PeerFlow

When I invented the Web, I didn't have to ask anyone's permission.

One sentence sums it up:

When I invented the Web, I didn't have to ask anyone's permission.

&mdash: Net Neutrality: This is serious by timbl (Tim Berners-Lee), DiG, Wed, 2006-06-21 16:35

That's Internet freedom. That's why we need net neutrality.

What is net neutrality?

If I pay to connect to the Net with a certain quality of service, and you pay to connect with that or greater quality of service, then we can communicate at that level.

Where you and I are any pair of participants on the Internet.

FCC Investigating Wiretapping?

Now this would be a good thing if it happened:

House telecom subcommittee Chairman Edward Markey (D-Mass.) repeated his call for the Federal Communications Commission to investigate widespread allegations of telecom privacy law violations by intelligence agencies that received cooperation from telecom carriers in anti-terrorist surveillance efforts.

— Markey renews calls for FCC investigation into wiretapping, By Jeffrey Silva, RCCWireless News, September 12, 2007 - 2:13 pm EDT

That would be about as likely as Gonzales starting such an investigation.

Oh, wait:

After Markey wrote Martin in March to ask him to launch an investigation into whether telecom privacy laws have been broken, the FCC chairman wrote Attorney General Alberto Gonzales to verify that the agency could not conduct such a probe because it would violate federal laws governing disclosure of state secrets. Gonzales, who recently announced his resignation, has yet to respond to Martin.

Markey points at a number of events since his first request, such as that it's not a secret anymore that the government has been using telcos to wiretap.

It would be good if the FCC were to represent the public interest, rather than just the telco and cableco and the administration's interest.

-jsq

PS: Seen on Fergie's tech blog.

Twaddle v. a Wonder of the World

It's good to see a newspaper not mince words:

A free-for-all web (after normal monthly broadband charges have been paid) is one of the wonders of the world and a binding force for all communities.

...

The Federal Communications Commission has just been advised by the US department of justice, under heavy lobbying from the operators who stand to gain from higher data charges, that a neutral net might "prevent, rather than promote" investment and innovation. This is twaddle. An open-access net has produced one of the greatest surges of innovation ever recorded and has given an opportunity for people all over the world to communicate with each other and share knowledge on equal terms. Long may it continue to be so.

— In praise of... a freely available internet, Leader, The Guardian, Tuesday September 11, 2007

The Guardian brings up a related point:

It has only become an issue because the US Congress is scrutinising the question of "net neutrality", though why the US authorities - rather than an international body - should deem themselves to have jurisdiction over the internet is not clear.

The usual answer to that is that a properly constituted international body would do even worse. Although nowadays, it seems the otherwise unlateralist U.S. government is toeing the (pseudo-)capitalist international party line.

-jsq

Back to the ITU Future

I should have expected the International Telecommunications Union (ITU) to be involved in this:

Another document came out last week that ties this all together. It's from the ITU, and it's called "Trends in Telecommunication Reform 2007: The Road to Next-Generation Networks (NGN)."

The ITU defines "NGN" as a network that provides quality-of-service-enabled transport technologies. The idea is that packet transport will be "enriched with Multi Protocol Label Switching (MPLS) to ensure Quality of Service (QoS)."

Translation, as far as I can tell: packet transport becomes the same as circuit-switched transport. Prioritization is controlled; it's a network optimized on billing.

— Tying things together, by Susan Crawford, Susan Crawford blog, Mon 10 Sep 2007 08:05 PM ED

This takes us back to the bad old days when national telephone companies sold you data service by the byte, through their preferred protocol, X.25. The advantage of circuit switching was supposed to be fully provisioned copper wires or other resources all the way through between two parties. The disadvantages were that you sometimes couldn't get a connection and the high price, which got even higher between countries. It seems the telcos have settled on MPLS as their modern equivalent of X.25.

-jsq

Merger Mania

Interesting post here on Scott Cleland's Percursor Blog:

A major reason why the stakes are so high in the FTC's review of the Google-DoubleClick merger is how remarkably fast online advertising is overtaking other advertising industry segments that have been around for decades.

— Online ad trends show the huge stakes in the Google-Doubleclick merger, by Scott Cleland, Precursor Blog, Wed, 2007-09-05 17:38.

Interesting especially in that I don't recall him having any similar trepidations about the AT&T-Bellsouth merger.

He quotes eMarketer as saying that:

a recent report from equity firm Veronis Suhler Stevenson predicts that the Internet will displace television as the No. 1 ad medium by 2011." [bold added]

Cleland did not provide a link to eMarketer or to VSS.

A little googling finds the VSS press release about its report, which actually says:

Internet advertising is expected to become the largest ad segment in 2011, surpassing newspapers.

— New Veronis Suhler Stevenson Forecast: Shift to Alternative Media Strategies Will Drive U.S. Communications Spending Growth in 2007-2011 Period; Consumer Media Usage Expected to Level Off Going Forward, Press Release, Veronis Suhler Stevenson, 7 Aug 2007

VSS says newspapers: not television. Looks like somebody had television on the brain.

