The Pacific Technology Alliance claims to be a "grassroots" organization representing consumer interests.

From time to time, Stop the Cap! readers send us news tips based on things they find in their local newspaper or online.  Shaffa in Seattle sent us a link to a letter to the editor in the Seattle Times which seemed to be right up our alley.  The writer, Tom Gurr, executive director of something called the Pacific Technology Alliance, wrote the newspaper advocating the redefining of broadband as “a necessary, transformative element to modern life.”  Gurr advocates widespread deployment of broadband service to all Americans.  So far so good.

We cannot overstate the economic impact, to both the individual and the nation, of building out broadband infrastructure and making it available and accessible to all. But not all Americans have access to broadband, and not all Americans who have access are able to use broadband. Price or concerns about privacy and data security are barriers for some. For these individuals and communities, the degree of “openness” or “neutrality” of the network is irrelevant.

America can universally reap the rewards of broadband through its infrastructure deployment, removal of barriers to adoption and investment in more efficient and cost-effective smart networks needed for tomorrow’s dynamic and ever-evolving applications and content.

Whoops… what was that part about “openness” or “neutrality” of the network being “irrelevant?”

As Stop the Cap! readers already know, Net Neutrality issues can go hand in hand with availability and price, and I have yet to meet anyone who hasn’t pondered how private their information is kept (particularly their credit card numbers used online) and how secure their computers are from external attack from viruses and spyware.

In communities with little competition, speed can fall behind more competitive cities nearby.  Prices are almost always lower when providers do battle to secure and keep customers.  Interfering with a consumer’s broadband service to maximize revenue or protect existing business models is a risky proposition if your biggest competitor doesn’t.  Customers will flee across town to “the other guy” for service.

It seemed odd to advocate for widespread broadband deployment while taking time out to swipe at Net Neutrality.  The closing line of the letter seemed slightly vague as well, so it was time to bring out The Google and figure out where this organization is coming from.

… Continue Reading

For those who tried to watch the live stream from this past Monday’s Internet Town Hall from Toronto, it was a process that demonstrated the limitations of broadband service in Canada.  Evidently the hotel broadband connection was inadequate for the task, and the stream suffered ongoing video and audio problems for the duration.

An audio podcast version has now become available and is included below.  Because the event runs nearly two hours, you may wish to download the audio and listen on the go.  If you want to listen here, remember that the audio player will only work as long as you remain on this page.

Internet Town Hall On Canadian Broadband/Net Neutrality Issues – Toronto, June 8, 2009 (1 Hour 50 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

The United Kingdom is the latest country to face the downside of arrogant Internet service providers throwing hissyfits when people actually use their broadband connections.  When broadband service providers entice investors with promises of fat returns, assuming most people won’t actually use those high speed connections for anything except web page browsing and e-mail, they get mighty upset when they catch their users watching online video instead.

One of the benefits of broadband is that it provides fast speeds to let people do more than what they used to with dial-up access.  That happens to also be one of the major selling points to get customers to part with a significant sum of money each month for the service.

They just don’t want you to use it.

British Telecom (BT) is the latest ISP to complain that the BBC’s iPlayer, which allows British residents to stream TV and radio programming on demand, and YouTube are using their broadband pipelines, but not paying them anything to do so.

That conveniently ignores the fact that their customers throughout the UK are paying them to deliver that connectivity, providing them with a handsome return.

Internet Service Providers not content with earning money from one side, now increasingly want a piece of the action on the other.  It’s the equivalent of making a long distance call, but asking both the person calling -and- the person called to pay a fee.

Since the companies providing the content consider the payment demands ridiculous, ISPs have started singling out certain types of traffic on their network and slowing it down, ruining picture quality and annoying their customers trying to access the content.

BT implemented a “Fair Use” policy for one of their broadband packages which lets them cut the speed of online video from the normal 8Mbps down to 896kbps between 5pm-12am each day.  BT claims that’s enough to watch online videos, but that very claim would negate any benefit from slowing down the connection.  How many TV shows do people stream at the same time on the same connection?

