Senate Panel Rejects Rules On Net Access

[jaguarr]

http://www.boston.com/business/tech.../29/senate_panel_rejects_rules_on_net_access/

Senate panel rejects rules on Net access

Measure fails to be included in telecom bill

By Bloomberg News | June 29, 2006
A US Senate committee rejected rules that would bar telephone and cable providers from charging companies including Google Inc. new fees for priority access to their high-speed networks.
The Senate Commerce, Science and Transportation Committee decided yesterday, in an 11-11 vote, against attaching the so-called network neutrality measure to a bill making it easier for telephone companies to sell television service. A measure must have a majority of votes to pass.
``Imposing a heavy handed regulation before there's a demonstrated need is wrong," said Senator Ted Stevens, an Alaska Republican who chairs the committee and wrote the bill. Stevens, whose bill passed in a 15-7 vote, joined most other committee Republicans in opposing the neutrality measure.
The vote is a setback for Google, owner of the most-used Internet search engine, Amazon.com Inc. and other Web companies that say they should be able to send video and other data at high speeds without paying a premium.
Phone companies including AT&T Inc. and Verizon Communications Inc. and cable companies such as Comcast Corp. oppose efforts to bar them from levying new fees to recoup billions of dollars spent on high-capacity networks.
Stevens's legislation would allow the Federal Communications Commission to fine phone and cable companies if they block subscriber access to legal content or services.
Proponents of tougher neutrality rules said Stevens's bill wouldn't stop broadband providers from favoring some companies over others that offer the same type of Web content or services.
Republican Senator Olympia Snowe of Maine, who cowrote the neutrality proposal with Senator Byron Dorgan, a Democrat from North Dakota, said before the vote that a failure to enact the measure would destroy the open nature of the Internet.
``What you will have is a monopolistic, duopolistic controlled network," she said. ``Broadband operators will be able to pick the winners and the losers."
Proponents of tougher neutrality rules said they will try again to add such language to Stevens's bill when the full Senate takes it up. The bill could move to the Senate floor in September, Stevens said.
Stevens said inclusion of the Snowe-Dorgan proposal would kill the bill's prospects for enactment because the House of Representatives would reject it.
``If we leave it out, we have a substantial chance of passing the most-comprehensive, consumer- oriented communications bill in history," Stevens said.
The US House of Representatives rejected similar neutrality rules June 8 in a 269-152 vote before approving, 321-101, a bill to ease phone companies sale of TV.
Stevens's bill would streamline the process for phone companies to obtain video licenses from local governments, allowing them to expand more quickly and take on rivals such as Comcast Corp., the biggest US cable-TV provider.
``Congress is close to producing a tangible victory for consumers -- lower cable TV bills and greater video choice," Peter Davidson, Verizon senior vice president for federal government relations, said in an e-mailed statement after the committee approved the bill.


So what do folks think about this? I'm really not happy with the way our government seems to be catering to their corporate buddies with this stuff.

jag

 

[Darthphere]

I wish I could comment, but to be honest I dont fully understand whats going on.

 

[jaguarr]

I wish I could comment, but to be honest I dont fully understand whats going on.

As usual, money is at the underbelly of this. The crux of this issue is about preventing larger bandwidth providers from levvying fees from big businesses in exchange for giving their websites and content higher priority in terms of speed and availability, or even exclusivity through outright blocking of their competition, on their networks. Imagine being an AOL customer for example and being flat out unable to access certain websites because they couldn't afford to or wouldn't pay the extortion fees that AOL wanted in order to even allow their sites to be accessed through their service. What this effectively does is gives huge advantages to big companies who can afford to pay for that priority, and strips the ability of smaller web based companies to compete. It also puts limitations on what information is accessible to you, depending on what ISP you are using and whether they are filtering content, which goes against the grain of what has made the internet such a powerful and amazing entity. In short, it undermines free competition and lends itself to corporate agenda. Imagine being unable to only use Verizon Classifieds but never be able to get to Craigslist. Or trying to go to campusmeals.com to order a pizza but only be able to get the Pizza Hut website. Or trying to go to Wikipedia and only being able to get the Microsoft Encarta website.

jag

 

[jaguarr]

Here's a good opinion piece that captures the issues at hand, here:

http://seattletimes.nwsource.com/html/opinion/2003092244_telecom29.html

Telecom bill would leave U.S. lagging behind rest of world

By Michael Weisman
Special to The Times

The new telecommunications bill before Sen. Ted Stevens' Senate Commerce Committee this week has been touted as reform of the cable-franchise laws. But it is much, much more. The bill is really a wholesale rewrite of the Telecommunications Act of 1934, the world's oldest existing telecom law. It is probably the most important piece of legislation the Congress will take up this session.