Intended vs. Legal

Shortly after a high level U.S. official acknowledged that telephone companies have helped the government in illegal spying, this comes out:

WASHINGTON — The Bush administration wants the power to grant legal immunity to telecommunications companies that are slapped with privacy suits for cooperating with the White House's controversial warrantless eavesdropping program.

The authority would effectively shut down dozens of lawsuits filed against telecommunications companies accused of helping set up the program.

The vaguely worded proposal would shield any person who allegedly provided information, infrastructure or "any other form of assistance" to the intelligence agencies after the Sept. 11, 2001 terror attacks. It covers any classified communications activity intended to protect the country from terrorism.

— Bush Seeks Legal Immunity for Telecoms, By KATHERINE SHRADER, Associated Press Writer, August 31, 2007 - 5:02 p.m. EDT

Let's let President Nixon sum it up:

Well, when the president does it that means that it is not illegal.

— Richard M. Nixon interviewed by David Frost, 19 May 1977.

Yet the same administration can't be proactive about effective regulation of first-mile Internet access for effective competition.

-jsq

The Amazon Channel

It's all very well to talk about net neutrality or Internet freedom and how it affects 700Mhz spectrum sales or freedom of the press. But what does all this have to do with the average Internet user?

Suppose the telcos and cablecos get everything they want.

To buy a BBQ grill on eBay, you'll have to pay for the eBay channel. This is above whatever you pay the seller for the grill or eBay for your membership. You'll have to pay your local Internet access company just to let you get to eBay to participate in the auction. Oh, maybe you'll be able to get there anyway, but your access may be so slow that you'll pay for the eBay channel out of frustration.

If you want to buy a book from Amazon, you'll have to pay for the Amazon channel. For search you'll need the Yahoo channel or the ask.com channel or the google channel. Assuming your favorite search engine is even offered as a channel. Many smaller services probably won't be.

Maybe it won't be quite this bad.

Broadband Speed by Country

Letting a picture tell the story of how Japan, Korea, France, Poland, Portugal, and other countries have faster broadband than the U.S., here's a graphical illustration of average broadband speeds per country. Finland, Sweden, Norway, and Iceland I would expect, since they've long been fast. But Poland?

There seem to be two tiers. Japan and Korea are the top tier. Then Finland, Sweden, and France. Then a third tier starting with the Netherlands. The U.S. is either in that third tier or in a fourth tier, depending on how you look at it.

The source report, Assessing Broadband in America: OECD and ITIF Broadband Rankings, By Daniel K. Correa, Information Technology and Innovation Foundation, April 2007, also examines broadband uptake, in which the U.S. is also fifteenth in these OECD rankings.

Maybe it's time for a change. A change in public policy and the addition of competition.

-jsq

Warp Speed From Behind

As we've mentioned before Japan has Internet connections much faster than those in the U.S. This point is getting more mainstream media play:

Broadband service here is eight to 30 times as fast as in the United States -- and considerably cheaper. Japan has the world's fastest Internet connections, delivering more data at a lower cost than anywhere else, recent studies show.

Accelerating broadband speed in this country -- as well as in South Korea and much of Europe -- is pushing open doors to Internet innovation that are likely to remain closed for years to come in much of the United States.

The speed advantage allows the Japanese to watch broadcast-quality, full-screen television over the Internet, an experience that mocks the grainy, wallet-size images Americans endure.

— Japan's Warp-Speed Ride to Internet Future, By Blaine Harden, Washington Post Foreign Service, Wednesday, August 29, 2007; Page A01

So is it just for video? If so, maybe we'd better let the telcos have their way.

Duopoly Spies

Well, I had been waiting to post something about the telcos and domestic wiretapping until more news came out, since much of it was still hearsay. But now National Intelligence Director and former National Security Agency Director Mike McConnell has confirmed it:

Now the second part of the issue was under the president's program, the terrorist surveillance program, the private sector had assisted us. Because if you're going to get access you've got to have a partner and they were being sued. Now if you play out the suits at the value they're claimed, it would bankrupt these companies. So my position was we have to provide liability protection to these private sector entities.

— Transcript: Debate on the foreign intelligence surveillance act, By Chris Roberts, ©El Paso Times, Article Launched: 08/22/2007 01:05:57 AM MDT

Ryan Singel points out in Wired's Threat Level blog that this is even though the same McConnell signed a sworn declaration in April saying to reveal that NSA and Verizon had such a relationship "would cause exceptionally grave harm to the national security."

Rage Against Distributive and Content Control

And now you do what they told ya, now you're under control

The Pearl Jam (and John Butler Trio and Flaming Lips and Rage Against the Machine) AT&T censorship fiasco has reached the attention of an FCC commissioner:

FCC Commissioner Michael Copps, fire-breathing advocate of network neutrality regulation and opponent of media consolidation, has taken a stand on AT&T's now infamous censorship of Pearl Jam front man Eddie Vedder's anti-Bush remarks at Lollapalooza. In an interview with OpenLeft.com's Matt Stoller, Copps supported the idea that there's a link between AT&T's deletion of Vedder's political comments from a webcast of the concert and the network neutrality fight that's brewing in the halls of Congress.

