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

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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

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p style=”text-align: center;”>CRTC Hearing: Day Two – Morning & Afternoon Session — Gatineau, PQ – July 7, 2009 (207 minutes)
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July 8, 2009

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p style=”text-align: center;”>CRTC Hearing: Day Three – Morning Session (Part 1) — Gatineau, PQ – July 8, 2009 (57 minutes)
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p style=”text-align: center;”>CRTC Hearing: Day Three – Morning Session (Part 2) — Gatineau, PQ – July 8, 2009 (42 minutes)
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p style=”text-align: center;”>CRTC Hearing: Day Three – Afternoon Session (Part 3) — Gatineau, PQ – July 8, 2009 (25 minutes)
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p style=”text-align: center;”>CRTC Hearing: Day Three – Afternoon Session (Part 4) — Gatineau, PQ – July 8, 2009 (78 minutes)
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July 9, 2009

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p style=”text-align: center;”>CRTC Hearing: Day Four – Morning Session (Part 1) — Gatineau, PQ – July 9, 2009 (68 minutes)
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p style=”text-align: center;”>CRTC Hearing: Day Four – Morning Session (Part 2) — Gatineau, PQ – July 9, 2009 (56 minutes)
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p style=”text-align: center;”>CRTC Hearing: Day Four – Afternoon Session (Part 3) — Gatineau, PQ – July 9, 2009 (37 minutes)
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p style=”text-align: center;”>CRTC Hearing: Day Four – Afternoon Session (Part 4) — Gatineau, PQ – July 9, 2009 (48 minutes)
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July 10, 2009

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p style=”text-align: center;”>CRTC Hearing: Day Four – Morning Session (Part 1) — Gatineau, PQ – July 10, 2009 (73 minutes)
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p style=”text-align: center;”>CRTC Hearing: Day Four – Morning Session (Part 2) — Gatineau, PQ – July 10, 2009 (41 minutes)
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p style=”text-align: center;”>CRTC Hearing: Day Four – Afternoon Session (Part 3) — Gatineau, PQ – July 10, 2009 (29 minutes)
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July 13, 2009

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p style=”text-align: center;”>CRTC Hearing: Day Five – English Translation Feed — Gatineau, PQ – July 13, 2009 (281 minutes)
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p style=”text-align: center;”>CRTC Hearing: Day Five – Morning Session (Part 1) — Gatineau, PQ – July 13, 2009 (33 minutes)
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p style=”text-align: center;”>CRTC Hearing: Day Five – Morning Session (Part 2) — Gatineau, PQ – July 13, 2009 (91 minutes)
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p style=”text-align: center;”>CRTC Hearing: Day Five – Afternoon Session (Part 3) — Gatineau, PQ – July 13, 2009 (66 minutes)
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p style=”text-align: center;”>CRTC Hearing: Day Five – Afternoon Session (Part 4) — Gatineau, PQ – July 13, 2009 (67 minutes)
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July 14, 2009

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p style=”text-align: center;”>CRTC Hearing: Day Six – Morning & Afternoon Session — Gatineau, PQ – July 14, 2009 (159 minutes)
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Recordings courtesy of: “Bonkers”

All week long, the Canadian Radio-television Telecommunications Commission (CRTC), Canada’s telecommunications regulator, is investigating Canadian ISPs who are throttling back speeds on certain Internet applications and engaging in “usage based pricing” of their wholesale accounts.

The hearings, which will run until Monday, will help the CRTC create regulations for how service providers manage their Internet traffic and address provider claims of network congestion.

A wide array of interests are represented at this week’s hearings (courtesy CBC):

1. ISPs that use internet traffic management for P2P file transfers

• Specifically: Bell Aliant, Cogeco, Rogers, Shaw, Barrett Xplor.
• What they are expected to say: Practices such as throttling are necessary to ensure fairness among internet users and prevent a few bandwidth hogs from slowing down the internet for everyone. Barrett Xplor use traffic management for satellite services, arguing that satellites are expensive and hard to upgrade.

