Just shy of one month after adoption, the Federal Communication Commission’s Net Neutrality rules face a legal challenge by one of the parties that helped write them.

Verizon Communications filed suit Thursday in the same federal court that in April threw out much of the authority the FCC thought it had over online telecommunications.

“We are deeply concerned by the FCC’s assertion of broad authority for sweeping new regulation of broadband networks and the Internet itself,” said Michael E. Glover, Verizon’s senior vice president and deputy general counsel. “We believe this assertion of authority goes well beyond any authority provided by Congress, and creates uncertainty for the communications industry, innovators, investors and consumers.”

Verizon’s lead attorney in the case in Helgi Walker, who will be a familiar face in the court — Walker successfully argued the original case Comcast brought against the Commission for trying to regulate its Internet service.

FCC Chairman Julius Genachowski's cowardly cave-in on strong Net Neutrality was rewarded with... a lawsuit from Verizon to overturn the regulations the company helped write.

But Verizon wants an even greater shot at success, asking for the same panel of judges who ruled in the Comcast case to also hear its challenge.

“Verizon has made a blatant attempt to locate its challenge in a favorable appeals court forum,” said Andrew Jay Schwartzman, senior vice president and policy director of the Media Access Project.

Outgunned.  Again.

The earlier decision in the Comcast case not only stripped the FCC’s authority to regulate broadband under a regulatory framework established under the Bush Administration, it derided the logic behind it.  During arguments, the FCC’s general counsel acknowledged he was likely to lose the case, and actually asked the Court for guidance on how to write better rules.

Remarkably, Verizon’s legal challenge comes after the company worked closely with the Commission to moderate Net Neutrality regulations.  The rules issued in December exempted wireless communications and were criticized by consumer groups for not truly representing a free and open Internet.

Rob Pegoraro, a Washington Post columnist, was incredulous the phone company was spending subscribers’ money fighting net policies that nearly mirrored the voluntary agreement it reached with Google last year.

“Okay, so you’re going to spend some of my money to fight a minimal set of regulations written to stop you from tampering with my Internet access? How is that supposed to make me feel comfortable doing business with you?

“(Note to Verizon: You are not only an enormous telecom conglomerate, you are The Phone Company. You don’t get to say “trust me.”)

“Then I got more annoyed.

“The regulations that Verizon regards as an affront to the Constitution match up closely with the proposal that Verizon published with Google in August–a suggested regulatory framework that many people, myself included, criticized for its minimal restrictions on wireless broadband services.

[…] “And not only did Verizon think that its proposed set of rules would be good for business last summer, it did so as recently as 2:25 p.m. Thursday, when a post on its public-policy blog favorably cited those suggestions.”

Nate Anderson at Ars Technica isn’t sure why Verizon is spending time fighting rules it supposedly agrees with either, and he produced a chart proving it:

Excerpted below are the main Verizon/Google provisions, followed by their matching item in the FCC’s “open Internet” order from December. All are exact quotes.

Despite the perceived rush to court, legal challenges against the FCC’s Net Neutrality rules were widely expected.  The FCC continues to tell the press (on background), it believes it has the authority to enact Internet-related regulations and policies.  But many court watchers familiar with the District of Columbia Court of Appeals think it is more likely than not Verizon will prevail on similar legal arguments Comcast used to win its case.

What then?

Pegoraro: “I’d like to think that it would be fitting if the FCC responded by returning to the regulatory strategy it should have adopted in the first place: putting broadband Internet services back under a simplified form of the “Title II” common-carrier regulation that most operated under until 2005.”

“But if the FCC couldn’t find the gumption to choose that more aggressive but more legally grounded option before, why would it now?”

In a welcome turn of events, the League of United Latin American Citizens (LULAC), which has routinely turned up as a member of Big Telecom-backed astroturf campaigns and takes money from AT&T, has come together with Latinos for Internet Freedom to issue a joint statement calling on the Federal Communications Commission to adopt equal Net Neutrality policies for wired and wireless broadband services.

