Qwest, the former-Baby Bell serving the upper midwest, mountain west, and desert states got caught on tape telling customers the company’s intent is to eliminate competition from independent Internet Service Providers by banning them from their network.

One such ISP, XMission, has blown the whistle on the anti-competitive practice, noting they could potentially be run out of business if Qwest manages to keep them from delivering competitive service over Qwest’s upgraded partly-fiber network.

In 1997, XMission first started providing service over Qwest’s DSL.  We have literally paid millions of dollars of revenue to Qwest for the privilege, all the while relieving them of the difficult task of providing excellent customer support.  In 2008, Qwest launched their “Fiber-to-the-Node” product which is usually falsely advertised as just plain “fiber”.  Unlike the UTOPIA system which runs fiber optics all the way to the home, Qwest FTTN runs fiber to a neighborhood, then copper DSL lines to the customer.  Because of the subsequent shorter distances on copper, they are able to attain download speeds of up to 40Mbit to the customer and 5Mbit from the customer.  This is normally referred to “download” and “upload” respectively.

There is one key difference in the FTTN product.  Qwest is not not allowing 3rd party ISPs like XMission to sell their own service over it, as we traditionally have with their first DSL product.  In addition, Qwest has been notorious for disinformation and service problems that motivate customers to drop their current ISP and change over to Qwest.  Technical problems exist, such as radio interference that degrades existing XMission customer DSL speeds, sometimes making their Internet connection unusable.  The solution offered by Qwest was not to shield the radio interference, but to switch customers off XMission and to their own product.  We have also had reports and in one case, a recording, of Qwest sales representatives telling customers that Qwest’s intent is to “eliminate” 3rd party ISPs.   Today, I received an email from a customer who was told by Qwest that XMission’s equipment is “too slow” to handle FTTN service.  Considering that we service customers on fiber and in our data center with up to a gigabit in solid bandwidth, one has to wonder why Qwest feels the need to lie to sell their service.  There is no technical reason why Qwest could not allow 3rd party ISPs like XMission to provide service over their FTTN network.

XMission has been hemorrhaging DSL customers for the past year, and I really don’t blame them for looking for bigger Internet connections.  I personally can only get 3Mbit download and 500Kbit upload to my own home and it is not enough bandwidth for me.  With Netflix, Hulu, Youtube, and other services demanding more and more bandwidth, homes will need larger and larger connections.  Unless they’re in a UTOPIA connected city, chances are that they are going to choose from two companies to buy Internet from in the future, neither of them stellar.

UTOPIA is Utah’s publicly-owned fiber optic platform delivering competitive choice to residents of 16 Utah cities.  Residents enjoy true fiber optic service and can select from 11 different Internet Service Providers, each offering their own speed levels, bundles, and pricing.  How many ISPs can you choose from?

Qwest’s newest network upgrades deliver service somewhat comparable to AT&T’s U-verse — faster broadband through a hybrid fiber, copper phone line-based network.  Qwest also sells traditional DSL service over standard phone lines, including so-called “dry loop” service that delivers broadband service without also buying a phone line.  While competing providers can sell service over many of Qwest’s DSL lines, they have been barred from selling access over these new, faster-speed lines.

Customers have been unimpressed with Qwest’s traditional DSL services which often promises far more than it actually delivers.

Alex Langshall in South Salt Lake was guaranteed 7Mbps DSL service from Qwest, but ended up with only 640kbps.  The reason?  His distance from the central office and the deteriorating quality of Qwest’s landline network.  Qwest’s technicians told Alex even after line conditioning and rehabilitation, he would only get 1.5Mbps service.

XMission publicized this recording between Qwest and one of their customers about the phone company’s intentions for independent ISPs on their network (July 21, 2010) (3 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

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The Internet video revolution will increasingly be blocked by Internet Service Providers who will leverage their duopoly markets with restrictive usage limits to keep would-be video competitors from ever getting their business plans off the ground.

William Kidd, industry forecaster for iSuppli, an industry analyst group, sees a future of Internet Overcharging schemes like usage caps, overpriced pay-per-use pricing, and other limitations designed to erect roadblocks for online video content, which increasingly threatens the cable-TV products of both cable and phone companies.

The latest scheme to limit usage of streaming media come not from concerns about bandwidth costs but rather the “unknown risks” online video could have for cable and phone companies’ other products.

Such risks, Kidd believes, will compel broadband providers to increasingly implement caps in order to mitigate any long-term gambles that providers might have to take to make streaming media available to home and mobile environments.

At present, content can be streamed over TV from online service offerings such as Hulu and Netflix, or accessed through a device such as the PlayStation from Sony Corp. In addition, new-media business models continue to emerge with the introduction of new platforms that circumvent services currently provided by traditional cable or satellite pay-TV providers.

The caps planned for implementation will sink virtually all of the video streaming services that are not partnered with cable and phone companies.  Kidd notes the caps he’s seen offer limited viewing — as little as three hours for wireless 200kbps video streams or standard definition video streamed on wired networks for up to 25 hours per month.  True HD viewing is simply not going to happen with caps on many providers planned to cut off viewing after only seven hours.

Business plans and would-be investors must take notice of what providers have in store for would be competitors, Kidd argues.  Since the phone and cable companies maintain a near-monopoly on broadband, they ultimately control what Americans can do (and see) on their broadband accounts.

Rogers reduced usage allowances on several of its broadband plans days after Netflix announced a streaming service for Canadians.

One need only look to Rogers Communications in Canada for a timely example.  Rogers promptly lowered usage limits on some of its broadband plans just days after Netflix announced a video streaming service for Canadians that could directly compete with the cable giant’s video rental stores and cable pay per view services.

“These new-media business models imagine that they don’t have to pay the network through which their data traverse,” he said. “However, such a theory is directly at odds with the ambitions of cable and satellite-TV operators, which increasingly are unwilling to provide heavy data access through their networks for free—especially if a way can be found to monetize ongoing data traffic into viable revenue streams.”

In addition, new Internet-born content providers wrongfully take for granted that the way their largely free content has been consumed now also will apply in the future to premium services. The assumption is a bad one, Kidd observed, because in order for consumers to consider the Internet as a true substitute for their big-screen TV, content would need to be comparable in both technical quality and entertainment value. And to achieve the same level of value, such content necessarily would be extremely bandwidth intensive.

As a result, for any number of these emerging TV-substitute models to work someday, one has to assume that the picture quality being proffered is acceptable for viewing on large-screen TVs.

But providers have a trick up their sleeves by implementing seemingly tolerable usage caps as high as 250GB per month, which seem generous by today’s usage standards.  But they will be downright paltry tomorrow, especially if they do not increase over time, as online video increases in quality and size.

“By implementing caps now that don’t impinge on the way subscribers use the Internet today, cable and telco operators are able to create for themselves an advantageous situation,” Kidd said. “Under these circumstances, emerging media competitors must work more directly with the network owners before getting their services off the ground—as opposed to around them, as they may have previously hoped.”

That means giving them exactly what they want — a piece of the action and control over the content that crosses over their wires to broadband consumers.

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Connected Texas is well-connected -- to AT&T and Verizon, charge critics.

Texas Agriculture Commissioner Todd Staples in under fire for choosing Connected Nation, a telecom industry-financed mapping group, to draw broadband availability maps for Texas.  Connected Nation has close financial and organizational ties to the nation’s largest telecommunications companies, several of which have also contributed heavily to Staples re-election campaign.

Critics contend Staples should have never chosen Connected Nation for the project, especially when two of its biggest backers — AT&T and Verizon, both made substantial campaign contributions towards his re-election.  Staples also owns small amounts of stock in both companies, according to a report published yesterday in the Dallas Morning News.

The Texas mapping project has been condemned by smaller Internet service providers for leaving them off the map altogether while providing plenty of details about large phone and cable company offerings.  For consumers shopping for broadband service, who is on the map may have a considerable influence over which provider they pick.

“They hit the big guys,” James Breeden, founder of LiveAir Networks, which covers rural parts of Central Texas told the Morning News. “I didn’t even know they were putting together a broadband map until I saw it on the news and went ‘Oh.’ Then I logged in and went, ‘Oh, really!’ ”

Staples

He said he couldn’t find his company or two nearby providers on the map. Some areas didn’t show the correct distributor. Others named one when none existed. “The map is just off. It’s not technically accurate,” he said.

As Stop the Cap! reported earlier, maps produced by Connected Nation are notorious for favoring the telecommunications companies that back the mapping group, in addition to being just plain inaccurate. But more importantly, their maps downplay broadband availability problems and conveniently serve the industry’s position that America doesn’t have a broadband problem.  Connected Nation maintains tight control over the raw data, citing provider confidentiality agreements.  That makes reviewing the data for accuracy impossible.

“It’s a scandal, a total scandal,” Art Brodsky, communications director of Public Knowledge, a public interest group that follows digital culture said in the Morning News piece. A longtime critic of Connected Nation, Brodsky has tracked the nonprofit since Kentucky officials accused it of overestimating broadband availability several years ago. The agency that grew into Connection Nation started there in 2001.

Brodsky said nondisclosure agreements make it difficult to see who really benefits from the mapping process.

The controversy has become campaign fodder for Democratic Ag Commissioner candidate Hank Gilbert, who has been bashing Staples in the press for spending taxpayer money to produce maps that benefit his campaign more than the people of Texas.

“Staples and … [the Agriculture Department] are willing to let a bid go to a company with such close ties to the telecom industry,” said Vince Leibowitz, Gilbert’s campaign manager. “That means they’re not doing their job as a consumer protection agency.”

Other groups given the opportunity to apply either were not given enough advance warning, or simply never heard anything back from the state.

Five other organizations responded to the Agriculture Department’s request for proposals. Luisa Handem of the Austin nonprofit Rural Mobile & Broadband Alliance said her group never heard back.

“We didn’t think the process was transparent,” she said. “We’re not even sure they looked at our application.”

The Agriculture Department restricted the opportunity to nonprofits, based on its interpretation of federal law. The agency told the University of Texas at Austin it could apply, but officials didn’t think they could complete the proposal in a month. The Agriculture Department said the federal government set the timeline.

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Stop the Cap! reader Bones sends word the FCC needs volunteers to help keep America’s broadband providers honest about their speed claims.  But the agency warns heavily usage capped consumers they probably shouldn’t apply, and anyone consuming over 30 GB per month is disqualified.

The FCC SamKnows Broadband Community aims to gather and report statistical data on the performance of America’s broadband providers.  Thus far, most of the earlier speed results being studied by public officials come from data aggregated from voluntary visits to speed test websites.  But the data is subject to considerable variation depending on the speed test site chosen, traffic and capacity issues that only impact the route to the test site, and what else a consumer may doing with their connection during the test.  Many also conduct speed tests when a technical problem is apparent, using the speed test site to verify their suspicions.

The FCC will send 10,000 volunteers a free router that will hook up to one’s broadband connection and quietly test it several times daily.  Comprehensive measurements to be taken include latency, packet loss, DNS query times and failures, web page loading times, as well as the obligatory suite of speed tests.  The testing is done in the background and the results are uploaded to SamKnows for review.  The FCC can use the data from all of the volunteers to identify the true performance of national and regional Internet Service Providers.  Do their speed claims actually match reality?  Do they suffer from congestion problems and at what times of day?

One group of ISPs the agency will have trouble measuring are those that heavily limit their customers’ use.  In fact, the Test My ISP website warns off customers with low data caps because the project is expected to send and receive about 4 gigabytes of data in full over the course of each month. While the program designers felt that much data was so insignificant it would not create a problem, some greedy ISPs out there beg to differ.  With some providers offering usage allowances at 5 or fewer gigabytes per month, the FCC quickly learned it doesn’t want to be responsible for spiking consumer broadband bills with any overlimit fees.

As a result, they’ve asked those usage capped consumers to think twice about applying for the traditional testing program:

Our units download approximately 2GB per month and upload around 2GB. If you’re on a product with a low usage cap then we’d advise against signing up, or at least informing us beforehand so that we can apply a different testing profile.

The FCC also isn’t interested in sending test units to customers they designate as “heavy downloaders”:

We’d classify anything above 30GB per month as being too heavy for us to gather useful results.

