Copps

Julius Genachowski’s fellow Democratic commissioner Michael Copps is signaling discontent with the FCC chairman over his weak approach at Net Neutrality reform.

During a Thursday speech before the Columbia University School of Journalism in New York, Copps said several aspects of Genachowski’s proposed reforms are non-starters for him.

In particular, he objects to Internet toll-booths, part of the “paid prioritization” argument that would allow preferred content to get traffic priority, presumably in return for money.  Copps sees that as the Internet’s great un-equalizer, allowing deep pocketed content providers to gain a competitive advantage.

Copps calls such arrangements dangerous, insisting they “cannot be allowed to supplant the quality of the public Internet service available to us all.”

Copps also finds it unacceptable that wireless providers gained major concessions that would allow them to treat content unequally.

“Internet Freedom also means guaranteeing openness in the wireless world as well as the wired. As people cut their wired connections, why would we deny them openness, accessibility and consumer protections in the wireless world,” Copps asked.

None of the proposals Genachowski makes may withstand legal challenges, Copps says, if the Commission does not reclassify broadband under Title II of its regulatory authority, declaring the Internet a “telecommunications service.”

“If this requires reclassifying advanced telecommunications as Title II telecommunications — and I continue to believe this is the best way to go — we should just do it and get it over with,” Copps said.

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The FCC’s Michael Copps appeared on BBC America’s World News to discuss his concerns about the quality of American broadcast journalism and Internet policies.  (4 minutes)

Mignon Clyburn, the Commission’s newest Democratic member, is being lobbied heavily by public interest groups to join Copps in demanding a better deal for consumers.  But some analysts think she’ll be the easiest vote for Genachowski to get.

Clyburn is a strong proponent of Net Neutrality and has made the issue a centerpiece of several public appearances.

Genachowski may find his proposal ultimately will fail to win a majority vote, because Republicans are strongly opposed to it, and his fellow Democratic commissioners may find voting for what some are calling a capitulation to providers too unpalatable.

Republicans promise to try and derail any Net Neutrality reforms in the House of Representatives when they take control in January.

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Mignon Clyburn receives thanks from public interest groups for her support of an Open Internet.  (2 minutes)

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Net Neutrality is the free speech issue of our times. Save the Open Internet! Visit http://wgaeast.org/savetheinternet to send a message to the FCC.  (1 minute)

Phillip "Of course you know this means war" Dampier

Sizing up the big winners from FCC Chairman Julius Genachowski’s latest Net Neutrality proposals is as simple as putting those praising Genachowski in column “A” and those outraged by downsized consumer protections into column “B.”  It comes as no surprise Big Telecom, the employees whose jobs depend on those companies, their trade associations and lobbyists are all living it up on the “A” side while consumers and public interest groups sit in the dark in column “B.”

Among the high-five club is Kyle McSlarrow, the outgoing head of the National Cable and Telecommunications Association, the cable industry’s top lobbying enterprise.

On the NCTA’s blog, an indication of your broadband future has been placed front and center — a meter.  Perhaps putting a coin slot on your cable modem or a credit card reader on the side of your monitor would be a bit too brazen, even for this industry.

McSlarrow, among others, heaped bountiful praise on the FCC chairman for his ‘enlightened’ views on Net Neutrality.  That hardly a surprise considering Genachowski has opened his phone line, and apparently his heart, to industry propaganda and arguments.

Genachowski’s remarks about usage-based pricing, in particular, were a breath of fresh air to Wall Street and providers clamoring to dispense with unlimited broadband service for consumers to increase profits:

Our work has also demonstrated the importance of business innovation to promote network investment and efficient use of networks, including measures to match price to cost such as usage-based pricing.

“This approach reflects a responsible and considered view of a fast-moving and highly dynamic marketplace but it doesn’t assume that there is any one ‘correct’ answer,” McSlarrow wrote.

It’s also a view consumers strongly disagree with, but those opinions are off the FCC’s radar.  Consumers don’t have the chairman’s direct phone number.  If they did, they could argue the fact “matching price to cost” would mean a dramatic reduction in pricing for today’s unlimited broadband account.  Instead, we have a lobbying effort to end “unlimited” entirely, backed by manufactured studies funded by providers expecting pre-determined conclusions.  Too bad the FCC doesn’t read provider financial reports.

Writes McSlarrow:

Some consumers don’t see the need to go online.  Others are constrained by cost.  Still others want to use the service they have in cutting-edge ways.  And the ability to pigeonhole companies and their business plans as being one thing or another is breaking down, particularly in an environment where Internet applications, content, and services change the way we behave as consumers, provide new opportunities for providers and consumers and alter how we all interact with both traditional and new devices and features.