2. ISPs that use other methods to deal with congestion

• Specifically: Telus, MTS Allstream, Primus, Quebecor on behalf of Videotron
• What they are expected to say: Methods such as usage-based pricing and network upgrades work well to deal with congestion, but each ISP should be allowed to make their own decisions regarding how they deal with congestion. Primus argues in its written submission that internet wholesalers such as Bell should not be allowed to impose their traffic management practices on the customers of other ISPs that buy wholesale network access from them.

3. Small ISPs, including those that may be throttled by their wholesalers

• Specifically: Coalition of Internet Service Providers Inc., Canadian Association of Internet Providers, Execulink, Cybersurf.
• What they are expected to say: Many of these companies buy internet access wholesale from companies such as Bell, create packages and resell it to their own retail customers. They argue that allowing wholesalers to apply traffic management to customers of other ISPs is anti-competitive.

4. The entertainment industry

• Specifically: Independent Film and Television Alliance, Canadian Film and Television Production Association, Alliance of Canadian Cinema, Television and Radio Artists.
• What they are expected to say: The internet is an important platform for distributing music, film and TV. ISPs should not act as gatekeepers for those.

5. Other businesses and organizations that rely on the internet to deliver services

• Specifically: Zip.ca, Jason Roks, Vaxination informatique, Norm Friesen, Canada research chair in e-learning practices at Thompson Rivers University, Open Internet Coalition
• What they are expected to say: Traffic management practices that discriminate against certain types of data could reduce investment in broadband networks and consumer choice, inhibit innovation and freedom of expression and be abused to engage in anti-competitive practices.

6. Consumer and public interest advocacy groups

• Specifically: Public Interest Advocacy Centre, Union des consommateurs, National Union of Public and General Employees, Canadian Internet Policy and Public Interest Clinic on behalf of Campaign for Democratic Media, Council of Canadians with Disabilities and ARCH Disability Law Centre
• What they are expected to say: Their position is similar to that of businesses and organizations that rely on the internet, but they are also concerned that technologies such as deep packet inspection could invade consumers’ privacy.

Several interest groups are willing to advocate for certain bandwidth management techniques over others, much to the consternation of some consumers following the hearings.  Jacob Glick, Canada policy counsel for Google, for example, told CRTC commissioners he supported usage based pricing if it meant throttled broadband would end.  In his written and spoken comments before the CRTC, he indicated that throttled broadband was the worst choice for ISPs:

They have the potential to hurt innovation and other techniques are preferable, including:

• Boosting network capacity.
• Using different pricing models.
• Using techniques that target the amount of bandwidth use rather than the type of application using the bandwidth; for example, slowing a user’s connection after reaching a certain limit.

Glick argued that such techniques helped Comcast reduce network congestion after it was ordered by regulators to stop throttling its customers.  Comcast has a 250GB monthly consumption allowance.

John Lawford, counsel for the Public Interest Advocacy Centre, which claims to represent three Canadian consumers groups, also advocated usage based pricing telling the Commission it was an acceptable alternative to dealing with network congestion issues.

But Timothy Denton, national commissioner for the CRTC, inquired about whether usage based pricing would inhibit the development of innovative, but bandwidth intensive, services like online video.  Marvin Ammori, general counsel for Free Press argued that it very well could.  Ammori pointed out there are anti-competitive issues to consider because many online innovations, particularly video, may compete with Internet providers’ own services.

Canadian consumers following the hearings on several technology websites were hostile to both usage based pricing and Net Neutrality violations.

John from St. Catherines wrote Stop the Cap!:

“I don’t know who these groups claim to represent but they sure as hell don’t represent me or any of the other consumers I know.  It sounds like some of these so-called pro-consumer groups are being funded by commercial services that will be harmed more by bandwidth throttles than with these overcharging scams.  Rogers does it all – they throttle, they cap, they charge penalties, and they raised their prices anyway!  Glick is part of Google which has their own agenda which isn’t consumers, and Lawford is full of crap.  He and his friends are like the passengers on the Titanic clawing their way to the front of the ship as it goes down. He’s not smart enough to realize all he’s accomplishing is going down with the ship a few minutes after the rest of us. He’s still going to drown, along with all of the consumers these people claim to represent.”