"Events like this are connected to the larger issue of network neutrality, so it is very very important," Copps said in response to a question about whether or not AT&T's censorship of Vedder has any implications for network neutrality. He went on to say, "So when something like the episode occurs with Pearl Jam that you're referencing that ought to concern all of us... because if you can do it for one group, you can do it to any group and say 'Well, it's not intentional,' and things like that. But nobody should have that power to do that and then be able to exercise distributive control over the distribution and control over the content too.

— FCC Commissioner: Pearl Jam censorship linked to net neutrality fight, By Jon Stokes, ars technica, Published: August 17, 2007 - 01:56PM

And it's good that Copps sees the connection between this episode and media consolidation. Copps talks a good talk, but will he do more than "grudgingly accept" this sort of thing, like he did the bogus 700Mhz auction rules? Will he vote against, and will he persuade other commissioners to do the same? And can someone persuade Congress to change the FCC's tune? It's all very well to rage against the machine, but who's going to change it?

Or can we get some Internet access competition? Then we could have Internet freedom.

-jsq

AT&T: Net Neutrality Tool?

Forbes, normally more of a capitalist tool than a flaming radical rag, keeps covering AT&T's Pearl Jam fiasco:

AT&T's “content monitor” hit the mute button during part of Pearl Jam’s “Blue Room” Live Lollapalooza Webcast sponsored by the telecom, depriving viewers of some anti-George Bush lyrics—and handing live ammunition to “net neutrality” proponents in the form of an almost perfect example of what they predict will happen if a few companies are allowed to control the broadband pipeline.

— AT&T Silences Pearl Jam; Gives 'Net Neutrality' Proponents Ammunition, Staci D. Kramer, PaidContent.org, 08.09.07, 7:45 PM ET

Their followup gets even better:

AT&T spokesman Michael Coe said that the silencing was a mistake and that the company was working with the vendor that produces the webcasts to avoid future misunderstandings. He said AT&T was working to secure the rights to post the entire song - part of a sing-along with the audience - on the Blue Room site.

— AT&T Errs in Edit of Anti-Bush Lyrics, By MICHELLE ROBERTS, Forbes, 08.10.07, 10:59 AM ET

While the lumbering dinosaur was working on that, Pearl Jam already had the uncensored version on their site.

And it just keeps getting better.

Yet Less Spectrum

Not being content with squelching competition in the 700Mhz auction:

The Federal Communications Commission is seeking to shut the door on a plan by a group of Silicon Valley entrepreneurs to offer free wireless broadband Internet service everywhere in the U.S., the chief executive of the group said Wednesday.

M2Z Networks Inc. issued a statement Wednesday in which it said it would take the FCC to court in an attempt to force the agency to conduct a thorough analysis of the plan before it determined whether it would back it or not.

The company has proposed taking 25 megahertz of spectrum that is currently vacant and using it to build a wireless broadband Internet network to provide free service to 95% of Americans within a decade.

— UPDATE: FCC Opposes Silicon Valley VCs' Free-Broadband Plan, (Updates with comment from Rep. Anna Eshoo, D-Cal., in the fifth paragraph.) By Corey Boles, Dow Jones, August 15, 2007: 05:14 PM EST

Why would the FCC object to that?

700Mhz: Duopoly As Usual

Susan Crawford reads the 700Mhz auction rules and confirms the worst:

1. Those Carterfone protections don't mean too much. The no-locking, no-blocking requirements are hedged in by substantial limitations: the winning licensee will be able to lock and block devices and applications as long as they can show that their actions are related to "reasonable network management and protection," or "compliance with applicable regulatory requirements." In other words, as long as the discrimination can be shown to be connected (however indirectly) to some vision of "network management," it will be permitted. (Discrimination "solely" for discrimination's sake is prohibited, but that's not too difficult to avoid.)

— Many, many devils in the details: 700 MHz rules, by Susan, from Susan Crawford blog, 13 Aug 2007

So it's ILECs vs. CLECs, round two. Guess who'll win?

And even supposedly Cmr. Copps "grudgingly accepted" these rules. Seems to me we need a whole new FCC, so we can get some real rules of the road.

And what we really need is some real competition.

-jsq

Pearl Jam Censored by AT&T?

Photo: AP Photo/Magnus Johansson-MaanIm

Political censorship?

After concluding our Sunday night show at Lollapalooza, fans informed us that portions of that performance were missing and may have been censored by AT&T during the "Blue Room" Live Lollapalooza Webcast.

When asked about the missing performance, AT&T informed Lollapalooza that portions of the show were in fact missing from the webcast, and that their content monitor had made a mistake in cutting them.

— LOLLAPALOOZA WEBCAST: SPONSORED/CENSORED BY AT&T? News, PearlJam.com, 7 August 2007

So, "a mistake".

Uhuh.

But it gets better.

