Nel's New Day

February 4, 2015

Net Neutrality off Life Support

I have two questions for you:

  1. Do you use the Internet?
  2. Do you ever get impatient?

If you answer yes to both these questions, you may think the following news is wonderful.

Federal Communications Commission (FCC) Chairman Tom Wheeler has asked for authority to enforce open Internet protections. For years, there has been a threat to equal access to the Internet, made worse by the Washington, D.C. Circuit Court ruling against fair access to the Internet. If Wheeler’s proposal succeeds, Title II of the Communications Act will stop service providers from charging some content providers, for example Netflix, more money than others for access. The plan includes equal rules for both mobile and fixed networks. FCC commissioners will vote on the plan later this month. The four other commissioners are equally split between Republicans and Democrats.

Another part of the plan is to give the FCC authority over points of interconnection between an Internet service provider and the rest of the Internet. The agency will also be able to investigate complaints about unfair interconnection activities.

Wheeler appeared to waffle about the concept of “net neutrality,” blocking charges for faster service, until President Obama supported the plan in November. A FCC official said that reactions from financial analysts and ISPs such as Sprint showed that the plan could work without harming investments. The question is whether the final plan will have loopholes for these companies.

Telecom and cable companies fighting the plan are upset. Doug Brake, telecommunications policy analyst at the Information Technology and Innovation Foundation, stated that the decision is an “unjustified, overblown response to what has in actuality been a by-and-large hypothetical concern.” (Netflix has already been charged more to get speed equal to other companies.) These corporations are hoping that congressional Republicans will strip FCC of the authority to require strong Internet protections.

In a piece published in Wired, Wheeler wrote about his past experience as the president of a startup, NABU: The Home Computer Network. Its delivery time was hundreds of times faster than Steve Case’s AOL, he said, but NABU went broke because it had to depend on cable television operators to grant access to its systems. Case had access to unlimited customers because they used the telephone network rather than cable. Wheeler explained his change from using “commercial reasonableness” under Section 706 of the 1996 Telecommunications Act as the basis for his decision: “I became concerned that this relatively new concept might, down the road, be interpreted to mean what is reasonable for commercial interests, not consumers.”

Wheeler added, “My proposal assures the rights of internet users to go where they want, when they want, and the rights of innovators to introduce new products without asking anyone’s permission.”

Verizon had “won” the lawsuit that stopped the FCC from giving fair access to Internet providers. After the corporation sued to block the FCC’s 2010 net neutrality order, the court threw out FCC rules against blocking and discrimination. The ruling stated that the FCC was wrong by imposing per se common carrier rules applied to the former telephone network onto broadband without first classifying broadband providers as common carriers. It left the door open for the FCC to do exactly that, making the outcome worse for Verizon and fellow ISPs. The proposed rules stop speeding up, slowing down, or blocking broadband Internet traffic just like regulations dating back to the early days of the telephone business.

The FCC vote on February 26 will lead to lawsuits, no matter which side comes out on top. The broadband industry—telecom, mobile, and cable providers—has deep pockets and argue that these rules would stifle network investment and strangle innovation. Michael Powell, a former chairman of the FCC and now CEO of lobbyist trade group National Cable and Telecommunications Association, said that any attempt to reclassify broadband under Title II would amount to “World War III.”

Meredith Attwell Baker, CEO of the CTIA wireless trade group, claims concern “that the FCC’s proposed approach could jeopardize our world-leading mobile broadband market.” She hasn’t read any of the thousands of articles on the Internet showing that people in the United States pay more and get less from their web connection. In Europe, the Internet speed makes the speed in the U.S. seem sluggish, and the cost there can be about $56 a month for broadband—Internet, television, and telephone combined. One study ranks the U.S. 16th in the world in speed and cost of broadband connections.

Internet in the UK comparable to the U.S. is $6 per month. The government paid nothing to develop the Internet, but government regulations force more competition in the market. America’s AT&T and Verizon are members of a consortium that is pushing for faster broadband service in the UK. They want more competition but say that the policies they support in Europe would be a big mistake for the United States.

About a year ago, BBC published an article on how the United States compares to other countries in the world. As it points out, many people in the U.S. even have to rent the modem (we do!). One user said, “That’s like a rental car company charging customers an extra $7 fee per month to include the steering wheel.” Yup.

Under Wheeler’s proposal, the FCC cannot set rates for ISPs or tariffs. It also cannot require ISPs to share lines to customers with rivals offering a competitive Internet service. Wheeler pointed out that mobile service is governed in the same manner as his proposal. “Over the last 21 years, the wireless industry has invested almost $300 billion under similar rules, proving that modernized Title II regulation can encourage investment and competition,” he said. His justification for putting the Internet on an equal basis with wireless networks is that over half the people in the United States access the Internet on mobile devices. “Wireless can’t carry 55 percent of the Internet’s traffic and expect to be exempt from Open Internet requirements,” he said.

Wheeler’s draft rules have even more provisions to irritate big broadband corporations. The proposal enforces consumer privacy rules; charges Internet providers to help subsidize services for rural Americans, educators, and the poor; and ensures that services such as Google Fiber can more easily build new broadband pipes. Providers would not be required to contribute to the subsidy fund initially, but the proposal makes this possible later if the FCC thinks the fund is necessary. The existing Universal Service Fund helps schools and libraries buy Internet service, reduces the cost of telephone service for low-income Americans, and subsidizes connectivity for rural areas.

The impetus last summer was lagging until John Oliver, late-night comedian of Last Week Tonight who started on Jon Stewart’s The Daily Show, gave a 13-minute rant about the lack of net neutrality. The resulting millions of comments demanding net neutrality briefly shut down the FCC website. That success was followed by Mozilla, the maker of the popular Firefox browser, suggesting that the FCC split the Internet in two. Wheeler explored the hybrid plan, but President Obama’s urging may have led Wheeler to drop the idea in favor of the current proposal.

Net neutrality, which seemed to be on life support just a year ago, may become law of the land. If it does, it will make a fortune for the lawyers from the broadband industry.

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