In fact, BT’s policy does impact on the quality of the video streamed to the viewer.  The iPlayer is capable of sensing your broadband speed and reducing the quality of the stream to match the speed you have available.

Of course, should the BBC agree to pay BT some sort of transport fee, they might find their way clear to take the speed bumps out of their way.

A founding principle of Net Neutrality is to treat online content equally when transporting it.  Your stream from the BBC should not be hampered while a stream from someone else is not, just because they paid extra.  Are bandwidth costs increasing?  No, they are decreasing.  There is no compelling argument to prevent providers from keeping up with demand.  If they want to earn money from content, they can produce their own and provide it to subscribers on equal terms.

If cable operators intend to impose Internet Overcharging schemes to measure and cap residential broadband accounts, the Federal Communications Commission (FCC) must impose equal treatment on traditional video cable television packages to allow customers to subscribe to only the channels they want.

The Austin Broadband Interest Group, a not-for-profit broadband advocacy organization, calls out the cable television industry for advocating an end to flat rate broadband service at the same time they continue to resist a-la-carte pricing for cable television packages.

In a filing with the FCC as part of a nationwide broadband policy inquiry, the Texas group recites the history of Time Warner Cable’s recent proposed experiment curtailing current flat rate Internet service.  Time Warner Cable planned to expand its Internet Overcharging market test conducted in Beaumont, Texas into four additional cities: Austin and San Antonio in Texas, Rochester in western New York, and the Triad region of North Carolina.  Customers in the test would have faced the prospect of paying 300% more for an equivalent level of flat rate service, with bills increasing from $40-50 a month to a staggering $150 a month, with no increase in speed or immediate improvement in service.

The Austin group claims that such Internet Overcharging efforts are designed to protect Time Warner Cable’s video business model, which includes the packaging of flat rate video cable TV packages to customers across the country.  Time Warner Cable, among other cable providers, have grown increasingly concerned about free online video potentially discouraging customers from subscribing to a cable television package.  Industry executives fear that new generations of Internet users will dispense with traditional cable TV service, obtaining video entertainment online, instead.

The group advocates the FCC enforce a rule that any broadband provider that wants to implement limits or consumption-based service tiers must also offer the same pricing model for video programming.  Matthew A. Henry and Chip Rosenthal, authors of the filing, include other competing video providers in their comments.  Telephone companies, including AT&T and Verizon, have begun offering video services to customers in addition to broadband packages.  AT&T is testing an Internet Overcharging scheme to limit consumption in two cities — Beaumont, Texas and Reno, Nevada.

The cable industry has struggled with Congress and the Commission for years to prevent the imposition of a-la-carte video programming pricing, permitting customers to pay for only the channels they want to watch.  The industry claims it would destroy the business model of cable television, where cable programmers like CNN, The Weather Channel, A&E, and most others impose a subscription fee based on the number of “basic cable” subscribers that have access to those channels.  Most networks charge between 10-80 cents per subscriber, with some sports-related channels charging considerably more.  By dividing the costs among every subscriber, the industry argues, it can deliver a robust video package to everyone for the same price.

Unfortunately, cable programmers continually increase the rates they charge for their cable networks, often well above the rate of inflation, and many broadcast networks and stations also demand cable companies take on new networks they may not necessarily want, to obtain continued permission to carry local stations on the cable dial. The result: relentless annual rate increases for cable television packages.

