House Speaker Nancy Pelosi, with fellow Senate Democrats and FCC Commissioner Jessica Rosenworcel (upper left corner), speaks at the announcement of a new bill that would codify net neutrality as federal law.

Democrats in Congress this morning unveiled a new bill that would effectively reinstate the 2015 Open Internet rules repealed under the Trump Administration’s Republican-dominated Federal Communications Commission.

The new bill, “Save the Internet Act of 2019,” was hailed by House Speaker Nancy Pelosi (D-Calif.) as a “pillar of economic opportunity” for the digital 21st century information economy and a bill that will stop internet service providers from raising broadband prices even higher.

“A full 86% of Americans oppose the Trump assault on net neutrality including 82% of Republicans,” Pelosi said at an announcement ceremony held in Washington this morning. “With the Save the Internet Act, Democrats are honoring the will of the people and restore the protections that do this — stop unjust discriminatory practices by ISPs that try to throttle the public’s browsing speed, block your internet access, and increase your costs. This is about freedom, this is about cost.”

FCC Chairman Ajit Pai announced his intention to repeal net neutrality in 2017, and despite tens of millions of letters protesting that decision, Pai began rolling back net neutrality rules last year.

The three-page bill was co-sponsored by 46 Democrats in the U.S. Senate. It codifies the language from the FCC’s 2015 Open Internet rules as a standalone federal law, no longer subject to reinterpretation or dismissal by the FCC. A companion bill is expected to be introduced in the House on Friday.

Senate Minority Leader Chuck Schumer (D-N.Y.) implored Senate Republicans to get on board with Democrats to support the re-establishment of a level playing field on the internet, criticizing their lack of support during last year’s effort to resurrect net neutrality.

“Unfortunately, all but three Senate Republicans voted on behalf of the special interests,” Schumer said, noting the measure still passed the Senate in 2018 but ultimately was shelved by the then-Republican controlled House. “So now we have a Democratic House, and Republicans will have a second chance — there are second chances — to right the Trump Administration’s wrong.”

Here’s the Save The Internet Act of 2019 that nearly every Senate Democrat joined me in introducing today. 3 pages that will restore #NetNeutrality. Let’s pass it and make the internet free and open again. #SaveTheNet pic.twitter.com/BCYtcmcMe3

— Ed Markey (@SenMarkey) March 6, 2019

Net neutrality has faced multiple legal challenges and intense lobbying by the telecommunications industry, especially by large cable and phone companies that generally oppose the concept, claiming it would impede management of their networks and block the creation of new innovative services that could deliver extra bandwidth on demand. Telecom companies also complain content providers like Netflix unfairly utilize their networks without fair compensation.

House Speaker Nancy Pelosi and her fellow Senate Democrats introduce the Save the Internet Act of 2019, a bill re-establishing net neutrality as federal law. (31:35)

Video programmers that want to avoid the problem of usage allowances that can deter internet video streaming have a new way to make an end run around Net Neutrality, distributing their content “cap-free” through “virtual cable channels” that are distributed over broadband, but appear like traditional cable TV channels on a set-top box.

This morning, Fierce Cable noted Wurl’s IP-based streaming cable television network platform was here, offering cable operators new cable channels that are actually delivered over the customer’s internet connection. The Alt Channel, Streaming News Network, The Sports Feed and Popcornflix will appear on set-top boxes and onscreen guides like traditional linear cable channels, starting in August. Wurl claims at least 51, mostly small and independent cable operators, have already signed up for the service, which could quickly expand to 10-12 channels in the future. But Multichannel News has confirmed only one partner so far — Fidelity Communications, a small cable operator serving parts of Arkansas, Louisiana, Missouri, Oklahoma and Texas.

What makes these channels very different from the other networks on the lineup is that they are delivered over the customer’s internet connection directly into a cable set-top box, and will generally be exempt from any usage allowances or caps providers impose on broadband usage. Wurl acts as a distributor, obtaining content from “popular online studios” that “until now has only been available on computers and mobile devices.” Wurl’s partners can get their content exposed on traditional cable TV to a potentially greater audience, who can watch while not worrying about using up their monthly internet usage allowance.

The first series of bracketed channels are Wurl-TV broadband based channels, while the second are traditional linear cable networks delivered by RF or QAM. Both integrate seamlessly into the cable set-top box’s on-screen program guide.

