Posts Tagged: Net Neutrality

FCC publishes Net Neutrality details, opposition mounts

Posted by & filed under fcc, Net Neutrality, News.

Behold! The Underminer!On March 12, 2015, the FCC published its 300-page-plus Net Neutrality ruling, titled In the Matter of Protecting and Promoting the Open Internet: Report and Order on Remand, Declatory Ruling and Order.

As expected, Republicans in Congress immediately threatened to undermine it.  US Representative Fred Upton (R-MI), Chair of the House Committee on Energy and Commerce and two Congressional colleagues announced their objections the same day.

Another US Representative, Marsha Blackburn (R-TN) exclaimed that “Trying to regulate or reclassify the Internet has as much support as transferring Guantanamo Bay detainees to the United States. Both proposals are net losers that need to be retired once and for all.”   She is co-sponsor of an anti-Net Neutrality bill, HR4070, The Internet Freedom Act, which is currently before the 113th Congress.

Was the FCC strong-armed?

Republicans believe that President Obama inappropriately influenced FCC Chairman Tom Wheeler on Net Neutrality.  So far, Republicans in Congress have scheduled five hearings into the matter:

  • US House Oversight Committee, March 17
  • US Senate Committee on Commerce, Science, and Transportation, March 18
  • US House Energy & Commerce Committee, March 19
  • US House Appropriations Committee, March 24
  • US House Judiciary Committee, March 25

This week, The Washington Post reported that the FCC’s Inspector General, who is named by the FCC Chairman, has opened an internal investigation.   On March 17, US House Communications and Technology Subcommittee chairman Greg Walden (R-OR) released a draft bill to reauthorize the FCC.  One of its stipulations is to make this Inspector General independent of the agency.

While the Republicans are firm in their convictions, others believe that this situation simply repeats a tactic that they’ve used since the days of Ken Starr and Whitewater, and most recently after the killing of the US Ambassador in Benghazi Libya: conduct endless hearings to create the appearance of a criminal situation where none actually exists.

Perhaps a better tactic would be to do a little research about the legislators initiating these hearings, to see where their campaign donations come from.

The FCC goes to the movies

I’m reminded of two movie references, the obvious one being The Empire Strikes Back.   Just before the the FCC’s vote, Republican FCC Commissioner Ajit Pai even quoted Emperor Palpatine, saying “Young fool… Only now, at the end, do you understand,” imagining that someday, people would look back wistfully upon the decision with regret that they didn’t stop it when they could.

But perhaps more aligned with America’s political climate, there’s also that charming character from the last scene of Pixar’s The Incredibles.

FCC declares Net Neutrality

Posted by & filed under Blog, fcc, Net Neutrality, News, Opinion, Public Policy.

FCC 2015-0226 NN 800w

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:

  1. (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.”
  2. “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?
  3. “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.

FCC soon to rule on Net Neutrality…

Posted by & filed under Blog, broadband, CenturyLink, Competition, fcc, Net Neutrality, Operators, Opinion, TV Everywhere.

FCC_logoUpdate 11 Feb 2015:  The majority of FCC’s five commissioners are always of the party of the sitting President.  So when FCC Commissioner Ajit Pai exclaimed: “I have studied the 332-page plan in detail, and it is worse than I had imagined,” it was no surprise, as Mr Pai is one of the two Commissioners in the Republican minority.


The wait is nearly over: FCC Chairman Tom Wheeler posted an article with Wired that previews the FCC’s decision on Net Neutrality.  At risk of alienating some old friends and making some new ones, my opinion is that the FCC’s pending regulation under Title II of the Communications Act of 1934 is exactly the right thing to do.   Operators with their own network facilities have challenged NN and will continue to do so, but their bark is worse than the bite.

Why? Because the FCC holds the keys:

  • The FCC set the precedent for N.N. in 1934 by mandating a responsibility to put phone calls through (common carrier), and reinforced it in 1996 by adding transparent handoff between wireline and wireless.
  • What happens when any of these network providers starts producing its own content (As owner of NBC Universal, Comcast comes to mind), and gets throttled by another network provider?  The FCC is the arbiter.
  • If any of these operators actually did go ahead and not play by the FCC’s rules, the FCC can issue warnings, followed by fines, followed by revoking their licenses to operate.

