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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Carol Hevey, executive vice president of operations for TWC’s Carolinas region.

Stop the Cap!‘s strong readership in the Triad region of North Carolina comes from their experience with Time Warner Cable’s Internet Overcharging experiment this past April.  For residents in greater Greensboro and surrounding communities, now you get a chance to be pioneers of a different sort.

Time Warner Cable today announced Greensboro, Raleigh, and Charlotte, all in North Carolina, among the first in the nation able to purchase Road Runner Mobile, a new 4G wireless mobile broadband service designed to accompany your existing Road Runner subscription.

On December 1st, Time Warner Cable customers can sign up for the service, providing speeds up to 6Mbps, starting at $34.95 per month, if you are on a Price Lock Guarantee (a service commitment requiring you to remain with Time Warner Cable in return for service discounts) and subscribe to a bundle of services.  That low priced option has a usage allowance of 2 gigabytes per month.

Time Warner Cable's Carolinas region service area

“With Time Warner Cable’s 4G Mobile Network, we now offer the fastest mobile service available and extend our reach outside the home.” said Carol Hevey, Executive Vice President of the Carolina Region for Time Warner Cable.  “Giving our customers the convenience of mobility and the speed of 4G, Road Runner Mobile lets customers take their favorite Internet service wherever they go.  This is an important part of our strategy to give our customers any content, on any device, anytime, anywhere.”

Time Warner Cable is using the Clearwire WiMax network to provide the service, a benefit it gained along with Comcast when they became part-owners of the Sprint-Clearwire venture.

Pricing will vary depending on the level of service customers need:

• Road Runner Mobile 4G National Elite gives unlimited access to both Time Warner Cable’s 4G Mobile Network and a national 3G network (Sprint, presumably), for use when traveling.
  o $79.95 per month for Road Runner Standard or Turbo customers.
  o Further discounts for Double and Triple play customers and those on a Price Lock Guarantee.
• Road Runner Mobile 4G Elite gives customers unlimited access to the Time Warner Cable 4G Mobile Network.
  o $49.95 per month for Road Runner Standard or Turbo customers.
  o Further discounts for Double and Triple play customers and those on a Price Lock Guarantee.
• Road Runner Mobile 4G Choice gives light users 2GB of service on the Time Warner Cable 4G network each month.
  o Available for $39.95 per month to customers of at least one other Time Warner Cable service.  Additional $5 off if you have a Price Lock Guarantee and bundled service package.

Time Warner Cable plans to launch additional mobile services to customers in the future such as the ability to program a DVR from a mobile device and the ability to take their video content with them on the go.  Time Warner Cable will be expanding its 4G Mobile network to additional service areas over the next few months including Dallas, TX and Honolulu and Maui, HI.

Customer experiences with the Clearwire network have been decidedly mixed.  In Portland, uneven signal coverage has plagued service and fueled customer returns.  In Greensboro, some who have tested the Clearwire-branded version of the service report earlier speeds close to 5Mbps that have since slowed to below 2Mbps.

As with any wireless mobile service, inquire about trial options and cancellation policies before signing any contract.  Consumers should always verify service is available to them at tolerable speeds before committing to any contract.

Suvi Lindén, Finland's Minister of Communications

Yleisradio Oy, the public broadcasting service in Finland, today reported starting next July, every person in Finland will have the right to a one-megabit broadband connection.

The announcement from the Ministry of Transport and Communications makes Finland the second European nation to consider broadband service more than just a modern day convenience.

Minister of Communications Suvi Lindén said broadband service must be universal, and at equitable speeds throughout Finland.  Private providers have been unable or unwilling to bring universal service to the country, so the Finnish government is compelled to do the job they won’t.

“No-one can be left outside the day-to-day functioning of the information society. As the telecommunications network needed cannot be provided on market terms in all respects, its construction must be supported by public funds,” she said.

Permanent Secretary Harri Pursiainen confirmed Lindén’s views about universal access in a study concluding it is impossible to expect commercial providers to provide regionally equal service throughout the country.