Canada’s largest online movie rental firm was particularly concerned about usage pricing models.

Rob Hall, chairman of  Zip.ca and CEO of its parent company told the Commission its plans to provide direct delivery of movies and other programming directly to consumers online, without waiting for a DVD to arrive in the mail, could be jeopardized by speed throttles and usage limits.  Hall said that cable and telephone video providers get to deliver their own programming to viewers over the same wires as their Internet service, but without any limitations.  Hall said that represents evidence that providers are giving priority to their own network traffic over others.

“The same rules must apply to both,” Hall said.

Hall was also concerned about ISPs spying on customers and potentially taking advantage of the data they collect:

Some ISPs are throttling peer-to-peer file transfers using programs such as BitTorrent, which “might be an ideal platform” to deliver Zip.ca’s movies, as it uses the network efficiently.

Deep packet inspection, a technique used for traffic control, will be abused to access marketing information about users that his company has collected.

If rules change suddenly, and there is no way to resolve the problem quickly, his company could be put out of business.

Independent ISPs are also concerned about the implications of throttled service.  They purchase Internet access from large providers like Bell (Canada) and then resell that connectivity to their customers.  Recently, Bell started imposing usage based billing on their wholesale accounts and throttled their speeds, forcing providers to raise prices and limit access.

The proposition, according to several providers, is that they are supposed to compete with Bell and large cable operators with a service that is identical or worse than what those providers offer, with the same limitations on usage and service, at a price that reduces or eliminates potential savings and benefits for their customers.  They believe many providers will be driven out of business because of the anti-competitive marketplace.

Many appearing at the hearing were skeptical about the effectiveness of bandwidth throttling, particularly of peer to peer applications.  Many such networks are rapidly moving to hiding traffic to avoid the network throttle.  Jean François Mezei, who runs the consulting company Vaxination Informatique, told the Commission that those heavy users of such applications will switch to a less efficient protocol to hide their traffic, which would only increase congestion further.

Toronto-based technology consultant Jason Roks said the real problem is false advertising by providers who are overselling their networks to subscribers.  Roks said advertised speeds in provider promotions rarely meet expectations, companies do not disclose the actual speeds of throttled services, and consumers are not given access to that information.  Roks told the Commission bandwidth providers are using throttles and other control measures to avoid investing in expanding their networks.

“If they can’t afford to upgrade their networks to support that many customers at advertised speeds, they should let customers go,” he argued.

More reactions from Canadian consumers below the fold.

… Continue Reading

This represents another consumer victory, and comes thanks to the hard work of Free Press, which has been a strong advocate for creating robust, equitable access to broadband services throughout the United States, available to those in rural locations as well as economically disadvantaged inner city neighborhoods.  This assures that no grant applicant can take public tax dollars and build discriminatory networks that violate Net Neutrality.

The National Telecommunications Information Administration, along with the Rural Utilities Service, today unveiled grant guidelines for the $7.2 billion allocated for broadband deployment in the American Recovery and Reinvestment Act, signed into law by President Barack Obama in February.

The criteria, or “Notice of Funds Availability,” create a detailed system for prioritizing grant applications and outline how the agencies will distribute $4.7 billion in broadband money for the NTIA’s Broadband Technology Opportunities Program and $2.5 billion for RUS loans and grants. Under the rules announced today for the BTOP programs, applicants that provide wholesale access to their networks at reasonable rates will be given preference for funds. Preference will also be given to networks that offer affordable services and community partnerships, among other public service goals. All recipients will have to operate their networks in a manner consistent with the FCC’s Internet Policy Statement as well as agree to “not favor any lawful Internet applications and content over others.”

In March, Free Press released a broadband stimulus grant scorecard that outlined criteria policymakers should use to score potential broadband deployment projects. Many of the factors identified by Free Press in March, such as Net Neutrality, broadband adoption, affordability, speed and job creation, are reflected in the criteria released today.

“Today, the Obama administration reaffirmed its commitment to Net Neutrality by ensuring that public funds will not be used to build closed and discriminatory networks,” said S. Derek Turner, research director for Free Press and author of the scorecard. “These broadband programs are first class examples of public policy serving the public interest. They will use public dollars to build out Internet access as a public service infrastructure.”

