Archives for the 'Broadband and Neutrality Regulation' Category
Comcast to FCC: We’re not gonna take it
After a little bit of suspense, Comcast today filed suit in federal court challenging the FCC’s authority to sanction it for “unreasonable network practices.” I say suspense because there was speculation that Comcast might have decided to look the other way and live with a decision that didn’t really force it to do much that the market hadn’t already made it do. I’m happy to see that they’re not standing for Kevin Martin’s blatant overreach. As I’ve said many times before, the FCC has no authority to punish a company for behaving “unreasonably” when it has never established a criteria for what is reasonable.
I don’t know to what statement specifically Saul Hansell is referring, but in his New York Times post breaking the news, he wrote:
Kevin Martin, the commission’s chairman, has argued that making rules in advance is not a good method to regulate fast-moving markets like Internet service. Under his stewardship, the commission has published broad principles and has taken action only when it found that objectionable practices have occurred.
I love that. Making laws before we apply them isn’t really efficient.
If you want every gory detail about why the FCC’s order should fall, I heartily recommend to you Barbara Esbin’s recent paper [PDF] on the matter. Esbin is a fourteen-year veteran of the FCC and, among other things, in her paper she explodes an argument that I’ve been hearing lately, namely that the FCC has “ancillary jurisdiction” to regulate broadband network management practices. She writes:
As Commissioner Adelstein stated: “[T]he Order sets out the Commission’s legal authority under Title I of the Act, explaining that preventing unreasonable network discrimination directly furthers the goal of making broadband Internet access both “rapid” and “efficient.” This appears to be a paraphrase of Section 1 of the Act, which recites the Act’s purposes and the reason for creation of the FCC, including “regulating interstate and foreign commerce in communication by wire and radio so as to make available . . . a rapid, efficient, Nation-wide and world-wide wire and radio communication service with adequate facilities at reasonable charges…” But because Title I is also considered the source of “ancillary jurisdiction,” that is akin to saying that the FCC can regulate if its actions are ancillary to its ancillary jurisdiction, and that is one ancillary too many.
Amen.
Of “Cartels” and Price Wars
So, if Tim Wu’s thesis is correct that the broadband marketplace is “a cartel,” should we be reading headlines in today’s Wall Street Journal and CNET News.com like this: “Price War Erupts For High-Speed Internet Service” and “Broadband Price War Brews“? From the WSJ story:
The battle between cable and phone companies to sign up new customers for high-speed Internet service is heating up, creating fresh opportunities for consumers to cut their bills. [...] While the most generous offers are coming from the phone companies, some analysts expect cable companies will also become more aggressive in their own promotions as they compete to retain customers.
Geez, if that’s a cartel, give me more of them!
Opposing Viewpoints on Network Neutrality
I contributed the Cato institute’s side in this debate at Opposing Viewpoints. I took the “no” position to the question “Should the Government Regulate Net Neutrality?” Arguing opposite are the Save the Internet coalition, the Open Internet Coalition, and Public Knowledge.
I wrote my points before seeing the other peoples’ contributions, but my take on the debate is best summarized by this comment which should be appearing on the site in the near future:
What’s striking about the arguments of all three pro-regulation contributors is that while they adopt the rhetoric of urgency, none of them has offered a specific explanation of what will happen if Congress does not enact new regulations. It may very well be true that the major incumbents would like to transform the Internet into a proprietary network, but thus far, there are precious few examples of them actually attempting to do so. Indeed, the only example of any significance that they’ve been able to cite is Comcast’s interference with BitTorrent. And that example certainly doesn’t support their argument.
Comcast interfered in a relatively minor way with one of the dozens of applications on the Internet. For its trouble, the company got a bunch of negative publicity, a customer backlash, and (thanks to header encryption technology) no real control over the use of BitTorrent on its network. By March, Comcast was in full-scale retreat, signing an agreement with BitTorrent, Inc, and pledging to stop blocking BitTorrent traffic by the end of the year.
By the time the FCC ruled on the issue in July, its involvement had been rendered completely superfluous by the progress of events. Comcast wasn’t posing a looming threat to network neutrality that the FCC had beaten back. Comcast had already surrendered months ago, and the FCC showed up long after the battle was over to claim credit for the victory.
