Broadband & Neutrality Regulation

Free Press Pressing Communities of Color on Net Neutrality

by Carl Gipson on June 17, 2010 · 7 comments

A fun little tidbit from Huffington Post today. Cook County Commissioner Robert Steele penned an op-ed revealing that Free Press, strong advocates for Net Neutrality regulation, is pushing its agenda on minority communities in order to gin up support for further regulation of the Internet. I’m sure there is no connection with today’s FCC decision to move forward with its Notice of Inquiry on reclassifying the Internet to fits Chairman Genachowski’s controversial “third way.”

Take a minute to read the entire piece by Commissioner Steele, but one of the more salient points is this,

“My first thought when reading this [Free Press] email was, ‘what do these folks know about the needs and wants of communities of color, especially on an issue as impactful as Net Neutrality?'”

In assessing a couple of recent surveys on broadband adoption among minority communities (especially African-American and Hispanic), a couple of things become evident. First, the nation is facing an adoption problem, not an access problem. Those who are not connected to broadband are in this position largely due to their own choice. The FCC’s own report shows that, while African-Americans and Hispanics trail the average in broadband access, the gaps have narrowed just in the last year.

Not only that, but when it comes to the African-American community, it is the older folks who are not connecting (both minority and non-minorities). Those in the minority community under the age of 30 have basically the same broadband adoption rates as whites, which mean younger adults are recognizing the benefits of broadband. The same can be said about educated households, but then, educated households have a higher income level than non-educated and higher income is another factor towards higher adoption rates.

Another interesting factoid is that the minority groups are more likely to access the Internet via a handheld device. This means that mobile broadband growth may very well help pick up the slack in the “digital divide.” It seems more and more are relying on their smartphones to handle their Internet needs.

Really though, the bottom line is that people in low-income households, and those who tend to be older, are the ones that by-and-large do not want to connect to the Internet. There is nothing in Genachowski’s “third way” regulatory scheme, nor in anything that Free Press is pushing, that will help bridge this gap.

It’s a shame that Free Press is using racial division as a motivation to push unnecessary government regulation.

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The FCC Through the Looking Glass: Broadband is What We Say It Is

by James Gattuso on June 17, 2010 · 1 comment

“When I use a word, it means just what I choose it to mean — neither more nor less,” Humpty-Dumpty said. The famous egg could have worked for the Federal Communications Commission, which today took the first step toward re-defining broadband service as telecommunications.

The decision comes only two months after a federal court — rather definitively – ruled that the agency had no authority to apply net neutrality rules to Internet service providers. But it only took a few weeks for Chairman Genachowski to come up with a plan B: re-classifying broadband service as telecommunications service. At today’s meeting, the Commission — on a 3-2 vote — adopted a notice of inquiry on doing just that. Never mind that the initial that broadband is not telecom was the result of a years-long inquiry by the Commission. If the FCC says a computer is really a telephone, then it is. Lewis Carroll would be proud. Continue reading →

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FCC “Third Way” Plan = Beginning of Big Government Broadband Era

by Adam Thierer on June 17, 2010 · 4 comments

Today, the Federal Communications Commission (FCC) voted along party lines to adopt a Notice of Inquiry opening a new proceeding to regulate the Internet by reclassifying it under Title II of the Communications Act. FCC Chairman Julius Genachowski calls this his “Third Way” plan. In a PFF press release, I issued the following response:

In its ongoing ‘by-any-means-necessary’ quest to regulate the Internet via Net Neutrality mandates, Chairman Genachowski’s FCC continues to flaunt the rule of law and magically invent its own authority as it goes along. If this Chairman wants to bring the Net under his thumb and regulate broadband networks like plain-vanilla public utilities, he should ask Congress for the authority to pursue such imperial ambitions. As the law stands today, the FCC has no such authority. Indeed, the unambiguously deregulatory thrust of the Telecom Act of 1996 stands in stark contrast to Chairman Genachowski’s outdated vision for Big Government Broadband.

The FCC stands on the cusp of killing one of the great deregulatory success stories of modern economic history by reviving the discredited regulatory industrial policies of the 19th Century. The revisionism about that epoch is dead wrong: Price controls and protected markets limited choice and stifled innovation. With the agency rolling back the regulatory clock in this fashion, today marks the beginning of the Internet’s “Lost Decade” of stymied investment, innovation, and job creation as all sides wage battle over the legality of reclassification and its implementation.