“Although we disagree on some of the components of the proposed network neutrality regulations, there is one point on which we are in lock step: the FCC’s network neutrality rules must apply equally to wireline and wireless internet access.  Of course we understand that what is ‘reasonable network management’ may be slightly different over different types of connections.  Cost is the primary barrier to broadband adoption, and Latinos are turning to their mobile phones as their only onramp to the internet.  We are committed to finding ways to lower broadband costs by increasing competition through wireless access and other means.  It is therefore essential that the FCC ensures that users of wireless and wireline services are protected by its openness rules.”

Of course, broadband providers’ demands for deregulation and unified opposition to Net Neutrality have never delivered and will never provide cheaper Internet service to anyone.  In fact, the court ruling that eliminated the FCC’s authority over broadband gave providers nearly a year of a wide open marketplace, yet many providers are now sending out notices they are -increasing- broadband prices for subscribers.  Net Neutrality has never been enforced against wireless networks either, and as a result most either usage cap, throttle, or charge enormous overlimit fees for users deemed to be “using too much.”

Increased competition can bring lower prices, but only if it extends well beyond today’s duopoly.  In areas where one provider is likely to maintain a de facto monopoly, effective oversight is required to ensure consumers receive adequate service at fair prices.

Still, it is a surprising and welcome change to see LULAC recognizing the true nature of broadband access for many economically-challenged Americans, especially in minority communities where unemployment continues to be catastrophic.  Some consumers are finding prepaid wireless broadband service to be one way onto the Internet, yet Big Telecom has sought to keep those networks exempt from any Net Neutrality consumer protections.  That cannot be allowed to happen.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Verizon vs. Latinos for Internet Freedom.flv[/flv]

Watch these two competing spots from Verizon and the Latinos for Internet Freedom.  One is self-serving and a tad condescending, the other calls for a free and open Internet where individuals get a level playing field to tell their own stories and live their own lives without fear or special favor.  (2 minutes)

Big Telecom Cash works its magic

As the fall elections near, the rhetoric and sheer nonsense from those opposed to important consumer broadband reforms has reached a fever pitch.  And as our reader Karen writes, too many Americans and the candidates they support just don’t get it.

Here in Delaware, Tea Party candidate Christine O’Donnell exemplifies what Net Neutrality supporters are up against — complete ignorance and big cash contributions.  Before she went into hiding, I attended one of Christine’s rare public events and asked her about where she stood on Net Neutrality and her response was she believed “all sides should be represented on the Internet.”  So she thinks Net Neutrality is about views expressed online, not stopping the telecom industry from slowing or blocking access to websites.

At least 35 of the Tea Party groups are opposed to Net Neutrality, mostly because their financial backers (big corporations and billionaire-funded front groups) have convinced members they should be.  Many others are stupid enough to believe Glenn Beck and his pal Phil Kerpen at Americans for Prosperity who say Net Neutrality will “censor” the Internet or turn control of it over to Barack Obama.

Conservative groups heavily funded by corporate interests they refuse to identify are backing various chapters of so-called “Tea Party” groups and feeding them talking points generated by companies like AT&T and Verizon in opposition to Net Neutrality.  The Center for Individual Freedom runs a website StopNetRegulation, edited by conservative activist Seton Motley, dedicated to derailing broadband reforms.  Motley was also quoted in The Hill in late September warning Republicans about antagonizing Tea Party types with their support for Net Neutrality in Congress.  Only then his comments came as leader of the group “Less Government.”  Judging from the organization’s website, Motley is also in favor of reduced size websites because his amounts to a single sentence.

Seton is convinced the end of the net world, as we know it, comes November 30th when the government could “seize control of the Internet.” That’s the date of the FCC’s November meeting, at which Seton suspects Julius Genachowski will finally move to reclassify broadband as a telecommunication service. 

Seton completely misrepresents reclassification as saddling the Internet with “the same rules as landline telephones.”  I read that claim somewhere before… oh yes, straight from AT&T and Verizon lobbyist talking points.