Besides, do you honestly think that your favorite cable, telco or wireless operator would actually walk away from business (e.g. stop investing in their networks, as AT&T and Verizon have each threatened to do) if the FCC put NN in place?  Really?  Would you like to buy a bridge?

In my opinion, N.N will result in exactly the opposite.  Readers of my blog know about my trevails with Centurylink, which currently has no incentive to give me more than 3.2mbps down and .9mbps up.  I am out of mobile range, and no cable operator serves my neighborhood.  If Centurylink were suddenly to have competition, I would expect them to protect their share, not abandon it.

In other words, I believe that NN will spur a race to the top, not the bottom.

Right on cue: Comcast may acquire Time Warner Cable (Thoughts…)

Posted by & filed under Blog, broadband, Comcast, fcc, Net Neutrality, News, Opinion.

I hadn’t been active with my blog in a while, but I was so incensed at my poorly coordinated broadband activation by CenturyLink that I posted six articles in rapid succession, ending yesterday with my thoughts about competition.

comcast-nbc-logo TWC logoSo, from my own personal perspective, the announcement that Comcast would acquire Time Warner Cable struck me as ironic.  Some of the early reports seemed to position this acquisition as a fait accompli, which it is not.   Most news outlets, ranging from The Wall Street Journal and Bloomberg to The PBS News Hour and National Public Radio, emphasized that the deal would take time, and face regulatory scrutiny.  As a point of reference, Comcast’s acquisition of NBC Universal took two years to close.

One of my morning calls today (2/14) was with an industry friend in the UK, who asked “What do you think?”  From a services perspective, Comcast and TWC serve mutually-exclusive territories, so competition among TV, voice, and broadband providers in any given locality is not likely to change significantly.  And although this acqusition would make Comcast more powerful overall, a successful acquisition isn’t likely to reduce the number of voices in the American marketplace of ideas because Time Warner content is not part of the deal.   The acquisition is likely to be approved, but I hope that certain conditions are applied.

The greatest potential for risk comes with broadband market share.  A merged Comcast-TWC would serve nearly 30% of American households.  With that kind of market presence, the results can be both good and bad.  On the good side, a larger Comcast could conceivably negotiate lower costs from its programming suppliers because the new entity would be reaching the new and higher aggregate number of subscribers (although whether or not such a negotiation would be successful, and whether or not such a savings would then be reflected in the consumer’s bill are both open questions.  I do know that my Comcast broadband-only bill was nearly $80/month before I moved out of their service territory this past month, which included ambiguously-defined surcharges).

On the other side of the coin, many fear that the company could quietly compromise the quality of over-the-top video services like Netflix with impunity, and ignore or rationalize their way past any challenges to such a practice.  Comcast and others have been accused of this practice.  (the corollary of that being that, maybe, Hulu would remain at full quality, since Comcast’s NBC Universal is a co-owner in Hulu).  But that is an ill-informed point of view (** See below).

FCC_logoJust last month, we were reminded of this issue when D.C. Circuit Court of Appeals invalidated the Federal Communications Commission’s 2010 Open Internet Order, which Verizon Communications and others had challenged.  A group of US Senators quickly sent a letter to FCC Chairman Tom Wheeler, who is evaluating that situation; urging him to “quickly adopt enforceable rules to prevent the blocking and discrimination of Internet traffic… (and) withstand judicial scrutiny.”   Mr. Wheeler says that he will try. US Senator Ed Markey (D-Massachusetts) introduced a bill to keep Net Neutrality in effect until this evaluation is complete.

Internet advocates have differing opinions as to whether or not Net Neutrality will stand.  The Electronic Frontier Foundation is pessimistic, while Freepress thinks the FCC can preserve it.  I personally believe that Net Neutrality is as basic as universal telephone service or the availability of electricity, or law enforcement, or fire prevention: available to all, without bias.

One of the FCC’s conditions in the Comcast NBC Universal acquisition was for Comcast to maintain a practice not to discriminate against online video programmers, and to add ten independently-owned programming channels to its cable lineup over the 8 years following the acquistion.  But what happens after 2018, when the non-discrimination period expires?  Will Internet access speeds be intentionally limited for streams of IP video programming that originate outside of a Comcast headend?  Will independent programmers find themselves shut out?  Comcast has many friends in the US Congress, and contributed more than $853,000 to members of the Subcommittee on Communications and Technology in the US House of Representatives between 2001 and 2012.