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event transcript: “What Should the Next Communications Act Look Like?”

by Adam Thierer on June 16, 2010 · 0 comments

PFF has just published the transcript for an event we hosted last month asking “What Should the Next Communications Act Look Like?” The event featured (in order of appearance) Link Hoewing of Verizon, Walter McCormick of US Telecom, Peter Pitsch of Intel, Barbara Esbin, Ray Gifford of Wilkinson, Barker, Knauer, and Michael Calabrese of the New America Foundation. It was a terrific discussion and it couldn’t have been more timely in light of recent regulatory developments at the FCC. The folks at NextGenWeb were kind enough to make a video of the event and post it online along with a writeup, so I’ve included that video along with the event transcript down below the fold. Continue reading →

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What the Oil Spill Really Says About Net Neutrality: Regulatory Capture v. the Nirvana Fallacy

by Berin Szoka on June 9, 2010 · 18 comments

A diverse group of technology companies including broadband, video and wireless providers as well as Google, Microsoft and hardware giants like Intel and Cisco today launched the Broadband Internet Technical Advisory Group (BITAG or TAG) to provide exactly the kind of self-regulatory forum for dealing with concerns about network management practices that we at PFF have long called for—most recently in Adam Thierer and Mike Wendy’s recent paper, “The Constructive Alternative to Net Neutrality Regulation and Title II Reclassification Wars.” But rather than applauding BITAG, the regulatory radicals at Free Press insisted that:

this or any other voluntary effort is not a substitute for the government setting basic rules of the road for the Internet.

Swansong of an Industry?

There must be a separate FCC rulemaking process, which can take the recommendations of this or any other voluntary advisory group into account, but rubber-stamping those recommendations would ignore the agency’s mandate to create public policy in the public interest. Allowing industry to set its own rules is like allowing BP to regulate its drilling. The Comcast BitTorrent case shows that without government oversight, Internet Service Providers will engage in what are already deemed by engineers to be bad practices

Free Press certainly wouldn’t have the influence they do if they weren’t so good at picking metaphors. But what does the oil spill really teach us about regulation? The Wall Street Journal notes the growing outrage on the political Left against president Obama from those who are “furious and frustrated that the President hasn’t demanded the heads of BP executives on pikes.” But the Journal points out the central irony of the situation:

The [so-called] liberals’ fury at the President is almost as astounding as their outrage over the discovery that oil companies and their regulators might have grown too cozy. In economic literature, this behavior is known as “regulatory capture,” and the current political irony is that this is a long-time conservative critique of the regulatory state….

In the better economic textbooks, regulatory capture is described as a “government failure,” as opposed to a market failure. It refers to the fact that individuals or companies with the highest interest or stake in a policy outcome will be able to focus their energies on politicians and bureaucracies to get the outcome they prefer.

Continue reading →

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Three Cheers for New Broadband Internet Technical Advisory Group

by Adam Thierer on June 9, 2010 · 8 comments

A new voluntary Broadband Internet Technical Advisory Group (BITAG or TAG) is being announced today with the goal of bringing together Internet engineers and other technical experts “to develop consensus on broadband network management practices or other related technical issues that can affect users’ Internet experience, including the impact to and from applications, content and devices that utilize the Internet.” BITAG’s goals include: (1) educating policymakers on such technical issues; (2) attempting to address specific technical matters in an effort to minimize related policy disputes; and (3) serving as a sounding board for new ideas and network management practices. BITAG will be chaired by University of Colorado at Boulder Adjunct Professor Dale Hatfield.

This is absolutely terrific news, and it’s exactly the sort of thing Mike Wendy and I called for in our recent PFF white paper, “The Constructive Alternative to Net Neutrality Regulation and Title II Reclassification Wars.”In that piece, we argued that we needed “quick, non-government-driven dispute resolution fora, best practices and industry-led guidance.” That’s exactly what BITAG will provide.

Indeed, this new Technical Advisory Group is a very sensible step forward and it represents a constructive alternative to the ‘Net Neutrality Wars’ that continue to rage in Washington. BITAG essentially “de-politicizes” the Internet engineering issues by offering an independent forum for parties to have technical disputes mediated and resolved – without government involvement or onerous rulemakings. Consequently, this will help avoid the red tape and incessant delays that usually accompany bureaucratic resolution mechanisms, which can stifle continuous technological innovation and investments. Continue reading →

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Broadband Reclassification: The Third Way or the Highway?

by Larry Downes on May 25, 2010 · 4 comments

The announcement yesterday from key Congressional Democrats of an effort to reform the Communications Act put me in a nostalgic mood. Here follows one of my longest efforts yet to bury the lede.

One of my favorite courses in law school was Abner Mikva’s “Legislative Process” course, which he taught while serving on the D.C. Circuit Court of Appeals and before his tenure as White House counsel to President Clinton. Mikva had previously served in Congress; indeed, one of the first votes I ever cast was for Mikva while an undergraduate at Northwestern University.