The other examples network neutrality activists like to cite are even weaker. For example, Verizon briefly refused to give an SMS short code to a pro-choice group. Not only did this incident have nothing to do with the Internet, but Verizon voluntarily reversed itself just a few days later. Once again, any regulatory response would have been far too late to make a difference.
In short, there’s no “precipice” here. Network owners don’t have a magic wand that will transform the Internet into a proprietary network. The filtering and blocking tools network providers do have are clumsy and easily circumvented. There are plenty of people monitoring broadband providers’ behavior, and they will ensure that any network neutrality violations get widely publicized. Network owners saw what happened to Comcast, and they learned that interfering with network neutrality is a bad business strategy: it’s more likely to produce angry customers than larger profits.
The advocates of new regulation have been predicting the imminent death of network neutrality for three years now. Yet network neutrality is no more endangered today than it was at the height of the Congressional debate over network neutrality in 2006. If we do start to see real evidence that technological and market forces are inadequate to protect the neutral Internet, there will be plenty of time to debate and pass appropriate regulations at that point. But it would be a mistake to pass new regulations now based on purely speculative concerns.
Peering and Transit at Ars
My favorite thing about Ars Technica (aside from the fact that I get to write for them) is their in-depth features on technical issues. Out today is the best discussion I’ve seen of transit and peering for the lay reader. One key section:
I once heard the following anecdote at a RIPE meeting.
Allegedly, a big American software company was refused peering by one of the incumbent telco networks in the north of Europe. The American firm reacted by finding the most expensive transit route for that telco and then routing its own traffic to Europe over that link. Within a couple of months, the European CFO was asking why the company was paying out so much for transit. Soon afterward, there was a peering arrangement between the two networks…
Tier 1 networks are those networks that don’t pay any other network for transit yet still can reach all networks connected to the internet. There are about seven such networks in the world. Being a Tier 1 is considered very “cool,” but it is an unenviable position. A Tier 1 is constantly faced with customers trying to bypass it, and this is a threat to its business. On top of the threat from customers, a Tier 1 also faces the danger of being de-peered by other Tier 1s. This de-peering happens when one Tier 1 network thinks that the other Tier 1 is not sufficiently important to be considered an equal. The bigger Tier 1 will then try to get a transit deal or paid peering deal with the smaller Tier 1, and if the smaller one accepts, then it is acknowledging that it is not really a Tier 1. But if the smaller Tier 1 calls the bigger Tier 1’s bluff and actually does get de-peered, some of the customers of either network can’t reach each other.
When I first learned about the Internet’s basic peering model, it seemed like there was a real danger of a natural monopoly developing if too many tier 1 providers merge or collude. But what this misses is that larger networks are facing a constant threat of having their customers bypass them and peer directly with other customers. As a result, even if there were only one tier 1 provider, that provider wouldn’t have that much monopoly power, because any time it raised its prices it would see its largest customers start building out infrastructure to bypass its network.
In effect, the BGP protocol that controls the interactions of the various network creates a highly liquid market for interconnection. Because a network has the technical ability to change its local topology in a matter of hours, it’s always in a reasonably strong bargaining position, even when dealing with a larger network.
Things are trickier in the “last mile” broadband market, but at least if we’re talking about the Internet backbone, this is a fiercely competitive market and seems likely to remain that way for the foreseeable future.
The FCC’s Comcast/Net Neutrality Order & Commissioner McDowell’s Dissent
On Wednesday, the FCC released the decision (PDF, text) it adopted back on August 1 holding that Comcast had violated the FCC’s 2005 net neutrality principles (PDF, text) by “blocking” peer-to-peer file-sharing traffic on its network using the popular program BitTorrent. Paragraphs 3-11 lay out the FCC’s (still-disputed) finding of facts.
Commissioner McDowell’s Scaliaesquely scathing dissent (PDF pp 61-67) provides an accessible summary of the order and should be required reading for everyone on all sides of the issue. Despite having been provided with the final version of the order only the night before its release, McDowell distills the order into six key points, rejecting the Commission’s reasoning on all but one point (jurisdiction):
- Was a complaint properly brought against Comcast under FCC rules? No, FCC rules allow the kind of complaint brought against Comcast to be brought only against common carriers, which cable modem operators are not.