Finland intends to construct an advanced broadband network, starting with the guarantee of 1Mbps minimum speeds for virtually every citizen.  The plan recognizes that reaching the most remote parts of the country will require a mobile broadband network, and have made provisions to tolerate lower speeds on those networks, for now.

But the Finnish government does not consider 1Mbps anywhere near adequate to provide 21st century connectivity.  It has declared that anything less than 100Mbps service is simply unacceptable in the new “information economy.”

The 100Mbps minimum service standard would be mandatory, and targeted to be achieved no later than 2015, if the recommendations are approved by the Finnish Parliament.

“Citizens and businesses need increasingly effective data transfer. This is necessary, among other things, for teleworking, business, e-commerce, and access to social and health services,” Lindén states.

Harri Pursiainen

Television broadcasting also faces a turning point in the next few years, as channels become more diverse and high-definition transmission enters the picture. Here, high-speed broadband is an essential factor,” Lindén stresses.

The report proposes that the state, regions and municipalities share in the costs of improving the telecommunications network in those areas where the target level for 2015 cannot be reached by commercial means. The purpose is for the Regional Councils to organize competitive bidding among the telecommunications operators.

Where public funds are needed to construct networks, money will be raised by auctioning off certain radio frequencies for commercial use, as well as a telecommunications tax levied on providers in the country, somewhat equivalent to the United States’ Universal Service Fund, which helps subsidize rural telephone service.

Finnish consumers can still elect not to purchase broadband service, and can still select among several providers, choosing the speed and technology they want for the connection.  The Finnish government will offer a “domestic help credit,” akin to a tax credit or subsidy, to help disadvantaged Finns purchase computers and other equipment to use broadband service.

Finland joins Switzerland in providing universal access to broadband.  The Swiss government was the first in Europe to mandate broadband service availability throughout the country as of January 1, 2008.  But the Swiss definition of broadband is much more limited, setting minimum acceptable speeds at just 600kbps downstream and 100kbps upstream.

Both the United States and the United Kingdom have universal service goals as well.  The UK government targets 2Mbps speed to “virtually all” homes by 2012, funded by a telephone line tax.

Thanks to Stop the Cap! reader Greg for the news tip.

Glenn Britt, CEO of Time Warner Cable

I spent the morning dealing with the dentist and some significant tooth pain, which could end up leading to another delightful root canal.  It’s times like these when I like to share the pain.  Back on April 2nd, Time Warner CEO Glenn Britt spoke with CNBC reporter Julia Boorstin about Britt’s thoughts on Internet Overcharging, the state of the cable industry, the growing reliance Time Warner Cable has on its broadband products, and where online video fits into the picture.  Although Time Warner Cable shelved the consumption billing experiment, the belief in such billing experiments has not changed.

Virtually everything else in the interview remains largely the same for the company, including the all-important topic of TV Everywhere and online video content, which is back in the news.

If you want to understand the challenges facing big cable, this is must-see-online-TV. (Check out the unintentionally ominous background music which appropriately turns up around four minutes in.)

[flv width=”400″ height=”300″]http://www.phillipdampier.com/video/CNBC Glenn Britt 4-6-09.flv[/flv]

CNBC’s Julia Boorstin talked with Time Warner Cable CEO Glenn Britt on April 2nd about the cable company and the state of the industry these days. (15 minutes)

The reported deal between Comcast, the nation’s largest cable operator and NBC-Universal, part owner of Hulu, could have serious consequences for the Internet’s most popular destination for online television shows and movies.

In just a year, Hulu has enjoyed a quadrupling of visits well into the millions, streaming dozens of network television series, specials, and movies, all supported by commercial advertising.  Devised to help combat online video piracy and earn additional advertising revenue from web watchers, Hulu partners NBC, Fox and Walt Disney Co., have been successful at drawing scores of Americans to the video website.  Program distributors have also been pleased, earning money from shows like Lou Grant that haven’t been on network television in decades.  But after the economic crash of 2008, the venture has proven costly for the partnership, challenged by an advertising marketplace on life support and outright hostility by broadband providers, cable operators, and Wall Street investors, upset that the service is giving it all away for free.

