Video: FCC Chairman Julius Genachowski Announces Net Neutrality Proposal

Phillip Dampier September 21, 2009 Net Neutrality, Public Policy & Gov't, Video 3 Comments

FCC Chairman Julius Genachowski

FCC Chairman Julius Genachowski

FCC Chair Julius Genachowski announced a proposal that would prevent cable, wireless and telecommunications companies from blocking certain information on the Internet. A panel of industry analysts then discussed the concept called “net neutrality,” along with their ideas for improving broadband access.

Recognizing the need to expand the U.S. broadband network to ensure America’s infrastructure and economic development, Congress tasked the Federal Communications Commission (FCC) with developing a national broadband plan by February 17, 2010. On September 21, FCC Chairman Julius Genachowski delivered remarks on the national broadband plan and other communications issues.
[flv width=”320″ height=”240″]http://www.phillipdampier.com/video/Genachowski and Panel 9-21-09.flv[/flv]
C-SPAN covered the event this morning and had a comprehensive discussion about the state of broadband in America today. (1 Hour, 48 Minutes)

Event Information

When

Monday, September 21, 2009
10:00 AM to 12:00 PM

Where

Falk Auditorium
The Brookings Institution
1775 Massachusetts Ave., NW
Washington, DC

Participants

Featured Speaker

Julius Genachowski

Chairman
Federal Communications Commission

Moderator

Cecilia Kang

Reporter
The Washington Post

Panelists

Ben Scott

Policy Director
Free Press

Josh Silverman

CEO
Skype Technologies S.A.

Darrell M. West

Vice President and Director, Governance Studies

David E. Young

Vice President, Federal Regulatory Affairs
Verizon Communications

HissyFitWatch: Shaw & Rogers Non-Compete Agreement Tossed, Allowing Shaw Acquisition of Mountain Cablevision

Phillip Dampier September 21, 2009 Canada, Competition, HissyFitWatch, Recent Headlines, Rogers, Shaw 4 Comments
Who Dares to Break the most sacred Ark of the Cable Covenant?

Who dares break the most sacred Ark of the Cable Covenant?

In March 2000, two cable magnates sat down for the cable industry equivalent of My Dinner With Andre.  Fine wine, beautiful table linens, an exquisite meal, and a Monopoly board with pieces swapped back and forth representing hundreds of thousands of Canadian consumers.  Ted Rogers and Jim Shaw drew a line on the western Ontario border and agreed to stay on their respective sides of it.  Ted and Jim divvied up each others cable interests, swapping Rogers’ systems west of Ontario with Shaw’s systems east of the provincial line. Thus was born the Ark of the Cable Covenant, with its founding principle: Thou shalt not compete or intrude in my territory.

The only question left at the end of the meal was who was going to pick up the check.  You did.

And so it was.  Since 2000, Shaw Communications has kept its operations west of Ontario, Rogers stays in Ontario and points eastward.  A very nice state of affairs, as long as you are not a Canadian consumer looking for competitive relief from high prices and lousy service.

Shaw Raids Ontario

Shaw Raids Ontario

But in July there was heard a great rumbling across the prairies and into the verdant forests and rolling hills of southwestern Ontario.  What was that sound?  Who were these cowboy hat wearing hordes riding across the lands to the shores of Lake Ontario carrying saddle bags stuffed with cash?  Why look, Calgary-based Shaw is staging a $300 million dollar buyout raid on Mountain Cablevision, Ltd., a 41,000 subscriber independent cable company based in Hamilton, Ontario.

But what of the sacred agreement?  Ted Rogers passed away in December, leaving Shaw to rhetorically ask, “What agreement? Do you know anything about an agreement?”

Indeed, there is no honor among thieves and cable executives seeking the spoils of a highly uncompetitive industry.  Rogers was shocked to discover an invasion on their turf, and they responded with a torrent of attorneys to block the deal, as Canwest News Service notes:

“Shaw is bound by the restrictive covenant which prohibits Shaw from building or acquiring any broadband wireline cable business in Ontario, Quebec or Atlantic Canada,” Rogers argued in court documents released Thursday.

Thankfully for Shaw, Ontario courts do not typically recognize “covenants” as sacred documents not to be broken.  Justice Frank Newbould on the Ontario Superior Court of Justice rejected the de facto non compete agreement and said Rogers had not proven any irreparable harm from the sale, dismissing Rogers’ “proof” as “speculative in the extreme.”

Of course, you realize this means war.

Tim Pinos of Cassels, Brock & Blackwell LLP is Rogers’ lead lawyer on the file. Shaw’s intentions are clear, he said Friday: “Shaw desires to re-enter Eastern Canada and acquire cable systems.”