- Does the FCC have jurisdiction over Internet network management? Yes, under the Supreme Court’s 2005 Brand X decision.
- Does the FCC have rules governing Internet network management to enforce? No, “the Commission did not intend for the [2005] Internet Policy Statement to serve as enforceable rules but, rather, as a statement of general policy guidelines,” nor can the Commission “adjudicate this matter solely pursuant to ancillary authority.”
- What standard of review should apply? No, even assuming this case had been properly brought under enforceable rules, the Commission applied what amounts to a “strict scrutiny” standard–something unprecedented for reviewing private, rather than governmental, action.
- Was the evidence sufficient to justify the Commission’s decision? No, the “FCC does not know what Comcast did or did not do” and should have “conduct[ed] its own factual investigation” rather than relying on “apparently unsigned declarations of three individuals representing the complainant’s view, some press reports, and the conflicting declaration of a Comcast employee.” The evidence did not suggest any discriminatory motive behind Comcast’s network management techniques
- Is the decision in the public interest? No. “By depriving engineers of the freedom to manage these surges of information flow by having to treat all traffic equally as the result of today’s order, the Information Superhighway could quickly become the Information Parking Lot.” Comcast had already resolved its dispute with BitTorrent through outside arbitration. The FCC should “allow the longstanding and time-tested collaborative Internet governance groups [already working to establish processes for resolving such disputes] to continue to produce the fine work they have successfully put forth for years.”
Network Neutrality Exaggeration
One of the frustrating things about telecom debates is participants’ tendency to play fast and loose with the numbers. This tendency exists on both sides, but I think it’s more pronounced for the pro-regulatory side. Consider, for example, Susan Crawford’s post from last week on John McCain’s tech agenda:
First, here’s the fact: We don’t have a functioning “free market” in online access. John McCain thinks we do. That kind of magical thinking takes real practice.
Instead, we’ve got four or so enormous companies that control most of the country’s access, and they’re probably delighted that McCain is promising not to regulate them.
I can’t think of any plausible way of defining the broadband market that gives you four as the number of major firms. We have three major telephone companies and (depending on where you draw the line) somewhere between four and eight major cable companies. And that, of course, is focusing exclusively on high-speed residential service. T-Mobile and Sprint provide lower-speed wireless Internet access, and there are a number of companies that provide access to business customers.
Maybe that’s just nitpicking about the numbers, but her qualitative view of the marketplace is just as distorted:
Continue reading this post »
Free Broadband Now! . . . and a Pony
From the acclaimed “. . . and a pony” series at WashingtonWatch.com.
FiOS coming soon to DC?
After gaining final approval to rollout FiOS in New York City a few weeks ago, Verizon has come to a preliminary agreement with the District of Columbia to deploy FiOS television service in the nation’s capital. This long-awaited announcement follows nearly a year of negotiation between Verizon and D.C. franchising authorities.
Thanks to its especially onerous franchising regime, the District of Columbia has lagged behind surrounding areas in fiber-optic connectivity. Neighboring communities such as Arlington, Fairfax, and Bethesda have had FiOS for years, and D.C.’s lack of fiber-optic service has long been a sore spot for the city.
D.C. residents can’t celebrate just yet, though. Verizon must overcome one more regulatory hurdle before starting to dig up the streets. The franchise agreement must receive a green-light from both the D.C. city council and the Attorney General. If the New York City episode is any indication, getting politicians to acquiesce will involve expensive demands and forced concessions, resulting in higher prices for everyone.
Another muni wi-fi failure (Portland), and taxpayers will pick up the tab
Portland’s muni wi-fi experiment has failed. [Add it to the list of failures]. According to Broadband Reports, taxpayers are going to be on the line for $60K:
Portland had high hopes of being one of those cities where citywide wireless networks might actually work but those hopes did not pan out. Earlier this summer, Wi-Fi provider MetroFi announced that the company could not afford to continue operating the network there. Attempts to sell it off failed and the network was shut down. That’s not the end of the story, though. In order to launch the network, MetroFi had to set up 600 (arguably unsightly) antennas throughout the city. The company had claimed that these antennas would be removed by the end of July but they remain up; MetroFi says that they still plan to follow through on removing them but city staff members report fears that the company is too strapped for cash to keep their end of this bargain. Estimates for removal are around $90,000; subtracting out a $30,000 bond for removal that was part of the MetroFi contract would still mean that Portland’s taxpayers could pay up to $60,000 to get those antennas taken down.