With the increasing use of multimedia content and other high bandwidth applications being released to the Internet masses, we beg to differ with the arbitrary definition that 30 GB constitutes “heavy downloading.”  We understand the agency doesn’t want other online usage to create an issue for the accuracy of its speed tests, but they should take better care with their language.  One could use a file backup service and easily consume more then 30 GB uploading and never download more than a gigabyte.

A screenshot of the types of data SamKnows will be collecting and measuring (click to enlarge)

Other restrictions:

• You have a fixed line broadband Internet connection to your residence.  This is not for WISPs, mobile broadband, or other wireless broadband services.
• You use a standalone device to connect to your broadband service – i.e not a USB ADSL modem.
• You have a stable broadband connection (i.e. it doesn’t disconnect frequently). Note that this is just referring to the connection – not the speed.
• You have a spare power socket near your existing router (or wherever you plan to connect the unit. Keep in mind that a network cable must run between the unit and your router though! We supply a 1m cable).
• You need to be on one of the ISPs that we’re measuring.
• You are not an employee or a family member of an employee of one of the ISPs being monitored.

Also, you must agree to the following:

• Not to unplug the unit or your ISP’s router unless I’m away for an extended period of time.
• Not attempt to reverse engineer or alter the unit.
• To notify Samknows if and when I choose to change ISPs.
• To return the unit to Samknows should I no longer wish to be involved (Samknows to pay reasonable postage costs).
• To connect the unit in the way described in the documentation.
• To keep Samknows updated with valid contact details (i.e. email and postal address).

SamKnows is a British company hired by the FCC to conduct the speed test project.  SamKnows is already familiar to British broadband consumers for its comprehensive broadband availability checker showing all of the broadband choices available based on the address where service is to be installed.

The company also reports on broadband news, mostly impacting Europe.

And before the paranoid start suggesting this is Obama’s Internet Spy Box, SamKnows offers this:

However, the unit simply acts as a standard switch or standard router and does not look at any of the packets flowing across your network. It only monitors traffic volumes for the purposes of deciding when to run (or not to run!) the tests and to measure consumption.

Testing information uploaded from the unit to our servers contains no information about you whatsoever. Furthermore, all such communications are encrypted, ensuring that results cannot be tampered with en-route.

Your individual unit’s test results will be available to you alone. Your unit’s results will also be aggregated with others from the same ISP to form a larger average set of results that can be viewed publicly.

We have absolutely no intention of doing anything that may adversely affect your privacy or security.

Click here to view the embedded video.

The implications for the FCC’s national speed test program could mimic Great Britain’s, where providers were held to account for wide variations between speeds promised and those actually delivered.  Meaningful broadband reform in the States could include a requirement that providers’ marketing claims be provable, compelling at least some to perform competitive upgrades instead of delivering broken promises.  This ITN News report from last summer illustrates what happened when UK provider speed claims were put to the test.  (3 minutes)

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[Stop the Cap! will be closely following Google's experimental gigabit fiber-optic broadband network.  We'll be bringing regular updates about the communities applying, the strategies they are using to attract Google's attention, what the competition thinks, and the impact of the project on American broadband.]

Columbia, Missouri is excited about the prospect of being chosen as a test city for Google gigabit broadband.

It’s just one of tens of communities seeking to apply for Google’s new experimental fiber to the home network delivering super fast broadband to residents and businesses.

Columbia is the fifth largest city in the state, with 100,000 residents who call the heart of mid-Missouri home.  Columbia is a classic college town, supporting the University of Missouri.  It’s uniquely known as one of the most-educated communities in the country, with over half of its residents holding college degrees.  Columbia residents are quick to embrace new technology, and this drive to adopt the latest and the greatest has fueled interest in Google’s fiber network.

Columbia’s Regional Economic Development, Inc. (REDI), promoting local business and economic development, has been coordinating what to do next.  They’ve been joined by ComoFiber, which is working to generate public interest in the project and help devise a strategy to win Google’s attention.

Columbia, Missouri

Mike Brooks, from REDI, said the city has seen a great deal of interest from the community to apply for Google’s plan.

Last week, both groups met to educate the public and start identifying why Columbia poses an attractive place for Google’s project.

Some believe Columbia would be the ideal city to build such a network.  ComoFiber explains:

The reasons are numerous, but the biggest reason is really quite simple: Columbia is on the knife’s edge: the sweet spot between big, highly-developed cities and small, under-served towns.

The reason this is so important is because it’s easy to see why Google might want to deploy its fiber in either a big city or a small town, but it’s equally easy to see why they wouldn’t. The big cities have high-tech industry, universities, highly educated populae and other capabilities that allow them to produce the kind of applications and creative products that Google wants to research. On the other hand, major cities already have a great deal of fiber infrastructure, and their broadband prices are generally reasonable. So really, they’re already enabled; adding marginally-faster service to those markets won’t be the kind of sea-change that the plan is designed to study.

ComoFiber compiled a list of strengths from both the “big city” and “small town” perspective:

Columbia/Boone County, Missouri

Columbia as Big City:

1. Multiple colleges and universities, including world-class research facilities.
2. A major life sciences epicenter. Life-science is perhaps the most data-intensive industry in the world.
3. A highly-educated, technically-skilled populace. Thirteenth-most educated in America, to be exact.
4. Many high-tech small businesses, including Internet-centric outfits such as Newsy.
5. Several major hospitals and health care businesses, including some at the forefront of technological advancement.
6. Small-business incubators run in cooperation with universities and the city.
7. The world’s foremost journalism school and the Donald W. Reynolds Journalism Institute, which houses a state-of-the-art Technology Testing Center.
8. Several existing Internet service providers who can take advantage of this new open network.
9. Excellent data backhaul capability due to our position on the I-70 corridor.
10. With over 100,000 people, the population is high enough to meet Google’s goal for project scale.

Columbia as Small Town:

1. Sub-par broadband performance with high prices.
2. Very little existing fiber-to-the-home infrastructure.
3. High tariffed rates for enterprise-class data products (T1, DS3, etc.)
4. Midrange population density should be a good microcosm for suburbia nationwide.
5. Smaller building development (no high-rises) makes infrastructure deployment simpler.
6. ”The District” contains the kind of mom-and-pop small-town businesses that can innovate unencumbered by corporate imperatives.
7. Frequently listed in “best places to live” compilations, such as that of Money Magazine.
8. Location in the heart of middle America sends a powerful symbolic message.
9. Low cost of living will be nice for the employees Google will need to move in.
10. With only a bit over 100,000 people, the population is low enough not to dwarf Google’s goal for scale.

The incumbent cable operator, Mediacom, can’t understand why there is such excitement over Google’s fiber project.

“Google is going to be in select markets, and it’s kind of a test that they’re rolling out,” Mediacom director of operations Bryan Gann told KOMU-TV in Columbia. ”It may be limited to some commercial applications in the beginning.”

Mediacom is Columbia's incumbent cable company

Mediacom doesn’t think most residents have any need for super fast broadband.

“I think when you get up to those higher speeds that fast, it’s a select group that would even be interested in it going at that speed,” Gann said.

Despite that remark, Gann quickly added Mediacom was already providing the fastest broadband access in town.  In early February, Mediacom boosted its top broadband speed to 50Mbps, and Gann says the company already has plans to boost that speed to 100Mbps in the future.

“We’re already supposed to go to 100, so we can press on the accelerator anytime we want to,” Gann said.

When a new fiber-based competitor threatens to arrive in town, most cable companies downplay the competitive threat.  Mediacom was no exception.

Gann told KOMU Mediacom was used to competition in broadband service and doesn’t see Google Fiber as a threat.

“With the technology that the cable industry put into Columbia, we’re ready to increase our speed to match competition,” Gann said.

Click here to view the embedded video.

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The Electronic Frontier Foundation is not happy with the Federal Communications Commission’s proposed Net Neutrality rules because they come with built-in loopholes, the most egregious being a clause which allows providers to throttle, block or otherwise interfere with traffic that could consist of “the unlawful distribution of copyrighted works.”

The movie and recording industries have been attacking Net Neutrality for months, accusing it of providing a copyright-violating-free-for-all.  The FCC seems all-too-willing to adopt that meme, and write a convenient lobbyist-friendly loophole into Net Neutrality policies that would suggest provider interference with broadband networks is bad… except when this or that special interest redefines it as “good and lawful network management.”

For years, the entertainment industry has used that innocent-sounding phrase — “unlawful distribution of copyrighted works” — to pressure Internet service providers around the world to act as copyright cops — to surveil the Internet for supposed copyright violations, and then censor or punish the accused users.

From the beginning, a central goal of the Net Neutrality movement has been to prevent corporations from interfering with the Internet in this way — so why does the FCC’s version of Net Neutrality specifically allow them to do so?

The EFF is asking consumers to sign an online petition asking the FCC to yank that exception out of their proposed Net Neutrality rules, and let the industry use existing law enforcement methods to protect copyrighted works.  Of all the industries that seem to do just fine zealously efforting to protect its copyright interests, Hollywood and the music industry don’t need additional special protection clauses inserted into broadband policy law.

Law enforcement can use existing laws to chase crime, and most honest Internet Service Providers would tell you they don’t want to police their users.  Allowing this exception is a convenient backdoor to do what some have wanted all along — to throttle or block high volume network traffic like torrents and newsgroups, this time under the guise of taking a bite out of crime.

While directly appealing to the FCC might be more effective, signing the petition at least gives the EFF the ability to draw media and political attention to a worthy endeavor.

Let’s not repeat the same mistakes certain other major policy initiatives have endured this past year, where good intentions were steamrolled by lobbyists into a loophole-ridden, industry-protectionist horror show.

The best way to ensure an open and free Internet is to literally demand exactly that — no exceptions.

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DC Circuit Court

Once again, the United States Court of Appeals for the District of Columbia Circuit is proving to be the best friend corporations have to unravel regulatory policy and consumer protection laws that might violate corporate free-speech or trade rights.  It has become a favored venue for telecommunications providers who want to be rid of pesky prohibitions or reasonable regulation.

After a series of arguments, universally considered disastrous for the Federal Communications Commission’s authority to regulate broadband, the cable operator may want to send flowers to the Court… a lot of them.

Earlier this month, attorneys for the FCC defended their right to tell Comcast it cannot throttle its customers’ broadband speeds.  The FCC maintains it has regulatory authority over broadband service, claiming such power could be inferred from Title I, Section 230(b) of the Communications Act, which states that it is the policy of the United States “to preserve the vibrant and competitive free market that presently exists for the Internet” and “to promote the continued development of the Internet.”  From that the FCC wrote a policy statement stating it was, “necessary to ensure that providers of telecommunications for Internet access or Internet Protocol-enabled (IP-enabled) services are operated in a neutral manner.”  That was the basis for their crackdown against Comcast’s speed throttle.

After the arguments between Comcast and the FCC concluded, court-watchers believe the Commission’s days of broadband oversight are numbered.

Ars-Technica’s Matthew Lasar documented the probable train wreck for those who seek to rein in provider abuses.

At issue is whether the FCC has been granted direct legal authority for Internet regulation by Congress. Comcast, and as it turned out many on the Court, believe the FCC is relying on policy statements, not written law, for their regulatory authority over Internet Service Providers.  The Court transcript says it all:

Randolph

“In looking this over I found a good many situations in which Congress has instructed the FCC to study the Internet,” said Justice A. Raymond Randolph, [appointed to the Court by President George H.W. Bush in 1990], “and taxation of transit sales transactions on the Internet, and this, and that, and the other thing. But what I don’t find is any congressional directive to the FCC to regulate the Internet.”

It wasn’t hard for [Comcast attorney Helgi G.] Walker to summon a response to this observation. “That’s right,” she declared.

And with that, Comcast had won. Even before the FCC’s attorney got to the bench, the judges were doing Walker’s job, swatting aside arguments on behalf of the agency’s Order sanctioning the ISP. Pro-FCC briefs to the court had noted that the Supreme Court recognized the Commission’s ancillary authority in its Brand X decision, a crucial ISP access case. Randolph threw this bullet point into the trash icon, referring to the “offhand statement” in Brand X. “And the Supreme Court has moved so far away from that kind of an analysis in today’s modern jurisprudence,” he added, “it seems antiquated.”

By the time Commission lawyer Austin C. Schlick began his rebuttal, Randolph moved in for the kill.