The key point is that that we need to focus on what best serves consumers.  With all this change, it is necessary to have the flexibility to test new business models – and perhaps new pricing plans – in order to see if they make sense.

A usage-based pricing model, for instance, might help spur adoption by price-sensitive consumers at the lower end of the socioeconomic ladder.  As Sanford Bernstein analyst Craig Moffett noted in a report issued yesterday, “{u}sage-based pricing for broadband would have profound implications.  At the low end, it would allow cable operators to introduce lower priced tiers that could boost penetration and help in efforts to serve lower income consumers.”

McSlarrow

Evidently, to chase the small percentage of Americans who either don’t have an interest in going online, or think it costs too much, the NCTA wants those already online to face Internet Overcharging schemes ranging from usage caps to metered billing.  Is it flexible for consumers who face the end of broadband pricing as they’ve lived with for more than a decade or is it flexible for providers who can run to the bank with the higher profits rationed broadband delivers?

McSlarrow quotes Moffett’s quest for higher profits for his clients — Wall Street investment banks, but ignores the implications Moffett himself admits — consumer rebellions, self-rationing of usage, a stifling of online innovation from independent companies not connected with providers, and higher prices.

American providers look north for an example of Big Telecom’s pot ‘o gold — Canadian ISPs that have managed to wreak havoc on the country’s broadband rankings, forcing consumers to live with higher prices and, in some cases, declining usage allowances.  Canada’s broadband innovation graveyard is an object lesson for Americans: usage-based pricing doesn’t deliver savings to anyone except the most casual users living under constrained speeds and paltry allowances as low a 1GB per month.  For everyone else, broadband prices are higher, speeds are slower, and usage allowances deliver stinging penalties for those who dare to exceed them.  What do Canadian providers do with all of the money they earn?  A good sum of it goes towards acquiring their competitors, further reducing an already-poor competitive marketplace.

As one Ontario reader of Broadband Reports noted, “our largest cable company has the money to buy three professional sports teams but not enough to roll out DOCSIS 3 [to all of its customers.]  Our largest phone company, Bell, has the money to buy half the news stations in Canada, but cannot seem to get users off of 3Mbps DSL service.  The whole system is a scam.”

While the rest of the world is decidedly moving away from limited-use broadband, American providers have sold Genachowski that rationing the Internet is “innovation.”

Of course, you and I know real innovation means investing some of the enormous profits providers earn back into their networks to keep up with growing demand.  Providers can innovate all they like to attract price sensitive customers, so long as current unlimited plans remain available and affordable.  But as AT&T illustrated earlier this year, the first thing off the menu is “unlimited,” replaced with overpriced and inadequate wireless data plans that only further alienate their customers.

AT&T should take a lesson… from AT&T.  While it gouges its customers on the wireless side, the company has managed to solve the affordability question all by itself, without resorting to wallet-biting.  It dramatically reduced prices on its DSL services — now just $14.95 a month for its customers, which includes a free gateway and modem.  That sure sounds like a solution for budget-conscious customers and delivered all without antagonizing those who want to keep their current unlimited service plans.

AT&T seems to have managed to solve the affordability question without overcharging their customers.

Cable companies deliver their own budget broadband plans, but it comes as no surprise they barely market them, fearing their premium-paying customers could downgrade their service.

In short, Internet Overcharging is a solution chasing a problem that simply does not exist in a responsible broadband marketplace.

McSlarrow says he’s not arguing for or against any particular model.  All he is really confident about is that the marketplace is changing and that “companies will have to adapt to that change.”

But as is too often the case, McSlarrow, his industry friends and colleagues, and Chairman Genachowski have forgotten it’s ultimately consumers who have to adapt to change, and we promise it means all-out war if providers tamper with unlimited broadband service.

The Cowardly Lion is back.

Federal Communications Commission chairman Julius Genachowski believes he has a sound legal basis to implement Net Neutrality policies to protect Internet traffic from provider interference, but has stopped considerably short of implementing his own proposed enforcement mechanisms.

Genachowski outlined his ideas to implement Net Neutrality reform in brief remarks before the Commission this morning.

“Broadband providers have natural business incentives to leverage their position as gatekeepers to the Internet,” the text of the speech says. “The record in the proceeding we’ve run over the past year, as well as history, shows that there are real risks to the Internet’s continued freedom and openness.”