Russian Roulette

FCC Commissioner Michael Copps has a way with words. Last year he said we should be talking about Internet freedom rather than net neutrality. And now he says we're

playing Russian roulette with broadband and Internet and more traditional media

— FCC Commissioner: US playing "Russian roulette with broadband and Internet" By Nate Anderson, ars technica, August 03, 2007 - 09:20AM CT

And the Russians are winning.

French FttH

In the U.S., it's difficult for a municipality to put up a wireless Internet service even if it's a disaster zone and the telco hasn't gotten its POTS service back up, because the duopoly doesn't want the competition. Meanwhile, in France:

Municipalities, cities, states, territories and regions are driving the French municipal (wireless and wired) broadband uptake as newly authorized by law. A new article of French “code général des communications” passed in June 2004 (law ref code is L-1425-1) gives these public entities the following rights :

1. build, subsidize and develop “passive” telecom infrastructure and provide/transfer them to carriers or independent local users.
2. build open networks on a given territory and provide/transfer them to a territorial carrier.
3. operate open telecommunications networks in respect of regulations.
4. provide telecommunications services to end users.

— Municipal broadband in France, by Esme Vos, MuniWireless, at 7:42 PM on September 5, 2005

The municipality does have to demonstrate that there isn't already a similar service, but given the "open networks" aspect, that shouldn't be difficult. Could this have something to do with why France is ahead of the U.S. in Internet connectivity and speed?

Apparently so:

Nowadays there are over a hundred projects, small and big. One famous one One famous one is the plan to do FttH in Hauts-de-Seine, the department chaired by Mr Sarkozy until he became President. Sarkozy was the man personally proprosing the FttH roll out in Hauts de Seine.

— Some French muni BB inspiration to Maybe Rep's Boucher & Upton? Dirk H. van der Woude, Interesting People, 5 August 2007

He points out that picture FCC Commisioner Tate and ARCEP Commissioner Gauthey have met, as in the picture. Perhaps soon we'll get a U.S. president who might be influenced by French president Sarkozy on this subject.

-jsq

It's Good to be King!

How are those merger conditions coming along?

Remember the story back in June about how AT&T had extremely quietly started offering $10 DSL as was required in its deal to buy BellSouth? The company was promoting many other, more expensive, DSL options, but the only way you could get the required $10 version was if you specifically knew to ask about it. Broadband Reports points to an interview from an Atlanta newspaper with AT&T CEO Randall Stephenson where he's asked about the $10 DSL. The interviewer points out that no story about AT&T resulted in a more irate response from AT&T customers as its story about the hidden offer for $10 DSL, suggesting that this was a huge issue for AT&T customers. Stephenson's response? First he denies that the company made it hard to find, and then he says that they're not promoting it because customers don't want it. This, despite the clear response from customers to the very newspaper who was conducting the interview. Then, he basically admits that the $10 DSL doesn't work very well, saying that they don't promote it because they don't want to give customers a product that sucks. Of course, he says that as if it's not his company that has quite a bit of control over whether or not the product sucks.

— AT&T CEO: We Don't Promote $10 DSL Because No One Wants It, Techdirt, 1 August 2007

This is even though the AJC reporter introduced the question with:

Of all the things the AJC has written about AT&T lately, none has caused more reader irritation than AT&T's $10 a month DSL offer, which was required by the Federal Communications Commission when you bought BellSouth.

— Q&A: AT&T CEO Randall Stephenson, By Scott Leith, The Atlanta Journal-Constitution, Published on: 07/27/07

The techdirt writer goes on to point out that this is what SBC used to do with naked broadband, too, i.e., dance around and do nothing. After all, without regulation or competition, it's good to be king!

-jsq

Mergers + Bad Regulation = Higher Prices

What hath mergers wrought?

AT&T and MCI long distance increased over 200+% since 2000 for low volume users, 80% increase in Verizon local service in New York City since 2000, 472% since 1984, new bogus late fees or ‘shortfall’ fees, a 29% increase of the Universal Service Fee since 2006, and increases to every service, from packages, toll calls, and calling features to inside wire maintenance --- it goes on and on. Worse, plans are being made to increase the FCC Line Charge to $10.00, increase Universal Service and even add new fees.

Competition was supposed to lower prices. Instead, America’s phone customers have been taken advantage of, especially low income, low volume users, and seniors. Teletruth has received multiple AT&T and Verizon bills ALL showing major increases, new charges, and new problems. If competition did exist for local, long distance, packages, etc. then all of these increases would not have happened.

— AT&T and Verizon Local and Long Distance NJ and NY Phone Bills Show Massive Price Increases. Phone Mergers and a Lack of Competition Are to Blame. FCC Phone Rate Data Are Hiding the Problems. TeleTruth News Alert, 25 July 2007

Mergers and bad regulation, that is.

The Martin 700Mhz wireless acution plan leaves the same two big incumbents, AT&T and Verizon, in place. And Verizon is probably going to be a bit bigger soon, once it absorbs RCCC. Should we expect a different outcome this time?