“May it please the Court,” Schlick began. “Ms. Walker hasn’t attempted to defend the actual network practices that were employed here, and so I won’t spend time just… ”

Sentelle

[Justice David] Sentelle cut him off. “Well, her position is that she doesn’t have to,” he tersely noted. “She’s here to say that you don’t have any business inquiring into those practices, ergo we don’t either.”

That’s true, Schlick conceded. “Right,” Sentelle warned. “So you may want to move on to something that’s at issue then, Counsel.”

And that was largely that.  The Court is very likely to hand down a ruling that strips the FCC of its ability to regulate or oversee broadband service in the United States.  Even Schlick knew what has forthcoming:

By the end of the discussion Schlick was bargaining with the judges. “If I’m going to lose I would like to lose more narrowly,” he confided. “But above all, we want guidance from this Court so that when we do this rule-making, if we decide rules are appropriate we’d like to know what we need to do to establish jurisdiction.”

“We don’t give guidance,” Randolph grumbled, “we decide cases.”

Comcast should have bought lunch for everyone.

So now public policy groups and advocates of FCC oversight over broadband, particularly as it relates to Net Neutrality, are scrambling to figure out what to do next.

It comes down to four possible outcomes:

1. One of the parties appeals the case;
2. Corporate control of broadband without oversight is assured, as the FCC is stripped of any regulatory authority;
3. The FCC manages to find some other wording from laws Congress passed that justifies lawmakers wanted the agency to oversee and regulate broadband services;
4. Congress passes new laws specifically enacting broadband regulatory authority for the FCC.

Of course, today’s bland authority over broadband comes as a result of legislative compromise from the great regulatory battles over telecommunications during the Clinton Administration.  Providers argued less is more, and have grudgingly accepted limited FCC authority over some of their services, except when a challenge threatens to cost them control or a lot of money.

With a hostile reception at the Court, and the FCC’s “surrender first, fight later” legal argument, an appeal may only delay the inevitable.  The FCC does have plenty of Congressional directives to review which may permit it to enact Net Neutrality protection, but another provider lawsuit opposing Net Neutrality is inevitable.  In fact, without the passage of a clear, concise federal law providing the Commission with explicit broadband regulatory authority enacting Net Neutrality and other protections, the aptly-numbered “2″ is the likely outcome for consumers.

Thankfully, Rep. Edward Markey’s (D-MA) Internet Freedom Preservation Act would solve much of this problem, by forbidding Internet service providers from doing anything to “block, interfere with, discriminate against, impair, or degrade” access to any lawful content from any lawful application or device.

Getting it passed in a Congress mired in division is another matter.  The best way to overcome that is a strong showing of support for Markey’s legislation in calls and letters to your members of Congress, and that you are carefully watching their votes on this issue.

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New Zealand Telecom

New Zealand’s Telecom is the latest company caught with a defective broadband usage meter that overbilled 150,000 of their 500,000 customers for Internet usage never utilized.  The problem was tracked to a “technical problem” involving the company’s network upgrade in preparation for the introduction of TiVo.  Telecom’s engineering partner Juniper was held responsible for introducing the error which resulted in more than one hundred thousand customers finding their broadband speeds reduced for “excessive usage” to near-dial-up or billed steep overlimit penalties for the months of November and December.

On December 23, Telecom sent out letters to around 150,000 customers informing them of the error.

“Our reports show us that you will have experienced slowed internet speeds earlier than expected in your billing months,” said the letter, signed by Telecom’s general manager of broadband, Ralph Brayham.

Telecom spokeswoman Emma-Kate Greer told the New Zealand Herald all customers who had been affected by over-charging or slowed internet speeds had been identified.

They had been refunded and credits had been given to “customers who may have been incorrectly slowed.”

Customers shocked by their November and December bills were initially stuck taking Telecom’s word for the overbilling, resulting in lots of finger-pointing in New Zealand households.  The Herald reported:

Sarah Broughton, from Herne Bay in Auckland, said she had been frustrated by the slow broadband, and had accused one of her flatmates of downloading too many movies.

“There are six people living in our house. We all suspected everyone else was downloading heaps,” she said.

“We were blaming other people.

“I never suspected it was Telecom. You think when you give them money they are going to use it properly.

“It’s just been so annoying.”

Usage meters, a vital component of Internet Service Providers seeking an enhanced payday from Internet Overcharging schemes that bill customers based on how much data they consume, have been controversial because of questions regarding the accuracy of their measurements.  Most providers do not permit independent verification of the accuracy of their meters, despite their accounting for a significant portion of a customer’s monthly broadband bill.

It took a concerted, organized effort by members of the Geekzone website to “out” Telecom’s erroneous billing practices and get the company to issue compensation to impacted customers.

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Kyle McSlarrow

Once again, the telecommunications industry is threatening to run to the courts if it faces Net Neutrality regulation, claiming their corporate freedom of speech would be violated by protecting the rights of consumers to access the content of their choice on their terms.

Kyle McSlarrow, President & CEO of the National Cable & Telecommunications Association, the nation’s big cable operator trade association, delivered the warning at yesterday’s appearance at the Media Institute in Washington, DC.

In a speech clearly designed to put regulators on notice, McSlarrow dismissed Net Neutrality as a solution in search of a problem and a concept big cable would likely challenge in the courts.

“When all the dire warnings of the net neutrality proponents are stripped away, there really are no signs of actual harm.  Yes, there have been a couple of isolated incidents that keep being held up as examples of what needs to be prevented, but nothing that suggests any threat to the openness of the Internet,” McSlarrow said. “Internet Service Providers do not threaten free speech; their business is to enable speech and they are part of an ecosystem that represents perhaps the greatest engine for promotion of democracy and free expression in history.”

McSlarrow told the audience that the cable industry would be among the victims of Net Neutrality, claiming their rights to transact business on their networks could be trampled by an overzealous Federal Communications Commission.

Almost every net neutrality proposal would seek to control how an ISP affects the delivery of Internet content or applications as it reaches its customers.   This is particularly odd for two reasons:  First, there is plenty of case law about instances of speech compelled by the government – “forced speech” — that suggests such rules should be scrutinized closely. Second, and perhaps more importantly, it is an almost completely unnecessary risk.  All ISPs have stated repeatedly that they will not block their customers from accessing any lawful content or application on the Internet.  Competitive pressures alone ensure this result:  we are in the business of maximizing our customers’ choices and experiences on the Internet.  The counter examples used to debate this point are so few and so distinguishable as to make the point for me.

Beyond the forced speech First Amendment implications, however, net neutrality rules also could infringe First Amendment rights because they could prevent providers from delivering their traditional multichannel video programming services or new services that are separate and distinct from their Internet access service.  While the FCC’s NPRM acknowledges the need to carve out “managed” or “specialized” services from the scope of any new rules, it also expresses concerns that “the growth of managed or specialized services might supplant or otherwise negatively affect the open Internet.”   Meaning what?  Well, the strong implication is some kind of guaranteed amount of bandwidth capacity for services the government deems important.

McSlarrow is focused front and center on the rights of providers, not consumers, when he speaks about the First Amendment.  His constituents are Time Warner Cable, Cox, Comcast, Charter, and the other NCTA members, namely big cable companies.  In his view, any regulation or interference in how providers decide to deliver service is a potential violation of their constitutionally protected rights.  That’s a side effect of the nation’s courts recognizing that corporations have rights, too.

McSlarrow predicts a laundry list of  ‘doom and gloom’ scenarios that would befall providers if Net Neutrality was enacted:

• Net Neutrality could prevent providers from delivering their traditional multichannel video programming services or new services that are separate and distinct from their Internet access service;
• Net Neutrality would prohibit ISPs and applications providers from contracting for any enhanced or prioritized delivery of that application or content to the ISPs’ customers.  Under the proposal, ISPs wouldn’t even be permitted to offer such prioritization or quality-of-service enhancements at nondiscriminatory prices, terms and conditions to anyone who wanted it.
• Net Neutrality may mean that they [content providers] can’t provide material in the enhanced form that they want.
• Net Neutrality could tell a new entrant or an existing content provider that it cannot enter into arrangements with an ISP for unique prioritization or quality of service enhancements that might enable it to enter the marketplace and have its voice heard along with those of established competitors.

McSlarrow doesn’t offer a shred of evidence to prove his more alarmist predictions, even as he demands it from those who support Net Neutrality.  The kind of unregulated, non-neutral net McSlarrow advocates already exists in places like Canada.  What you see there is what you’ll get here  — threats of usage caps unless speed throttles are permitted, arbitrary “network management” that reduces speeds for some services while “enhancing” or “exempting” certain other services (usually those partnered with the provider), and in the end usage caps -and- throttles -and- price increases.  In Canada, the story extends beyond the retail broadband market.  Wholesale broadband sold to independent ISPs comes nicely throttled and overpriced as well.

McSlarrow maintains a see no evil, hear no evil approach to his provider friends who pay his salary.  Comcast’s quiet throttling of peer to peer applicati0ns that blew up into a major scandal when the truth came out was evidently one of the “isolated incidents” he speaks about.  That’s only the nation’s largest cable operator — no reason to get bent out of shape about that.

Let’s break down McSlarrow’s concerns and read between the lines:

• Nothing about Net Neutrality impacts on a cable system’s ability to deliver its multichannel video programming.  What McSlarrow is hinting at is that cable may end up using some of the same technology that moves online video to your computer to transport television programming to your TV set.  AT&T does that today with its U-verse system.  It’s basically a fat broadband pipe over which television, telephone, and broadband service travels together over a single pair of wires.  There is no demand that broadband must usurp your cable television package.
• McSlarrow is trying to be clever when he describes “new services” that he defines as separate and distinct from Internet access service.  That usually includes “digital phone” products which providers already exempt from usage limits imposed on competitors like Vonage.  If “network management” throttles Vonage while exempting the cable system’s own phone product, is that fair?  What about the forthcoming TV Everywhere?  Could a provider throttle the speed of Hulu while exempting its own online television service?  What happens if a provider’s own service is exempted from these throttles and can deliver a higher quality picture because of that exemption?
• “Bandwidth is not infinite.”  That’s something I’ve heard providers argue for more than a year complaining about their congested networks and why they need to impose controls to “manage them.” McSlarrow wants providers to be able to “manage” those networks by selling enhanced speeds for applications that partner with the provider.  Unfortunately, because cable broadband is a shared resource, those premium enhanced speeds will consume a larger share of that resource, naturally slowing down everyone else who didn’t agree to pay. Providers will say they are not ‘intentionally’ slowing down the free lane, but that’s a distinction without a difference to the consumer who will find many of their websites slower to access.
• Today’s model asks consumers to make the ultimate choice. If they want a faster online experience, they can purchase a faster tier of service. Now providers want to change that by establishing a nice protection racket — pay us for “enhanced speeds” or your content may not reach your customers at a tolerable rate of speed.
• It’s ironic McSlarrow is suddenly crying about how unfair it is content providers can’t purchase these “enhanced services.”  That’s a change of tune from an industry that used to accuse the large number of content providers who support Net Neutrality as freeloaders trying to use “their pipes for free.”

Customer demand for higher speeds and more reliable service should be all the impetus the cable industry needs to deliver quality service, particularly considering consumers pay a lot of money for the service and remain loyal to it.

McSlarrow’s final argument is a testament to the arrogance of the cable industry on the issues that concern subscribers.  A-la-carte channel choice, equipment options and expenses, usage limits, rate increases, and service standards are all issues this industry has fought with regulators about.  What customers want is secondary, and can remain that way as long as consumer choice is kept limited.  McSlarrow’s valiant defense of the rights and freedoms of the cable industry to offer extra freedom of speech through enhanced speed-privileges to content partners is more important to him and his provider friends than the rights of customers to not have their service artificially degraded to make room for even bigger cable profits.

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Mark A. Jamison

Stop the Cap! reader Joe sends along news of another one of those guest opinion hit pieces on Net Neutrality that pop up regularly in the media.  This one, The Internet is Never Neutral, printed in today’s Sun-Sentinel in south Florida, comes from Mark A. Jamison and Janice Hauge, a dynamic duo who have co-written several papers that always manage to turn up favorable conclusions for big telecommunications companies, including these page-turners:

• “Bureaucrats as Entrepreneurs: Do Municipal Telecom Providers Hinder Private Entrepreneurs?”
• “Subsidies and Distorted Markets: Do Telecom Subsidies Affect Competition?”
• “Dumbing Down the Net: A Further Look at the Net Neutrality Debate.”