FCC’s Comcast decision was political failure
There’s been a fair amount of chatter on this blog (here, here, and here) about how to properly view the FCC’s recent Comcast decision. My take is that while everyone is focused on questions of market failure, we are in the midst of a huge government failure. Read my full explanation here.
A Debate About Data Confidentiality and the Forthcoming ‘Broadband Census for America’
A recent post to Dave Farber’s [IP] list:
WASHINGTON, August 8 - I’d like to take a moment to respond to some of the issues raised by the recent e-mail of Brett Glass.
With respect to the issue data confidentiality, it’s important to separate out several issues here:
(1) The names of carriers and the locations in which they offer services, by ZIP code.
(2) The number of subscribers that carriers have in a particular ZIP code.
The Form 477 of the Federal Communications Commission requires carriers to submit both types of information to the FCC.
I agree that category (2) may well be confidential information. I do not think that category (1) can be considered confidential.
The web site that I run, http://BroadbandCensus.com, is an attempt to combine information about broadband from various sources. In addition to “crowdsourcing” data from internet users, we are combining public information from the FCC’s Form 477, publicly available information about carriers and where they offer services, as well as from states and localities. Since we launched BroadbandCensus.com in January 2008, We have had thousands of internet users tell us the names of their providers, where those providers are offering service, and they’ve taken our beta speed test.
It is important to note that Form 477 data released by the FCC does not include the names of the carriers. The FCC recently ordered carriers to begin to provide information on the census tract level (a unit slightly smaller than a ZIP code). However, unless the FCC changes its policy, consumers will still not be able to obtain carrier information from the agency.
Hence, the data we have from the FCC is extremely limited.
TPW 37: The Comcast Kerfuffle 2: The Chairman Strikes Back
On this week’s show, we discuss the implications of the FCC’s controversial recent ruling against Comcast in the BitTorrent controversy. This is a topic we have covered previously on our podcast in episodes 34 and 35, and have been writing extensively about on the Tech Liberation Front blog over the last few days. In its decision last Friday, the FCC held that Comcast had engaged in unreasonable network management practices when it delayed access to BitTorrent traffic. Even though BitTorrent Inc. and Comcast have already settled their dispute and indeed are now working collaboratively together on solutions to these issues, FCC Chairman Kevin Martin said that legal action was necessary because others had complained about the practice.
On today’s show we focus on the implications of the FCC’s decision and what it means for the future of net neutrality regulation and communications policy more generally. Joining us for this week’s show are TLF regular contributors Jerry Brito of the Mercatus Center at George Mason University, Hance Haney of the Discovery Institute, Tim Lee of the Cato Institute, Jim Harper of the Cato Institute, James Gattuso of the Heritage Foundation, and Adam Thierer of the Progress & Freedom Foundation who moderates the discussion.
We’re having a little problem with our podcasting plugin, so here’s a temporary way for you to listen. You can download the MP3 here, or use the online player below.
Regulate the Internet? FCC.gov Has It Right
The FCC last Friday may have jumped with both feet into the business of regulating the Internet, but someone forgot to tell the folks that run the Commission’s website. “The FCC Does Not Regulate the Internet or Internet Service Providers (ISP)” the “consumer publications” page of FCC.gov is still proudly telling visitors, referring them over to their state consumer protection office or to the Federal Trade Commission as the proper agencies for such things.
In the past, I’ve been critical of the shambolic way in which the FCC’s website is run. But in this case, the problem isn’t with the web folks - they have the policy exactly right. It’s the FCC, not FCC.gov, that’s bungled the job.
Someone at the Commission will eventually tell the website folks to fix the error. But who will get the Commissioners to fix theirs?
Game, Set, and Match: Martin!
An ex parte letter submitted to the FCC in the Comcast Kerfuffle - subject of strong criticism by TLF-friend and friendly sparring partner Harold Feld - got me thinking on another level about the FCC’s recent action against Comcast.