Aside from picking a competitive fight with Rogers, an expansion east would pit Shaw against smaller but powerful players, such as Videotron, which is owned by giant Quebecor Inc., and commands a near-monopoly in Quebec.

With the agreement shattered, Rogers is likely casting its eyes westward, observers say.

Earlier this week, Edward Rogers was appointed to the role of deputy chairman of the company his father built. He moves from heading up Rogers Cable and will also oversee new operational responsibilities, including strategic acquisitions.

Unfortunately for consumers, some sacred agreements will remain unbroken.  Namely the one that keeps companies like Shaw and Rogers from competitively wiring communities already served by each other and competing head to head.  That simply wouldn’t do.  It would ruin a perfectly delightful meal.

Wall Street Journal Says Net Neutrality A Boon To Bandwidth Hogging, Ignores Industry’s Own Self-Interest

net_neutralityA Wall Street Journal article this morning calls the imminent introduction of Net Neutrality policy “a boon for consumers […] to use their computers or cellphones to enjoy videos, music and other legal services that hog bandwidth.”

The article refers to the widely expected announcement today by FCC Chairman Julius Genachowski that Net Neutrality should be adopted as the fifth principle governing Internet service in the United States.

But Journal reporter Amy Schatz’s judgment about who wins and who loses in the Net Neutrality debate is framed by the flawed broadband provider arguments she adopts as reality:

The proposed rules could change how operators manage their networks and profit from them, and the everyday online experience of individual users. Treating Web traffic equally means carriers couldn’t block or slow access to legal services or sites that are a drain on their networks or offered by rivals.

The rules will escalate a fight over how much control the government should have over Internet commerce. The Obama administration is taking the side of Google, Amazon.com Inc. and an array of smaller businesses that want to profit from offering consumers streaming video, graphics-rich games, movie and music downloads and other services.

Setting aside the inappropriate use of the word “hog” to define broadband usage, which comes straight out of the broadband industry’s public relations strategy, Schatz ignores the fact some of the biggest drains on these networks will soon come from the industry’s own efforts to dominate online video — TV Everywhere.

In fact, the excuses for imposing Internet Overcharging schemes in 2009 do not reference much beyond online video growth as a justification to impose speed throttles and price increases on consumers.

Schatz adopts industry positions as fact in a number of places throughout her piece, which belongs on the Editorial page of the Journal:

If the FCC does force U.S. wireless carriers to open their networks to data-heavy applications like streaming video, it could push them beyond the limited capacity they have. Already, in areas like New York and San Francisco, a high concentration of iPhones has caused many AT&T customers to complain about degrading service.

In fact, many wireless carriers already provide their own wireless video to customers, and don’t seem to be engaging in a lot of hand-wringing over that.  Should Net Neutrality force open the wireless platform, the quality of the service, not the provider’s self interest will govern the success and failure of individual applications.  AT&T, which has earned massive revenue from its exclusive iPhone arrangement with Apple, can and should continue to invest some of that revenue into expanding their network to meet the demand.  If they cannot, it is an open question why they would allow any online video or other data-heavy applications on their networks until those networks can handle the traffic.

In such a scenario, wireless carriers may have to rethink how much they charge for data plans or even cap how much bandwidth individuals get, said Julie Ask, a wireless analyst at Jupiter Research.

This ignores the fact providers have already rethought about how much they charge for data plans.  Some providers are now compelling subscribers to choose data plans as part of their two year service agreements, while the industry is replete with 5GB usage caps on wireless data services today.  Someone should ask Ask what she thinks is forthcoming that hasn’t already happened.

The FCC’s proposal will take into account the bandwidth limitations faced by wireless carriers, according to people familiar with the plan, and would ask how such rules should apply to current networks.

…which takes the wind out of the sails of the argument Net Neutrality would be ruinous to wireless providers.

The proposals come as the FCC faces a federal appeals court case over its authority to regulate Web traffic. Comcast is fighting an FCC decision last year to ding it for violating the agency’s “net neutrality” principles when it slowed traffic for some subscribers who were downloading big files. Comcast said it didn’t violate any rules because the FCC had never formally adopted any, but it did change how it manages its network.

In reality, Comcast’s speed throttle targeted files small and large, all because they were delivered over a specific network Comcast didn’t like: peer to peer.  That’s a protocol that relies on a group of people obtaining files by sharing pieces already downloaded with one another until the file is complete for everyone.  That involves uploading and downloading file pieces, often over a lengthy period.  Comcast’s network was built with the assumption most customers would download far more than they upload, and peer-to-peer challenged that model with its file sharing methodology.  The surge in upload traffic challenged their network at times, so Comcast decided to throttle the maximum speeds consumers could use while engaged in peer-to-peer file sharing.