It doesn’t matter to Seton and other conservatives that Genachowski went out of his way to say he would not be applying any onerous telephone-era regulations on today’s broadband providers.  In fact, Genachowski’s actions to date have moved at such a glacial pace, friends have to occasionally check his pulse to make sure he’s still with us.

So what is so big, bad, and scary about Net Neutrality?  It simply guarantees your Internet Service Provider doesn’t start throttling your speeds when accessing websites and Internet applications they dislike, cannot block access to websites critical of their agenda, and are not allowed to extort payments from content providers just to allow traffic onto “their” networks.

While that may pose a Halloween freak-out for the profit-obsessed phone and cable companies, it’s hard to find actual consumers (not paid by said providers) who want their Internet service blocked or slowed down.

Seton goes way over the top turning this into a First Amendment free speech issue.  That argument only works for the likes of AT&T and Verizon who find their corporate right to overcharge people for broadband being infringed.

Seton then argues his view must be right because even minority groups support his position.  As readers here already know, most of the groups he names to bolster his argument are “dollar-a-holler” organizations willing to peddle the phone and cable company agenda on their letterhead in return for donation checks.

So have many additional normally Democrat paragons, including several large unions: AFL-CIO, Communications Workers of America (CWA), International Brotherhood of Electrical Workers (IBEW); several racial grievance groups: League of United Latin American Citizens (LULAC), Minority Media and Telecom Council (MMTC), National Association for the Advancement of Colored People (NAACP), Urban League; and an anti-free market environmentalist group: the Sierra Club.

If you ever wondered why AT&T and Verizon spend so much on contributions to these interest groups, Seton Motley just handed you the answer — so he and the companies he supports could name drop them in arguments against pro-consumer broadband reform.  And considering the CWA and IBEW represent phone company workers, it’s not a surprise to see them on their side of this issue either.  Wherever you look amongst those in opposition to Net Neutrality, a check from AT&T and/or Verizon is almost always waiting to be deposited.

The Obama-Has-Concentration-Camps-crowd parked on Andrew Breitbart’s website ate it up and wrote comments like this:

The communist can’t control the people with a internet that is out of control, all dictatorships have the power over what the people can read, free thinkers in this day and age are considered terrorist, Republicans, conservatives, anti abortionist, Oath Keepers, Christians, ex military, people who think the Constitution is still the law of the land, my lord, the communist can’t have these sorts communicating with each other over the internet, why, they may all come together one day and put a stop to the one world government goal, you know, the goal of making the world one big slave camp.

This kind of wild opposition has even corporate Republicans on edge, according to The Hill.  A major talking point of Net Neutrality opposition is that such “sweeping changes” should not be enforced by the FCC, but from legislation enacted in Congress.  But because Tea Party elements are opposed to the concept altogether, and Republicans are loathe to hand Democrats their votes on much of anything, even a corporate-friendly Net Neutrality bill introduced by Rep. Henry Waxman (D-Calif.) went up in flames.  Waxman’s bill would have enacted some protections, but only until 2012, at which point it was open season on broadband consumers.

The Hill piece delivered a disappointing fact of life for much of today’s Congress, beholden first to corporate interests (underlining ours):

In a striking sign that people who normally align themselves with telecommunications companies may line up behind the bill if it is industry-backed, ardent net-neutrality critic Brett Glass, founder of a wireless company, is open to it. He tweeted on Monday, in a note to Americans for Prosperity executive Phil Kerpen, that the Waxman legislation seems “more reasonable than I expected.”

In a note earlier this month, analysts at Stifel Nicolaus wrote that although Republican House members “may not have incentive to solve a political problem for Democrats,” some may support the bill “if there’s a push by” phone and cable companies and at least some Internet companies.

But the shilling for Big Telecom has never been a one-party-problem.  While Republicans appear to be moving in lock step against Net Neutrality, a number of groups and politicians on the Democratic left have also been only too willing to take AT&T money and run to a microphone to oppose a free and open Internet.

The Los Angeles Times gave plenty of space on an issue we’ve written repeatedly about on Stop the Cap!:

Key minority groups are backing the carriers’ efforts to thwart the net neutrality proposals, which would, for instance, prohibit carriers from charging more to give some residential and corporate customers priority in delivering online content.

