Today’s Net Neutrality declaration by the FCC is unquestionably the most important telecommunications policy decision thus far in the 21st century. In recent weeks, it had become increasingly clear that this would be the FCC’s direction.
There had been doubts, given FCC Chairman Tom Wheeler’s previous associations in the telecommunications industry. From 1976 to 1984, he was President of the NCTA and from 1992 to 2004, he was President & CEO of the CTIA, which lobby for the cable and cellular industries, respectively. Both groups oppose Net Neutrality today.
In addition to the Chairman, the FCC is governed by four other Commissioners. The FCC’s majority reflects the political party of the President, so therefore, Mr Wheeler and Commissioners Mignon Clyburn and Jessica Rosenworcel are Democrats. They voted ‘Aye.’ Commissioners Ajit Pai and Michael O’Rielly are Republicans, and voted ‘No.’
Chairman Wheeler summarized the ruling in his statement
“We asked the public to weigh in, and they responded like never before. We heard from startups and world-leading tech companies. We heard from ISPs, large and small. We heard from public-interest groups and public-policy think tanks. We heard from Members of Congress, and, yes, the President. Most important, we heard from nearly 4 million Americans who overwhelmingly spoke up in favor of preserving a free and open Internet.
“Building on (a) strong legal foundation, the Open Internet Order will:
- Ban Paid Prioritization: “Fast lanes” will not divide the Internet into “haves” and “have-nots.”
- Ban Blocking: Consumers must get what they pay for – unfettered access to any lawful content on the Internet.
- Ban Throttling: Degrading access to legal content and services can have the same effect as blocking and will not be permitted.
“These enforceable, bright-line rules assure 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.
“The Order also includes a general conduct rule that can be used to stop new and novel threats to the Internet.”
What the opposing Commissioners had to say
Those who watched the FCC proceedings online, as I did, were given a real treat. After Mr Wheeler’s opening statement, the Commissioners took turns to make statements of their own. Given today’s antagonistic political environment, the primary role of the two opposing Commissioners was to misrepresent the outcome and use scare tactic positioning as they expressed their disagreement with the decision. I must admit that they are very good at what they do.
For example, Commissioner Pai made several points in his statement:
- (Paraphrasing) “The Internet will be taxed.” And he went on to talk about the Universal Service fee *** on your phone bill, and how a new line item will show up on phone bills for the Internet. In reality, “the Order DOES NOT require broadband providers to contribute to the Universal Service Fund under Section 254. The Order will not impose, suggest or authorize any new taxes or fees – there will be no automatic Universal Service fees applied and the congressional moratorium on Internet taxation applies to broadband.”
- “The Internet will be slower and prices will be higher.” Large carriers attempt to justify their claim about slower speeds by saying that Net Neutrality would be a disincentive for them to invest in their networks. So AT&T or Verizon would actually give Comcast or a future DISH Network wireless broadband service an opening to take market share away from them?
- “Nothing in this order will promote competition… If you liked Ma Bell monopoly in the 20th century, you’ll love this in the 21st.” Actually, today’s ruling is very clear (see above) that there will be no preferential treatment for access or interconnection. Creating a level playing field that anyone can enter; a sound foundation for competition.
*** It should be noted that the Universal Service fee helped give telephony to rural areas in the 1930s, and in a very real sense, helped incubate IPTV among rural operators a decade ago.
Commissioner Pai used words like “takeover,” “sham proposal,” and “special interests” to position the Net Neutrality decision exactly inside-out from what it really is. He also claimed that the government didn’t create the Internet, hoping that listeners may have forgotten that the Internet was ‘invented’ by DARPA (the Advanced Research Projects Agency within the US Department of Defense, a government agency), and a community of government-funded academic institutions.
The other opposing Commissioner, Mr. O’Reilly, also pulled no punches, calling the Net Neutrality decision an “unlawful power grab.” Then Mr O’Reilly went on about how Title II is all about price regulation and taxation. So the truth comes out: taxation is bad. Net Neutrality should be opposed because it is a new tax, and that “this is back door rate setting authority.” Despite explicit statements in the ruling that it is not.
But read the FCC’s order, read the statements of each of the FCC Commissioners, and then decide for yourself.
Fear ruled the weeks leading to this decision
These comments by the minority Commissioners simply reflected the meme that had been running unchecked in the wild.
In the days and weeks leading up to this FCC decision, the opposition played on anti-Obama sentiments with ridiculous propositions like “Barack Obama is shutting down the Internet,” and insulting statements that Tom Wheeler is “simply Obamas’s (colorful language for the word ‘tool’) on this.” US Senator Ted Cruz (R-Texas) insisted “Net Neutrality is Obamacare for the Internet.”
One commenter went so far as to say that (I’m paraphrasing and can’t remember the source) ‘..only four million people submitted comments to the FCC, out of more than 300 million Americans,’ implying that the 4 million were meaningless.
What the Net Neutrality decision really means
Today’s ruling put an end to the notion that “open access” to the Internet was to be a function of lesser or greater means. It’s that simple.
I have no doubt that some of my friends and colleagues stand as opposed to Net Neutrality as I stand in favor. Everyone is entitled to their opinion. But as opposing parties begin to notice that Net Neutrality has opened market opportunities to them that otherwise would not have been available, they will thank the FCC.