Republicans are likely to oppose the FCC’s new proposal — both at the FCC and in Congress — arguing that the FCC is trying to fix problems that don’t exist and that the agency should take a more hands-off approach to the fast-changing industry.

“With only a few isolated instances of complaints alleging net neutrality-like abuses ever having been filed, it is a mistake,” said Randolph May, president of Free State Foundation, a free-market oriented think tank.

It’s difficult to fathom exactly how much more “hands-off” the agency can get with respect to broadband, an unregulated service in the United States.  That “hands-off” policy was responsible for the establishment of de facto monopoly/duopoly broadband service in most American cities, wireless broadband that charges nearly the same price for the same usage capped service, and is tinkering with Internet Overcharging to leverage that market status into higher pricing for all consumers.

May’s argument is akin to calling the fire department only after a fire has consumed half of your home, not when the smoke detector first goes off.

As a result, both the cable companies and phone companies had incentives to create conditions on the Internet — either through pricing or slowing or speeding up certain sites — to favor their own content.

This sentence, buried towards the end of the piece, exemplifies exactly why Net Neutrality is so important.  Let’s put this fire out before it burns out of control.

North Carolina Rep. Ty “Big Telecom’s BFF” Harrell Resigns Under Ethical Cloud

 

Rep. Ty Harrell - Big Telecom's BFF: Buh, Bye

Rep. Ty Harrell (D-Raleigh) submitted his resignation today after an ethics investigation raised questions about his campaign finances.  Harrell resigned to ‘spend more time with his family and to deal with divorce proceedings.’

Stop the Cap! readers will remember Harrell from this past spring, when he allowed Time Warner Cable to help draft anti-consumer, anti-municipal broadband legislation and introduced it as his own.  It seems Harrell has been representing his own interests over that of his constituents well beyond just a telecommunications bill our readers shamed him into walking away from this past spring.

“The people of District 41, and all citizens of North Carolina, deserve representatives who can make clearly-focused decisions on their behalf,” Harrell wrote in a letter to House Speaker Joe Hackney. “With the recent turbulence in my personal life and continued speculation about my campaign expenditures, I do not feel that I can provide the high standard of representation that my constituents expect and deserve.”

On this the people of Raleigh should wholeheartedly agree.  Harrell’s interests in serving some of his corporate friends, who have contributed generously to his campaign, obviously exceeded the interests of his constituents.  The News & Observer today reports:

Harrell’s campaign expense report for January through June of this year showed an unusual number of expenses for a year with no election. Many of the expenses were to restaurants at a time when Harrell had no source of income other than his nearly $14,000 legislative salary. In an earlier report, he listed paying $235 to a pricey children’s clothing store and $191 to Sharon Luggage, with both identified as a “committee meeting.” and the descriptions of the expenses often were listed as “donor recruitment,” “strategy meeting” or other explanations that the elections board found insufficient.

Harrell has been living outside his district for more than a month at a friend’s house, feeling unhappy in marriage. His wife, Melanie Dupon, filed for divorce in July, alleging an extramarital affair.

The affair was probably with big telecom.

Harrell wrote as part of his resignation letter:

“My parents always told me, and I believe, that public service is an honorable calling,” Harrell wrote. “I answered that call by serving in the General Assembly as an agent for positive change. But holding public office can put significant strains on a young family and I am living proof of that.”

One of the strains Harrell writes about could have been how to creatively hide the money in expense reports that he allegedly spent on himself.  As Stop the Cap! North Carolina issues coordinator Jay Ovittore reported back in May, Harrell accepted $2750 in campaign contributions from telecommunications companies, a sizable amount for a state legislator not running a committee.

The election board’s staff found so many alleged discrepancies, it asked for more than 200 pieces of additional information on Harrell’s filings, according to the News & Observer.

As we wrote back in May, Harrell’s response to our charge that his bill represented the direct opposite of his own constituents’ best interests was one of “surprise.”

Representative Harrell, we honestly cannot understand your surprise over the outrage and backlash that came after you handcrafted, on spec from Time Warner and its lobbying lawyers, an incredibly anti-consumer, anti-competitive, nightmare of a piece of legislation designed to destroy municipal broadband across the state of North Carolina.

Rep. Ty Harrell (D-NC), who normally considers himself a progressive Democrat, has so bumbled his way through this entire affair, he’s managed to end up on the same side as the ultra-big-corporate friendly Americans for Prosperity, which is now war-dialing its way through North Carolina with push polls and fear-monger phone messages.  If that doesn’t sound alarm bells that something isn’t right, what will?  He admits he didn’t realize North Carolina has been through this anti-consumer nonsense before.  In 2007, largely the same bill was bought and paid for by big telecom special interests, but failed to pass after elected officials realized it would antagonize their constituents into voting for anyone but them in the next election.  No kidding.