Among the accusations against Comcast is that it throttled a P2P conduit for movies because it’s also in the busines of delivering movies. The letter points out that colleges and universities, which have no similar interests, do the same things or take far blunter actions against P2P. It’s not a bad point, and it helps dispell the idea that Comcast was doing anything other than trying to provide good Internet service to the bulk of its customers.
Now, given that the letter summarizes the practices of many top universities, it throws in a provocative line: “If there is to be regulation, therefore, it must apply equally to all providers.” This suggests that the same regulation must apply to universities, which got Harold, Ars Technica, and a few others foaming.
The point of the letter was that network managers who don’t sell video services also degrade P2P. Point made. And from what I’ve seen of the reaction: point conceded. Comcast’s network management wasn’t motivated by an anti-competitive impulse.
But still, Feld seemed to argue, Comcast doesn’t get to do that because . . . it’s Comcast. Or something. It’s this blindness to a real legal justification or a real distinction between Comcast and other Internet service providers that I think has him walking hand-in-hand with the FCC into the NCTA’s trap.
The paragraph prior to the provocative line suggesting regulation of universities contains this sentence: “Allowing some Internet service providers to manage P2P traffic - much less to engage in complete blocking of P2P traffic - while prohibiting others from doing so would be arbitrary and capricious.” This is an administrative-law term of art - “arbitrary and capricious.” The use of it tells us that NCTA or Comcast will challenge the FCC’s decision to regulate only one provider of Internet access without regulating all similarly situated.
But Comcast is under a different regulatory regime!, says Harold and the others. Not in an enforcement of this “broad policy statement” thing-y. The FCC is claming free rein to regulate - not authority based firmly in statute - and if it can throw that rein over cable ISPs, it can throw that rein over universities, over Starbucks, and over the open wi-fi node in Harold’s house.
Now, given the free rein that the FCC is asserting, there is a darn good argument that it’s arbitrary (and “capricious”) to regulate only cable ISPs or commercial ISPs in this way. The FCC has to regulate the whole damn Internet this way if it’s going to regulate Comcast.
Is it the best argument ever? Nope. But it’s good enough for what FCC Chairman Kevin Martin wants to do.
Wait. What Kevin Martin wants to do? No, Jim, it’s the NCTA that’s setting the trap.
Au contraire, my inner voice. It’s Kevin Martin. He’s crafty.
By instituting this weird, weak, and barely legal regulation, Kevin Martin will get ‘net neutrality regulation bottled up in the courts for - what - the next five years? By that time, there’s a decent chance of there being more competition among ISPs. Projects like Broadband Census and NNSquad may have changed the product and market landscape. The political landscape will have shifted in exciting new ways. And when the FCC loses in the D.C. Circuit (yet again), the issue returns to a Congress where advocates of Internet regulation have moved to new issues and gotten rusty on net neutrality regulation. It’ll be another three or four years after the FCC loses before their net neutrality regulation efforts can get a head of steam.
So, has Kevin Martin deftly disposed of the ‘net neutrality issue for the next decade? My theory is plausible, though I know some would dispute it. Adam Thierer would undoubtedly call it “absurd” - but he puts that adjective on just about everything.
Net neutrality regulation wasn’t even close to getting through Congress, Adam argued to me recently, and Martin is motivated by his hatred of Comcast and the cable industry, along with his political aspirations. The former point is the strongest, but it’s a matter of perception. What I know of Chairman Martin is not a wild-eyed zealot or a hater, but a planner and careful thinker. Regulating Comcast doesn’t really redound to his political benefit in any meaningful way, and his political aspirations are doomed if he thinks it does.
So that’s my theory, and I’m stickin’ to it: Kevin Martin has set back net neutrality regulaton by a decade - by letting the camel’s nose under the tent.
Broadband access platforms & speeds over 3 decades
Very useful chart over on the Verizon policy blog put together by Link Hoewing and Larry Plumb. Link uses it illustrate the changes we have seen over the past three decades in terms of Internet access platforms and speeds. It’s too small to read here, so make sure to go there to see it more clearly and also see Link’s interesting discussion.
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