“To those large corporations that say public interest requirements are too restrictive, we say step aside and make way for the thousands of other companies, non-profits and municipalities that are eager to bring the transformative benefits of the open Internet to the millions of Americans left on the wrong side of the digital divide,” said Turner.

Along with the release of grant guidelines, leaders from the three federal agencies charged with collaborating and overseeing the national broadband plan were joined by Vice President Joe Biden in Erie, Pa., this morning to discuss funding. Commerce Secretary Gary Locke, Agriculture Secretary Tom Vilsack and newly appointed FCC chair Julius Genachowski discussed broadband stimulus plans and the importance of providing high-speed Internet to rural America.

“These agencies have set the bar for our nation’s digital future,” said Turner. “The success of the national broadband plan hangs heavily on how these federal dollars are doled out and these guidelines will help ensure that funds are allocated in a fair and efficient manner consistent with the priorities set forth by Congress and the president.”

The RUS and NTIA will begin accepting applications and reviewing them over the coming months. The first round of grant awards are expected to be issued in December.

[Updated 1:00pm ET: Stop the Cap! reader Michael Chaney found a video interview done last fall with some Australian providers falling all over themselves to praise themselves for Internet Overcharging schemes, and suggest American providers learn from them how to get away with trying the same thing.]

The group managing director of Telstra (Australia), Justin Milne, wants you to know that the era of free love is over.  They are sick and tired of letting content producers like Ninemsn (a partnership between Australia’s Nine Network ((think ABC or CBS)) and Microsoft’s MSN) use their pipes for free to send those video clips to their customers.  It’s time to break out the checkbooks and start paying them for freeloading on their network.

In a commentary for ZDNet Australia, Milne equates Net Neutrality with greed and “economic self-interest dressed up as moral virtue.”  Pot to kettle, especially when he quotes Franklin Roosevelt:

Franklin Roosevelt said during the Great Depression that heedless self-interest reflected not only bad morals but bad economics too.  Seventy years on, his advice still rings true.

Yes it does, and Telstra is a perfect example of that in practice, offering dreadful broadband service with paltry limits on usage and heavy throttles on speed when one exceeds them, all for a substantial price.  Telstra’s own self-interest leaves a lot of Australians despising the provider and begging for alternatives.  The morality of a company that now wants content providers, with whom it has no business relationship, to pay them money to reach their customers, can be left to the reader’s determination.

This is a tune we’ve heard before.  AT&T’s former CEO Edward Whitacre was the guy who first lit the flame to the gas line of abusive provider tactics using generally the same language:

How do you think they’re going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain’t going to let them do that because we have spent this capital and we have to have a return on it. So there’s going to have to be some mechanism for these people who use these pipes to pay for the portion they’re using. Why should they be allowed to use my pipes?  (11/07/05)

After Whitacre was educated that providers already pay hosting fees, infrastructure and licensing costs, and provide the very stuff that drives consumers to sign up for AT&T’s broadband services (and pay them for it) in the first place, Whitacre did a full reversal three months later:

“Any provider that blocks access to content is inviting customers to find another provider. And that’s just bad business.” (3/21/06)

Milne follows in Whitacre’s earlier footsteps, except he wants to be paid by everyone.  His customers are already subjected to limits on usage, which have limited Australia’s multimedia online experience years behind most others, and now he wants to have the money he earns from Internet Overcharging -and- the right to limit content that reaches his customers to only those who pay Telstra for the right to deliver it:

“Some content providers such as ninemsn argue that Telstra should subsidise the cost of the ninemsn customers visiting their internet sites. We might also assume [they] would prefer petrol to be free for their cars, and Hayman Island would like air travel to the resort free,” Milne wrote.

“But Shell, Qantas and Woolworths do not give their services away for free. Just like BigPond and the rest of Australia’s ISPs, they need to charge their customers a fee so that over time their investment is recouped,” he said.