Wurl’s unicast approach relies on its own content delivery network to provide one internet stream for each set-top box accessing its programming, which also allows for support of on-demand programming. But every cable customer watching a Wurl channel is effectively streaming video over their internet connection. Cable operators usually blame internet video for consuming most of their available internet bandwidth, necessitating the “need” for usage allowances/caps or usage based billing to manage and pay for bandwidth “fairly.” Yet Wurl’s networks consume just as much bandwidth as traditional online video. But because Wurl is partnering with cable operators, that content is not subject to the usage caps Netflix, Hulu, or Amazon Video customers have to contend with.

Wurl claims its approach is so cable-operator friendly, “there’s no reason to say no,” said Sean Doherty, Wurl’s CEO and co-founder.

Cable operators are offered Wurl channels for free, with no affiliate fees or upfront costs, and no significant technology costs since the channels are distributed direct to the set-top box over broadband, not RF or QAM. A video player is embedded into the virtual cable channel, which allows viewers to pause, rewind, and fast forward programming.

In the future, cable systems are expected to gradually transition to IP-delivery of all of their video content, turning the cable TV line in your home into one giant broadband connection, across which television, internet access, and phone service are delivered.

But cable operators are still making distinctions between services that are gradually becoming different in name only. If a customer watches a Wurl channel over the internet on their desktop, that would count against their usage allowance. But if they watch over a cable-TV set-top box, it won’t, despite the fact the journey the channel takes to reach the viewer is exactly the same. That gives certain content providers an advantage others lack, representing a classic end run around Net Neutrality.

To be fair, that is not a distinction Wurl has made in any of its marketing material, but the fact preferred content can be managed this way is just one more reason the FCC should ban usage caps and usage-based billing on consumer internet accounts. Wurl’s own marketing material tells operators the cost and impact of its video streaming on the cable operator’s existing infrastructure is next to zero… because Wurl’s content comes across broadband platforms already so robust, they can easily accommodate the potential of thousands of viewers all watching Wurl channels without any issues. That reality undermines the cable industry’s own questionable arguments about the need for data caps or usage billing.

The Federal Communications Commission’s Net Neutrality rules took full effect Friday, after a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit denied petitions for a temporary stay of the rules made in separate lawsuits by AT&T and other telecom industry opponents.

“This is a huge victory for Internet consumers and innovators!,” FCC Chairman Thomas Wheeler exclaimed in a written statement. “There will be a referee on the field to keep the Internet fast, fair and open. Blocking, throttling, pay-for-priority fast lanes and other efforts to come between consumers and the Internet are now things of the past. The rules also give broadband providers the certainty and economic incentive to build fast and competitive broadband networks.”

The Net Neutrality rules govern both wired and wireless Internet services, and most observers predict the biggest impact will be felt by wireless customers. Wireless providers have experimented with speed throttling, priority access, data caps, and so-called “sponsored data” exempt from usage caps or usage billing. Some of these practices are now illegal under Net Neutrality rules and others are subject to increased scrutiny by the FCC.

Providers generally have not opposed rules blocking online censorship, paid prioritization, and selective speed throttling, but they are vehemently against the FCC’s catch-all “Internet general conduct rule,” that effectively allows the agency to oversee issues like interconnection agreements that connect content producers with each ISP, data caps/usage billing, and issues like zero-rating — providing an exemption from an ISP’s usage allowance for preferred content partners.

Providers argue the FCC could block innovative pricing and usage-based billing they argue customers would like to have.

Other industry groups claim Net Neutrality will lead to a significant decline in investments towards broadband upgrades and expansion. But Charter Communications CEO Thomas Rutledge, now in the middle of a multi-billion dollar merger deal with Time Warner Cable and Bright House Networks, disagreed, noting it will have no effect on Charter’s investment plans for its own cable systems or those it may acquire.

“The big news today is that there is no news,” said Timothy Karr, senior director of strategy for Free Press. “With Net Neutrality protections in place, there are no dramatic changes to the way the Internet works. Internet users are logging onto a network that’s open, as they’ve long expected it to be.”

Friday is the last day to submit your views on Net Neutrality with the Federal Communications Commission. Although there may be some future opportunities to comment, it’s important to make your voice heard with the FCC today. Almost 650,000 Americans have done so to date, and we need to see this number rise even higher to combat the influence and power of Big Telecom companies looking to turn the Internet into a corporate toll booth.