Living in the Silicon Forest, we've come to take certain things for granted. Our tech startups and venture-capital firms have learned to assume that Internet and telecom networks will be a platform for innovation open to anyone who can pay the freight for success. Workers have come to rely on fast and plentiful Internet access open to any type of device or application. Major retailers like Amazon, REI, Powell's Books and PC Connections have come to rely on the Internet as a route into the living rooms of customers all over the world.

Under Stevens' bill, all that will change. The telecoms will be able to split Internet access into premium lanes, segregating access to customers based on the content, origin and purpose of the data or bits. Amazon will have to pay the network operator for access to customers, finally legitimating the dream of telecom executives to tax the eyeblinks of every user. Apple will have to pay the networks to allow its customers to download iTunes music and video. If it chooses, the network can simply block iTunes music or Amazon book purchases, redirecting customers to another service the network operator prefers. In fact, there is no guarantee that Internet access, as we know it today, will continue to exist at all.

The thousands of startup visionaries living in the Northwest might want to find their passports, because creating new business models in the U.S. will become much more complicated, and expensive. In the rest of the developed world, it won't be a problem, because every developed country has a strong network-neutrality law in place, extending not just to the Internet, but also to mobile networks, cable TV and television. Stevens' bill puts the U.S. out of step with the rest of world, a world that is fast passing us in productivity, the knowledge economy and broadband connectivity.

The telecom and cable duopoly arguse that it's necessary to impose a monopoly business model on the Internet in order to generate enough profits to upgrade the existing infrastructure and roll out new advanced services to the public. To date, the U.S. government has provided more than $200 billion to these companies as an incentive to upgrade their networks to the international norm.

We haven't seen much in return for this "free lunch." The duopoly enjoys below-market rates for tunneling under the sidewalks and streets, or hanging its wires in front of views. Still, the public has seen no competition to speak of, and the network operators shut out the many thousands of companies that tried to provide competition in the past 10 years.

The purpose of Stevens' bill is not to bring competition in cable TV or the Internet. There has never been any barrier to local competition, except the desire to compete. The purpose of the bill is to roll back the middling efforts at competition that Congress has enacted over the past two decades.

Leaders of the telecom and cable duopoly tell us to trust them, because this time they really mean it, competition and advanced services will come ... in 10 to 12 years. After all, their Astroturf Web sites and push polling tell us, you can't trust the government, so you are left with the cable and phone companies as your only friends. This means we're in big trouble.

The telecom and cable duopoly will find its respective monopolies enshrined in the law, with no obligation to play fairly with new entrants to the market (there can't be any under Stevens' bill), no requirement to carry traffic for "freeloaders" like YouTube, iTunes, Amazon, Real Networks or MSN, and no fear of future entrepreneurs like Jeff Bezos, Sergey Brin or Craig McCaw horning in on the action.

Local franchising is only a small piece of this bill, and, yes, it needs reform. But it is dead wrong to claim that local franchising authorities have stifled competition. Any company that wishes to enter any community may do so at any time, and that has been the law for decades.

It would be a waste of valuable ink to reiterate the virtues of a free and open Internet. They are demonstrated every day in the pages of this newspaper, and in its excellent Web site and online news services. But we stand a very good chance of seeing these important democratic tools disappear, or at least be far less effective than the alternative.

The alternative is real. Every other major developed country has strong network-neutrality laws in place, far stronger than anything the Congress is considering in any of the many amendments to Stevens' bill.

Because these countries have strong laws, keeping the networks open to competition and free for any budding startup to use, they have far surpassed the U.S. on the information highway. They have faster networks, lower fees and more-advanced services like IPTV, distance learning, and remote medical and security monitoring. Their networks are more reliable and secure, because reliability, security and speed are built in.

While not as tangibly exciting as the space race, or with the threatening specter of Sputnik circling overhead, our national efforts to move into a 21st-century knowledge economy are every bit as important. This is a race we do not want to lose; it is a race we cannot afford to lose.