The two are also working on other papers purporting to study regulatory policy and competition issues.  Let me illustrate my psychic powers by guessing they’ll find regulatory authorities to be obstacles to the well-oiled telecommunications machine and competition will be most hearty if there are no pesky regulations to hamper it.  We’ve seen how well that has worked so far for consumers in North America.

Remember Al Gore calling the Internet the information superhighway? The metaphor wasn’t and isn’t perfect, but it is instructive. Suppose we applied net neutrality to our transportation system — there would be no high-occupancy vehicle lanes during rush hour, no car-only lanes on interstates, and no toll road as an alternative to I-95 in South Florida. Transportation would be more costly and provide less value.

Forcing net neutrality would have similar results. Time-sensitive information, such as stock market transactions, would wait in line behind football game highlights.

Jamison, who is a former manager at Sprint Communications, and Hauge miss the entire point of the Internet’s biggest strength: its equal treatment of traffic from the smallest blog to Amazon.com.  Assuming providers, earning billions in profits even as their costs decline, invested appropriately in those networks, there would be no need for high-occupancy vehicle lanes and toll roads.  These kinds of “traffic management” techniques are proposed because provider dollars don’t keep up with consumer demand.  Social engineering tries to throttle traffic downwards by discouraging it with toll fees or manage it with special high cost lanes reserved only for those willing to pay or follow arbitrary rules governing their use.  More often than not, those premium lanes go underutilized while the rest of us remain stuck in the slow lane.

Net Neutrality would not impede network management that enhances the efficiency of traffic, except when it comes at the expense of someone else’s traffic. Net Neutrality also throws up a roadblock against providers who would plan to cash in with enhanced connectivity services that cannot exist unless  a market is created to sell them.  It’s similar to providers in Canada limiting your access to broadband, then throwing a penalty fee on your bill… unless you sign up and pay for their “insurance” plan to protect you from those charges.

Want to run a video streaming application on the Internet?  Pay for a broadband provider’s deluxe delivery insurance, and customers will be able to watch that video without buffering.  The alternative is to be stuck waiting because your video is being delivered on an artificial “slow lane.”

If you are thinking that it sounds like net neutrality restricts innovation and hurts customers, you’re right. Our research has shown that net neutrality limits innovation, contrary to the claims of the net neutrality proponents. How can this be? Imagine a one dimensional network — one that does nothing but carry information from point to point, which is how the old Internet has worked. What kinds of content providers flourish in that context? Those big enough to distribute their software across the net and those whose software takes advantage of the great bandwidth that they don’t have to pay for.

Their research makes numerous assumptions that might prove accurate in a laboratory environment, but simply discounts provider mischief in their efforts to maximize profits and minimize costs.  Providers have earned countless billions providing this “one dimensional network” to consumers.  It’s the one bright spot in a lackluster telecommunications sector.  Those who innovate new broadband applications have flourished.  Some providers who have not want to innovate in a different way – by inventing new Internet Overcharging schemes to profit from the service without actually improving it.  When their interests are at stake in owning and managing their own content services, bandwidth suddenly becomes plentiful.  The TV Everywhere project will potentially provide a value-added service to cable and telco TV providers, all made possible in marked contrast to their argument that other producers’ video content is clogging their networks.

Another naked fallacy in the authors’ argument is that content providers don’t pay for the bandwidth to host and distribute their content.  They do — to the companies that host their content and provide connectivity to the Internet.  That’s the job of web hosting companies.  Internet service providers simply want to be paid extra for doing their job – providing connectivity to consumers who pay $4o or more a month Free Press found costs about $8 to provide, and then also charging content creators a second time to facilitate delivery of that content.  That’s akin to charging a phone customer for placing a long distance call and also demanding to bill the person who answers.

Now, suppose that the network can offer enhancements that improve customers’ experiences. Content providers whose sites would not benefit from such enhancements could ignore the offering. But there will be some content providers who could improve their services by buying the enhancements, such as priority packet delivery. These sites become better without net neutrality and offer customers more service. In other words, there is more innovation and greater customer welfare without net neutrality than with it.

Promises, promises.  Just getting these providers to upgrade broadband speeds to consumers has been a never-ending quest.  Many consumers are willing to pay for “improved service” in the form of faster connections to the Internet.  Consumers are not willing to pay more for artificially limited service, be it through throttled speeds or usage caps.

At the conclusion of their study, which assumes providers will not leverage their duopoly in most American markets to increase pricing/revenue and reduce costs by limiting demand on their networks, they readily admit they did not take into account several possible scenarios:

One issue is how the offering of premium transmission might affect the network provider’s incentive to change the standard transmission speed. At least AT&T has committed to not degrade service for any network user, but it is unclear how such a commitment would be enforced.

Secondly, we do not analyze the effects of peer-to-peer communication, which is growing in importance on the Internet.

Thirdly, we do not consider the effects of vertical integration by the network provider and whether this would provide an incentive for foreclosure.

The PURC is part of the University of Florida, but also receives private corporate funding

Because the broadband industry fights any attempt to regulate their service, it is unlikely any such promise from AT&T would be enforced.  What AT&T defines as “degraded” service is open to interpretation as well.  As broadband demand is dynamic and growing, should AT&T leave standard transmission speeds exactly as they are today, that non-premium service would be degraded through inattention to broadband growth.  Peer to peer communication is largely a story from the first round of the Net Neutrality debate in 2006-7.  A more significant amount of traffic is now attributed to online video.  Finally, not considering vertical integration in the cable and telephone industry is a fatal flaw.  The history of telecommunications regulation has largely been written during periods when the cable and telephone industry abused their market position to overcharge consumers for service, lock up content distribution channels, and forestall competition wherever and whenever possible.

Frankly, Jamison and Hauge’s world view only innovates new, even fatter profits for providers like AT&T.  Perhaps some of those profits can go towards even greater funding for the Public Utility Research Center, where Jamison serves as director and Hauge as a Senior Research Associate.  The PURC, part of the University of Florida, just happens to have, among others, AT&T and Embarq Florida as sponsors, and both companies have seats on the PURC Executive Committee.

Sun-Sentinel readers don’t have that information because it’s not included in the disclosure at the bottom of the piece.  Following the money would shed a lot more sun on this important debate.

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Adam Lynn

Most people agree: They pay their cable company too much money. Not only is this view widely held, it’s also backed up by hard numbers.

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John Boehner (R-Ohio)

Eighteen Republican senators joined twenty House Republicans in a letter writing campaign to get FCC Chairman Julius Genachowski to drop Net Neutrality from the agenda at the Federal Communications Commission, calling the policy “counterproductive,” and would create a “chilling effect” on broadband investment in the future.

Many GOP members signing the latest round of letters also took issue with Net Neutrality a few years ago when it was a hot topic in Washington.

After Sen. Kay Bailey Hutchison’s aborted attempt to de-fund FCC enforcement of Net Neutrality regulations, the past month has seen a full frontal assault on Net Neutrality by many Republicans.  Minority Leader John Boehner (Ohio) and Republican Whip Eric Cantor (Virginia) co-authored a letter to President Barack Obama suggesting he intervene to drop Net Neutrality policies and instead focus on the national broadband plan.

Any regulations that would prohibit Internet service providers from managing their networks, they said, would discourage those companies from investing the billions of dollars needed to expand broadband access.

“We believe that network neutrality regulations would actually thwart further broadband investment and availability, and that a well-reasoned broadband plan would confirm our view. So to hastily begin the process of adopting network neutrality rules months before issuing such a plan implies that politics are driving the FCC’s decision-making process.”

Ranking Member of the House Communications, Technology & the Internet Subcommittee, Rep. Chris Stearns of Florida fired off a letter to Genachowski echoing the same sentiment:

Sam Brownback (R-Kansas)

“At first glance, net neutrality regulations may appear reasonable and harmless, but, a deeper examination reveals that net neutrality is neither reasonable nor harmless. These mandates would harm consumers, reduce competition, and discourage new investment and innovation at a time of tremendous technological growth.”

“The FCC bears the responsibility to prove a market failure, especially since its 2002, 2005, 2006, and 2007 decisions on cable modem service, digital subscriber line service, broadband over power line service, and wireless broadband service were predicated on the notion that the broadband market nationwide is competitive and that regulation is unwarranted,” Stearns wrote.

Of course, during the years he cites, the Republicans enjoyed a majority on the Commission that made that finding.

Stearns and his colleagues suggest that the FCC could only intervene if substantial evidence existed the broadband marketplace was collapsing.

The Senate Republicans, led by Senator Sam Brownback of Kansas and Chuck Grassley of Iowa, questioned the need to adopt new regulation, suggesting only two abusive incidents have occurred in the last five years that would have been prohibited by the regulations.

“It appears your decision to create new commission rules is outcome-driven. Your promulgating network neutrality rules seems to emanate from a fear that there may be some problems related to openness in ‘the future.’  Our view is that it is harmful for the commission to impose industry-wide rules based upon speculation about what may occur in the future.”

“Such a major policy shift should be contemplated with only all of the FCC Commissioners involved,” they wrote. “To do it with just one party reduces the confidence the public and Congress has in the proposal.”

Pro Net Neutrality groups had none of it:

Gigi Sohn, Public Knowledge:

It is truly unfortunate that the House Republican leadership has put itself in the position of trying to slow down the greatest economic engine for job creativity and innovation ever created. Under the neutral, non-discriminatory Internet, thousands and thousands of new businesses were created and millions of dollars were invested.

The latest House Republican letter asking for the FCC to slow action on preserving an open, non-discriminatory Internet is simply another attempt at a delaying tactic by those who favor big telecom and cable companies over competition and innovation.

The letter also has fatal flaws, such as when it asserts that Net Neutrality would make investment more difficult, or that Net Neutrality would result in lower speeds and higher prices for consumers. Both of those claims are false. Billions of dollars were invested in the Internet ecosystem, not only by carriers, but by companies doing business on the Internet, and by consumers subscribing to Internet services. That is the investment we seek to expand. There is nothing in banning discrimination on the basis of source, ownership or destination of bits would create lower speeds or raise prices. Those are simply distractions.

Net Neutrality is about big telecom, cable and wireless companies (which are often the same) picking winners and losers on the Internet. It has nothing to do with online services, consumer electronics or applications. The FCC should proceed to guarantee the freedom of the Internet that all consumers and businesses deserve.

Markham Erickson, Open Internet Coalition:

This issue has been under debate since 2005 when the Supreme Court issued its Brand X ruling. The previous Republican-led FCC engaged in ad-hoc enforcement in the Comcast case. To suggest this is a radical policy u-turn is simply incorrect.

The Internet existed for more than 25 years under a neutral regime. During that time, a national data network was built out by telcos and cable providers, despite a neutrality requirement. To suggest that a return to that status quo threatens broadband investment is not borne out by experience. In fact, it is critical to investment that this issue be addressed sooner rather than later — further delay in addressing this core policy issue will harm investment flows into new and innovative technologies.

“

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Professor Geist

The Canadian Radio-television Telecommunications Commission, the Canadian equivalent of the Federal Communications Commission in Washington, may be forced to consider American broadband policy before defining Net Neutrality and its role in Canadian broadband, according to an article published today in The Globe & Mail.

[FCC Chairman Julius Genachowski's] proposal – to codify and enforce some general principles of “Net neutrality” – comes as the Canadian Radio-television and Telecommunications Commission is expected to release its own position this fall, after public consultations this summer that prompted feedback from tens of thousands of Canadians.

“The kinds of principles that the FCC is now looking to put into rules are precisely what the CRTC heard from many groups this past summer,” said Michael Geist, a University of Ottawa professor who holds the Canada Research Chair in Internet and E-commerce Law. “The kinds of concerns that Canadians have been expressing have clearly been taken to heart by the FCC.”

Many Canadian citizens have been unhappy with the CRTC after a summer of hearings and policy decisions which have almost universally-favored Canadian broadband providers’ positions.  The CRTC seemed skeptical during hearings over the urgency to enforce Net Neutrality protections and stop provider’s throttling of peer to peer networks.  But consumers were even more upset when the Commission agreed with Bell, Canada’s largest phone company and wholesale broadband provider, and allowed the company to impose “usage based billing (UBB)” (Internet Overcharging) on wholesale buyers — primarily independent Internet Service Providers.  Canadian customers attempting to avoid usage caps and consumption billing relied on more generous policies from independent providers, policies likely to be revoked with the imposition of UBB, potentially making flat rate broadband service in Canada largely extinct.