If you recall, FCC chairman Tom Wheeler is promoting a scheme where big ISPs like Verizon, AT&T and Comcast can divide up the Internet and introduce toll lanes allowing preferred paid traffic to travel on the Internet at faster speeds, usually at the expense of unpaid traffic that will get relegated to an Internet slow lane. It’s pay to play, and customers of these ISPs are already getting a preview of the new corporate road map for the net. Netflix viewers on ISPs that don’t have a paid agreement to handle video traffic suffer from rebuffering and lower quality video. But ISPs collecting tolls from Netflix don’t subject their customers to a degraded online video experience. Of course, before ISPs realized they could make money selling fast lanes, Netflix worked fine on virtually all of these providers.

Wheeler’s proposal would extend the two-tiered Internet to other websites and service providers, allowing big telecom companies to hand-pick winners and losers and discriminate in favor of their own Internet traffic. Comcast does that today with online video on certain game consoles. If that video comes from Comcast, it doesn’t count against any usage caps. If it doesn’t, it could get rough sticking to Comcast’s arbitrary usage allowance.

The FCC is in way over its head, unaware of the creative ways ISPs can find loopholes large enough to drive through any well-intentioned consumer protections. There is only once certain way to keep ISPs honest — reclassify them as what they should have been all along – a telecommunications service subject to common carrier rules. That would guarantee ISPs could not meddle with your Internet service for financial gain, could not artificially slow down “non-preferred” traffic to make room for paid traffic, and would guarantee that Internet applications of the future will succeed or fail on their merits, not on how much money they are willing to spend.

Since the FCC website is jammed today, we recommend e-mailing the Commission by this Friday at: [email protected]

Our friends at Free Press have published some sample comments they are getting, which may help you formulate yours. Here is ours as well:

Dear Chairman Wheeler,

Although we believe your intentions are good, your proposed Net Neutrality rules simply do not afford enough protection to preserve a free and open Internet. Troubling signs are already clear as providers test how much they can get away with meddling with Internet traffic. The wireless experience is replete with examples of selective speed throttling, usage caps, and traffic discrimination that allows some content to escape the usage meter and throttle while competitors cannot.

The Internet is a transformative experience for many Americans because for the first time in a long time, entrepreneurs can build online businesses that are judged on their merit, not on how much money they have to spend to achieve and maintain prominence. Anything that allows an ISP to collect additional funds for a “preferred” traffic lane will come at the detriment of others who have to share the same broadband pipe. This is especially evident in the wireless world, which escaped even the light touch regulatory framework of your predecessor. Providers promptly began creating new schemes to further monetize growing data traffic, bandwidth shortage or not. Almost none of these changes really benefit customers — they are simply new revenue-making schemes.

A foreshadowing of what is likely to happen under your proposal is also apparent with Comcast and Netflix. For several years subscribers had no trouble accessing online video. But when the issue of traffic compensation was reintroduced by Internet Service Providers, the upgrades to manage natural Internet growth largely stopped and the Netflix viewing experience on these ISPs deteriorated. Verizon, AT&T and Comcast all argue that a paid traffic deal would adequately compensate them to enhance the viewing experience customers already pay good money to receive with or without a paid peering arrangement with Netflix.

Money drives these debates. If an ISP properly managed their broadband infrastructure, there would be no incentive for any company to contract for a better online experience on a so-called “fast lane” because existing service would perform more than adequately. When a company cuts back on those upgrades, a market for paid prioritization appears. Customers will ultimately pay the price, primarily to ISPs that already enjoy an enormous margin selling broadband service at inflated prices.

A rising tide floats all boats, so your focus should not be as short-sighted as allowing ISPs to divide up the limited broadband highway. The FCC should instead focus on setting the conditions to hasten new competition and force existing providers to upgrade and maintain their networks for the benefit of all subscribers and content producers. The FCC must also move swiftly to cancel state bans on community broadband networks, eliminate regulations that deter broadband start-ups, and maintain enough oversight to guarantee a level playing field on which all can compete.

There is only one way to effectively accomplish all that. Reclassify broadband service the way it should have been classified all along: as a telecommunications service subject to common carrier regulations. Canada has been very successful requiring ISPs to open their last mile networks to competitors, which have allowed people to avoid compulsory usage caps. Customers have a choice of multiple providers from their local phone or cable company, giving rise to much-needed competition.

