophisticated pricing strategies as long as those practices do not harm competition.

In assessing whether a practice harms competition, it is essential not to confuse harm to competitors with harm to competition. The Commission has stated “We believe that consumers of broadband access service should have the ability to exercise meaningful choices.” Those choices should include services offered by edge providers that have chosen to enter arrangements for differential treatment in order to offer more desirable services to their customers. Such options will benefit consumers, even as they reduce rival edge providers’ economic welfare by increasing the competitive pressure they face.

Of course, in the past few months, the pressure on the FCC to actually use Title II has increased, and the other big broadband players have made it quite clear that they're furious with Verizon for fighting back against the last set of totally meaningless rules, since the backlash may lead to much stricter rules under Title II.

It now appears that Verizon is belatedly making a big push to attack the idea of Title II and say, "Hey, those original plans from Wheeler to use 706 sound great." That seems to be the clear message from Verizon's new letter to Senator Pat Leahy and corresponding blog post entitled "Title II Is Not The Answer".

In the letter, Verizon refers to the Title II option as "unprecedented utility-style regulation" and praises Section 706 as being effective.

Unprecedented, huh? Really?

If that's the case, why did Verizon beg regulators to have its FiOS internet broadband service classified under Title II for the sake of government subsidies? Here's Verizon using Title II in New Jersey: And again in Washington DC: So, um, you know, it actually seems fairly well precedented... by Verizon, no less. Verizon is playing a ridiculous shell game here, in which it wants to be classified as Title II in order to get subsidized access to install its network, but then doesn't want to be held to the rules that Title II puts on those networks. And so it claims, laughably, that such rules are "unprecedented," even as Verizon begs to be regulated under them when it benefits itself.

The letter also insists that "paid prioritization" is a joke and nothing more than "demagoguery since no major ISP has expressed an interest in offering 'paid prioritization' and all agree that the FCC has a valid legal path to prohibit it." Oh really? Can we just go right back up to the quotes we pasted above from Verizon's own filing with the FCC in July, in which it made clear that it wanted to engage in offering "differentiated services" to consumers? Does it think no one read that thing? Now it says no ISP is interested in offering any such service?

Even worse, later in the letter, Verizon actively plays up the idea of a different form of paid prioritization: the cynical use of "zero-rating" apps or things like T-Mobile's "Music Freedom" service. Verizon and other anti-net neutrality advocates point to these programs as "consumer friendly" proposals that would be barred under real net neutrality rules. Here's Verizon's letter:

Inflexible regulation also threatens to take choices away from American consumers. For example, some net neutrality advocates have attacked new business models, such as sponsored data or “zero-rating,” that would save money for consumers. Under these nascent arrangements, content providers could voluntarily agree to pick up the tab for usage-charges when consumers go to their sites. Or in other instances, such as T-Mobile’s Music Freedom plans, in order to differentiate its service a broadband provider could decide not to charge usage for certain types of traffic. While most consumers would no doubt welcome the opportunity not to pay for their usage – and some consumer groups have recognized the potential for such practices to help address affordability and encourage adoption – many of the loudest supporters of new regulation have advocated the regressive step of banning these pro-consumer practices.

It's a total joke to refer to these as "pro-consumer practices." As we explained after T-Mobile announced the Music Freedom program, this is like saying that you're a "hero" for setting a house on fire to save the baby inside. The only reason these programs are good for consumers is because they knock down the artificial walls set up by the telcos in the first place. It's not pro-consumer to say, "Hey, we're going to charge you massive data rates for everything... Oh, except for these few services that we'll be nice and let you access without those fees (probably because those services paid us directly already)."

Zero-rating programs sound good if you ignore the very reason why they're necessary in the first place: because of the artificially high tariffs that the telcos put there in the first place. It's not "pro-consumer" to offer them a tiny oasis from the ridiculous billing practices you yourself set up.

But that's the kind of contradictory bullshit that we've come to expect from Verizon these days. Title II is unprecedented (except all the times we beg to use it to get taxpayer-funded benefits for ourselves). No one wants paid prioritization (except that we've said we'd like to do paid prioritization). Zero-rating is pro-consumer (in that it saves the consumer from the rest of our awful policies). Basically, it seems like Verizon is so used to hiding the nasty details down in the fine print, that it now does it as standard operating procedures in everything it says and does.

Filed Under: fcc, net neutrality, open internet, paid prioritization, patrick leahy, section 706, title ii
Companies: verizon

Both Comcast And Verizon Agree To Pay Millions To Settle Overbilling Claims

from the but-you-can-trust-them dept

The big broadband players keep trying to tell us (and politicians and regulators) how good they are and how much we can trust them. Part of their whole pitch on killing net neutrality is that they'd never do anything to harm consumers. And yet... Just this week, the FTC has sued AT&T for lying to consumers about its "unlimited" plans (just weeks after AT&T was fined for "cramming" bills with unwanted charges). And in the last few days it's also come out that Comcast has agreed to pay $50 million to settle overbilling claims, and Verizon has agreed to pay $64 million to settle overbilling claims. And that was all by Wednesday. There's still more time this week.

If these were one-off situations, it would be one thing. But these companies have a fairly long history of shady billing practices, dreadful customer service and similar antics. This is part of the reason why some people are so concerned about the various merger attempts by these companies and why they're all actively seeking to block meaningful regulatory oversight. Bad practices like these can be limited when there's meaningful competition -- but even the FCC is now admitting we don't have that in the broadband market.

This is a real problem.

Broadband access has become such a key part of how we live and how we work. And it's controlled by companies that have a long and detailed history of treating their customers horribly, lumping on bogus fees, overbilling and providing horrible, horrible service. That's not a recipe for a strong and innovative future. It's suggesting some companies are focused on squeezing as much cash as possible out of consumers, while providing a bare minimum level of service and blocking any and all attempts at meaningful competition.

These latest overbilling settlements are just a few small examples of a much larger problem that has been going on for years. It's something that absolutely needs to change. And it won't change by making those companies more powerful and limiting the competition even more.

Filed Under: broadband, consumers, overbilling, power
Companies: at&t, comcast, verizon