Phillip Dampier

The Federal Communications Commission has announced the composition of its new Open Internet Advisory Committee to help track and evaluate the effects of the agency’s Net Neutrality policies, but has no member directly representing the interests of consumers.

The OIAC will focus on important Net Neutrality policies like transparency, reasonable network management practices, the differences governing policies for wired and wireless broadband, and issues like usage caps and speed throttling. But there are no voices on the committee that speak directly on behalf of end users — individual customers who use the Internet in their daily lives.

The FCC instead packed the panel with business, social policy and educational interests, many with direct financial ties to large telecommunications companies.

Selected members include:

• Harvey Anderson, Vice President of Business Affairs & General Counsel, Mozilla
• Brad Burnham, Founding Partner, Union Square Ventures
• Alissa Cooper, Chief Computer Scientist, Center for Democracy & Technology
• Leslie Daigle, Chief Internet Technology Officer, Internet Society
• Jessica Gonzalez, Executive Board, Media and Democracy Coalition; Vice President for Policy & Legal Affairs, National Hispanic Media Coalition (representing NHMC)
• Shane Greenstein, Professor and Kellogg Chair of Information Technology, Kellogg School of Management, Northwestern University
• Russell Housley, Chair, Internet Engineering Task Force; Founder of Vigil Security, LLC (representing Vigil Security, LLC)
• Neil Hunt, Chief Product Officer, Netflix
• Charles Kalmanek, Vice President of Research, AT&T
• Matthew Larsen, CEO, Vistabeam
• Kevin McElearney, Senior Vice President for Network Engineering, Comcast
• Marc Morial, President & CEO, National Urban League
• Elaine Paul, Senior Vice President, Strategic Planning, The Walt Disney Company
• Jennifer Rexford, Professor of Computer Science, Princeton University
• Dennis Roberson, Vice Provost & Research Professor, Illinois Institute of Technology (representing T-Mobile)
• Chip Sharp, Director, Technology Policy and Internet Governance, Cisco Systems
• Charles Slocum, Assistant Executive Director, Writers Guild of America, West
• Marcus Weldon, Chief Technology Officer, Alcatel-Lucent
• Michelle Zatlyn, Co-Founder & Head of User Experience, CloudFlare

Missing are the voices of consumers who want an open Internet and do not believe in Comcast and AT&T’s definitions of “reasonable network management” that include Internet Overcharging schemes like usage caps and overlimit fees.

Consumers will instead have to depend on Internet businesses and institutions that coincidentally share an active dislike of traffic control measures, primarily for their own business reasons.

By excluding the consumer’s voice in policy debates, it is no wonder FCC Chairman Julius Genachowski increasingly seems amenable to the companies he is supposed to independently oversee — spending a considerable amount of time opening industry conventions with keynote speeches, reviewing lobbyist briefs about various communications issues, and talking directly with the corporate leadership of the companies involved. It is disturbingly clear he is listening less and less to consumers. A clear sign of that was his vocal support for the kinds of usage-based Internet pricing schemes that consumers generally loathe.

Genachowski and his staff need to spend more time listening to individual Internet users and the customers of providers and less time attending industry-sponsored events.

The OIAC is a good place to start. Consumers deserve a seat at the table in a debate that will impact every American Internet user.

Genachowski

On Tuesday, Federal Communications Commission Chairman Julius Genachowski said that he generally supports data caps and tiered broadband pricing plans. The chairman’s comments came during an interview at the Cable Show with former FCC Chairman Michael Powell, now the top lobbyist with the National Cable and Telecommunications Association.

Genachowski has remained consistent in his cautious support for “industry innovation” that includes usage-based pricing, with a caveat providers should not exploit that at the expense of consumers.  But consumer groups like Free Press already believe usage caps, particularly on wired broadband services, are already bad for consumers, exploit a marketplace duopoly, and are worthy of investigation by the agency.

“All the evidence shows that caps on wired broadband platforms like cable make no sense. They don’t affect network congestion, even in the rare instances where congestion actually exists on these systems,” says Free Press policy director Matt Wood. “Cable companies use them to penalize their subscribers and discourage them from using innovative services that compete with cable TV.”

Free Press reminded Genachowski of Comcast’s recent actions which exempted its own video content from usage caps, while leaving them in place for competitors.

“Comcast’s recent actions show both the harms of these caps and the lack of any legitimate reason for them,” noted Wood. “[Now] Comcast changed course and suspended caps temporarily in all but a few markets — but promised to start overcharging any users there who exceeded these arbitrary limits.”

“The FCC has turned a blind eye to this competition problem. If it wants to see experimentation in pricing that actually benefits consumers, we need a competition policy that creates more experimenters.”

[flv]http://www.phillipdampier.com/video/CNBC FCC Chairman on Spectrum Crunch TV Everywhere 5-22-12.flv[/flv]

FCC Chariman Julius Genachowski spent the day hobnobbing with cable industry executives at the Boston Cable Show. In an interview with CNBC, Genachowski defended usage-based pricing, claiming it will bring lower prices to light users, spur “innovation” and enable consumer choice. Verizon Wireless customers on the cusp of being thrown off their grandfathered unlimited data plans may have a bone to pick with the FCC chairman about how innovative and enabling such policies have on them. Genachowski also suggests his controversial Net Neutrality policy is working, despite recent attempts by Comcast to exempt its content from the company’s usage cap and the wireless industry toying with toll-free data for preferred partners. Genachowski had little to offer consumers in the interview, instead suggesting his deregulatory stance on “innovation” will eventually benefit them.  (5 minutes)

The Federal Communications Commission today welcomed two new commissioners to the five-member panel that oversees telecommunications in the United States.