“When you give national civil rights groups millions of private dollars, there’s no firewall strong enough to keep that money out of their policy,” said Malkia Cyril, executive director of the Center for Media Justice.

Cyril and other consumer and public advocates have been buoyed by comments from Federal Communications Commission member Mignon L. Clyburn, a prominent African American and daughter of Rep. James E. Clyburn (D-S.C.).

She said in a speech in January that she was surprised that most statements and filings by “some of the leading groups representing people of color have been silent on this make-or-break issue” of net neutrality.

“There has been almost no discussion of how important — how essential — it is for traditionally underrepresented groups to maintain the low barriers to entry that our current open Internet provides,” Clyburn said.

AT&T's cash machine benefits groups like LULAC

At issue are the enormous contributions from big phone and cable companies like Comcast, AT&T and Verizon that routinely translate into what we’ve called “dollar-a-holler” advocacy.  After the checks get deposited, many of these groups generate innocent sounding letters of support for the latest merger, deregulation, or policy debate — always in favor of Big Telecom and too often directly against the interests of the people they claim to represent.

No group better exemplifies this than the League of United Latin American Citizens (LULAC), a particularly eager player in the cash for advocacy game.  And the group doesn’t care whether the money comes from Verizon or AT&T.  They’re on board with both.

Brent A. Wilkes, executive director, penned this guest editorial for the Houston Chronicle, for which he was called an “idiot” by at least one of the newspaper’s readers:

Net-neutrality rules should prevent broadband providers from engaging in anti-competitive behavior, but they should not be commandeered to insulate wealthy Internet applications companies from paying their fair share of the broadband bill. Any new rules must protect consumers both by ensuring their unfettered access and by shielding them from having to shoulder all the costs for faster broadband networks that our nation so badly needs. Such an approach will not please the special interests, but it will be a double win for consumers.

From AT&T’s talking points to Wilkes editorial.  “Wealthy Internet applications companies” already pay for their own bandwidth and for the Internet’s expansion.  Search engine companies like Google and Yahoo! construct data centers with their own money just to maintain their services to consumers, generating jobs and helping local economies.  Wilkes ignores the fact broadband providers already earn plenty from their subscribers — consumers and businesses who pay a monthly fee so they can access those “wealthy Internet applications companies.”

But that is not enough.  Now broadband providers want to be paid twice.  To facilitate their argument, they’ve invested more than a million dollars in LULAC alone to defend their position, which ultimately brings Latinos (and everyone else) the high broadband bills today that Wiles scaremongers will be forthcoming tomorrow.

Wilkes was shocked, shocked by the implication that phone company money would have anything to do with LULAC going out of its way to comment on arcane telecommunications policy issues, always in favor of its benefactors.

“It’s kind of like saying the minority organizations can’t think for themselves,” Wilkes said, adding that any suggestion that minority groups were mouthpieces for the industry was “offensive.”

Verizon played along:

“I can tell you we do not, and have not ever, given money to minority organizations so that they will support our positions on any topic,” said Peter Thonis, a spokesman for Verizon Communications Inc. “We talk to many groups about our positions, and some agree with us and some do not.”

So if Verizon talked to Stop the Cap! about their positions, do you think we’d receive a handsome check from the phone company?

Britt cut out all of the middlemen and picked up the phone to personally lobby FCC Chairman Genachowski about broadband reform.

The Times documented numerous other examples:

For instance, David Cohen, Comcast’s executive vice president, joined the board of the National Urban League three years ago as part of a three-year partnership to promote the league’s various educational programs. Comcast, now seeking FCC approval to buy a controlling interest in NBC Universal, was recognized that year for being one of several sponsors to donate $5 million or more to the organization.

On the local level, the Greater Sacramento Urban League has Barbara Winn, a Sacramento-area director of external affairs for AT&T, as its chairwoman and Linda Crayton, Comcast’s senior director for government affairs in California, as vice chairwoman.