-jsq

RCCC Stock Up Just Before 700Mhz Auction

Previously I wondered where the big wireless telephone carriers would find enough bandwidth to buy outside the pending 700Mhz auction, as Republican Commissioner Robert M. McDowell suggested. Well, the place to look is the stock market. A day before the FCC decision of yesterday, the stock of Rural Cellular Corp (RCCC) went up about 30% on news that Verizon was buying RCCC. Such a sale has to have been pending for some time; probably at least six months. So it seems that McDowell's assertion is useful political cover for Verizon, if not prediction of future acquistions. Maybe both; I guess we'll see.

-jsq

FCC's Martin Wireless Auction Plan

The Post has some interesting analysis of which FCC commissioners said what when they approved Chairman Kevin Martin's 700Mhz wireless auction plan:

The "open-access" provision was endorsed last month by FCC Chairman Kevin J. Martin, a Republican, and gained support from the two Democratic commissioners, Jonathan S. Adelstein and Michael J. Copps. Deborah Taylor Tate, a Republican commissioner, also voted in favor of the deal. Martin said he hoped the proposal would encourage a new entrant to compete with the cable and phone companies that provide broadband service.

Republican Commissioner Robert M. McDowell voted against the proposal, arguing that placing any conditions on the sale of airwaves would hurt smaller carriers by making smaller licenses without any requirements appealing to larger bidders.

"Smaller players, especially rural companies, will be unable to match the higher bids of the well-funded giants," he said.

— FCC Approves Airwave Use For All Phones, Wireless Network Opened To Options if Not Firms, By Kim Hart, Washington Post Staff Writer, Wednesday, August 1, 2007; Page D01

It's not clear to me where the bigger players will find enough smaller licenses without any requirements to be worth their while. Unless those licenses are also attractive because of the Universal Service Fund.

What did the corporate players say?

AT&T U-Verse Considered as Cable TV

In case it wasn't obvious why the telcos want local TV franchise laws repealed:

A federal judge has thrown up a roadblock in front of AT&T as it attempts to roll out its new U-Verse IPTV service in the state of Connecticut. In an opinion issued yesterday, Judge Janet Bond Arterton ruled that AT&T's U-Verse IPTV service is a cable television service like any other and is therefore subject to local franchising agreements.

— Federal judge: AT&T U-Verse == cable TV, By Eric Bangeman, ars technica, Published: July 27, 2007 - 10:44AM CT

But isn't it different from cable if it's carried over IP?

Universal Slush Fund

The regulatorium in action:

A decade-old telephone tax intended to help bring affordable service to rural areas has instead turned into something quite different: a bottomless and politically protected well of cash for cell phone companies that do big business in rural America.

Over the past four years, there’s been nearly a tenfold increase in government subsidies paid to a handful of so-called “competitive” providers — cellular phone companies paid by the fund to offer service in rural areas where an existing carrier already receives a subsidy.

The Universal Service Fund has collected $44 billion over its 10-year lifetime from a surcharge on the phone bills of nearly every American.

Regulators and lawmakers have long viewed the fund as inherently flawed. Even a member of the federalstate board that runs the program calls it “bizarre.” But efforts to change it have been derailed repeatedly by companies that benefit from the largess, and by supporters in Congress who represent sparsely populated states.

— Federal fee on phones is windfall for cell firms, By John Dunbar, ASSOCIATED PRESS, Updated: 07/29/07 6:37 AM

The article goes on to say wireless telephone companies benefit the most because they can connect rural customers at much less cost than landline telcos can. But that's not all.

Crack Google?

Cringely gets anxious over Google's floor bid for 700Mhz. After pointing out that Verizon and AT&T coming around to Kevin Martin's leaked counterproposal of watered down "open access" rules, he says:

Look who Google is up against -- all the largest Internet service providers in the U.S. Google will not win this even if they win the auction, because the telcos and cable companies are far more skilled and cunning when it comes to lobbying and controlling politicians than Google can ever hope to be. The telcos have spent more than a century at this game and Google hasn't even been in it for a decade. And Google's pockets are no deeper than those of the other potential bidders.

— Is Google on Crack?: Eric Schmidt bets the ranch on wireless spectrum, Robert X. Cringely, Pulpit, 27 July 2007

Cringely is missing the point about who Google is up against. These outfits have not been the largest ISPs for more than a century. They've been telephone companies for more than a century. And being around for a long time isn't necessarily a sure win. Look at the Vatican; it's been around for two thousand years, and it's managed to lose most of its traditional heartland of Europe. Sure, Google is fragile, in some senses even more fragile than Microsoft, as Cringely points out. But even Microsoft is losing market share from IE to an open source browser, Firefox. Google, as a proponent of open source that actually understands it, has a fair chance here. The incumbent duopoly telcos aren't really in the Internet business; Google is.

Maybe Cringely's right that Google alone couldn't win the auction. But Google and Sprint possibly could. Sure, Sprint is a phone company, too. But that doesn't mean it's going to side with the rest if it scents profit. Maybe with a little help from Apple.

Let's hope that's what Google is really up to, rather than expecting to get Martin to change the rules and then wait for AT&T to deliver another striped bass.