In general terms, Net neutrality refers to the concept that access to all legal content on the Internet should be equal. The concept often comes up in relation to the practice of “bandwidth throttling,” where ISPs limit the transfer speed of certain kinds of data – such as the transfer of large movie files between users – but not other kinds.

Many large Canadian ISPs have argued that network management doesn’t affect Net neutrality, and taking away an ISP’s ability to manage its network results in worse service for a large number of customers.

Currently, there is no uniform practice among large ISPs in Canada when it comes to network management. Some firms throttle bandwidth during certain times of the day, whereas other limit bandwidth all the time, or not at all. A CRTC ruling this fall could go a long way toward implementing a uniform code for all ISPs.

“In light of what we’ve seen today, [the CRTC ruling] will be particularly telling because the benchmark now isn’t just what the CRTC heard during this hearing, the benchmark now is our neighbours to the south,” Prof. Geist said. “The CRTC will in many ways be measured up against what the FCC is doing in the U.S.”

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Communications and Information Technology Minister Hon. Steven Joyce

New Zealand, long ranked near the bottom of the barrel in broadband according to OECD rankings, will embark on a $1.5 billion (NZD) national broadband initiative, with a publicly-owned fiber network as its hallmark.

The plan, which will give urban and suburban New Zealand residents access to speeds faster than commonly available in the United States, will reach three-quarters of the population within the next ten years.  New Zealand has discarded the “wait around for the private sector” approach, which has left the country with stiflingly slow and heavily capped broadband at high prices.  Instead, it will create an open access fiber optic network on which private providers can compete and offer consumers the speeds they desire.  Communications and Information Technology Minister Steven Joyce issued a statement explaining why the government was getting involved:

Private sector companies have decided, on behalf of their shareholders and as a commercial decision, not to invest in a nationwide network of fibre-to-the-home at this point in time.  The government understands this, and so wishes to assist and work with the private sector in improving the business case for ultra-fast broadband.

The government is also getting involved in order to encourage the provision of widespread open access dark fibre services, which will facilitate the best possible competition outcomes in emerging markets and encourage innovation in wholesale and retail services.

For residents in 33 communities across the country targeted for access to the new network, it cannot come soon enough.  For many of them the most important issue, even beyond speed, is an end to what one Henderson resident called “the current crap called ‘data caps.’”

“The speed of the broadband is meaningless compared to the tiny data caps involved.  On the current slow broadband, I use up my 50GB data cap 12-15 days into the month.  Ultra fast broadband would only be useful with no data caps involved, because the existing broadband speed is twice as fast as the cap already,” Lucy in Auckland told the New Zealand Herald.

Rose in Glenfield agrees:

“We have a 20GB data cap that we chew through in about 10-14 days, and then we are stuck on 64kbps or we have to pay another $30 for another 20GB to get through the rest of the month. When are they going to address these kinds of issues,” she asks.

New Zealand has seen the impact of Internet Overcharging schemes for years.  Providers originally introduced ‘data caps’ to reduce the usage on their networks, but have since relied on them, and consumption billing also as a way to collect revenue.  Most residential customers endure usage caps of 20-50GB per month.  After that, some providers dramatically reduce their connections to just above dial-up speed, while others have found new revenue by charging customers $2/GB or more in overlimit penalties and fees.  Some offer additional usage allotments, but at high prices, such as $30 for 20GB of additional usage.

The result has been a dramatically lower adoption of broadband in New Zealand, and many don’t think it’s worth the money.

John Rutter in Howick suggests speed is secondary to dealing with the issue of loathed usage caps.

“I like the idea of a ultra-fast broadband investment initiative but I hope Internet service providers like Vodafone, Slingshot, and Orcon will provide unlimited Internet soon. Unlimited Internet should come first, then ultra-fast broadband,” he said.

The government has received public support for its broadband initiative.  The public benefit is a much faster “public highway” on which private providers can offer service to individual customers.  By constructing a fast pipeline publicly that no provider is willing to provide privately, it creates additional value for consumers who find faster, more reliable service, preferably on better terms.

“Already a number of companies have shown interest in the government’s broadband initiative,” Joyce said in a statement. “It’s time to get on with finding the right partners to build these networks.”

The government “is prepared to accept a less than commercial return” from the partners. It aims to hold less than 25 per cent in the partnered investment vehicles and will resist contributions of more than 50 per cent.

For rural New Zealand, the answer generally won’t come from a fiber-based strategy, Joyce says.  Instead, the government estimates $300 million will be needed from public and private sources for a rural broadband plan.  Significant portions of New Zealand are difficult to reach with traditional broadband networks, and many New Zealand residents in even medium sized outlying towns find themselves on long waiting lists for what service is available.

Steve in Wellington told the Herald “a lot of towns (like Richmond, Tasman and Rolleston – not just remote areas) have issues where due to lack of exchange space many people cannot get broadband or are on ‘port waiting lists’ waiting for ports to become available. I think the main issue should be ensuring access to broadband full stop. Not just faster for those lucky enough to already have it.”

Rural broadband through wireless is one initiative under consideration.  WiMax technology can deliver fast broadband to rural area, often at faster speeds than traditional telephone company DSL in rural communities.

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This website is run on a voluntary and non-profit basis.  Our ability to reach you, the reader, comes as a benefit of an open and free Internet.  I can criticize and speak my mind openly and freely even about my own Internet Service Provider, because on today’s Internet the gatekeeper is your own motivation to write and publish content, and the motivation of the reader to consume it.

In the last few years, some Internet Service Providers have argued it is time to change this winning formula.  They are upset that groups and businesses are creating and distributing content over “their wires” without “paying a portion of the costs for those wires.”  No matter that you and I already pay those costs when we sign up for service with that provider.  Now they want content providers to be willing to pony up money to be assured that their content will reach you, the customer.  Don’t agree to pay?  They can’t guarantee your content won’t be slowed to a crawl by too many outside groups trying to use “their pipes for free” and you and I will be left with Internet service that provides super fast connections to those that pay, and a whole lot of waiting around to access those that don’t.

There is bipartisan support for the just introduced Internet Freedom Preservation Act of 2009. It would finally make Net Neutrality the law. It’s urgently needed during this time of provider bad behavior, from Internet Overcharging schemes to efforts to control broadband content distribution. Our friends at SaveTheInternet have a petition to sign, but it’s also important to reach out directly to your member of Congress and tell them to support H.R. 3458. It protects the Internet as we know and love it today.

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I usually don’t spend a whole lot of time debunking the more crazy conspiracy theories about Net Neutrality because I presume most online users are smart enough not to be suckered into sideshow distractions, usually paid for by providers trying to wave shiny keys at consumers to get them to support things exactly opposite their own best interests.  Unfortunately, there are a few shills out there who insist on trying to conjure up bizarre conspiracy theories about Net Neutrality representing some sort of Obama Administration/left wing takeover of the Internet.

When Newsbusters, a conservative media watchdog group, bought into this (and also sprang for the deluxe undercoatings, fabric protection, and deluxe floor mats), it was time to fire up the Debunk-o-matic once again and set the record straight.

What is particularly insulting is the ongoing effort to try and co-opt conservatives into this corporate protection circus, when truth be told, conservatives should absolutely be in favor of Net Neutrality for the same reasons any other person, regardless of where they fall on the political spectrum, should be — it protects their rights to be able to speak out on the issues that concern them the most, judged on the quality of their content, not on how much money they can pay to be sure those views can travel unimpeded to interested readers across the country and beyond.

Put on the rubber boots, because we’re going to splash through some inch deep puddles:

Enter the similarly-misnamed ‘net neutrality’ movement, which advocates total government control of Internet browsing. Net neutrality would forbid Internet service providers from regulating traffic on their networks, and would place that regulatory control in the hands of the FCC.

While the left bemoans restrictions by private companies on their subscribers’ use of the Internet, progressives have few qualms with allowing the federal government a say in what we can or cannot see, do, or say on the Internet.

The centralized control of Internet use by the federal government would provide a powerful tool for the censorship of websites deemed politically unfavorable. The current administration’s labeling of right-wing fringe groups as ‘extremists’ and potentially national security threats, and the labeling of town hall protestors as ‘political terrorists’ suggests that the realm of impermissible internet use could conceivably include groups that espouse intense opposition to federal policies.

I think author Lachlan Markay has been stuck in a parallel universe, like in that Star Trek episode, because he defined Net Neutrality the exact opposite of its reality.

The FCC can’t even get rational limits on cable system ownership to survive court review.  How Markay believes a naked attempt by the FCC to regulate political content on the Internet will pass muster requires something more than simply writing alarmist claims it will happen because he says it will.

The feeble effort to link town hall protesters and Obama conspiracy theories to the issue of Net Neutrality is a transparent effort to co-opt conservatives into a cause that means standing with the providers waiting to throttle their broadband speeds and charge their favorite websites more money.  I don’t believe for a second conservatives trust the local cable or phone company to do the right thing by them, as they continue to be stuck with ever-increasing bills for channels they don’t watch and certainly don’t want to pay for and phone features they don’t want or use, but end up paying for anyway.

Though no elected net neutrality advocate would ever suggest that the movement intends to regulate content, pundits on the left have been far more forthcoming. In March, a blogger at the Huffington Post lauding net neutrality wrote, “We have a very rare opportunity right now to lock in a progressive advantage in Internet communications, information sharing, and Netroots mobilizing.”

Markay attempts to bolster his argument by linking to a Huffington Post blogger that supposedly lets it all hang out in public — conspiracy revealed, case closed.  He assumes his readers won’t bother to click on the link, because if they do, they’ll discover Markay’s source didn’t have to be linked via HuffPost, he could have just turned around to the guy figuratively sitting at the desk behind him and quoted him directly.  Yes folks, he linked to a “Contributing Editor for NewsBusters.org,” the very site Markay writes for.

Seton Motley isn’t the go-to-guy for the quality expose either.  Indeed, Motley himself quoted from Joseph A. Palermo, another HuffPost blogger who penned a piece that proved he didn’t really understand Net Neutrality either.

Palermo instead advocated that progressive causes use broadband to bypass the “media filter” and talk to audiences directly.  Motley saw the words “Net Neutrality” in the headline and figured he’d done his job for the day.

Not so much. Not one of these people appears to understand what Net Neutrality is all about.

Net Neutrality is completely above the partisan divide because it insists, regardless of content, if it’s legal it should not be impeded by a broadband provider and should be allowed to travel unfettered across their wires.  Indeed, it also demands that the Internet be a true democracy of ideas, not one of entrenched interests with lots of money that can buy their way onto the fast lane while others make due with a potentially slower “free lane” that some providers proposed.

There you have it, straight from the horse’s mouth. The left is seeking net neutrality as a means of consolidating control over the Internet, the same way it sought consolidated control over the airwaves with the Fairness Doctrine, and the same way it is now seeking that same objective in the guise of ‘diversity’ and ‘localism.’ Those on the center-right should not be fooled into thinking that ‘localism’ or ‘net neutrality’ promote free enterprise or free speech.

Yes, three people who completely misunderstand the basic premise of Net Neutrality have weighed in and passed judgment on Net Neutrality. Palermo wasn’t writing about Net Neutrality and it should have not been in his headline.  Motley went along for the ride and assumed Palermo knew what Net Neutrality was, and then reflexively attacked just because Palermo plays for the blue team and Motley plays for the red.  Markay just provided the frosting for this big cake of wrong and added even more rhetorical sprinkles on top.  All that’s missing from this recipe for disaster is a provider to come on by and overcharge everyone for a piece.

The true risk of consolidation of control of the Internet isn’t coming from the federal government, it is coming from the providers themselves.  Where Markay has no concrete examples of actual government abuse, I do have real world examples of what happens when Net Neutrality protection is not guaranteed by law.  Providers in Canada, where Net Neutrality does not exist, uniformly throttle the speeds of certain content, and at least one provider directly blocked access to a website because of a political/business dispute the site had with that provider.