Among the loudest to complain is Comcast, which is now angling to acquire NBC, and its 30% ownership stake in Hulu.

Comcast CEO Brian Roberts has repeatedly complained about the implications of giving away online video, which for some have begun to replace cable television subscriptions.

“If I am any one of these programmers, not just ESPN but the Food Network and I have a business in that 50 percent, 60 percent, 70 percent of my business comes from subscriptions, I want to think long and hard before I just put that content out there for free and not think through what it is going to mean to my business,” Roberts said at an investors conference in May.

Roberts view was shared by the CEO of the nation’s second largest cable operator, Glenn Britt of Time Warner Cable.

“If you give it away for free, you’re going to forego that subscription revenue,” Britt said. “And if you actually think the ad revenue can make up for that, then God bless you and go on your way. But I don’t think that’s the case, and (networks) don’t really think that’s the case either.”

The difference between Comcast and Time Warner Cable is that the former could gain part ownership in the largest service now giving it all away for free, and that has major implications for Hulu’s future.

“Would Comcast put an end to the Hulu model of using the Web to distribute free TV content?” asked Michael Nathanson, senior media analyst at Sanford C. Bernstein & Co. “Will Comcast continue to support Hulu?”

The Los Angeles Times reports there is already a precedent for Hulu limiting content for online viewers in response to complaints:

Hulu already has limited users’ access to certain cable programs, including FX’s “It’s Always Sunny in Philadelphia,” in response to an outcry from the TV producers and cable companies that object to paying TV programmers hundreds of millions of dollars each year for shows that are offered free online.

“Arguably, their ability to shape online content distribution, and to recast windows for video on demand, would be an important attribute of any deal,” wrote Craig Moffett, a cable industry analyst at Sanford C. Bernstein.

Comcast’s interest in NBC Universal would dramatically expand its entertainment portfolio with such attractive cable channels as USA Network, MSNBC and CNBC as well as the Universal Pictures movie studio. The proposed Comcast-NBC Universal venture also would give the cable operator a greater role in deciding how and when TV shows and movies are distributed online and at what price to consumers.

Comcast’s influence would primarily be felt in cable network programming streamed online, as Comcast has a vested interest from the millions it currently pays those programmers to carry their networks on Comcast cable systems nationwide.  Comcast could advocate Hulu become a partner in the TV Everywhere cartel, providing video content only to “authenticated” pay television subscribers, or it could limit the number of episodes available for free, or when those episodes appear on the service.

Soleil Securities media analyst Laura Martin thinks an even more likely possibility would be charging a fee for some of its more popular content.  Martin points to Hulu’s own financial problems, a consequence of the crash in the advertising market.  Soleil estimates that the three partners subsidize $33 million of the losses at Hulu even after earning $123 million this year from advertising.  Even worse, Martin says, is the cannibalizing of the networks’ own advertising earnings from broadcast runs of those shows now available online.  She told the Times that for every viewer who migrates to the Internet, the companies forfeit $920 a year in ad revenue.

But not everyone believes the Comcast-NBC deal is such a great idea.

Time Warner CEO Jeff Bewkes today told an industry conference in Manhattan that large media mergers have had a lousy track record.  Still, he said the merger would probably benefit the cable industry as a whole, because broadcast networks content with giving away content for free online will now be a part of the very industry hurt by that formula and will be more friendly towards arguments to stop it.

“We love to see our competitors taking risks,” Bewkes said.

[flv width=”400″ height=”300″]http://www.phillipdampier.com/video/CNBC Hulu 9-7-09.flv[/flv]

CNBC’s Julia Boorstin talked with Hulu CEO Jason Kilar in September about the desire for the company to partner with the cable industry’s TV Everywhere project.