So far, FCC regulation has made US  internet access less competitive than most of the free world. In the pre FCC days of dial up, any and all providers had equal access to the PSTN network, and while telcos enjoyed an advantage, competition for subscribers was robust. Prices fell as low as free (with advertisements).  When broadband came along, the same open access rules enabled competitors to deliver DSL Service over that same network. Exhibiting it’s extreme cronyism, the FCC declared a duopoly to be a competitive market and ended fair (paid) access to last mile to consumers homes. This effectively rubbed out fixed line competition. When the FCC opened new wireless spectrum for a competitive “Third Pipe” to the Internet, it waived rules that would have prevented Verizon and AT&T to buy the spectrum in most major markets (They already controlled most of the communications frequencies in these areas).

Now we have a new chair at the FCC, who has all of the credentials to be called a duopoly super crony. His determination to gain the authority to regulate the Internet should be sounding alarms everywhere. Unfortunately, most big media and tech media are also an agenda media.

Federal Communications Commission Chairman Julius Genachowski on Thursday plans to lay out a roadmap for regulating broadband. This step has been eagerly anticipated since a federal court ruling last month cast doubt on the agency’s authority over high-speed Internet access.

The FCC now regulates broadband as a lightly regulated “information service” and had maintained that this gave it legal authority to act on its national broadband plan, which it released in March, and to mandate net neutrality. But the U.S. Court of Appeals for the District of Columbia rejected this argument.

Since then, the FCC has been trying to decide whether to reclassify broadband as a more heavily regulated telecommunications service, which would be subject to “common carrier” obligations to share networks and treat all traffic equally.

Late Wednesday, the agency said it will seek a “third way” approach that strikes a balance between “weak” rules for information services and “needlessly burdensome” rules for telecommunications services. This approach, the FCC said, would apply a “small handful” of telecommunications regulations on broadband providers and would include “meaningful boundaries to guard against regulatory overreach.” (Yahoo)

Anyone who believes giving the FCC new authority to regulate the pipes needs to objectively review the agency’s past behavior and the professional connections of  it’s board. An open market would be the best way to insure good behavior by access providers. Not only has the FCC stifled competition, Genachowski has publicly stated the last mile line sharing is not on the table. While he advocates opening new wireless frequencies, he also advocates auctioning them to the highest bidder over open public access. If you really think the FCC’s “neutral net” will really be neutral you’ll be very disappointed if the FCC gets what it wants. Don’t say I didn’t warn you.

While the FCC searches for a way to get the authority to regulate the Internet, the net neutrality debate rages on. I stand firm on my position that net neutrality is a very poor substitute for real competition.

Competition ended the day the FCC quit requiring telcos to share their last mile right of ways and lines. That left the telcos and cable guys as a fixed line duopoly. Next, the FCC destroyed the promise of a wireless Third Pipe by not preventing the sale of broadband spectrum to the telcos along with allowing the cable guys buying up a chunk of Clearwire’s national Wimax network. So, with an uncompetitive market, net neutrality rules are being pushed as the fix for unfair traffic management. Never mind the fact that the FCC has done a pathitic job of protecting the public interest so far. It wants us to trust it to do better with new regulations.

As the FCC gets closer to crafting network neutrality rules (assuming they even have the authority to do so), AT&T lobbyists have worked overtime to push the idea that creating such rules would automatically result in job losses. To help nudge this scary meme into the press, they hired their old friend Bret Swanson, formerly employed at the Discovery Institute — a think tank that created both the “Exaflood” (debunked here countless times) and “Intelligent Design”. Back in February Swanson, like most AT&T hired policy wonks, used completely bogus “science” to insist that network neutrality rules would result in 1.5 million job losses. He came to that number simply by adding up all of the people employed by companies that submitted comments to the FCC opposing network neutrality (seriously). (Techdirt)

The idea that net neutrality will result in job losses at AT&T or anywhere else is just plain silly. So is the notion that FCC regulations will prevent unfair traffic management practices. I What is needed is an open market. That means fair sharing of the old copper infrastructure we all paid for years ago combined with some open access broadband spectrum. When there are 4 or 5 options in a given market, the net neutrality issue will take care of itself. That doesn’t mean some regulation isn’t needed. In rural market’s someone will need to intervene. I think that task is best left to LOCAL GOVERNMENTS, not the FCC.

By the way, I can guarantee you that an open market will result in job losses at AT&T. The silver lining to that cloud is that here will be better employers in the same line of business for the displaced to work for.

Has Art Brodsky lost his grip? His posting over at Public Knowledge has to be one of the lamest lines of defense ever offered as a basis for over turning the Rule of Law. Kindness of Strangers be damned!