With strong Net Neutrality, consumers can reach the websites they want without interference. Ignore nonsense suggesting Net Neutrality is a government takeover or censors the Internet — two provably false assertions. In fact, Net Neutrality is the opposite.

I urge you to move with all speed towards reclassification, if only to prevent the inevitable legal challenges to any future policies built on the shakier ground of the current framework, which has not held up well under court scrutiny. I hope the voices of more than a half-million Americans contacting you on this issue will be more than enough to overcome industry objections. We are not asking for 1950s-style telephone regulations. We just want a legally affirmed platform that allows the Internet of today to continue being successful tomorrow.

Yours very truly,

McAdam

The head of Verizon believes two concepts will become Internet reality in the short-term future:

1. Those that use a lot of Internet bandwidth should pay more to transport that content;
2. The “intelligent” Internet should prioritize the delivery of certain traffic over other traffic.

Welcome to a country without the benefit of Net Neutrality/Open Internet protection. A successful lawsuit brought by Verizon to toss out the Federal Communications Commission’s somewhat informal protections has given Verizon carte blanche to go ahead with its vision of your Internet future.

Lowell McAdam, Verizon’s CEO, answered questions on Tuesday at the Morgan Stanley Technology, Media & Telecom Conference, attended by Wall Street investors and analysts.

McAdam believes groups trying to whip Net Neutrality into a major issue are misguided and uninformed about how companies manage their online networks.

“The carriers make money by transporting a lot of data,” McAdam said. “And spending a lot of time manipulating this, that accusation is by people that don’t really know how you manage a network like this. You don’t want to get into that sort of ‘gameplaying.'”

McAdam believes there is nothing wrong with prioritizing some Internet traffic over others, and he believes that future is already becoming a reality.

“If you have got an intelligent transportation system, or you have got an intelligent healthcare system, you are going to need to prioritize traffic,” said McAdam. “You want to make sure that if somebody is going to have a heart attack, that gets to the head of the line, ahead of a grade schooler that is coming home to do their homework in the afternoon or watch TV. So I think that is coming to realization.”

But McAdam also spoke about the need for those generating heavy Internet traffic to financially compensate Internet Service Providers, resulting in better service for content producers like Netflix — not considered ‘priority traffic’ otherwise.

“You saw the Netflix-Comcast deal this week which I think — or a couple weeks ago — which is smart because it positions them farther out into the network, so they are not congesting the core of the Internet,” said McAdam. “And there is some compensation going back and forth, so they recognize those that use a lot of bandwidth should contribute to that.”

McAdam reported to investors he had spoken personally with FCC chairman Tom Wheeler, who seems to be taking an even more informal approach to Net Neutrality than his predecessor Julius Genachowski did.

Verizon’s machine-to-machine program is likely to be a major earner for the company.

“In my discussions with Tom Wheeler, the Chairman, he has made it very clear that he will take decisive action if he sees bad behavior,” McAdam said, without elaborating on what might constitute ‘bad behavior.’ “I think that is great; great for everybody to see that. And I think that is what we would like to see him do, is have a general set of rules that covers all the players: the Netflixes, the Microsofts, the Apples, the Googles, and certainly the Comcasts and the Verizons. But the only thing to do is not — you can’t just regulate the carriers. They’re not the only players in making sure the net is healthy. And I think we all want to make sure that investment continues in the Internet and that customers get great service.”

Verizon has already reported success monetizing wireless broadband usage that has helped deliver growing revenue and profits at the country’s largest carrier. Now McAdam intends to monetize machine-to-machine communications that exchange information over Verizon’s network.

McAdam believes within 3-4 years Americans will have between five and ten different devices enabled on wireless networks like Verizon’s in their cars, homes, and personal electronics. For that, McAdam expects Verizon will earn between $0.25 a month for the average home medical monitor up to $50 a month for the car. Verizon is even testing wireless-enabled parking lots that can direct cars to empty parking spaces.

For those applications, McAdam expects to charge enough to guarantee a 50% profit margin.

“These can be very nice margin products,” McAdam told the audience of investors. “So even at $0.25 if you are doing 10 million of them and it’s 50% or better margins, those are attractive businesses for us to get into.”