Of course, Shell, Qantas and Woolworths only charge once for their products and services.  They don’t install a toll booth on a road and claim that because a full petrol tank weighs more than a near-empty tank, there needs to be a surcharge toll.  Qantas doesn’t send people down the aisle on a flight with a collection plate demanding more money for your ticket because the plane was packed.  All of Australia’s ISPs charge their customers for providing broadband connectivity.  Telstra does as well.  The difference is that Telstra wants to charge its customers a fee and also charge the websites you choose to visit a “transport fee” on top of that.  Your bill as a customer doesn’t go down because of “cost sharing.”  Telstra’s profits simply go up.

Milne’s problem with Net Neutrality is its core principle that all legal data traveling across the net must be treated equally.  That means Telstra has no way to enforce their HissyFit.  In the absence of Net Neutrality, they can block, limit, or throttle those that refuse to pay them.

The cost of the infrastructure to support this traffic has been borne almost entirely by internet service providers, and not by the publishers. In Telstra’s case alone, the company has invested billions of dollars in the Next G mobile broadband network covering 99 per cent of Australian consumers, the HFC cable network in major cities and the extensive ADSL network.

Unfortunately there is no magic pudding, so this investment must be repaid by the beneficiaries of the internet — the users on the one hand, and the publishers who seek to make money from those users through advertising and subscriptions.

Milne almost suggests they did this out of the goodness of their heart, and their investment was not going to be paid back.  The fundamental reality is that subscribers to those services are Telstra’s customers and they pay for that service, such as it is.  That is where that investment will be recouped.  Demanding a company that has no business relationship with your company to pay up or else face the potential of being cut off is akin to extortion.

I offered Milne two alternative suggestions:

• Expand your network to create infrastructure suitable to meet the needs of your subscribers, who will sign on in greater numbers to your service.
• Create hosting platforms and services at attractive prices to content providers who will use your service to host their content (and pay you for actually doing something for them).

Barring that, this is nothing but a HissyFit from another provider looking for a payday.

Michael Chaney, one of our readers, discovered this video interview compilation done last fall by ZDNet.  Enjoy the Internet Overcharging excuse making, where the customer becomes the enemy, and the creativity to find new ways to charge more in without bounds.

“The attempt is being made certainly in the UK but also in the US to push that cost onto the content owner by saying, you pay, and we’ll prioritise your traffic,” he said. “[And] if you don’t pay, your traffic will be really crap.”

[flv width=”480″ height=”360″]http://www.phillipdampier.com/video/ZDNet Australia Providers 2008.flv[/flv]

[Updated 12:11pm EDT: Scott McNulty from Comcast notes in our comment section that the TV Everywhere concept will count against the 250GB usage allowance Comcast grants residential broadband customers, and suggests the concept is non-exclusive and voluntary.  We debate Scott on that point — see the Comments below the article to follow along and add your thoughts.]

The best kept secret in the broadband industry is now out.  Stop the Cap! reader Lou dropped us a note to say the New York Times has decided to let cable’s big secret out of the bag in an article published today entitled, “Cable TV’s Big Worry: Taming the Web.”  Lou writes, “finally, the mainstream media is pointing out that the real threat to Time Warner Cable and others is Hulu.”

In addition to the obsession to “monetize” content that is currently given away for free online, many in the cable industry believe the best way to tame the web is to control the content and method of distribution.  If you subscribe to a cable TV package, you’re approved.  If you don’t, no online video for you!  Once accessibility is limited to those “authenticated” to access the content, a handful of companies can determine exactly who can obtain their video programming, for how long, and at what price.  For everyone else not going along, discouraging ‘unauthorized’ viewing and disrupting underground distribution are powerful tools for providers to protect their video business model.

What is the best way to do that?  Internet Overcharging schemes of course.  By raising the alarm that online video growth will create a tsunami-like wave of Internet brownouts and traffic jams, and by trying to pit subscribers against one another based on perceptions of their usage, the message that will be part of any cable industry “education” campaign is that limits, tiers, fees, and penalties are the answer to all of these problems.  Watching Hulu every night?  Naughty. With this 20GB monthly limit, we’ll put a stop to that.  Netflix movie tonight?  Do you really want to risk going over your allowance and incurring “necessary” overlimit fees and penalties that represent more than 1,000% markup over our actual costs?  Wouldn’t it be fairer to your neighbors to watch HBO on your cable package instead?