Michael Weisman is a Seattle attorney and expert in telecommunication law and policy. He is a policy adviser to Reclaim the Media and other public-interest groups.


Bottom line, the ONLY people who would benefit from this crap is the telecom industry. There's a reason Microsoft, Google, Yahoo, Apple and so many others are against this.

jag

 

[Darthphere]

Hmmm, I see. How will this affect those random Geocities Anime sites and stuff like that?

 

[jaguarr]

Hmmm, I see. How will this affect those random Geocities Anime sites and stuff like that?

Say you're using BellSouth, who requires extortion fees from web sites in order to even display their sites to their customers. Geociities can't or won't pay those fees to BellSouth, so BellSouth then blocks all Geocities content on their network. End result: you can't get to the Geocities Anime sites as a BellSouth customer. Period.

jag

 

[Darthphere]

Say you're using BellSouth, who requires extortion fees from web sites in order to even display their sites to their customers. Geociities can't or won't pay those fees to BellSouth, so BellSouth then blocks all Geocities content on their network. End result: you can't get to the Geocities Anime sites as a BellSouth customer. Period.

jag

I see, this is incredibly stupid.

 

[jaguarr]

I see, this is incredibly stupid.

I'll give you another example. Say you want to visit the Google video site, but Google has refused to pay AOL extra fees to cover the "cost" of extra data streaming from their video site, so AOL limits or blocks access to Google video. No Google video for you. That's actually one of the concerns Google has raised over this, too.

jag

 

[Darthphere]

Isnt this bordering on unconstitutional?

 

[jaguarr]

Isnt this bordering on unconstitutional?

Possibly. It's definitely anti-competitive and blatantly illustrates the level of favoritism some of the people in our government give to their corporate buddies. To the point that it's borderline corruption, in my book. The U.S. government needs to get over the fact that the internet is a worldwide entity and they don't have a right to try to do these kinds of things with it, in my opinion. Especially when there is no benefit to the government to do so, only to their telecom pals (which is ironic since the internet infrastructure and technology was initially funded by the U.S. government and now the telecom's are pretending like THEY own it lock, stock and barrel), AND especially in a time where the U.S. government has criticized China for their censorship on the 'net. Hypocrisy is okay as long as there is money involved, apparently.

jag

 

[Darthphere]

Im just saying this could particularly be argued to be an obstruction of freedom of speech, press, and even assembly. It depends on the interpretation. I can just see me now looking up the news and only get Foxnews.

 

[jaguarr]

Im just saying this could particularly be argued to be an obstruction of freedom of speech, press, and even assembly. It depends on the interpretation. I can just see me now looking up the news and only get Foxnews.

It's not entirely out of the question for the constitutional impact of this stuff to be called into the limelight at some point. There are some BIG corporate dollars at play from companies like MS, Google, Apple and many others that want to see net neutrality and fair competition preserved because it could become VERY expensive for them otherwise, having to pay all these extortion fees to all these providers since they have such high profile, profitable services. These are companies with deep legal benches and some hefty legal funds to throw at issues like this. It could get very ugly.

jag

 

[lazur]

This is a very tricky thing.

One the one hand, the cable and phone companies own the lines used for high speed internet (and slow speed internet also, for that matter), so to say it's 'unconstitutional' for those companies to expect something in return for the use of those lines is probably pushing it. It's not unconstitutional to expect payment when someone uses something you have provided for use. That's just the nature of business.

On the other hand, it has the potential of upsetting the internet as we know it today, so I'm completely against it in its current proposed state.

I have no problems with the telecom companies making some money for the networks they provide (up until now free, at least to the end users, being us), but I'm also not knowledgeable enough about what is currently being paid to them for the use of these networks, if anything at all.

 

[vindrow]

Smacks of a monopoly, and the most stupid thing they could do.

 

[jaguarr]

Found another good article that breaks down why this is a mess:

http://blogs.chron.com/bluebayou/2006/06/net_neutrality.html

June 29, 2006
The changing internet
By John Whiteside

You've probably heard a bit about the ongoing net neutrality debate; it's not over, but the concept of net neutrality took a blow yesterday when a Senate committee rejected a proposal to include language requiring it in a telecommunications bill.

So what's this all about?