Genachowski praised the progress the Internet has managed to achieve over the past decade, and said his efforts would ensure that progress could continue with a minimum of regulation.  In that spirit, Genachowski announced he would not move that the Commission re-assert its legal authority to oversee broadband by a process to reclassify the service under Title II, which governs telecommunications services.

Comcast successfully sued for repeal of the Commission’s original authority, implemented by Bush FCC chairman Michael Powell, which classified broadband as “an information service.”  A DC Circuit Court discarded the legal basis for Powell’s regulatory authority in a sweeping victory for the cable giant, which was sued for throttling down speeds for broadband customers using peer to peer applications.

Genachowski argued he has “a sound legal basis” to pursue his latest vision of Net Neutrality rules in spite of the earlier court case.  But critics doubt that and charge that the FCC chairman has capitulated to America’s largest broadband providers, including Comcast, AT&T, and Verizon.

Genachowski's view of the Internet does not meet the realities consumers face without Net Neutrality protection assuring a free and open Internet.

“By not restoring the FCC’s authority, Chairman Genachowski is unnecessarily placing his Net Neutrality agenda, and indeed his entire broadband agenda, at risk,” said Free Press executive director Josh Silver.

Boiled down, Genachowski now seeks just two major principles governing provider behavior:

1. No censorship of content.
2. Full disclosure of network management techniques so consumers know what providers are doing to their broadband connections.

Consumer groups are furious that the chairman has apparently discarded many of Net Neutrality’s most important consumer protections, and accused him of caving in to lobbyist demands and abdicating his responsibility to oversee critical broadband infrastructure.

Marvin Ammori, a cyber-activist and public interest law professor said the proposal also fell well short of meeting President Barack Obama’s repeated promises to enact strong Net Neutrality policies.

“It’s make-believe Net Neutrality,” said Ammori, who called Genachowski’s proposals “garbage” and “meaningless gestures.”

Now off the table:

A ban on Internet Overcharging schemes that allow providers to limit, throttle, or overcharge consumers who use more than an arbitrary amount of Internet usage per month. This exposes home broadband users to the same kinds of bill shock that wireless customers already experience.

A ban on using “network management” to artificially slow or block traffic the provider — at its sole discretion — determines is “harmful” or “congests” their network. Under Genachowski’s new proposal, the definition of “harmful” could be made by an engineering department on technical grounds or in an executive suite as companies ponder their financial returns. So long as they manage traffic without “unreasonable discrimination,” it’s okay with the Commission.

Built-in loopholes guarantee providers need only set rates high enough to assure only “preferred partners” can afford the asking price, and that only their competitors meet the definition of “harmful” traffic worthy of speed throttling.  The proposal also reportedly only covers video and voice traffic on wireless networks.  It’s open season on everything else if you access the web from a smartphone or wireless broadband service.

Actual legal authority to implement any broadband reform policies. It was Julius Genachowski and the FCC’s General Counsel Austin C. Schlick that argued without asserting legal authority under Title II, nothing the Commission did could be assured of withstanding a court challenge.  Yet today the chairman now claims his legal team has found some legal precedents that somehow will keep his policies in force after inevitable lawsuits are filed.  Former FCC chairman Powell thought much the same thing about his own idea of reclassifying broadband as “an information service.”  The DC Court of Appeals thought otherwise, something Schlick knows personally, having fought the Comcast case before that court.  In the end, Schlick correctly guessed his case was a train wreck, and was reduced to asking the court for legal pointers about how to draft regulations that could survive a court challenge.

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This “other” Julius Genachowski from May of this year delivered remarks that carried a very different tone about the importance of restoring legal authority to oversee broadband.  But that was before AT&T put him on their speed dial, successfully reaching him personally more than a half dozen times in the last few weeks to argue their point of view.  Consumers don’t have Julius Genachowski’s phone number.  (4 minutes)

In short, Genachowski’s proposals represent near-total victory for providers, and any cable or phone company annoyed with the few scraps still on the agenda need only file suit arguing the Commission lacks the authority to stick its nose into their business affairs.  Without Title II authority in place, that lawsuit is probably going to result in a favorable ruling putting us back where we are today — with no Net Neutrality protections.  But by then, the Internet will be a very different place, loaded with toll booths from content providers and your ISP, who may ask for extra money if you want to watch Netflix or download files.  Your speeds may be reduced at any time, to any level, if a provider deems you’ve over-consumed your traffic allowance for that day, week, or month.

Worse, some providers will dispatch bills with overlimit fees that could run into the hundreds of dollars (or more) for those with a family member who left a high bandwidth application running while running out the door to catch the school bus.