The inequity of cable’s argument that it must be allowed to continue providing flat rate television programming packages (and disallow a-la-carte) while programming costs increase, while demanding an end to flat rate Internet pricing, despite a decrease in the costs to provide it, suggests “fairness” is not the motivation for proposing such Internet Overcharging schemes:

In May of 2009, Time Warner Chief Executive Officer Glenn Britt essentially admitted that the competitive threat of online video to traditional cable is the driving force behind the company’s capped and metered pricing model. Mr. Britt told investors, “If, at an extreme, you could get all of the programming you get over cable for free on the Internet, over time people will stop buying (TV).”  Unfortunately, Time Warner has chosen to protect its cable revenues through unfairly restricting usage of its broadband service. This clearly demonstrates the need regulatory ground rules aimed at dissuading such anti-consumer and anti-broadband business practices.

Rather than representing a “fair” method of billing, metered pricing plans and usage caps are a strategy intended to salvage diminishing cable revenues by forcing users to use less Internet. Users have been watching increasing amounts of video online, with some abandoning their cable service altogether in favor of broadband (an effect that has been sped by the struggling economy). This presents an obvious dilemma for broadband providers that also offer a cable product, like Time Warner: as online video watching goes up, the revenue-generating cable usage goes down. Online video is bad for business because a cable company directly profits from its cable content through advertising, pay-per-view and video-on-demand, but can’t profit off Internet content. The fact is that Time Warner is offering competing products and the company has a vested interest in cable video prevailing over Internet video. Time Warner introduced metered pricing and usage caps to make its customers turn off their computers and pick up the remote.

iAWFUL (which stands for Internet Advocates Watchlist for Ugly Laws) launched this week, calling attention to the “most reckless and misguided laws” impacting the Internet.

The site, a project of NetChoice, a Washington, DC eCommerce advocacy group, particularly opposes what they feel are “misguided” regulatory approaches to online problems by well meaning lawmakers, often on the state level. NetChoice claims to be a coalition of trade associations, eCommerce businesses, and online consumers, “all of whom share the goal of promoting convenience, choice and commerce on the Net.”

The inaugural list of the worst contains several state tax initiatives targeting Internet commerce, rules forcing websites to spend more time and effort enforcing their abuse of service policies, and an effort to regulate online ticket sales.  NetChoice also challenges efforts by lawmakers to incorporate certain standards, such as security and encryption, into law.

Presumably, the weight given to determining which are the “worst” laws is determined in part by the group’s members:

1-800-Contacts
America Online/Time Warner
American Vintners Association
Association for Competitive Technology
eBay
Electronic Retailing Association
IAC
Internet Alliance
NewsCorp
Oracle
Overstock.com
VeriSign
Yahoo!
The Wine Institute

One of the intended purposes of the iAWFUL list is to draft consumers into the fight against the targeted legislation.  While most of the inaugural list’s targets are anti-consumer, NetChoice doesn’t answer exclusively to those consumers.  They answer to the members who belong to the organization.  Often, the interests of consumers and business do merge, but not always.

Knee-jerk, overly prescriptive laws can destroy whole business models or stifle innovative new forms of communication before they have a chance to emerge. Too many laws are proposed without considering unintended harm they may cause to thousands of Internet companies and millions of Internet users.

NetChoice is dedicated to fighting these attacks on core Internet principles.

Destroying business models may not always be anti-consumer.  On our own issue of Internet Overcharging, could legislation designed to put an end to it be seen as a friend or foe to NetChoice?  A business model alone may be worthy of fighting to protect, but as Stop the Cap! readers understand, that isn’t always true.  Legislators are not the only ones capable of engaging in overreaching antics.  Some of NetChoice’s member companies have done that themselves.

Care must also be given to determine the exact definitions of “stifling” and “core Internet principles.”  The former may be a matter of perspective, the latter is not defined at all.

Perhaps iAWFUL will be a consistently positive asset for consumers and will not incorporate laws designed to protect consumers from anti-competitive behavior and Internet Overcharging onto their top 10 list.  Time will tell.  But consumers should always be wary about Internet organizations that claim to represent consumer interests, but rely on industry money to keep the lights on.  Some of those groups, particularly those in Washington, turn out to be astroturf organizations that claim to represent ordinary citizens, but really front for commercial interests, which often have a different agenda.