I'm not going to try to explain the entire arguments for and against net neutrality. But here's a brief explanation and some links.

There's an old and established idea in telecommunications called "common carriage" that's formed our sense of how telecom services work: the idea that telecoms are providing a highway (to use the most obvious analogy) on which traffic travels - phone calls and now data. They build the highway, we pay them to use it (by placing a call or by transmitting data). We can pay to have a simple low-tech access "ramp" (such as POTS, or "plain old telephone service"), or we can pay for more: from DSL to a T1. Once our traffic enters that highway, it's all handled the same way.

Network operators (the big telecoms like AT&T and Verizon and cable operators like Time Warner and Comcast) would like to change that. They would like to be able to offer premium services - so, for example, if Google wants to make a deal with them, they can have their traffic travel on newer, faster networks while my data keeps plugging along on slower routes.

At first glance, this doesn't seem like a crazy idea - if a company is willing to pay for their own special "fast lane," why shouldn't they be able to? That's a free market at work, right?

The problem is that we are talking about a market that's controlled by an oligopoly of a handful of network providers, with extremely high entry costs that make it essentially impossible for anyone else to enter it.

If you haven't been following the debate closely, here are some places where you can get both sides of the argument:

* Vint Cerf, one of the people who helped design and build the internet at the Department of Defense, has been one of the clearest voices talking about why net neutrality is important; here's a letter he wrote to the House committee that considered (and rejected) net neutrality.
* Here's the web site of It's Our Net, a pro-neutrality group.
* Here's the web site of a group that says that net neutrality means burdensome government regulation.
* This InfoWorld article talks about the unusual alliances that have formed between groups taking stands on this issue.

There's been a lot of heated, and somewhat misleading, rhetoric on both sides of the argument as people try to frame the debate in ways that they think will make sense to consumers. That's not surprising; telecom legislation is by its very nature very complex and tends to make peoples' eyes glaze over, so there's a tendency to see it reduced to sound bites. But there are some key issues that I think are worth paying attention to.

It's easy to see why network operators want to be able to create different tiers of service. It's a source of revenue. When this debate began, we heard people like the chairman of AT&T (then SBC) complaining about how content providers like Google and Yahoo! are getting a "free ride," which was just stupid; while you and I pay our monthly fees for our connections to the net so we can view their content, they're paying a whole lot more to connect their data centers to the network. There's no free ride there (and that language has faded away a bit, probably because no one was fooled by it).

What has happened is that the network operators are working off of business models and pricing structures that don't work anymore. We are accustomed to "all you can eat" internet access, and as services like streaming video, voice over IP, and other things that eat up lots of bandwidth become common, we're costing the providers more. So they're looking for new revenue sources. But nobody wants to be the first one to tell DSL and cable modem customers that from now on, your basic monthly fee covers a certain amount of bandwidth, and when you go over it, you pay more. That's a completely fair way to price things (and more in line with how businesses pay) and there's no legal reason it can't be done.

Network operators are also preparing to invest in a lot of new infrastructure to make the network faster and more reliable; they are looking for ways to recoup that investment as quickly as possible, and shaking a lot of cash out of the Googles and eBays of the world is an obvious approach. It's a bit like realizing that someone is driving trucks loaded up with diamonds on your highway, and deciding that they have to pay more because their cargo is valuable.

And this gets to the disturbing aspect of the telecom's position: they have realized that the real value of their network is not the network itself, but the information travelling over it. AT&T makes its money by building and selling infrastructure, but there's a much higher value-add for offering an innovative service delivered over that network. So they want to move into that game, either by building more capabilities into the network, or by shaking down the people who are using the network to get their innovative business idea to customers.

This is where ending net neutrality becomes a potential innovation killer. Ending net neutrality will raise the entry costs for new businesses. We've seen companies like Google and eBay rocket from startups with brilliant ideas - better search technology, creating a global, dispersed marketplace - into giants. That's going to get harder when established players (which is what those companies are now) have an advantage in reaching customers.

It's also disturbing to think that companies as hostile to their customers are the telecoms could take on a gatekeeper role. These are the companies are allergic to innovation and have explicitly told us that their business model is shaking as much extra money out of their customers as possible. Should net neutrality end, I think we're heading down a path toward network operators exercising more control over how their networks are used - and some of the innovation happening now competes with them. What happens when a voice over IP provider like Skype or Vonage has to negotiate with AT&T and Verizon to offer their services? Or someone like YouTube, offering video over the network (something that telecoms are moving into)?

