[Chtechcomm] Congress considers broadband fees

Joel Dunn joel at jdunns.com
Thu Feb 9 19:30:31 EST 2006

More on this topic, from Bill St. Arnaud's mailing list...

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[Here is a couple of excellent papers on the importance of Network
Neutrality.  The first is testimony given by Vint Cerf to the Senate
committee looking at the issue, and the second is testimony from Public
Knowledge - an advocacy group that defends consumers' digital rights. There
is general agreement that facilities based competition in the last mile is a
much better solution, rather than regulatory or legislative imposition of
network neutrality. But as Vint Cerf points out in his remarks, despite all
the promise, facilities based competition from wireless and other services
has declined in the past few years.  Thanks to Vladimir Prodanovic for the
pointer to Public Knowledge.  Some excerpts -- BSA]


The Internet's open, neutral architecture has proven to be an enormous
engine for market innovation, economic growth, social discourse, and the
free flow of ideas. The remarkable success of the Internet can be traced to
a few simple network principles - end-to-end design, layered architecture,
and open standards -- which together give consumers choice and control over
their online activities. This "neutral" network has supported an explosion
of innovation at the edges of the network, and the growth of companies like
Google, Yahoo, eBay, Amazon, and many others. Because the network is
neutral, the creators of new Internet content and services need not seek
permission from carriers or pay special fees to be seen online. As a result,
we have seen an array of unpredictable new offerings - from Voice-over-IP to
wireless home networks to blogging - that might never have evolved had
central control of the network been required by design.

Allowing broadband carriers to control what people see and do online would
fundamentally undermine the principles that have made the Internet such a

As of December 2004, the FCC's figures show that incumbent cable and
telephone company broadband services together constitute 98.7 percent of the
total market. This leaves only 1.3 percent of the current market for
alternative broadband networks such as wireless, satellite, and BPL.
Shockingly, the share of alternative networks has shrunken steadily, from
2.9 percent in December 1999. Thus, even the FCC's own figures demonstrate
that there are only two dominant and only partially-competitive modalities -
cable and telco -- and a tiny and declining share of third modalities.

To me, as a scientist, it comes down ultimately to questions of physics and
economics. First, can such alternative networks be built, given the
limitations of available network atoms and radio spectrum? Second, will such
alternative networks be built, given the immense time and effort involved?
Whether we are discussing BPL or WiMax or satellite, the prospect of a
near-term, ubiquitous competing broadband platform does not appear

In the absence of any meaningful competition in the consumer broadband
market, and without the user safeguards that have governed similar last-mile
competition to date, one would expect carriers to have an economic incentive
- and the opportunity -- to control users' online activity. Not
this incentive is already manifesting itself.

Consumer Group Touts Benefits of Net Neutrality

by Cheryl Bolen

A report released Feb. 6 by Public Knowledge, an advocacy group that defends
consumers' digital rights, found that the U.S. economy and society would
benefit more from an open Internet than from having carriers exercise
greater control over their networks.

Supporters of the white paper outlined its findings for reporters on the eve
of a hearing on net neutrality in the Senate Commerce, Science, and
Transportation Committee. Although that committee has not introduced a bill,
the House Energy and Commerce Committee has released a staff draft of
legislation that contains net neutrality language.

The 58-page report was authored by John Windhausen, the former president of
CompTel, a trade association representing competitive local exchange
carriers. The report was meant to be both a reference guide and an advocacy
tool for those seeking net neutrality requirements.

Gigi Sohn, president of Public Knowledge, said net neutrality is the
principle that permits any consumer to visit any Web site, attach any
device, and access any content over the Internet. It also ensures that any
application, content, or service provider can reach any consumer without
blocking, degradation, or impairment.

"We think it [the report] makes a very strong case for Congress to codify a
straightforward and enforceable net neutrality requirement," Sohn said.

Without such a requirement, an emerging trend will likely increase in which
broadband network operators behave like traditional cable operators, picking
and choosing which content providers and services get favored treatment over
their networks.

Among the benefits of net neutrality requirements are the expanded growth of
e-commerce, new applications and consumer equipment, innovative uses by
educational institutions, increased choices in entertainment, and increased
communications and applications choices, she said.

The report also responds to the four major objections made by network
operators to an enforceable net neutrality principle, Sohn said. The report
contains model legislative language to codify net neutrality.

"Contrary to what the network providers would have you believe, we don't
think that you need a big, burdensome regulatory regime," Sohn said.

Instead, the reports suggests a straightforward rule that would give the
Federal Communications Commission the authority to enforce net neutrality
through a complaint process, so long as the network operator bears the
burden of demonstrating that any interference of traffic is necessary. "That
burden-shifting we think is incredibly important," she added.

Windhausen said that after studying the issue, he is convinced there is a
"real problem" that must be addressed. "There's a lot more evidence of
discrimination and blocking than I had ever been aware of," he said.

The report details eight examples of clear discrimination and blocking that
have occurred, across a variety of platforms and technologies, Windhausen
said. For example, there have been cases where carriers have not allowed
consumers to do home networking or put servers on the network, he said.

Moreover, there are equipment manufacturers that are specifically marketing
devices to carriers and network operators to help them engage in blocking
and discrimination, Windhausen said.

One of the first arguments made by network operators is that a net
neutrality requirement is a solution in search of a problem, Windhausen
said. However, the examples in the report clearly show there is a problem,
he said.

Second is the argument that net neutrality will interfere with network
operators' ability to manage their networks, Windhausen said. This argument
does not "hold much water" considering that wireless companies have been
operating for years under a much more onerous common carrier regime, while
managing their networks just fine, he said.

"They've always had the right to prevent abusive use of the network," he

Third, network operators have argued that net neutrality could delay their
deployment of broadband, Windhausen said. "In fact we think network
neutrality will promote broadband deployment, because the greater the value
in the network, the more consumers will use it, and the more network
operators will deploy and build broadband networks to meet that demand," he

Finally, the report examines the issue of "tiering" or a so-called "private
Internet," Windhausen said. On this issue, it is important to recognize the
difference between when tiering is permissible and when it is not, he said.

The report finds that tiering can be done in a way that is
nondiscriminatory, and that there may be some value in allowing network
operators to charge more for higher speeds of access, Windhausen said.

However, Windhausen said, this should only be done under two conditions --
if the higher-value access is made available on a nondiscriminatory basis,
so there is no exclusive access, and if all broadband customers are
guaranteed a minimum level of service.

"Network operators can make different tiers of service available, to both
consumers and service providers, as long as those tiers of service are made
available on a nondiscriminatory basis to anybody who wants to take them,"
Windhausen said.

Brent Thompson, vice president of government affairs for IAC/Interactive
Corp., said he supports the report, which comes at an "outstanding" time in
the policy process. "It's critical that we get the public and policymakers
educated about what's at stake and what's necessary," he said.

Essentially, it is a choice for Congress between a consumer-centric Internet
and a network operator-centric Internet, Thompson said.

"And we think that right now what we need to have is both regulatory
continuity -- that is that the Internet grew up on a foundation of
nondiscrimination and that's one of the reasons it is an open system today.
And number two is we think we need regulatory certainty," Thompson said.

Mark Cooper, director of research for the Consumer Federation of America,
reiterated his position that some "differentiation" of services should be
allowed, so long as the consumer and not the network operator makes that

Cooper's group and two other consumer advocacy groups released a report in
January showing that consumers are concerned about anyone blocking or
controlling their access to Internet sites.

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