If only just to quell the fears of the paranoid, I would propose that FCC Chairman Wheeler take two steps: first, make the non-discrimination clauses of the FCC’s conditions to Comcast from the NBC Universal acquisition permanent as a condition of a Comcast – Time Warner acquisition.  Second, extend those conditions to all service providers.  The FCC could reclassify broadband as a Common Carrier service, obligating Comcast and all other operators to carry any traffic on their networks or face legal action.

As remote as the FCC may seem to average mortals, anyone can submit comments to the FCC about this issue (and select “09-191 Preserving the Open Internet” from the drop-down menu).  On the other hand, it’s best to keep emotions at a minimum: fear that the sky is falling is probably misplaced.

The above-linked Wall Street Journal article on the acquisition provides a detailed timeline of consolidation in the cable industry, and the Columbia Journalism Review maintains Who Owns What, to track the holdings of major media companies.

                 

** Edited February 25:  Netflix will in fact be paying Comcast to guarantee QoS/QoE over Comcast’s network.  If the intent were to collude in order to raise prices to the consumer, it would be a terrible precedent and probably found to be illegal.  But that fear is not grounded in realities of OTT delivery, because paying Comcast or any other access provider for transport on their networks is a common practice, and is more likely reduce the content providers’ transport costs, not raise them.  Pay TV operators with broadband services have always positioned OTT video providers as freeloaders on their networks, but that positioning is disingenuous because paid transport at a wholesale level is a common practice and a revenue stream.

See Dan Rayburn’s recent posts for the best characterization that I’ve seen to date.

A thought about Net Neutrality in the Cloud Era

Posted by & filed under Net Neutrality, Opinion.

New Net Neutrality rules go into effect on November 20, 2011. It’s a good opportunity to get beyond the politics of the matter, and into some substance.

My own belief is that open networks are critical in the cloud world (which is the position taken by Google, the FCC and others). Consider this parallel everyday example: a friend of mine uses Verizon Wireless and is therefore defaulted to Bing for search. To him, an annoying inconvenience – but what would happen if suddenly VZ blocked access to Google altogether? Interestingly, it appears that Verizon may challenge the new Net Neutrality rules once they go into effect.

Of course network owners want to monetize their networks. And they can (and why not!), by charging content providers for transport, and by taking revenue splits from advertisers. But please, not by charging the consumer, or enacting bandwidth consumption caps, or by otherwise penalizing the consumer in some way. As is their wont, consumers will find a way around it and have no qualms about bypassing or changing service providers.

A service provider’s networks are a sunk cost that it already bears. It can sell transport services and consumer access to content providers at prices equal to or below what a data-center-based third party CDN provider charges – an incentive for content providers that want to save money. At the same time, the service provider stands to make incremental revenue that likely wasn’t planned for when these networks were designed and budgeted.

Prediction: the average budget-minded consumer will be enraged if they couldn’t access content in the cloud that they had already paid for, and they wouldn’t stand for some service provider talking in code about capex and opex.

Google TV may disappoint some now, but will ultimately exceed expectations

Posted by & filed under Blog.

The annual TelcoTV conference is one of the premier events in the IPTV industry. As a conference with a telecom heritage (not streaming media or broadcast), TelcoTV’s focus has been IPTV (pay TV over managed IP access networks) and not IP Video (video on a best-effort basis). Many of the attendees are Telcos that looked at video as an engineering problem first, and by the way, also an answer to the competitive threat posed by cable – rather than the other way around.

In November, I had the privilege of moderating “Capitalizing on the OTT Opportunity,” the closing panel discussion of Day 1. On my panel were executives of two Tier-1 pay TV providers: Verizon’s FiOS TV and DISH Network. There were also the head marketing person from Netgem, a French provider of hybrid IP-broadcast set-tops and middleware, and an executive of Dailymotion, a content provider.

The basic premise of the panel session was to discuss the impact of Internet-delivered video on pay TV. In a few words, the impact will be very positive in the long run and there are lots of reasons why. But at the moment, everyone in the industry is blundering about and fearing for their own safety and survival, like spelunkers in a dark cave.