I also don't think Cringely is taking into account the stakes here.

Internet Robber Barons

Paul Krugman examines how far behind the U.S. is in every metric of Internet speed and broadband uptake, and why:

What happened to America’s Internet lead? Bad policy. Specifically, the United States made the same mistake in Internet policy that California made in energy policy: it forgot — or was persuaded by special interests to ignore — the reality that sometimes you can’t have effective market competition without effective regulation.

You see, the world may look flat once you’re in cyberspace — but to get there you need to go through a narrow passageway, down your phone line or down your TV cable. And if the companies controlling these passageways can behave like the robber barons of yore, levying whatever tolls they like on those who pass by, commerce suffers.

— The French Connections, Paul Krugman, New York Times, 22 July 2007

Krugman reminds us that as recently as 2001 the U.S. was far ahead. And then he gets specific.

The Internet As a Market: Al Gore and Reasoned Discourse

So I've been wondering what to say about Al Gore's book, The Assault on Reason. A story in The Economist helped me out. After lauding Gore for calling Mr. Bush's risky schemes well before most people, for denouncing the invasion of Iraq back in 2002, for his Oscar, and for being "the man who changed the climate of opinion climate change", it then ridicules the book's core thesis:

But he does not stop there. He worries about America's money-saturated politics. He lambasts television for infantilising the electorate.

...

He sometimes comes across as eccentric—as when he lambasts television for killing public discourse, then celebrates the internet as its potential saviour. A few minutes online, reading the zealots on either the right or the left, should have been enough to explode that illusion.

— Gore in the balance, From The Economist print edition, May 31st 2007

That last would appear to be the sort of trivialized, perhaps even infantilized, reaction Gore is lamenting. The big advantage of the Internet is you get not just a few zealots at extreme ends of an arbitrary spectrum: you get all the shadings and colors and depth you can absorb. And you can weave your own strands in this home-made tapestry.

Education Entertainment

EDUCAUSE is up in arms about a proposed amendment to the Higher Education Reauthorization Act that the Senate is supposed to be considering today. It basically makes the Secretary of Education an arm of the MPAA and requires institutions of higher education to police file sharing. I think this is the most interesting part of the amendment, where it's saying it will:

(1) the 25 institutions of higher education participating in programs under this title, which have received during the previous calendar year the highest number of written notices fromm copyright owners, or persons authorized to act on behalf of copyright holders, alleging infringement of copyright by users of the institution's information technology systems, where such notices identify with specificity the works alleged to the infringed, or a representative list of works alleged to be infringed, the date and time of the alleged infringing conduct together with information sufficient to identify the infringing user, and information sufficient to contact the copyright owner or its authorized representative; and

— Text of Amendments, SA 2314, Congressional Record -- Senate, 17 July 2007

So universities are supposed to keep lists of allegations against their students (or staff or faculty) and those lists can be used to determine their funding. Allegations, mind you, not convictions. This is once again the entertainment industry tail wagging the dog, in this case higher education. Hm, I suppose that's a bad analogy, since the entertainment industry seems to only understand the big head, not the long tail....

And as if to demonstrate Republicans have no monopoly on horribly bad ideas, this amendment is proposed by the Senate Majority Leader, Democrat Harry Reid. Is the Internet really that hard to understand?

-jsq

Google FCC Wireless Auction

Google CEO Eric Schmidt wrote to FCC Chair Kevin Martin Friday saying Google will commit the reserve price of $4.6 billion to the 700Mhz wireless spectrum auction if it goes forward with four open access conditions Google proposed in a July 9 letter. The four conditions are:

• Open applications: Consumers should be able to download and utilize any software applications, content, or services they desire;
• Open devices: Consumers should be able to utilize a handheld communications device with whatever wireless network they prefer;
• Open services: Third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms; and
• Open networks: Third parties (like internet service providers) should be able to interconnect at any technically feasible point in a 700 MHz licensee's wireless network.

— Google Intends to Bid in Spectrum Auction If FCC Adopts Consumer Choice and Competition Requirements, Press Release, Google, 20 July 2007 The Google 20 July letter actually says a minimum of $4.6 billion, so it will be interesting to see if Google bids up from there, not to mention who tries to outbid Google.

Internet Radio: DRM Air

Previously we saw a last-minute reprieve for Internet Radio. I read SoundExchange's press release, but I didn't catch this:

Under the new proposal, to be implemented by remand to the CRJs, SoundExchange has offered to cap the $500 per channel minimum fee at $50,000 per year for webcasters who agree to provide more detailed reporting of the music that they play and work to stop users from engaging in "streamripping" ­ turning Internet radio performances into a digital music library.

— SoundExchange Confirms Minimum Fee Offer: Reminds Commercial Webcasters of Obligations to Pay New Royalty Rates, Press Release, SoundExchange, 13 July 2007

Alan Wexelblat explains that part about "streamripping":

So it's that simple. Become our agents in preventing people from recording Web radio streams or face the financial axe.