That affiliate’s president, David B. DeLuz, wrote to the FCC in January that net neutrality rules “will strongly reduce broadband network investments and ultimately raise prices.” DeLuz said in an interview that the two telecom executives on the chapter’s board have not influenced its net neutrality stance.

“The Urban League does not engage in pay to play,” he said. “Just because [telecoms] write a check to us doesn’t mean they write the only check to us.”

The most remarkable part about the Urban League’s argument is that in a sea of corporate cash, competing checks can cancel each other out.

While the blizzard of bucks continues to descend on Washington, Time Warner Cable CEO Glenn Britt decided his cable company could cut out the middlemen and go right to the man with the plan to reclassify broadband.  Unlike ordinary consumers, Britt had no trouble getting FCC Chairman Julius Genachowski to take his call, allowing him to personally lobby against Net Neutrality and those nasty broadcasters trying to overcharge him for permission to carry local broadcast stations on the Time Warner Cable dial.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/ATT Net Neutrality There’s a problem.mp4[/flv]

It seems like only yesterday AT&T’s Ed “Our Pipes” Whitacre was clamoring for the right to deliver the Internet to consumers his way, complete with pay walls and speed throttles.  Very little has changed since Big Ed left for Government Motors with his $158 million AT&T golden parachute.  The name at the top has changed, but AT&T still recognizes money buys friends and influence.  (2 minutes)

Broadband for America is the product of the nation's largest phone and cable companies.

Broadband for America has begun assaulting the airwaves with a high-priced advertising campaign claiming that “broadband is leading the [economic] recovery” but is threatened by “1930s telephone regulations,” urging Congress to get involved to stop broadband reform.

The 30 second ads blanketed cable and several Sunday morning news shows yesterday.

What the ads don’t mention is Broadband for America is actually one giant front group backed by large phone and cable companies.  In a study released last fall, Stop the Cap! found virtually every single “coalition” member, including so-called “independent consumer advocacy groups,” do substantial business with, or have received significant financial contributions or board assistance from companies including AT&T, Verizon, and Comcast.

Well-financed by the telecommunications industry it directly represents, Broadband for America seeks further deregulation and wants Congress to stop the FCC from enacting broadband reforms ranging from “truth in marketing” and billing to Net Neutrality.

The “honorary co-chairs” of the group are Michael Powell, the same Bush Administration FCC chairman that badly bungled the FCC’s approach to broadband policy thrown out in the courts earlier this year, and former Congressman Harold Ford, Jr., who left public service for a very lucrative career in “dollar-a-holler” advocacy and working as a lobbyist for the economic-vampire investment bank Goldman Sachs (something Broadband for America left out of his online biography.)

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Broadband for America 30 sec spots.flv[/flv]

Broadband for America, a telecom-backed astroturf group, is running these advertisements promoting the agenda of AT&T, Verizon, and Comcast to try and stop broadband reform policies.  (1 minute)

Despite some denials last week that Verizon and Google were not married and cohabitating their political agendas, the two giants announced a shared vision of the Internet’s future — one that does not “purposely throttle or block content,” but reserves for themselves a new, super speed Internet for the two companies and their closest corporate friends that will make blocked websites the least of America’s broadband problems.

For Internet enthusiasts, the deal is nothing less than a complete sellout of one of the founding visions of the Internet – content judged on its merits, not on the deep pockets backing it.  It’s a complete betrayal of Net Neutrality and broadband reform by Google, which has some of the deepest pockets around and has apparently forgotten the story of its own founding — a story that would likely be impossible on an Internet envisioned by Big V & G. Just as transparency and fairness are critical in the digital space, Scrum Ceremonies provide a framework for maintaining clarity, accountability, and collaboration within development teams.

The Five Biggest Lies About Google and Verizon’s Net Neutrality Proposal

Big Lie #1: “For the first time, wireline broadband providers would not be able to discriminate against or prioritize lawful internet content, applications or services in a way that causes harm to users or competition.”