Verizon was the first large US-based service provider to deploy and scale an IPTV service (technically, a hybrid solution using IP for on-demand and cable TV technology for live TV). DISH Network is the first pay TV operator to deploy Google TV. Netgem has no U.S. presence yet, but has deployments in Europe – including one of the largest TV service providers in France, SFR (which operates Neuf Cegetel) which has more than 3 million IPTV subscribers – as well as Telstra, the incumbent Telco in Australia. Dailymotion’s video content is found on FiOS TV, Google TV, and many other platforms. So the panelists could all speak from personal and company experience.

I wrote an early analysis on Google TV, released in August (for which I’m about to release an update). So I was very curious about the actual product, and had it installed the week before TelcoTV so I could speak about it intelligently as the moderator.

So what was my verdict? For the most part, I have been very impressed (with the integration and the user experience), but also disappointed (for lack of content). However, I have every confidence that the early disappointments will be addressed and that, as a platform, Google TV will ultimately be seen as the game-changer it is. I have three reasons for this assessment.

1) The content owners’ blockade against Google TV is likely to be temporary

Because they don’t want to disrupt their long-established business models, the major American TV networks have blocked their content from being accessible by Google TV over the Internet. Network TV is largely ad driven, and has been since its very early days. So is Google: 98% of GOOG’s revenue is from advertising. So it’s a tug-of-war over ad dollars. The major networks and Hulu are blocking Google TV because no ad revenue sharing deals have been cut. Once they resolve their business issues, the content will flow. It’s as simple as that.

The TV content that Comcast distributes online via its Xfinity TV online service won’t work on Google TV because it uses Move Networks codecs (and in 2011, Microsoft Silverlight), which current Google TV-enabled devices can’t decode.

Also, Comcast seems to see Google TV as competition – in some ways correctly and in some ways erroneously. Comcast is reported to be readying its own Internet TV device, code named XCalibur. So, in that sense, yes, the two devices would be competing over online video ad dollars. But Comcast seems to be ignoring the potential of Google TV as a distribution medium that they can leverage, which is the potential that DISH saw. As a sidebar, if, by limiting the types of Internet-delivered content viewable by XCalibur, Comcast is acting as a gatekeeper, it is violating the “open networks” and “open services” tenets of Net Neutrality – another reason why the FCC should regain its backbone, but that’s another story.

2) Industry opinion leaders were nonplussed with Google TV, but impressions will change once it’s understood for what it is

Many in the industry punditocracy have said that Google TV’s success hinges on the availability of programming. True, but that’s only part of the story and is (in my opinion) temporary. They neglect the technology and service integration side of the discussion.

The only Google TV launch partner to date that has implemented the full vision of Google TV is DISH Network (with Logitech and with Sony, although I only have tried DISH with the Logitech Revue). This means that DISH’s TV DVR and EPG metadata are handed off to the Google TV search function, so you see a search result that includes them. That’s real TV through DISH Network, not just Web videos from YouTube (which also appear in the search result).

The other part of the integration is control of the set-top box. This means that DISH had to write software that ties their set-top box, the Revue, and Google TV via their respective APIs. If a program turns up in the search result and you want to DVR it, you press the DVR button on the Logitech Revue keyboard (or the regular DISH remote) and that’s it.

3) Google TV is not being merchandised or positioned correctly at retail.

If you go into a Sony Style store or a Best Buy (both were Google TV launch partners), you’ll find Google TV set up for demonstration. But in my experiences, both were set up with DirecTV, which hasn’t done the Google TV integration. Also, most sales people in consumer electronics shops are not subject matter experts, or trained on Google TV.

When the Sony person told me that he happened to be the designated “go-to” person for Google TV, I thought “Great, you don’t see that too often anymore! I got the right guy.” So I confidently picked up the remote and searched for a popular movie that I know is on pay TV right now. When I asked whether a Google TV search result would include TV programs and movies, he said “yes.” What a let-down when the only search results were the movie’s Web site, a Wikipedia entry, and some trailer videos on YouTube. No “real” TV. I guess he thought that, because the content was tied with something that’s on TV now, that it qualified as “TV.” I knew better, and more importantly, consumers do too.

The other disappointment was that the Sony products use this little game-controller-like remote control, and you have to press a trigger to use the keyboard. Reminiscent of the IBM PC Junior of the early 1980s. Because the Google TV integration has not been done with DirecTV, the retail experience quickly got into a mode where I was using the little mouse controller on the Sony remote. To be charitable, I’ll just say that this violates the most basic principles of TV user interface design 101, and did not pass the 57-year-old curmudgeon test.