Mr Brodsky starts with using the Ides of March reversal technique –

Of course, the story isn’t all that simple, is it? Because the hidden story of Comcast’s glorious victory is that if Comcast were smart, it wouldn’t in the first place have brought the case, which challenged the FCC’s authority over the company’s high-speed Internet service. Some in the telecommunications industry, perhaps even huge companies with three letters in its name, urged (begged?) Comcast not to take the FCC’s ruling to court, because of the possibility that Comcast could actually win and, potentially, win big —which is what happened.

The reason that the Telcos like the arrangement Art is that it extended their LATA boundary relationships into the non regulated digital environment without so much as a legal skirmish. And what’s this dismissive alluding but not naming? Its AT&T, VZ, Sprint. Don’t be so damn coy.

But where is the standing on damages to the industry that Mr. Brodsky intones? He offers two — Depend on the Kindness of Strangers, and Waiting for Godot. In the former case he charges that depending on the big firms for telecommunications advancement has led us on a downward spiral in terms of global competitiveness. There is some truth to that but not the whole truth. For who is the hand maiden leading the spiraling down the drain but the FCC itself. Then in the latter case we have this –

We can’t depend on unelected bureaucrats to deal with topics as essential as broadband, because the result could be “excessive and burdensome regulation” on those humble, hard-working telephone and cable companies who unfairly change the rules without any reason at all.

And to you I say, NO we cannot trust bureaucrats with damn near anything including telecommunications. If for no other reason that the concept of the Lack of Sufficient Knowledge on a continuing basis.

But thru all of Mr. Brodsky’s missive is this gem –

… Practically speaking (even if there is a very slim legal opening), broadband is free from regulation – a nirvana that the telecoms industry might once upon a time have gratefully accepted as its due, but now looks upon it with some trepidation because now the door has swung wide open to a full-scale discussion of bringing Internet broadband access services back under reasonable regulation.

Two counts here. Brodsky’s ox has been gored by this ruling yet now the door has been swung open for reasonable regulation? By what variant of a pharmaceutical does he come to this conclusion? Its an election year fella. The chances of a Democratic Congress taking this up is slim to none. Plus if the tea leaves are right the Republican Congress next year won’t have the cycle time to touch it either. The second is under proper procedure, the FCC being a creature of Congress should make the necessary request for an expansion of its authority by the proper means, not some gerrymandered legal trick with a wink and a nod. But Mr. Brodsky the FCC DOES NOT possess the authority to overstate its intended alloted powers. Or do I assume you are willing to abrogate the rule of law to achieve your statist aims under the color of consumer protection. How Stalinist.
More on Balderdash!

Remember me telling you that a FCC managed neutral net would by anything but in practice?

Yet now that the FCC has formally issued draft net neutrality regulations, they have a huge copyright loophole in them — a loophole that would theoretically permit Comcast to block BitTorrent just like it did in 2007 — simply by claiming that it was “reasonable network management” intended to “prevent the unlawful transfer of content.”

You heard that right — under these conditions, the new proposed net neutrality regulations would allow the same practices that net neutrality was first invoked to prevent, even if these ISP practices end up inflicting collateral damage on perfectly lawful content and activities. (EFF)

And then there’s how this could impact Netflix subscribers:

….include a potentially nasty loophole, Netflix warned—the “managed services” category that the Commission created in its Notice of Proposed Rulemaking back in October.

“Netflix is concerned that network operators will use so-called managed services in a way that harms unaffiliated content or service providers that compete directly with services provided by the network operator,” the company told the FCC earlier this month. “In short, if left unchecked, the ‘managed services’ category could engulf the Commission’s open Internet policies altogether” and let ISPs end run any regulations. (Ars Technica)

The loophole being discussed clearly enables your broadband provider the power to discriminate in the realm of content distribution. Of course both cable and telcos are very keen on protecting their own closed content distribution business.

Want a neutral net? I’ve got news for you: There isn’t one. Never has been. Never will be. Networks can not work correctly if they are not managed. The only fix is to open the market to competition. That way if Comcast noodles with your downloads, you’ll have more than one alternative provider. An open local loop could yield dozens of providers vying for your dollar. This is what the FCC should address. So called net neutrality is nothing more than a distraction for the real problem: a broadband duopoly.

That is what a 3 judge panel of the first District Court of Appeals just did in the case of Comast vs FCC. The Panel offered the ruling as memorandum, not binding, but telegraphing the Courts observations and if affirmed by the full bench sets the FCC on its ear. –

Federal appeals court gave notice Friday it likely would reject the Federal Communications Commission’s authority to sanction Comcast for throttling peer-to-peer applications.