That is a distinction no longer worth the difference should the two providers succeed in developing a special fast lane for their content partners.  If you don’t have the admission price or a favored pass to belong to the golden magic superhighway, not being purposely blocked or throttled on a clogged free lane offers little comfort when your start-up cannot compete with the bully boys that can outspend you into submission.

Both companies seek to invest millions in what is essentially a toll highway, incentivized by the potential returns offered by deep pocketed content producers willing to pay the toll.  With Wall Street following that money, those left behind on the slow lanes will find providers increasingly uninterested in throwing good money into necessary upgrades to keep the “free lane” humming.  The Internet that results will resemble the difference between a Chicago public housing project and the Ritz-Carlton.

Big Lie #2: “Reasonable” Network Management

The partnership’s declaration of support for its definition of  “reasonable” traffic management has more loopholes than Lorraine Swiss cheese.  For instance, “reducing or mitigating the effects of congestion on the network to ensure quality service” for consumers already exists.  It’s called “upgrading your network.”  Now, it could also mean classic Internet Overcharging schemes like usage limits, speed throttles applied to all “free lane” content, or billing schemes that “mitigate” congestion by charging extortionist pricing for broadband usage.  Using vague notions of “accepted standards” could be defined by any group deemed by Google and Verizon to be “recognized.”  Both have enough money to influence the very definition of “accepted standards.”

You don’t need a policy that reads like a credit card agreement to manage traffic on a well-managed, consistently upgraded broadband network.  Nothing prevents either company from providing such a network, but with no oversight and pro-consumer reform, nothing compels them to provide it either.

Big Lie #3: This preserves the open Internet.*

(*- excluding wireless broadband access to the Internet.)  As an increasing number of consumers seek to migrate some of their Internet usage to wireless networks, it’s more than a little unsettling Google and Verizon would exempt these networks from most of the “consumer protections” they have on offer.

Big Lie #4: The FCC gets its coveted authority to oversee the Internet.

Not really.  In fact, this agreement shares more in common with corporate interests that want less regulation and oversight, not more.  The suggested framework graciously grants the FCC the right to sit and listen to complaints, but strips away… permanently… any authority to pass judgment on the cases they hear and write regulations to stop abuses.

Clauses like “parties would be encouraged to use non-governmental dispute resolution processes” must give the arbitration industry new hope.  Already out of favor in many quarters, this proposal is tailor-made to bring a new Renaissance for “out of court arbitration” that heavily favors the companies that bind consumers and other aggrieved parties to using it.  The arbitration industry is no stranger to contributing to the right people to make them the only reasonable choice for dispute resolution.

Verizon and Google want nothing less than the right to define how their Internet will work — from the applications you can effectively use, the speed throttle you are forced to endure on the free lane, to the enormous bill you’ll receive for using those non-favored websites.

Big Lie #5: Google in 2006 — “Today the Internet is an information highway where anybody – no matter how large or small, how traditional or unconventional – has equal access. But the phone and cable monopolies, who control almost all Internet access, want the power to choose who gets access to high-speed lanes and whose content gets seen first and fastest. They want to build a two-tiered system and block the on-ramps for those who can’t pay.”

Google has come a long way, baby — in the wrong direction.  Demanding Google “not be evil,” something hundreds of thousands of Americans have already said today, is becoming so commonplace as to be cliché.  Still, being for Net Neutrality one day and throwing that concept overboard the next is the ultimate flip-flop.  When money talks louder than doing right by the millions of users who made both companies what they are today represents the ultimate betrayal.  Let’s make sure they realize it.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Bloomberg West Sees Tiered Web Pricing From Google-Verizon Plan 8-9-10.flv[/flv]

Bloomberg News reports consumers will be stuck with higher broadband bills, especially if they dare to watch online video, on a broadband platform envisioned to saddle Americans with toll highways for Internet content.  (4 minutes)

[flv]http://www.phillipdampier.com/video/CNBC Google Joint Internet Policy 8-9-10.flv[/flv]

CNBC echoed concerns about the Verizon-Google deal and its implications for the future of Internet applications.  (4 minutes)

Read the Verizon-Google Proposed Framework below the jump…

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