What should really scare conservatives is not having Net Neutrality.  These policies guarantee the right for all Americans to speak their minds and share their views, even those polar opposites Glenn Beck and Janeane Garofalo.  Let the best ideas win.

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Sen. Kay Bailey Hutchison (R-Texas)

Here’s a ‘shocking surprise’ for Texas readers.  Senator Kay Bailey Hutchison (R-Texas) is basically for whatever Internet Service Providers want when it comes to administering and charging for broadband service.  In a letter to Stop the Cap! reader Milan that confuses “Internet Overcharging,” the practice of throwing usage caps/limits or imposing consumption based billing on customers, with “Net Neutrality,” which guarantees that all network traffic is treated equally, Hutchison signals her opposition to government intervention in any of it.

Bizarrely, Hutchison claims that “congressionally mandated treatment of data” would “stifle competition” and “decrease incentive for [upgrades].”  That’s a logic train wreck.  How exactly telling a provider that they must treat data across their network equally would suddenly signal a potential competitor to throw in the towel escapes me.  If a provider is given the power to discriminate against traffic he or she doesn’t own, control, or partner with, the incentive to upgrade will never benefit the independent traffic anyway.

Apparently allowing providers to manage congestion on their networks the way they see fit is the only way consumers will be protected from “reduced speeds” and “higher costs.”  Yet many consumers already are faced with slower speeds created by providers who are decreasing investment in their own networks, despite earning continued healthy profits from them.  Consumer costs are increasing with or without Net Neutrality, and as consumers who were to be subjected to Time Warner Cable’s “experiment” with consumption based billing discovered, a $50 monthly broadband bill would have increased to $150 a month for an equivalent level of service.

The one clear fact of life Senator Hutchison either doesn’t realize or chooses to ignore is that consumers are the victims of America’s special interest-serving telecommunications policy she and other members of Congress helped put into place, assuring most Americans of anything but healthy competition.  Most Americans face a duopoly – one cable and one telephone company for broadband access.  Often, services from those two providers are not equivalent in terms of speed and performance, much less availability.

Competition is to be applauded, but using the word in a sentence does not provide Americans with assurances of getting it.  Forward thinking telecommunications policy promotes a true open market, investigates providers that refuse to overbuild into each others’ territories, demands robust oversight and regulation when necessary, and guarantees that no provider has the power to discriminate against traffic carried over that network, particularly when that traffic represents a competitive threat.

We’ve seen the results of the highly uncompetitive broadband marketplace most consumers, particularly in rural areas, face. It originates from policies that always benefit the providers first and foremost, while allowing the United States to continue to fall behind in broadband rankings measuring availability of fast, affordable, reliable and open broadband service. Continuing with these policies only assures providers get ahead while leaving you and I behind.

Sen. Kay Bailey Hutchison:

Dear Friend:

Thank you for contacting me regarding equal and unrestricted access to the Internet. I welcome your thoughts and comments on this issue.

The Internet is a valuable tool that facilitates business, education, and recreation for millions of Americans.

In 2008, an estimated 220 million Americans had access to the Internet at home or work. As Ranking Member of the Senate Commerce Committee, I am committed to ensuring that consumers benefit from competition in the telecommunications industry, resulting in lower prices, improved service, and access to 21st century technology.

Instrumental to the success of the Internet is the longstanding policy of keeping the Internet as free as possible from burdensome regulations. Increased investment in upgrading and expanding America’s Internet infrastructure, as well as innovative new broadband networks, will ensure that all Americans have access to affordable high-speed Internet. However, intensified regulation of the Internet, such as congressionally mandated treatment of data, would stifle competition and would decrease the incentive for network operators to invest in the Internet infrastructure.

It is my concern that mandates that prevent network providers from managing congestion on the Internet will reduce service speeds for many users, and eliminate a valuable tool for ensuring the most efficient use of network pipelines, resulting in increased costs to the consumer.

In a June 2007 report on the issue of “network neutrality”, the Federal Trade Commission (FTC) stated that no “demonstrated consumer harm from conduct by broadband providers” had occurred due to network providers managing Internet traffic.

More recently, the Federal Communications Commission (FCC) issued a decision involving Comcast and certain network management practices. While this decision works its way through the courts, Congress may continue reviewing network practices and Internet congestion issues.

Should any legislation regarding Internet access come before the Senate Commerce Committee, you may be assured I will keep your views in mind. I appreciate hearing from you, and I hope that you will not hesitate to keep in touch on any issue of concern to you.

Sincerely,

Kay Bailey Hutchison
United States Senator
284 Russell Senate Office Building
Washington, DC 20510
202-224-5922 (tel)
202-224-0776 (fax)

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Rep. Ed Markey

Reps. Ed Markey (D-Massachusetts) and Anna G. Eshoo (D-California), both members of the powerful House Energy & Commerce Committee, introduced legislation Saturday to enact Net Neutrality concepts into federal law.

H.R. 3458, the Internet Freedom Preservation Act, is designed to assess and promote Internet freedom for consumers and content providers. The bill states that it is the policy of the United States to protect the right of consumers to access lawful content, run lawful applications, and use lawful services of their choice on the Internet while preserving and promoting the open and interconnected nature of broadband networks, enabling consumers to connect to such networks their choice of lawful devices, as long as such devices do not harm the network.

Both Markey and Eshoo are not new to the Net Neutrality fight, having introduced similar legislation in the past two sessions of Congress, but failing to generate enough support to overcome powerful telecommunications lobbyists pushing for its defeat.

Both believe the Obama Administration’s stated support for Net Neutrality will help the bill overcome similar challenges during the current session.

Rep. Anna Eshoo

The bill has a clear message for the nation’s Internet Service Providers – upgrade your networks to sustain traffic – don’t discriminate against it.  The legislation’s framing language notes that most Americans face a monopoly or duopoly marketplace – one phone company and one cable company for their broadband needs.  The legislation suggests under such circumstances, providers would be likely to engage in discriminatory behavior against the traffic they do not own, control, or partner with.

“The Internet is a success today because it was open to everyone with an idea,” said Rep. Markey.  “That openness and freedom has been at risk since the Supreme Court decision in Brand X.  This bill will protect consumers and content providers because it will restore the guarantee that one does not have to ask permission to innovate.”

While the bill does not specifically address Internet Overcharging schemes, like usage caps and discriminatory pricing practices, it demands fairness for even the most traffic intense services, and demands “reasonable traffic management” standards. What defines that will be left at the desk of the Federal Communications Commission, which might end up being a wild card. The bill affords no protection for copyright infringement or other illegal/illicit online activities.

Tim Karr at Free Press advocated for the immediate passage of the bill, defining seven reasons why Net Neutrality protection is essential:

1. Economic Recovery and Prosperity

“The Internet has thrived and revolutionized business and the economy precisely because it started as an open technology,” Eshoo said in a statement on Friday. The Internet is so closely tied to U.S. economic recovery that President Obama and Congress earmarked more than $7 billion to help build out more high-speed connections at a time when our economy needs it most.

Obama and Congress also recognized that the economy cannot benefit by building a closed Internet. The American Reinvestment and Recovery Act requires that all federally funded networks be services that meet “nondiscrimination and network interconnection obligations” — that abide by Net Neutrality.

2. Free Speech

Freedom of the press extends only to those who own one — or so the saying goes. It once rang true in a world ruled by newspaper chains, radio and television broadcasters, and cable networks. But the Internet has changed all that, delivering the press — and in theory its freedoms — to any person with a good idea and a connection to the Web.

This extraordinary twist to “mass media” has catapulted many an everyday YouTube auteur to celebrity-status, while turning ideas born in a garage or dorm room into Fortune 500 companies. It is the reason so many Americans are now passionate about protecting their free speech rights on the Internet.

The Internet Freedom Preservation Act would stop would-be gatekeepers from re-routing the free-flowing Web. “To meet other national priorities, and to our right to free speech under the First Amendment of the Constitution of the United States,” the bill says, “the United States should adopt a clear policy preserving the open nature of Internet communications.”

3. Civic Participation

New media are more participatory and personal than ever before and have opened up new avenues for people to become involved with local, state and national politics. We saw it during the 2008 presidential election when tens of millions expressed their support for Obama and McCain via interactive Facebook, Twitter and e-mail forums. We are seeing it in 2009 from the streets of Tehran to the work of organizations like the Sunlight Foundation and the Center for Responsive Politics, which use the Internet as the means to open governments to public scrutiny and accountability.

This wave of digital empowerment is the gathering force for a healthier democracy, and it all depends upon a more open, affordable and accessible Internet for everyone. Expanding Internet access alone doesn’t erase concerns over what kind of information people will find when they get online. Net Neutrality guarantees that we all have an equal opportunity to play a part.

4. The Marketplace of Ideas

The Internet was the great surprise of the 20th century. Sir Tim Berners-Lee created the standard that opened the World Wide Web to everyone with an idea and a connection. At that time, few could imagine that this open architecture would fuel such a powerful eruption of economic, social and political creativity.

The Internet Freedom Preservation Act “will protect consumers and content providers because it will restore the guarantee that one does not have to ask permission to innovate,” Rep. Markey said when he introduced the bill.

This is true regardless of your age, social status or location. Net Neutrality safeguards everyone’s fundamental right to an open Internet, making it possible for one person’s good idea to blossom into the next big business or, even, a movement of millions.

5. Social Justice

Broadband in America today is not equally accessible: Users are predominantly middle- or upper-class and live in urban or suburban areas. Poorer communities and communities of color, as well as communities in rural areas, have been largely left off the grid.

Imagine what it would mean, then, to provide a connection to disadvantaged areas without also extending to them Net Neutrality’s guarantee of openness. Dominant ISPs have argued for this exception, saying Net Neutrality prevents them from connecting more people. But it’s a false choice and far too high a cost to give network owners the power to shunt ideas percolating up from these communities to a digital backwater.

The Internet Freedom Preservation Act guarantees equal and unbridled access to the Internet’s engine of opportunity, leveling the playing field so that we all have a chance to be heard.

6. The Rise of the Gatekeepers

A high-speed connection is useful only if you can connect to everyone else online. Net Neutrality leaves control over your Internet experience with you, the user. Yet network operators are considering charging extra money depending on where you want to go and what you want to do online. Some are deploying technology that would sift through and filter the content that you share with others online. Such discrimination endangers the open and level playing field that has made the Internet so democratic.

As more of us rely upon a high-speed connection to do all things media — watch and make video, follow the news, listen to music, Tweet, email and call our friends — legacy media are too tempted to get in our way, steering us back via old channels where they make all decisions for us. But there’s no going back to the analog oligarchy. The Internet Freedom Preservation Act keeps the gatekeepers at bay.

7. The Obama Opportunity

Forces are coming into alignment for Net Neutrality. We have a president who is an outspoken supporter, congressional leadership willing to fight for an open Internet, and a pro-Neutrality chairman newly ensconced at the Federal Communications Commission.

Since the fight for Net Neutrality began more than three years ago, 1.6 million Americans have picked up the phone, signed petitions, spoken out publicly and written letters to urge their members of Congress to get behind Net Neutrality.

The tides have shifted. Still, giant phone and cable companies aren’t going away. They think they can squash our movement — and over the past six months alone, they have hired 500 lobbyists in Washington to try to stop this bill.

This is our best chance to beat them back once and for all.

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Netgear's Rangemax™ Dual Band Wireless-N Gigabit Router - Premium Edition (WNDR3700) will be Netgear's first router to include usage monitoring capability built-in.

For many consumers asked, “how many gigabytes do you use on your Internet connection each month,” the answer is often a question: “what is a gigabyte?”

Because of efforts of Internet Service Providers to try and implement Internet Overcharging schemes, consumers who have no interest watching a company-provided web page “gas gauge,” will at least be given an independent way of assessing their monthly usage – through the router that often connects a cable or DSL modem to a home computer.

Netgear will introduce a new router this August that will include built-in usage monitoring tools.  The Netgear Rangemax™ Dual Band Wireless-N Gigabit Router – Premium Edition (WNDR3700) will sell for $190, and is targeted to high end users.  Netgear promises to introduce the feature on new router models going forward, eventually becoming a standard feature on every router sold by the company.  Software upgrades will be available to introduce the measurement tool to older equipment already in use.