Is it Fair for Big Trucks to Pay More On the Information Superhighway Because They’ll Wear It Out Faster?

In cities across the country, those interested in Internet Overcharging schemes are already engaged in focus group testing.  We know, because some of our readers have been stealth participants, informing us about all of their pretzel-like logic twisting games designed to convince the public that cable and telephone companies are not going to gouge you again with a higher bill.  Some want to use toll road analogies, others are using gas and electric comparisons, and one had the novel idea of putting a plate of food in the middle of the conference table and asking if it would be fair for just one person to eat 75% of it while the rest “go hungry.”

Unfortunately for them, by the end of the session, two of our readers attending two different panels derailed their efforts and had panels eating out of their hands in opposition to Internet Overcharging schemes, and collected a nice $75 (and uncapped lunch) for their efforts.

The Times piece only adds more evidence to help make the case that Internet Overcharging schemes aren’t about broadband fairness — they are part of a protection racket to protect fat profits earned from selling video packages to consumers.

Aware of how print, music and broadcast television have suffered severe business erosion, the chief executives of the major media conglomerates like Time Warner, Viacom and NBC Universal have made protecting cable TV from the ravages of the Internet perhaps their top priority.

“The majority of profits for the big entertainment companies is from cable programming,” said Stephen B. Burke, the president of Comcast, the nation’s largest cable company.

The major worry is that if cable networks do not protect the fees from paying subscribers, and offer most programming online at no cost — as newspapers have done — then customers may eventually cancel their cable subscriptions.

It’s My Cousin’s Fault

In other words, you and I are probably not the biggest threat the industry faces from the ultimate nightmare of eroding profits.  It’s really my cousin’s fault.  He, like many in their 20s, moved into his new home and didn’t do what many of us routinely did when we moved — start the newspaper service, connect the telephone line, and get the cable TV hooked up.

He did call Time Warner Cable — to only install Road Runner broadband Internet service.  He reads the news online, relies exclusively on a cell phone, and watches DVD’s and online video on his giant flat panel television.

The cable industry is horrified my cousin represents their future.

There is no sign of that happening anytime soon, but a recent poll by the Sanford C. Bernstein research group found that about 35 percent of people who watch videos online might cut their cable subscription within five years.

“We don’t think that it’s a problem now, but we do feel a sense of urgency,” Mr. Burke said.

An Urgency to Overcharge

Like most industries that have grown fat and happy on their traditional business models, the most common first response to a challenge to that model is to resist it.  The cable industry in particular has enjoyed a largesse of profits earned from years of de facto monopoly status in most communities, with the majority of its services being largely unregulated.  Cable rate increases have almost always exceeded the rate of inflation, and the public relations talking points for those rate increases has always been, “due to increased programming costs, which represent the increasing diversity and excellence of the cable channels we provide you….”

With prices for “basic/standard service” cable now approaching $60 a month, many younger customers just aren’t interested anymore.

Watching consumers abandon cable television packages for access through broadband gives executives and Wall Street analysts like Sanford C. Bernstein heartburn.  Until recently, many customers never contemplated the idea of getting rid of video packages and just keeping the broadband service they already have.  Not until Hulu.  That one website now represents a considerable amount of online video traffic from subscribers, and the cable industry isn’t in control of it, much less profiting from it.

Hulu represents a threat to be resisted.

You Use Too Much Internet, So We’ll Create Something That Will Make You Use More

To be fair to everyone, we have to get rid of the flat rate plan you’ve enjoyed for more than a decade and replace it with tiered pricing to be “fair” to subscribers because of enormous traffic growth. That what Time Warner Cable customers heard during a planned nonsensical trial of an Internet Overcharging scheme in four American cities, rapidly shelved when consumers rebelled and New York Congressman Eric Massa and Senator Charles Schumer got interested (Rochester, NY was a selected trial city).

It becomes all the more ludicrous as subscribers learn Time Warner Cable’s answer to the traffic jam is to add even more traffic… their traffic… onto their broadband lines.