The other FCC decision on this day
The Net Neutrality discussion overshadowed another important ruling that was announced the same day: that the FCC granted petitions from two community broadband providers in North Carolina and Tennessee, to expand broadband services into neighboring unserved and underserved communities. The opposition was from incumbent service providers.
On March 31, the FCC declared that local TV broadcasters can no longer enter into joint advertising sales agreements (JSAs) in which one station sells 15% of advertising time (or more) for another station in the same area. Joint ad sales agreements are common: Comcast’s Spotlight subsidiary has had them with AT&T and Verizon, which of course are pay TV competitors – and these parties see opportunities to scale their advertising efforts at a lower overall cost by partnering.
The spirit of this new FCC JSA ruling is intended to promote localism and diversity, and keep individual media companies from controlling an inordinate amount of power in any given local market.
But buried about half-way into the JSA announcement was another more important announcement: that the FCC has initiated the 2014 Quadrennail Review of Media Ownership. Since the 1990s and particularly over the last decade, the percentage of broadcast and newspaper media markets served by any one company has been a contentious issue. As it stands now, no single company can own more than one TV station in a single market – or in the largest markets, no more than two; as long as one of them is not a top-four station.
But neither the new JSA ruling, nor the current set of media ownership rules, have much bite to them: they can be skirted through waivers. If the FCC really wanted to address what many perceive to be inordinate power among local media outlets, it could address the ownership limits that were proposed but never fully adopted from the 2010 review cycle, in the 2014 Media Ownership review cycle.
This week, the FCC unanimously approved a reform of its Universal Service Fund into the Connect America Fund. One of its stipulations is that communications carriers will be required to offer broadband access to anyone that requests it. It also defines broadband speeds as 4mbps downstream and 1mbps upstream.
It’s a step in the right direction, although, according to a 2010 study by Oxford University, funded by Cisco, the U.S. still ranks just 15th worldwide in broadband. The study cites the leader, South Korea, as having 100% broadband penetration at an average speed of 35mbps.
In today’s American political climate, we can only hope that common sense prevails in the broadband arena, and that this modernization of the Universal Service Fund holds up. The old Bell System chartered itself to serve only urban areas, which is why rural residents can thank the U.S. government for mandating funding – a program with roots in the 1930s – to help ensure rural service. But, like today’s health care debacle, many rural people are likely to be hoodwinked into voting against their own self interests and oppose universal broadband as a wasteful socialist program.
Mea Culpa note: I posted a blog entry a few weeks ago when it began to circulate that Intel had pulled the plug on its Atom (CE4100, CE4200) chip sets. In fact, only the marketing team was dissolved and reassigned. According to reliable sources, the chips themselves are alive and well, and the next-generation 51xx dual-core series are in the hands of outside developers, with the first new products coming in the CES 2012 time-frame. That’s what I get for succumbing to sensationalism.
Who’d have known that the US Federal Communications Commission is running an apps development contest! I stumbled upon it by accident Deadline is June 1st.
Here’s the URL:
People can whine and moan that the FCC is clueless and behind the times, but I think they are trying. It would be nice if the same people who perennially try to undermine these kinds of well-intentioned efforts (and that includes the National Broadband Plan and the FCC’s “Allvid” proposal) would instead join the discussion, to make them better.
Battle lines in the Net Neutrality debate have long been established – if you have a vested interest in being paid for Internet access (e.g. if you are a communications service provider) or if you sell content (e.g. if you sell pay TV and/or own the conduit over which it travels), you probably are of the position that Net Neutrality will destroy the economy and the civilized world as we know it, and give you no choice but to lay off half your staff if it passes (heaven forbid). If you are a consumer, or someone that gets paid for facilitating access to content (like Google), you are likely to be in favor of it.
Which is why it was initially such a surprise to see Google on the “anti” side in its joint statement with Verizon that proposed (among other things) that the wireless Internet be “closed.” After all, hasn’t Google championed N.N. forever? Then I remembered that Google 1) derives 97% of its revenue from advertising and is becoming more concerned with protecting the interests of its advertisers, 2) offers paid content over YouTube, and 3) is close to launching a music service. Not surprisingly, Google is defending its stance.
But another unexpected party took a stance in Net Neutrality debate, unequivocally siding with it: the media industry executive Barry Diller. His holdings present his argument – he wants consumers to have unfettered access to them. The New York Times last week had one of the most objective articles I’ve seen on Net Neutrality (and Barry Diller’s position) in a long time. It seems counterintuitive that Mr Diller would be pro N.N. and anti-consolidation of the media, but kudos to him for taking these positions.
I was initially willing to give FCC chief Julius Genachowski the benefit of the doubt for his “Third Way” attempt to strike a balance between both sides of the Net Neutrality debate, but on further reflection, I have to agree with Mr Diller – it’s a sham. The New York Times article had the best one sentence definition I’ve seen in awhile: “in the broadest sense (the principle of N.N.) holds that Internet users should have equal access to all types of information online, and that companies offering Internet service should not be able to give priority to some sources or types of content.”
PS – This is my second recent blog post with a Lord of the Rings reference – although it’s just because I liked it as a title, not because it has anything to do with the actual story. Sorry ’bout that but I’m enjoying the books again.