Usage monitoring tools aren’t actually new.  Replacement “firmware” such as Tomato and DD-WRT, already measures usage, typically with a monthly consumption total.  That makes it much easier than some software measurement tools, which can only measure usage when left running (and only on a single computer).

Most consumers are not interested in measuring usage, but with the threat of overlimit fees and penalties or service termination, router manufacturers have begun to include measurement tools to help consumers keep track just in case.

Some providers, like Comcast, provide a monthly allowance of 250GB and only actively pursue the top 1% of customers who wildly exceed that.  Others, as have been regularly documented on Stop the Cap!, create very low limits, and then overcharge consumers with penalty fees when they exceed them.  Time Warner Cable met extremely hostile opposition to their roundly-attacked “tier experiment” in April, and quickly shelved the proposal until a company “education” campaign can be run.  The importance of checking usage will vary depending on how draconian of a limit one’s provider sets for its customers.

Netgear’s announcement can be read both positively and negatively.  It’s positive because it allows customers to independently measure their monthly usage and expose any providers who “play with the numbers” and overbill customers for usage never consumed.  It’s negative because it plays into industry arguments that measurement tools are a necessary element to conduct business, and helps establish a foundation to implement Internet Overcharging schemes.  Critics call such schemes unnecessary, considering the highly profitable returns providers enjoy at current pricing.

Cisco Systems, which owns Linksys, another major router manufacturer, is also considering bandwidth measurement tools for its router line in the future.

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CRTC Review of the Internet Traffic Management Practices of Internet Service Providers

July 6 — July 14, 2009
Conference Centre – Outaouais Room
140, Promenade du Portage
Gatineau, Province du Québec
Canada

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The CRTC hearings are being held to establish guidelines on practices that internet service providers use to manage traffic and congestion on their networks.  Among the issues under consideration: reducing the speeds of certain Internet applications such as peer-to-peer traffic, establishing usage allowances and/or limits on usage, and whether such practices potentially favor existing providers by protecting their other businesses from competition.

Hearing Transcripts

The official written transcripts of the CRTC hearing proceedings, primarily in English, released by the Canadian Radio-television Telecommunications Commission.

July 6, 2009 — CRTC Web Document

July 7, 2009 — CRTC Web Document

July 8, 2009 — CRTC Web Document

July 9, 2009 — CRTC Web Document

July 10, 2009 — CRTC Web Document

July 13, 2009 — CRTC Web Document

July 14, 2009 — CRTC Web Document

Hearing Audio

Unfortunately, audio from the session of July 6 is not available at this time.  Please consult the official written transcripts provided above. Also, hearings in Canada often feature speakers that switch fluidly between English and French when delivering testimony or answering questions. The vast majority of the hearing was conducted in English. On July 13th, there was some extended testimony delivered in French. Some Bell employees flipped back and forth between English and French during their testimony as well. Therefore, for those who are not bilingual, we have included a special audio file recorded from the simultaneous English translation feed on that day.

July 7, 2009

CRTC Hearing: Day Two – Morning & Afternoon Session — Gatineau, PQ – July 7, 2009 (207 minutes)
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July 8, 2009

CRTC Hearing: Day Three – Morning Session (Part 1) — Gatineau, PQ – July 8, 2009 (57 minutes)
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CRTC Hearing: Day Three – Morning Session (Part 2) — Gatineau, PQ – July 8, 2009 (42 minutes)
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CRTC Hearing: Day Three – Afternoon Session (Part 3) — Gatineau, PQ – July 8, 2009 (25 minutes)
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CRTC Hearing: Day Three – Afternoon Session (Part 4) — Gatineau, PQ – July 8, 2009 (78 minutes)
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July 9, 2009

CRTC Hearing: Day Four – Morning Session (Part 1) — Gatineau, PQ – July 9, 2009 (68 minutes)
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CRTC Hearing: Day Four – Morning Session (Part 2) — Gatineau, PQ – July 9, 2009 (56 minutes)
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CRTC Hearing: Day Four – Afternoon Session (Part 3) — Gatineau, PQ – July 9, 2009 (37 minutes)
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CRTC Hearing: Day Four – Afternoon Session (Part 4) — Gatineau, PQ – July 9, 2009 (48 minutes)
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July 10, 2009

CRTC Hearing: Day Four – Morning Session (Part 1) — Gatineau, PQ – July 10, 2009 (73 minutes)
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CRTC Hearing: Day Four – Morning Session (Part 2) — Gatineau, PQ – July 10, 2009 (41 minutes)
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CRTC Hearing: Day Four – Afternoon Session (Part 3) — Gatineau, PQ – July 10, 2009 (29 minutes)
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July 13, 2009

CRTC Hearing: Day Five – English Translation Feed — Gatineau, PQ – July 13, 2009 (281 minutes)
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CRTC Hearing: Day Five – Morning Session (Part 1) — Gatineau, PQ – July 13, 2009 (33 minutes)
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CRTC Hearing: Day Five – Morning Session (Part 2) — Gatineau, PQ – July 13, 2009 (91 minutes)
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CRTC Hearing: Day Five – Afternoon Session (Part 3) — Gatineau, PQ – July 13, 2009 (66 minutes)
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CRTC Hearing: Day Five – Afternoon Session (Part 4) — Gatineau, PQ – July 13, 2009 (67 minutes)
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July 14, 2009

CRTC Hearing: Day Six – Morning & Afternoon Session — Gatineau, PQ – July 14, 2009 (159 minutes)
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Recordings courtesy of: “Bonkers”

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Here comes the Astroturf

Deborah Taylor Tate, a Bush-appointed ex-commissioner on the Federal Communications Commission is now earning her paycheck regurgitating telecommunications industry talking points of behalf of the astroturf group, the Free State Foundation.

In an editorial in today’s Washington Times (thanks to reader Mitchell for alerting us about it), Tate perfectly falls in line with the talking points Stop the Cap! readers can repeat in their sleep, right down to ripping off AT&T’s “grandmother” analogy from several weeks ago.  Her employer, the Free State Foundation, has a long history of advocating pro-industry positions in opposition to consumer interests.  Having a former credentialed FCC official doing the industry talk is designed to impress.

Tate, who was never impressive as an FCC commissioner and maintains her ongoing unimpressive credentials at FSF, phones it in with a fact-free piece entitled, “Paying for Use is Fair,” in which she directly advocates for Internet Overcharging schemes, attempting to convince readers it will somehow save them money on their broadband service.

Her efforts to tell the story of “paying for what you use” will be comical to those in the communities where such “experiments” were conducted, because Tate either doesn’t know or care about the details of the market experiments she writes about.

Most broadband consumers would be astounded that some members of Congress want to block our ability to pay for broadband Internet use in precisely the same way we now pay for other commodities: Pay more if you use more; pay less if you use less.

Most consumers would be astounded an ex-FCC commissioner got the basic facts wrong about the basis of such pricing schemes.  No broadband provider has ever offered a “pay for what you use” pricing scheme.  They have only offered “pay MORE for what you use, and a lot more if you use more than you thought.”

This comes on the heels of Time Warner’s rapid retreat from a pilot test of pay-for-use broadband pricing, bowing to congressional pressure and protests from consumer groups. Studies have indicated the top 25 percent of users have consumed 100 times more bandwidth than the bottom 25 percent. So, what is fair about one-price-fits-all if someone uses 100 times more than you do?

At least Tate barely acknowledges another basic truth about these pricing schemes: the overwhelming majority of Americans do not want this kind of pricing model, and more than half would leave their existing provider if they tried to force them into one.

The “studies” Tate writes about do not exist.  They are claims by the providers themselves, which have never allowed for an independent review of the raw data the companies claim to base their findings on.  Nor does it account for the industry’s “need” to increase every consumer’s broadband bill with overcharging schemes based on limited consumption allowances and credit card-like overlimit penalties and fees.  Indeed, this is an industry with profits well into the billions of dollars whose costs are actually declining, along with their willingness to invest in growing their networks.  One need only review quarterly and annual financial reports issued by the providers’ themselves to learn the truth.  These companies are not hurting for profits.

Even where monopolies exist, pricing has generally been based on the notion that customers are charged more if they consume more and less if they use less. Obviously, beyond basic necessity, they could exercise some self-control, and could even save money through metering that measured consumption. This is especially true in an environment where consumers have options for providers of broadband, cell phones and now, in many cases, electricity.

Broadband pricing has been flat rate since the service was launched by phone companies providing DSL and cable operators launched cable modem service in most areas of this country.  That’s because broadband has been cheap, capacity plentiful, and profits high.  Absolutely nothing has changed in that equation, except a desire by broadband providers to dramatically grab additional profits, reduce demand with threats of overlimit fees or service being cut off for overuse, and attempts to invest less in their networks.  Controlling online video is critical for most of the providers who find that a competitive threat to their television service business model.

Tate doesn’t bother to contemplate increased competition, seeming happy enough to acknowledge monopolies do exist and then moving on to something else.  That mimics the FCC’s position over the past eight years, so that comes as no surprise either.

Whether run by local co-ops, governments or profit-making firms, any network has substantial capital costs to build out infrastructure, provide service, expand capacity and meet higher demand, particularly at peak periods. The same network cost issues also apply to Internet service providers. Expanding bandwidth and capacity for the exponential growth of Internet traffic is expensive. Updating security applications to prevent cybercrime are increasingly necessary for government, business and individuals, driving up costs even further. The supply of fiber optic cable and computer servers is not infinite, and we are already facing network constraints. We have all experienced the network being slowed by periods of heavy usage. Broadband providers — just like wireless providers — should be allowed to use a consumption model without government interference as long as consumers know and understand what they are paying for.

To date, there has been a surprising uniformity in billing for broadband Internet service. But why should a grandmother who checks e-mail once a day or makes an occasional purchase online be charged the same monthly rate as a researcher downloading massive data files or teenagers watching full-length movies every day? Why not provide consumers the freedom to monitor and control their own use — and to benefit from volume-based rate packages?

AT&T should consider legal action against Tate for plagiarizing their talking points.  In fact, her entire argument is part of the grand Re-education campaign we’ve written about since Time Warner Cable temporarily shelved their overcharging scheme back in April.  The “exaflood” nonsense, the “it’s expensive to spend money to upgrade our networks” whining, and the hissyfit over consumers using their service just as these same providers marketed them are all in there.

Deborah Taylor Tate: The Marie Antoinette of Internet Pricing

At least Tate is consistent — she never cared about consumers like you and I during her stay on the FCC, and she still doesn’t care about consumers by doing the bidding of groups like the Free State Foundation.

What do Washington Times readers think?  Not much of Tate or her positions.  Among them:

“Wow, did you just pull a page out of the telecom’s lobbyist manual to come up with this article?  They are doing this to prevent new technologies from making them an antiquated model, and they are doing it to get more money out of the customer. I promise it has nothing and I mean nothing to do with saving your grandma a single cent.”

“Are you being paid by the cable co? Seriously. Do you even realize with the utter lack of competition and the fact that the cable company enjoys a monopoly in most all of their markets, pricing for use is utterly bad for consumers.”

“Bill is right, you’re just reading talking points at this point, and not looking at the actual economics or technology behind it.”

“Deborah, Please take a moment to think for yourself instead of shilling for an industry. Metered billing has nothing to do with customer choice, please don’t pretend that it does. This is about making more money off of existing usage, while avoiding upgrading of networks and services.”

“So for instance, using the same logic and same company, when I call for traditional phone service, they are quick to sell me an “Unlimited” minute plan for $40.00/month.”

“Metered usage is nothing more than a money grab by the content providers. Their current business model is being threaten by media content being available via streaming services.”

In the end, consumers like you and I pay part of our monthly broadband bill to providers that are cutting checks to astroturf groups to advocate against consumer interests.  Imagine if they spent some of that money on their network upgrades, and a little less funneled to inside-the-beltway hackery written by underwhelming ex-officials-turned-insider-special-interests.

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Phillip Dampier

I have been following the Canadian hearings on Net Neutrality and Canada’s widespread use of bandwidth throttles and usage limits on broadband access.  It has been an issue confronting customers of the largest telephone and cable providers across Canada for at least a year.  Now that these practices have spread to wholesale accounts, which directly impact independent Internet Service Providers, it has created a major hullabaloo across the country.

The Canadian Radio-television Telecommunications Commission (CRTC) has decided to address these two issues together during the week-long hearings.