— When is a Reprieve Not a Reprieve, by Alan Wexelblat , Copyfight, July 19, 2007

700Mhz and Competition

Positions on future uses of the 700Mhz spectrum formerly occupied by analog TV aren't just for presidential candidates anymore. Congress is hearing arguments:

Rep. Edward J. Markey (D-Mass.), who chairs the subcommittee that handles telecommunications and Internet issues, urged the FCC to "seize this opportunity to create an open-access opportunity for wireless service in this auction." He added that wireless carriers are "exerting far too much control over the features, functions and applications that wireless gadget makers and content entrepreneurs can offer directly to consumers."

— FCC Auction Should Allow for Open Wireless Network, Say Lawmakers, By Kim Hart, Washington Post Staff Writer, Thursday, July 12, 2007; Page D08

Some search, VoIP, and computer companies say auctioning off some of that spectrum with open access requirements would promote competition, while telcos claim it would hurt their investments, stifle competition, and reduce revenues to the government from the auction. I think it may well reduce direct government auction revenues, but the economic benefits of real competition should be worth it. You'd think the nominally free market supporting telcos would agree with that.

Internet Radio: Live Air?

Sunday was when Internet radio was supposed to turn into dead air, after even an emergency court hearing had failed. However, during a Congressional hearing Friday,

...Jon Simson, director of SoundExchange – the label-affiliated organization responsible for setting royalty rates – told Congress that the group would not enforce the new royalty rates and would continue to work on negotiating new rates with the Digital Media Association (DiMA), who are acting on behalf of webcasters. “This is definitely a step in the right direction,” Pandora founder Tim Westergren, told us this morning. “At this point, provided there’s good-faith negotiations, they’re not going to go after people.”

— Public Outcry Staves Off Destruction of Internet Radio, Evan Serpick, Rock & Roll Daily, Rolling Stone, 7/13/07, 12:54 pm EST

Is this any way to run a regulatorium? All the regulatory bodies stonewalling, the courts not listening, and only one man deciding not to proceed?

AT&T's Striped Bass

You may recall that the FCC at the last minute in 2006, after the elections and before the electees took office, agreed to some conditions on the merger of Bellsouth with AT&T. Among them was a $10/month DSL plan.

The merger commitment specifies that the plan had to be offered. That means to me that it has to be put forth as an option!!! (If there's a fifty pound striped bass somewhere out there in the ocean, that's not an offer of fish!)

So I don't think AT&T is honoring its $10/month commitment.

— Is AT&T Honoring its Merger Commitments? David Isenberg, isen.blog, Friday, July 06, 2007

This is the same $10/month service USA Today announced AT&T was developing back in January. Maybe they'll just keep "developing" it until the 48 month time limit expires, or make it available to a few people and claim they've honored their commitment.This is what SBC used to do: claim availability if one person per ZIP code could get a service, and the FCC let them get away with that.

Isenberg asks:

Do you think the FCC will investigate?

A Cisco Way

Cisco has a policy blog, in which they back no regulation before market failure:

In other words, there is no reason to rush to impose burdensome Net Neutrality regulations in the broadband market. If there is one thing that we have learned from 70+ years of communications regulation, it is that regulation has significant costs and unintended consequences. The FTC clearly recognizes that government should react to actual problems, not hypothetical ones.

It's funny how the Internet grew up with net neutrality, but now it's "burdensome." Maybe innovation and competition are burdensome to incumbents.

-jsq

Market Failure?

Here's an interesting directive from the White House:

The order requires federal officials to show that private companies, people or institutions failed to address a problem before agencies can write regulations to tackle it. It also gives political appointees greater authority over how the regulations are written.

— House Balks at Bush Order for New Powers, By Jim Abrams, The Associated Press Tuesday, July 3, 2007; 8:16 PM

How does this work?

Broadband Produces Employment

Many have assumed that broadband is good for the economy; now here's a study with rivets:

More specifically, for every one percentage point increase in broadband penetration in a state, employment is projected to increase by 0.2 to 0.3 percent per year.

— The Effects of Broadband Deployment on Output and Employment: A Cross-sectional Analysis of U.S. Data, By Robert Crandall, William Lehr and Robert Litan, Brookings Institution, 2007

Of course, this is like saying every state in medieval Germany that had a printing press produced employment in the printing industry. There are economic and social effects far beyond mere employment. What should be done?

The paper has a few recommendations:

The surest route to lower prices is provided by increasing competition in the delivery of broadband services.

The Tree of Liberty

On this day in the United States we celebrate the Declaration of Independence with

Pomp and Parade, with Shews, Games, Sports, Guns, Bells, Bonfire and Illuminations

as John Adams recommended in 1776.

The Declaration laid out a "a long train of abuses and usurpations" and referred to "certain unalienable Rights", which the former colonials went on to spell out in a written Constitution (the oldest in the world today) to which they added a Bill of Rights. Is their work done?

FTC: What, Me Worry?

The U.S. Federal Trade Commission (FTC) says there's no need for net neutrality:

FTC Chairwoman Deborah Platt Majoras said that without evidence of "market failure or demonstrated consumer harm, policy makers should be particularly hesitant to enact new regulation in this area."