(It was a remarkable period at the law school. The year Mikva signed on as a lecturer was also the first year on the faculty for three professors just starting their academic careers: Larry Lessig, Elena Kagan, and Barack Obama. I took two classes with Lessig, including an independent study on the impact of technology on the practice of law, but regrettably none from the other two.) Continue reading →

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Thoughts on Democratic Proposal to Update Communications Act

by Adam Thierer on May 24, 2010 · 5 comments

I was very pleased to hear this announcement today from leading Senate and House Democrats regarding a much-needed update of our nation’s communications laws:

Today, Senator John D. (Jay) Rockefeller IV, Chairman of the U.S. Senate Commerce, Science, and Transportation Committee, Rep. Henry A. Waxman, the Chairman of the House Committee on Energy and Commerce, Senator John F. Kerry, the Chairman of the Senate Subcommittee on Communications, Technology, and the Internet, and Rep. Rick Boucher, the Chairman of the House Subcommittee on Communications, Technology, and the Internet announced they will start a process to develop proposals to update the Communications Act. As the first step, they will invite stakeholders to participate in a series of bipartisan, issue-focused meetings beginning in June. A list of topics for discussion and details about this process will be forthcoming.

This is great news, and an implicit acknowledgment by top Democratic leaders that the FCC most certainly does not have the authority to move forward unilaterally with regulatory proposals such as Net neutrality mandates or Title II reclassification efforts.

I very much look forward to engaging with House and Senate staff on these issues since this is something I’ve spent a great deal of time thinking about over the past 15 years. Most recently, Mike Wendy and I released a paper entitled, “The Constructive Alternative to Net Neutrality Regulation and Title II Reclassification Wars,” in which we outline some of the possible reform options out there. We built upon PFF’s “Digital Age Communications Act Project,” (DACA) which was introduced in February of 2005 with the ultimate aim of crafting policy that is adaptive to the frequently changing communications landscape. You can find all the white papers from the 5 major working groups here. I also encourage those interested in this issue to take a look at the video from this event we hosted earlier this month asking, “What Should the Next Communications Act Look Like?” Lots of good ideas came up there.

Anyway, down below I have included the video from that event as well as a better description of the DACA model for those interested in details about how that model of Communications Act reform would work. I think DACA holds great promise going forward since it represents a moderate, non-partisan approach to reforming communications policy for the better. I pulled this summary from the paper that Mike Wendy and I recently penned: Continue reading →

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Wireless Networks & Lemonade Stand Economics

by Adam Thierer on May 23, 2010 · 5 comments

I’ve been wading through the FCC’s latest Mobile Wireless Competition Report, and articles about it trying to make sense of what the the agency might be up to on this front. It’s hard to get a read on where the agency may be going here. As my PFF colleague Mike Wendy suggested in his post on the FCC’s report, “far from press reports which state the FCC clearly determined the market is not ‘effectively competitive,’ well, that’s wrong. In fact, the FCC fails to make any such determination whatsoever.” Moreover, just flipping through the charts and tables of the 237-page report, one is struck by how dynamic this marketplace is, and how crazy it would be for the FCC to declare it anything other than effectively competitive and highly innovative.

Yet, the FCC and many others seem hung up on industry structure. In particular, there seems to be a lot of hand-wringing about increasing consolidation among the sector’s top players. But the data the FCC reproduces in the report seem to undermine that concern. For example, here’s a snapshot of the “Mobile Market Structure in Selected Countries,” which appears on pg. 197 of the FCC report. It shows how much more consolidated foreign mobile markets are relative to the U.S., which is true of wireline markets too. And you can find much more evidence of how competitive the marketplace is in these two reports.

Continue reading →

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Facebook Triggers Another False Alarm over Corporate “Censorship”

by Berin Szoka on May 23, 2010 · 0 comments

Leo Laporte claimed today on Twitter that Facebook had censored Texas radio station, KNOI Real Talk 99.7 by banning them from Facebook “for talking about privacy issues and linking to my show and Diaspora [a Facebook competitor]. Since Leo has a twitter audience of 193,884 follower s and an even larger number of listeners to his This Week In Tech (TWIT) podcast, this charge of censorship (allegedly involving another station, KRBR, too) will doubtless attract great deal of attention, and helped to lay the groundwork for imposing “neutrality” regulations on social networking sites—namely, Facebook.

Problem is: it’s just another false alarm in a long series of unfounded and/or grossly exaggerated claims. Facebook spokesman Andrew Noyes responded:

The pages for KNOI and KRBR were disabled because one of our automated systems for detecting abuse identified improper actions on the account of the individual who also serves as the sole administrator of the Pages. The automated system is designed to keep spammers and potential harassers from abusing Facebook and is triggered when a user sends too many messages or seeks to friend too many people who ignore their requests. In this case, the user sent a large number of friend requests that were rejected. As a result, his account was disabled, and in consequence, the Pages for which he is the sole administrator were also disabled. The suggestion that our automated system has been programmed to censor those who criticize us is absurd.

Absurd, yes, but when the dust has settled, how many people will remember this technical explanation, when the compelling headline is “Facebook Censors Critics!”? There is a strong parallel here to arguments for net neutrality regulations, which always boil down to claims that Internet service providers will abuse their “gatekeeper” or “bottleneck” power to censor speech they don’t like or squelch competitive threats. Here are just a few of the silly anecdotes that are constantly bandied about in these debates as a sort of “string citation” of the need for regulatory intervention: Continue reading →