Both new commissioners were sworn in this morning by FCC chairman Julius Genachowski, who himself is the subject of some speculation he will leave his position at the agency during a second term of office for President Obama.

Jessica Rosenworcel replaces Democrat Michael Copps, who retired from the Commission.  She previously worked as one of Copps’ legal assistants, and has experience on Capitol Hill and as a staffer at the FCC.

Republican Ajit Varadaraj Pai replaces Meredith Attwell-Baker, who left the Commission to take a position at Comcast.

Baker’s departure was controversial because she participated in a vote that approved the merger of Comcast and NBC-Universal, and now works for the combined entity.

Pai has also worked on the Hill and at the FCC, previously serving in the office of general counsel at the FCC for former chairman Kevin Martin.

The FCC currently has three Democratic and two Republican commissioners.  Most FCC watchers predict the new appointments will not fundamentally change how the agency operates. FCC decisions are often unanimous.

Walden

When lawmakers talk about “unleashing” anything for “innovation,” it’s a safe bet we’re about to be treated to an anti-regulatory rant about how government rules are ruining everything for big business.  Rep. Greg Walden (R-Ore.) does not disappoint.

Walden is chairman of the Communications and Technology Subcommittee of the House Energy and Commerce Committee, an important place to be if you want to influence telecommunications policy in the United States.  Walden slammed the Federal Communications Commission this morning in an editorial piece in Politico, accusing the agency of regulating communications companies before they have a chance to engage in bad behavior:

Sometimes the FCC acts before thoroughly examining whether regulation is needed. It’s now time to stop putting the regulatory cart before the horse. That’s why this bill requires the FCC to survey the marketplace, identify a failure and conduct a cost-benefit analysis before imposing rules.

[…] When the FCC reviews a merger, it now often imposes unrelated conditions. These extraneous agreements may not correspond to any harm presented by the transaction, may not be justified industry-wide and, in some cases, are outside the commission’s jurisdiction.

Such bootstrapping is unfair to the singled-out parties. It also results in poor policy. Imposing extraneous conditions on a transaction that is not otherwise harmful is inappropriate. And if a transaction is harmful, imposing extraneous conditions cannot cure it. Merger conditions should be directly related to transaction-specific harms, and within the FCC’s general authority.

Walden’s concerns coincide with the corporate agendas of some of the nation’s largest telecommunications companies he oversees as chairman.  That may not be surprising, considering seven of the top 10 corporate contributors to his campaign fund are all telecommunications companies.

Walden's top campaign contributors (Source: Opensecrets.org)

Walden’s record on “innovation” is open to interpretation.  He is on record opposing Net Neutrality, has sought to “streamline” the FCC by hamstringing its authority, and has favored a variety of mergers and acquisitions that have effectively reduced competition for American consumers.

The FCC’s zeal for increased competition appears occasionally in its rulemakings, although the agency under Chairman Julius Genachowski can hardly be considered aggressive and out of control when it comes to some of the most contentious telecom issues that have arisen during the Obama Administration.  It only followed the Justice Department’s lead opposing the AT&T/T-Mobile USA merger.  It punted on Net Neutrality enforcement, doesn’t oppose Internet Overcharging, and has granted more mergers and acquisitions than it has sought to block.

FCC Chairman Julius Genachowski has not always successfully stared down industry efforts to consolidate and deregulate.

Some examples of “unrelated conditions” the FCC has imposed on mergers include no price hikes for consumers for a limited time (Sirius-XM), a discounted Internet service for poor families (Comcast-NBC Universal), and spinoffs of acquired cellular network assets in barely competitive markets (Verizon Wireless-Alltel).

Sirius-XM mostly kept to their agreement, but promptly raised prices when it expired, Comcast followed the FCC’s agreement to the letter but found ways to limit the number of qualified families, and Verizon Wireless sold some of their acquired Alltel assets to AT&T, which at least provided improved AT&T reception in certain markets they largely ignored earlier.

Consumer advocates would argue the FCC should never have approved these transactions in the first place, and the conditions the FCC imposed were so mild, they faced little opposition from the companies involved. But apparently even that is too much for Walden, who we have a hard time seeing opposing any of these mergers.  Besides, some of the largest companies donating to Walden’s campaign fund are already adept at working around the FCC, suing their way past the regulations they oppose.

Walden advocates the FCC only perform its oversight functions after the industry is proven to have imposed unfair, anti-competitive, and discriminatory policies against consumers, not to act to prevent those abuses in the first place.  In short, he wants the FCC to regulate only after the damage has been done. That would be akin to calling the fire department after your house burned to the ground. Companies would be free to walk away with their ill-gotten gains with little threat the FCC would punish bad behavior and fine the bad actors.

If you are Comcast, that is innovation.  If you are a consumer, it’s something else.