Unfortunately for Canadians, there is considerable division about how to manage Internet traffic, based on a premise from the largest providers that they do not have the capacity to provide everything to everybody.  Of course, getting providers to cough up raw data and allowing an independent group to verify it is like trying to feed your dog a head of lettuce.  You always have a fight on your hands.

Everyone attending has an agenda, and more than a few are willing to throw each other under the bus if it means getting what they want.  Some pro-content groups who also claim to be pro-consumer, but receive money from private businesses want no bandwidth throttles and suggest usage based pricing is the better option.  Some wholesale ISPs would prefer to put up with peer-to-peer usage throttling and “equal” throttling of other Internet applications if it means no usage based pricing for their wholesale accounts.

Consumers don’t want either one, and cannot understand why an industry raking in such enormous profits can’t simply make the investments required to rake in even more profits, especially if they create their own new products and services to take advantage of the broadband marketplace they are helping to create.

Canada’s largest providers have enjoyed the fight, and have managed to take advantage of the divisions created by groups willing to sacrifice each others’ interests for their own sake: they imposed BOTH usage based pricing and bandwidth throttles.  Oh, and raised your broadband bill by at least 10% for good measure.

This comes as a result of the myopic “only my interests matter” agendas some of these groups bring to the hearing room, and Commissioners obviously realize it, based on some of their challenging questions back to those testifying.

No hearing on these issues should ever rely on an unproven premise: the great exaflood, the clogged pipes, the torrent of data is upon us and we cannot survive without imposing limits, rate increases, and try to control usage.  Bring in an independent auditor and provide full access to raw usage data, consider how much investment companies are making in their networks compared with the profits they extract from them, and then consider whether we have a problem and examine possible solutions to it.  These third party astroturf groups releasing bought-and-paid-for “independent research” and equipment manufacturers with an agenda are not suitable for the task either.

Just as we’ve seen providers attempt to custom-draw their own maps for broadband penetration, providers are only too happy to release their own massaged data, but won’t allow anyone outside of the company to do so, ostensibly for privacy and competitive reasons.  Sorry, that’s not even close to being acceptable.

Stop the Cap! opposes Internet Overcharging schemes, which include usage based pricing and limits.  But we also oppose bandwidth throttles, free passes for provider-owned content while everyone else faces some “meter,” and companies that believe in “this is fast enough for you” broadband speeds which are far slower than those in more competitive markets.  We support Net Neutrality.  We support public investment in broadband development, as well as private investment.  We’re happy to support a deregulated framework for broadband when it works for consumers.  But we want oversight and regulation where competition is insufficient or non-existent.

As we’re watching events unfold to our immediate north, it’s clear other pro-consumer organizations and those that want to claim to represent consumers must also be on the same page so we don’t make the same mistakes.  We cannot be willing to throw in the towel on Net Neutrality if it means no Internet Overcharging, and we should never support Net Neutrality alone if it subjects consumers to enormous Internet bills because of some rationing plan that subjects people to overlimit fees and paltry usage allowances.

The only real choice is fast, affordable, reliable broadband service.  If private companies can’t or aren’t willing to provide it, than it’s time for municipal or public sector projects to build the infrastructure necessary to guarantee it.

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One of the arguments used by those who want to engage in Internet Overcharging is that people already “pay for what they use” for gas and electric service, so why shouldn’t they adopt the same attitude towards Internet service.

Historically, people did used to pay for their usage of online services, before there was a World Wide Web.  CompuServe, QuantumLink, PeopleLink, Delphi, GEnie, AOL, among many others used to provide access to dial-up users for a fee which varied depending on the amount of time spent accessing the service.  Rates during business hours were outrageous (CompuServe charged upwards of $12-16 per hour in the 1980s), but more reasonable during the evenings.

But as costs to provide the service declined, providers rapidly abandoned that type of pricing for flat rate, unlimited access for one monthly price.  Internet Service Providers worked the same way, with customers first using dial-up modems to connect for one monthly price.  Nobody worried about watching the clock or meters.  It has worked that way ever since, with highly profitable results for broadband providers.

MetroPCS Coverage Map (click to enlarge)

Now, some of these companies hunger for more of your dollars, and they are attempting to convince you their pricing should be similar to utilities like gas, electricity, and water (while conveniently not allowing themselves to be regulated like those providers).  They scrupulously avoid comparing their service with telephone companies, which are really the closest cousins to broadband service.

Now we know why.  While some broadband providers want to move away from flat rate pricing, telephone companies are moving toward flat rate pricing.

In addition to unlimited local, statewide, and nationwide flat rate long distance plans, MetroPCS, a regional prepaid mobile telephone provider, has announced a new unlimited international flat rate calling plan for just $5 per month.

To be eligible for $5 Unlimited International Calling,  customers must choose an unlimited calling plan starting at $40 per month.  For an additional $5, customers get unlimited calling to 100 countries.

MetroPCS sees this new international flat rate plan as a “game changer” in the industry, drawing large numbers of new subscribers who love to call overseas.  The company may even attract tourists who sign up with a “throwaway” basic mobile phone just for the duration of their visit.  The costs for the service are dramatically lower than roaming rates, especially for international calls, even with the price of the phone.

The only downside?  MetroPCS operates in only a limited number of cities, although they maintain roaming agreements with Leap Wireless (Cricket) to extend their coverage.  Once one company offers flat rate international calling, others will certainly follow, potentially establishing a new paradigm for truly unlimited mobile phone calling, regardless of where you call.

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Frontier’s webmasters have been working overtime today apparently doing some damage control, as well as issuing some clarifications about their new usage caps.   But like much of the mixed and muddied message customer service representatives are sending customers, the website now contains several inconsistencies and contradictions between the product description page and the Acceptable Use Policy.

Because of the changing story, we’ve decided to begin capturing and saving select pages from Frontier’s website and will be adding them to a new Reference Library under construction.   From there, you can download and save Adobe PDF versions of captured web pages, dated for your convenience.   Unfortunately, with the shifting positions of Frontier, what may be on the website today may be gone tomorrow.   If engaged in an effort to cancel service, it may be useful to have some of these pages available to reference, because customer service representatives may not be able to locate them.

Let’s breakdown what has changed in the last 24 hours.

First, it’s obvious readers are making a difference.   Frontier realizes they have a public relations problem on their hands of their own making.   The complaint calls and cancellation requests have clearly made an appropriate impact on the company, although not to the point of shelving the idea of a usage cap.   The company has instead decided to try and manage the story more carefully in hopes of controlling the message.   Unfortunately for them, as long as they want to impose caps on customers, we will be here to debunk the fictional excuses, expose the inconsistencies, and educate consumers about why they should not be convinced that less equals more.

Second, the original Acceptable Use Policy dated July 23, 2008 for residential customers remains in place:

Customers must comply with all Frontier network, bandwidth, data storage and usage limitations. Frontier may suspend, terminate or apply additional charges to the Service if such usage exceeds a reasonable amount of usage. A reasonable amount of usage is defined as 5GB combined upload and download consumption during the course of a 30-day billing period.

This is now in direct contradiction with a new section attached to the product information page for the residential DSL product, which includes this new language:

If I hit 5GB will my service be interrupted?
No. Your service will not be interrupted at 5Gb. You will continue to use our High Speed Internet service without disruption.

Does Frontier plan to limit my use of the Internet?
No, there are no plans to limit customer usage. On average a Frontier High-Speed Internet customer uses less than 1.5GB per month. Frontier residential High-Speed Internet service comes with 5G per month (about 5,000 Megabytes), which is more than double the monthly consumption of most of our subscribers.

We appreciate the company’s apparent new policy not to suspend or terminate accounts for exceeding their 5GB usage cap, but their Acceptable Use Policy requires immediate revision to ensure consistency.

Third, the newest promotional page includes this laugh-out-loud passage.   If you are seriously considering imposing a draconian usage cap of 5GB, which is obviously so unacceptable to a significant number of your customers that are calling to complain and cancel service, maybe this passage  is just pushing things a little too far:

We all love the Internet, and Frontier is committed to offering you all the bandwidth you need and want to take full advantage of the Web! Our basic residential Internet packages offers 5GB usage — that’s the equivalent of 500,000 basic text e-mails, 2,500 Photos, 40,000 Web Pages, over 300 Hours of Online Game Time, 1,250 downloaded songs, or a mixture of the above!

This kind of writing convinces me the folks in Frontier’s Marketing Department have finally joined the party.   Welcome aboard, but remember, if customers were upset enough to protest a 5GB usage cap, rubbing it in their face by telling them you love the Internet and are committed to offering all the bandwidth “you need” (if the year is 1988 and you have a 1200bps dial-up modem) will be seen as fighting words.   Telling customers 5GB a month lets you take full advantage of the Web is fine, if you never do anything except browse low density web pages.   Maybe we can Gopher and Telnet some things as well.   Somehow I doubt the marketing people will understand the irony of either.

The rest doesn’t get much better.   If Frontier wants to learn more about The Internets, they can use The Google to read about average customer reactions to broadband user caps and exactly what defines a “power user.”   Someone who exceeds 5GB a month hardly qualifies.   Also, another inconsistency:  If Frontier has not implemented a usage cap plan, then why does the language implementing it remain in the Residential Acceptable Use Policy?

What are “bandwidth caps” and what does it mean for Internet users?
“Caps” are thresholds where Internet Service Providers could deem usage in excess of “normal” usage. For the majority of our users, bandwidth caps will not be reached. However, some users have multiple servers or computers or download huge files that demand large amounts of available bandwidth. In response to these “power users,” the industry is moving toward “tiered usage” plans that would be applicable when consumption reaches certain bandwidth levels. This type of plan would result in heavy users paying for their fair share of usage and will make sure that average users do not subsidize high-usage consumers. Other Internet Service Providers like Comcast and Time Warner are testing these tiered usage plans. Frontier has not implemented tiered usage plans and will continue to evaluate if and when they would be necessary. If and when Frontier implements a tiered usage plan pricing and usage information will be communicated to all High-Speed customers.

Before we go, let me add there is a bit of good news from Frontier today, which is to their credit, assuming they publish this policy in the form of a written guarantee to customers, which amend their term contracts to assure them this language will remain in place regardless of if it appears on the website or not.   Until a written assurance is in hand, a promotional  blurb on a product description page is  insufficient to make me withdraw my recommendation to cancel service within the 30 day opt-out window:

If Frontier rolls out tiered usage plans, will my Pricing / Plan change if I am on a Frontier Price Protection Plan?
Pricing for customers on Frontier’s Price Protection Plan will not change during your initial term commitment if we roll out tiered usage plans.

This language should be slightly modified to state that any overage fees for bandwidth in excess of 5GB do not apply to Frontier Price Protection Plan customers, and that no penalty or disruption in service will occur if a customer exceeds the 5GB usage cap planned for more  formal implementation in the near future.   Assuming that language is in place, it means that customers on a 12-36 term commitment will not have to worry about any usage caps and they will not apply to them for the remainder of their contract. But, again, an inconsistency remains here as well.   The Acceptable Use Policy clearly states the 5GB limit is in place right now.   Further reference to this should also be included on the Terms & Conditions page, which also contains the opt-out clause, to clarify that usage caps do not apply to customers with a contract that does not specifically include them.

Stop the Cap! continues to call on Frontier to discard the usage cap limitation altogether.   Next week, we’ll have some better ideas for Frontier to consider that will not alienate their customer base and positions them to begin competing more effectively in their service areas.

This article was updated at 11:58pm, August 6, 2008 and replaces language from an article entitled “Breaking News” posted earlier this evening.

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Dave Burstein, reporting for GigaOM, said that two FCC Commissioners were overheard discussing Frontier’s decision to cap its customers at 5GB of usage per month at an FCC hearing in Washington.

The Federal Communications Commission has taken an interest in the broadband industry and reviewing its competitiveness and service, particularly to underserved rural areas. They are also concerned about net neutrality – where large Internet Service Providers can offer preferential treatment to their partners with faster backbone speeds, exemptions from usage caps, and more prominent placement of their content.

Burstein reports, “Frontier in 2007 had capital spending of $315,793 which seems like a lot until you note their Depreciation expense was $374,435. [A] five gigabyte [cap] is so low even a 2002 style network can handle it, but not maintaining the network is going to hurt them and their customers.”

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