Providers and their well-paid lobbyists celebrate their victory over consumers' wallets

So long as providers agree to abuse everyone more or less equally (excepting their own “preferred partners” of course), Julius Genachowski believes the next ten years of America’s online experience can be as great as the last.

In his dreams.  As Public Justice attorney Paul Bland said about dealing with ruthless companies like AT&T, assuming providers will behave favorably towards consumers puts you on the candy bridge into Rainbow Land.

Even with Genachowski’s proposed reforms, diluted to be point of being homeopathic, Republicans were moving in for the kill this morning.

Rep. Marsha Blackburn (R-Tenn.) a member of the House Energy and Commerce Committee, said she would work to topple any FCC-led Net Neutrality order.

“This is a hysterical reaction by the FCC to a hypothetical problem,” she said, adding that Genachowski “has little if any congressional support” for the action.

To overturn any order, Blackburn vowed to reintroduce her bill to prevent the FCC’s policy making process.

Robert McDowell, one of two Republican FCC commissioners, called the move to enact reforms a defiance against Congressional will.

“Minutes before midnight last night, Chairman Genachowski announced his intent to adopt sweeping regulations of Internet network management at the FCC’s open meeting on December 21. I strongly oppose this ill-advised maneuver. Such rules would upend three decades of bipartisan and international consensus that the Internet is best able to thrive in the absence of regulation,” McDowell said in a prepared statement.

All this is taking place at the same time Comcast has foreshadowed America’s future broadband experience: charging backbone provider Level 3 extra for sending Comcast customers online movies and TV shows, censored a blog run by one of its customers trying to get around Comcast’s unresponsive customer service agents, stifled innovation by independent cable modem manufacturer Zoom Modems, has achieved a fever pitch in lobbying Washington to hurry up and approve its colossal merger deal with NBC-Universal, and has a lobbying team convinced it can achieve victory on all fronts from a favorable incoming Congress.

If they and other broadband providers succeed, it’s time to get out your wallet and count your money before handing it over.  A consumer revolt is all that stands between your Internet experience today and an endless series of pay-walls and stifled speeds tomorrow.

Julius Genachowski

Federal Communications Chairman Julius Genachowski signaled recognition he was outmaneuvered by some of America’s largest broadband companies when he told attendees at the Web 2.0 Summit last week that a Verizon-Google compromise on Net Neutrality did serious harm to the Commission’s own plans on the subject of a free and open Internet.

“I would have preferred if they didn’t do exactly what they did when they did. It slowed down some processes that were leading to a resolution,” Genachowski said.

Genachowski was referring to last summer’s sudden agreement between the two tech giants — former opposites on Net Neutrality — regarding a proposed compromise.  Under its terms, Verizon would guarantee free speech rights on the Internet, but Google would concede Verizon’s rights to use limits, throttles, and other “network management” techniques on its wireless networks, which are critically important to Verizon’s bottom line.  Genachowski had been advocating broad-based Net Neutrality protections for all technologies, including wireless.

When word of Verizon and Google’s proposal hit the New York Times, it caused a series of confidential talks among industry players and FCC staffers to collapse.  That wasn’t bad news for consumer groups, who were locked out of the discussions from the start.  But it also may have also taken the wind out of the sails of the regulatory body’s urgency to implement broadband reform policies, as members of Congress opposed to the concept used news of the voluntary agreement as cannon fodder against “unnecessary and intrusive” government regulations.

It also embarrassed the FCC, which Daily Finance calls the most ineffectual regulatory agency in Washington.

Ever since the talks collapsed, all sides have been frustrated by the Commission’s apparent ongoing inaction on Internet policy.  Genachowski had made speeches earlier this year that left many with the impression Net Neutrality was a front burner issue at the Commission.  But as 2010 draws nearer to a close, the Commission has made no progress on the issue.  The incoming Republican Congress will not make it any easier, and consumer groups continue to call on the Commission to act before the end of the year.

Free Press President and CEO Josh Silver issued this statement:

“We are heartened to hear Chairman Genachowski finally express his disappointment with the Verizon-Google proposal. The loud public backlash made it evident that consumers would not accept a deal that would have divided the Internet into fast and slow lanes and allowed Internet service providers to block and prioritize content accessed through wireless devices. Clearly, relying on backroom deals cut between giant industry players is not the way to make policies that protect the public interest.

“The American people are still waiting for the chairman to deliver on his promise to establish real Net Neutrality rules that would prevent AT&T, Comcast and Verizon from creating toll roads on the Web. There is only one Internet, and consumers need clear rules to ensure that they are protected from Internet service providers who are seeking to monetize and monopolize the Web to pad their bottom lines.”