But Google TV, as a technology and as a tool-set – and as a concept that addresses new expectations about what TV should be – is a really good effort. What it needs is consumer awareness that rises above noise-level. If Google has the wherewithal to give away 10,000 Logitech Revues to developers, and now, 100 free 46″ HDTVs to consumers, why not deploy their minions to Best Buy and Sony Style stores to make sure it’s set up with DISH and to demonstrate it correctly?

I reiterate that DISH did a good job with it. Yes, it’s a little rough around the edges – as the old adage says, “beware of version dot-oh software.” We’ll see if the updates shipped by Google and Logitech in mid-December made a difference. I am told that DISH is working on some tweaks also. Hopefully, at some point, the technology will be refined sufficiently so it doesn’t require a companion device like the Revue.

Give it time. Anyone in TelcoTV circles will tell you that it also took years for the content owners to trust IPTV.

An Unexpected Party

Posted by & filed under Blog, Google, Opinion, Public Policy.

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.

Why is Net Neutrality so difficult?

Posted by & filed under Blog, Google, Operators, Opinion.

The way I understand Net (Internet) Neutrality, it’s pretty simple. Internet content should be able to go anywhere, and no commercial interest or government agency should be allowed to interfere with the free flow of information. Why is Net Neutrality so difficult?

The FCC has been ruminating over Net Neutrality for years now. In recent weeks, they’ve hosted closed-door meetings with major commercial broadband service providers. This week Google and Verizon came down from the mountain with a seven point proposal for Net Neutrality, called A Joint Policy Proposal for an Open Internet. Meanwhile, the FCC’s own talks were dissolved. Again, why is Net Neutrality so difficult?

Historically, Google has always championed Net Neutrality. Their four principles – Open Networks, Open Applications, Open Services and Open Devices – remain important guiding principles of the Internet. This week’s seven point proposal encapsulates these four, add two new ones proposed in the National Broadband Plan and by the FCC, plus one more. Let’s review them at them one at a time

First, make open principles enforcable (good!). Second, add an antidiscrimination principle (good!). Third, force service providers to explain their services clearly (good!) Fourth, give the FCC a clear mandate to regulate the Internet (which is currently in question, due to the the court ruling allowing Comcast to regulate what is on its private network, contradicting the FCC position that all Internet traffic be treated equally – so, good!). Fifth, allow for differentiated services (which promotes value added services – good, and it’s OK if some of them are paid or intended just for vertical markets). The seventh one favors extending the Universal Service Fund to the Internet (good).

The sixth proposal is troublesome, right from the get-go: “…we recognize that wireless broadband is different…” Think about it. Connectivity, to most people, is like water; people don’t think so much about how they are connected anymore. The only reason that wireless and wireline are being positioned differently is commercial, for bandwidth reasons – which LTE and WiMAX are poised to solve.

I will make no secret that I am a Net Neutrality advocate, but I’m not black-and-white about it. For example, service providers should be able to charge for premium content and that the activists are blind to this on purpose. But not be allowed, like Comcast, to bar traffic that they don’t like. Or like wireless providers, be given a “pass” essentially not to enforce Net Neutrality at all. Bandwidth is a temporary limitation in the long term, and Net Neutrality shouldn’t be confused with protection of intellectual property (pirated video distributed over P2P), which is a separate issue.

It all comes down to balancing corporate interests with the public interest, and those interests are not always aligned (shall we say politely). With Google’s Android and Chrome software being embedded in so many communications-savvy smart devices, and with Google TV on the horizon, Google is increasingly siding with its profit motive and doesn’t want to upset the media industry ecosystem. Especially when 97% of Google’s revenue comes from advertising.

Especially when Verizon’s latest Android-based smartphones are so successful, and especially since Motorola is reportedly building an iPad-like Android-based tablet for Verizon FiOS TV. No wonder Google appears to be compromising, and now I start to see why Net Neutrality is so difficult. Google has transformed from being a pure Internet company, into a platform for paid content.

Give the Google-Verizon proposal a few points for effort, but make Google stay after school to write on the board a thousand times: “I shall be true to my principles” and “I shall do no evil.” Hopefully, the FCC regains adequate spine to ignore clause number six.