Evidently online video is only a crisis requiring urgent action when it isn’t their online video.

One idea, advanced most vocally by Jeffrey L. Bewkes, the chairman of Time Warner, and embraced by many executives, would be to offer cable shows online for no extra charge, provided a viewer is first authenticated as a cable or satellite subscriber.

Mr. Bewkes has called the idea “TV Everywhere,” but others in the industry refer to it by other names: “authentication,” “entitlement,” and Comcast has called its coming service “OnDemand Online.”

“If you look at TV viewing, it’s up, even though the questions and stories are all about the role of video games and Internet usage and other uses of time,” Mr. Bewkes said.

The first test of the new system, which will authenticate cable subscribers online and make available programs on the Web for no additional charge, will be announced Wednesday, between Comcast and Time Warner. The trial will involve about 5,000 Comcast subscribers, and television shows from the Time Warner networks TNT and TBS.

It will be interesting to watch whether or not “no additional charge” means such content will be exempted from Comcast’s 250GB monthly usage limit, and whether Time Warner Cable will change their Subscriber Agreement to exempt their TV Everywhere service from the existing language in their agreement permitting Internet Overcharging schemes.  Time Warner Cable already exempts their “Digital Phone” product.

Ixnay on the Coin Chatter Already

The Times piece also raises eyebrows about the potential for collusion and antitrust violations in secretive meetings among industry executives, although they deny it.

The electronic media chiefs, including Mr. Bewkes, Jeff Zucker of NBC Universal and Philippe P. Dauman of Viacom, among others, have been more careful, so as to avoid being accused of collusion: much of the discussions have been on the telephone and in private, one-on-one chats during industry events. Pricing is rarely, if ever, discussed, according to executives involved in the discussions.

“We can’t get together and talk about business terms, but we can get together to work on setting open technology standards,” said Mr. Dauman, the chief executive at Viacom, which owns cable networks like MTV, VH1, Comedy Central and BET.

Although the representations from the industry seem benign, the potential for something far worse is always there.  Control the keys to unlock the door to online video (and the tools to lock out or limit the “other guy”), and you’ve got a plan to make sure people don’t dare drop their cable video package.  Where did the online video go from your favorite cable channel website?  It’s on TV Everywhere, and you don’t get in without an invitation.

One holdout among the major chief executives appears to be Robert A. Iger of the Walt Disney Company. At an industry conference this year he warned that gambits like TV Everywhere could be “anti-consumer and anti-technology” because such a plan would place cable programming behind a pay wall.

So much for “no extra charge.”

It’s Time to Investigate

Rep. Eric Massa (D-NY), is the House of Representatives’ watchdog on this issue.  He’s already connected the dots and realizes they lead in only one direction — to consumers’ pocketbooks.  Massa has introduced HR 2902, the Broadband Internet Fairness Act, specifically to prevent broadband providers from falling all over themselves to engage in anti-competitive, anti-consumer price gouging, all to cover their bottom lines.

This legislation, and Rep. Massa, needs your immediate support.  Call Congress and ask your representative to co-sponsor this vitally important bill.  The New York congressman is protecting consumers nationwide, and deserves your thanks and support.

Stop the Cap! also now calls on Congress and the appropriate regulatory bodies to begin an immediate investigation into the industry’s “cooperation” to launch TV Everywhere, and other similar projects. Specifically, we ask that an appropriate and thorough review be conducted to ensure that no collusion or antitrust violations have, are, or will take place as a result of this project.  We also call for a review of the “authentication” model proposed by the cable industry to ensure it does not exclude any consumer that subscribes to a competing video provider (satellite, telephone company, competing independent cable company, municipally owned provider, etc.), and that no “free pass” language be permitted that exempts their project from the terms and conditions that they seek to impose on others not affiliated with this project.

Senator Schumer’s long history of consumer protection would make him an excellent choice to lead such an investigation.

Once again, Net Neutrality must be the law of America’s online land.  Only with the assurance of a level playing field can we be certain no provider will attempt to exert influence or special favor over content they own, control, or distribute.