So in a "market" where the average customer has at most two choices, we're supposed to wait for a market failure?

Giant Beasts Gently Swatting

Susan Crawford pithily describes the current Internet access market:

The duopoly is something like Shamu and Godzilla on hire for televised wrestling – giant beasts gently swatting at one another for the cameras. They aren’t competing, these giants. There is a clear failure in the market for highspeed internet access in this country.

— Moving Slowly in the Fast Lane by Susan Crawford, Susan Crawford blog, Tue 19 Jun 2007 10:29 PM EDT

What is to be done?

Internet Deconstructs Spin?

Joe Trippi thinks the Internet changes politics from spin to something better:

Internet activism is spelling the end for the age of spin, the online campaign guru Joe Trippi will warned two British politicians, suggesting that the rules for dealing with "old media" no longer apply.

...

"Command and control ... [is] a disaster in the peer-to-peer social network world."

— Does the Internet Spell the End of Political Spin? By Tania Branigan, The Guardian. Posted June 15, 2007.

Dave Weinberger suggests more or less the same thing, somewhat less optimistically,

Media Ownership

While we're on the general subject of postal and Internet rates and a free press,, let's look at who owns the U.S. media:

In 1983, 50 corporations controlled the vast majority of all news media in the U.S. ... When the 6th edition of The Media Monopoly was published in 2000, the number had fallen to six. Since then, there have been more mergers and the scope has expanded to include new media like the Internet market. More than 1 in 4 Internet users in the U.S. now log in with AOL Time-Warner, the world's largest media corporation.

In 2004, Bagdikian's revised and expanded book, The New Media Monopoly, shows that only 5 huge corporations -- Time Warner, Disney, Murdoch's News Corporation, Bertelsmann of Germany, and Viacom (formerly CBS) -- now control most of the media industry in the U.S. General Electric's NBC is a close sixth.

— Number of corporations that control a majority of U.S. media, Media Reform Information Center, accessed 21 June 2007

This might be worth remembering the next time you hear that the market will sort out any problems and there's no need for regulation. Would that there were a market so that that could be true.

-jsq

None Should Be Favored

What's the theory behind the recent postal rate changes? The Chairman of the Postal Board of Governors spelled it out 27 years ago:

"...none should be favored and none benefited. Each party pays the cost of service it consumes, not less, and does not bear the cost of others’ consumption."

— James C. Miller III and Roger Sherman, “Has the 1970 Act Been Fair to Mailers?” in Roger Sherman, ed., Perspectives on Postal Service Issues 63 (1980).

And the Postal Regulatory Commission is following that theory.

Postal Radio?

What's the point of a free press if it can't be delivered?

To the surprise of many independent publishers, in February the Postal Regulatory Commission (PRC), the body in charge of determining postal rates, rejected a rate-hike plan that was submitted by the U.S. Postal Service, the people in the business of delivering the mail for the past 215 years. This plan was widely understood to call for an approximate 12 percent increase that would have hit all publications more or less equally.

Instead the PRC adopted a revised version of an extremely complicated proposal submitted by media conglomerate Time Warner that included a number of possible discounts favoring the largest publishers.

— Postal Rates = Free Press, Rate hike pushed by media conglomerate Time Warner threaten small and medium-circulation publications, By Robert W. McChesney, In These Times May 17, 2007

Why Time Warner?

Student Loan Regulatorium

This is a kind of thing that can happen when the regulators aren't really interested in regulating:

When Jon Oberg, a Department of Education researcher, warned in 2003 that student lending companies were improperly collecting hundreds of millions in federal subsidies and suggested how to correct the problem, his supervisor told him to work on something else.

Jon Oberg, a former Department of Education researcher, warned that student loan companies were abusing a subsidy program and collecting millions in federal payments to which they were not entitled.

The department “does not have an intramural program of research on postsecondary education finance,” the supervisor, Grover Whitehurst, a political appointee, wrote in a November 2003 e-mail message to Mr. Oberg, a civil servant who was soon to retire. “In the 18 months you have remaining, I will expect your time and talents to be directed primarily to our business of conceptualizing, competing and monitoring research grants.”

For three more years, the vast overpayments continued.

— Whistle-Blower on Student Aid Is Vindicated, By Sam Dillon, The New York Times, May 7, 2007

It wasn't so much turning a blind eye, as claiming there was no eye.

Could this happen in the U.S. telecom/ISP regulatorium?

-jsq

Exogenous Technological Change

Here's a good backgrounder video on where the Internet came from and where it may be going: Humanity Lobotomy. See especially the part by Larry Lessig about how printing presses in the early days cost about $10,000 in 2007 dollars, and lots of people had one and published books and pamphlets.

What did the telephone companies have to do with inventing the Internet?
Nothing.
The browser?
Nothing.
The World Wide Web?
Nothing.
What have they had to do with the Internet from the beginning of time?
Nothing.

--Bob Kahn

What did they invent?