Stop the Cap! is not surprised Rep. Harrell will now be looking for a new day job.  Democrat or Republican, Stop the Cap! is watching our elected representatives like a hawk.  We will continue to call out the bad actors and expose their anti-consumer actions.  The people of North Carolina have one less bad representative to deal with, but unfortunately there are others who are also cashing the checks and prepared to abandon the people they are supposed to represent.  We’ll continue to name names and show how much they’ve taken to vote against your interests.

Two news videos appear below the jump….

Jay Ovittore is Stop the Cap!’s North Carolina issues coordinator.

… Continue Reading

FCC Expected to Introduce Net Neutrality Rule Monday

Phillip Dampier September 20, 2009 Net Neutrality, Public Policy & Gov't 2 Comments
FCC Chairman Julius Genachowski

FCC Chairman Julius Genachowski

Federal Communications Commission Chairman Julius Genachowski is expected to unveil Monday a proposal to formalize Net Neutrality protections as part of FCC policy governing broadband providers.

Genachowski is expected to make a formal announcement as part of his appearance at the Brookings Institution, according to a series of leaks Friday afternoon.

The FCC chairman is expected to introduce Net Neutrality as the fifth spoke in a wheel of principles governing broadband service in the United States.  The “Four Principles” of broadband service in the United States was developed to set guidelines providers would follow in return for a hands-off regulatory approach by the Commission.:

  1. To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to access the lawful Internet content of their choice.
  2. To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to run applications and use services of their choice, subject to the needs of law enforcement.
  3. To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to connect their choice of legal devices that do not harm the network.
  4. To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to competition among network providers, application and service providers, and content providers.
  5. To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to open access to content without interference or discrimination by broadband providers.

The fifth principle would become part of formal FCC policy, which should provide assurances that Net Neutrality will be enforced by the Commission staff.

The establishment of Net Neutrality protection would fulfill one of the promises made by President Barack Obama during his presidential run in 2008.  The Obama Administration has consistently advocated Net Neutrality as a core tenet of American broadband service.

Genachowski is expected to underline the seriousness of his proposal by including wireless providers in the definition.  That would subject mobile broadband providers to the same rules wired providers face, an important distinction that could put a stop to wireless phone companies acting as gatekeepers to block third party software applications designed to bypass those companies’ networks and calling plans.  iPhone owners in particular have been subjected to restrictions on the types of software and services they are allowed to use on their phones used on the AT&T network.

Consumer advocates are widely anticipated to applaud the FCC’s action, but some remain concerned that an FCC rulemaking by itself does not provide the robust protection federal law would provide, particularly if an administration in power appoints FCC Commissioners uninterested in enforcing it.  A bill has been introduced in the House of Representatives to make Net Neutrality the law, not just an FCC policy.  Passing the legislation provides even stronger guarantees that Net Neutrality principles will be respected.

The move by Genachowski to move forward on formalized Net Neutrality protection now may have come after the Commission watched a federal court throw out other informal FCC policies as unconstitutional.  Comcast has a pending lawsuit against the FCC after the Commission ordered Comcast to stop interfering with peer-to-peer traffic on its broadband network.  Comcast objected to the FCC involvement and feels the Commission exceeded its authority.  Should a judge agree, in the absence of a more formalized FCC rulemaking, Comcast would be free to resume throttling the speed of certain traffic on its broadband service.

An FCC rulemaking could provide ammunition to Net Neutrality critics that passage of a federal law would be redundant and unnecessary.

Net Neutrality critics argue that broadband networks should be free to manage the traffic on their service as they see fit, suggesting the goal of providers is to provide a consistent level of broadband service to all of their customers.  They suggest consumers that find network traffic policies too onerous would take their business elsewhere, discouraging provider excess.

But advocates for Net Neutrality argue the industry can leverage an undercompetitive marketplace to throttle and restrict traffic — reducing the traffic load on and the need for upgrades. In the absence of robust competition, other providers would could follow suit.  Net Neutrality advocates are also concerned broadband providers may attempt to monetize premium levels of service for content creators.  In return for a fee, content providers would be assured of enhanced speeds and performance in reaching that ISP’s customers, while those who don’t pay find themselves on a broadband “slow lane” that could make them uncompetitive.

Genachowski’s proposal is likely to permit broadband networks sufficient flexibility to do some network management, such as blocking denial of service, spam, and virus attacks, but not allow providers to prioritize traffic based on fees.

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