What the telcoms are calling an option for them to operate freely is potentially a way for them to stifle new competition - and they've got a very poor track record in this area.

Consider the state of broadband access in the US, and it becomes very hard to trust that we won't see all kinds of problems if net neutrality ends. One of the arguments that the telecoms have made that sounds pretty compelling is that they are going to invest in new infrastructure, and they have to pay for it somehow. That makes sense until you see the job they've done with today's infrastructure.

Here's an ugly truth: broadband in the US is low quality and expensive. Salon.com took a look at the situation last year:

Next time you sit down to pay your cable-modem or DSL bill, consider this: Most Japanese consumers can get an Internet connection that's 16 times faster than the typical American DSL line for a mere $22 per month.

Across the globe, it's the same story. In France, DSL service that is 10 times faster than the typical United States connection; 100 TV channels and unlimited telephone service cost only $38 per month. In South Korea, super-fast connections are common for less than $30 per month. Places as diverse as Finland, Canada and Hong Kong all have much faster Internet connections at a lower cost than what is available here. In fact, since 2001, the U.S. has slipped from fourth to 16th in the world in broadband use per capita. While other countries are taking advantage of the technological, business and education opportunities of the broadband era, America remains lost in transition.

How did this happen? Why has the U.S. fallen so far behind the rest of its economic peers? The answer is simple. These nations all have something the U.S. lacks: a national broadband policy, one that actively encourages competition among providers, leading to lower consumer prices and better service.

Instead, the U.S. has a handful of unelected and unaccountable corporate giants that control our vital telecommunications infrastructure. This has led not only to a digital divide between the U.S. and the rest of the advanced world but to one inside the U.S. itself. Currently, broadband services in America remain unavailable for many living in rural and poorer urban areas, and remain slow and expensive for those who do have access.

Which brings us back to my point that there is not a free market in the US for these services; there are a few giants controlling 98% of our broadband market, and the result has been poor and expensive service. It's interesting to hear then talk about their exciting new television-over-IP services; if you lived in France, you could already have that today, for less money than it will cost in the US. (And they've delivered it without the changes in how the internet works that the American telcos insist are needed for it to work.)

So we have the people who've done a terrible job serving the public so far asking for more power to control the market. This is a recipe for disaster.

Vint Cerf has argued that ending net neutrality will simply push innovation out of the US. I think he's right, but overly optimistic; in Europe, the big telecoms are watching what we do closely. If our network operators are successful in ending net neutrality, we can expect similar arguments in the EU (where I think they'll face more opposition).

All of that said, I've found the messages from net neutrality proponents rather frustrating. There's been a lot of vague talk about "discrimination" that will come if net neutrality goes. They're not wrong, but they wind up sounding like they are talking about some kind of anti-competitive government control, and that does not resonate with Americans. I think this is one of the reasons that there's been relatively little public outcry about the issue.

What net neutrality does is introduce more competition into an area that, because of its fundamental economics, is never really going to be a free market they way we usual think of "free markets." Building infrastructure costs money; you or I can't decide to become the next network operator, set up shop, and start laying fiber. That is exactly the kind of market where some straightforward, easy to implement regulation is needed.

There's quite a bit at stake here, and it's disappointing to see Congress failing to take these issues into consideration. The telecom lobby is rather large and powerful, and throws a lot of money around Capitol Hill. And that works in DC.

It's also quite disappointing (though not surprising) to see our own Sen. Kay Bailey Hutchison, who sits on the committee that rejected net neutrality, voting against it.

The issue isn't dead; this was a committee vote, and net neutrality is still an issue. If you think the way the internet has worked up to now is a good thing, it's worth doing some reading on the issue, and contacting your legislators to let them know what you think about it. Should the network operators prevail, a few years from now you might be using an internet where folks like Verizon and AT&T exert a lot more control over what you do with it. That's a disturbing thought.


jag

 

[Edward Brock]

This sucks donkey balls. More info on this in my sig.

 

[logansoldcigar]

Tim Berners-Lee is dead set against this as well.

 

[Darthphere]

Im glad to see some big guns like Microsoft and Apple going up against this, even if its for selfish reasons.