The U.S. Court of Appeals for the District of Columbia Circuit suggested as much during oral arguments with the FCC and Comcast. The Philadelphia-based cable concern is appealing the agency’s 2008 decision ordering it to stop hampering the peer-to-peer service BitTorrent as a traffic-management practice.

The order was in response to complaints Comcast was sending fake signals to users of BitTorrent, a bandwidth-heavy protocol often used to pirate copyright content.

“You have yet to identify a specific statute,” Judge Raymond Randolph told an FCC lawyer regarding the legal authority to ding Comcast.

To be sure, Friday’s reaction to the appellate court hearing made it increasingly clear the Obama administration’s FCC has been preparing for a defeat concerning net neutrality (.pdf), one of the largest issues surrounding internet freedom.

The upshot of this memo? —

* Net Neutrality as it has been proposed since Chairman Martin’s tenure may not survive in its current form if it survives at all.

* That the FCC may not even have the authority to regulate in this area as no controlling regulatory clause has been found by the court.

* That the 30% rule fostered by the FCC on the cable industry is willful and capricious. The panel summarily vacated that baseline without standing in current rule making by the FCC itself.

* Has political implications beyond the scope of this blog.

In many ways we are right back to 2004 in regards to carriers regard to traffic management, FCC’s role in this issue and the very nature of Net Neutrality.

Linky.
Full Finding here.

Or should I say the channel selector? You still might want to keep the cable for data transport — to get TV. –

So say you skip the Boxee Box and go with the Zino. One of the frustrations of internet TV is finding what you want, when you want it. This show is only on Hulu, that show is only on the network’s portal, and you’re on the web…what do you care which network produced what show? Can’t someone else keep track of that?

Well another launch yesterday was Clicker, a programming guide for internet TV. What’s nice about Clicker is that it only offers full episodes of content, so you won’t get dozens of hits that lead to 15 second clips. Clicker catalogs content from both free and paid sources, such as Netflix Instant Streaming and Amazon Video-on-Demand, but it marks paid content clearly so you can skip over it if you wish. You can set up Playlists, and Clicker also offers some social features, such as Trends and connecting your Clicker account to your Facebook account.

With each passing month it seems like cutting the cable cord becomes a more viable alternative, but yesterday in particular seemed to be a Big Day for internet TV (most of these launches were probably due to the NewTeeVee event that took place in San Francisco, CA). So are you ready to ditch cable? Or have you already? Please share your thoughts in the comments!

That is from IT World. Not exactly a CES oriented publication.

But the question is, is next year, THE year more users cut out the channel side of the cable connection? It could be if things remain stable as in near free. Or that Hulu does go to a paid service that’s like $20/year and includes premium offerings at that price. Sadly for the TWC and Comcast’s of the world, whether that happens or not is out of their hands.

The deep question is could Comcast survive as a data only transport provider?

Well the Net Neutrality rules have been codified by the FCC. All that is left is the wrangling about peripheral details. As a recap the prime components are —

The rules codify four old principles and introduce two new ones. Broadband providers must not block users from sending legal content on the net. They must let users run the applications and services they like and connect whatever devices they care to. And providers must not harm competition among ISPs or online services. The new principles require that broadband providers not discriminate against content services (i.e. block Skype because it competes with an ISPs voice service) and that they disclose to users and the feds how they manage their networks.

The rules would also explicitly extend beyond so-called wireline providers such as DSL and cable and apply to wireless internet services, such as 3G, satellite and WiMax. Providers would have leeway to shape or throttle traffic for network management purposes or to help police or “homeland security.”

The full rendering is here.

Couple of observations/effects now that this have been issued –

• Figure that the Telcos will now move to push congress for fiscal relief. The most likely move being a tax recapture modification for a period of years so they can accelerate the depreciation of the PSTN netowrks. 18 year depreciation rules need not apply anymore in telecom.
• Is ‘carrier of last resort’ now a dead duck? The new rules are not clear. But you can bet the Telcos will wish it so.
• This could be liberating for the Telcos as well, were they to play their cards right. Sure the PSTN will shrink. Were I Telco I would foster it. Partner with a Skype or other VoIP or their own captive and get the last of the user base on VoIP. Gut the CO of the old switch gear. Work with folks like Akami and turn the free space into network edge data centers. Lower costs, new services, lower cost per user. What’s not to like?
• Just because you can attach it does not mean the provider can’t shut you off. The new rules have ‘network manageabiltiy’ aspects attached. That folks includes bandwidth throttled or outright port closure.
• End of walled garden video channels? When the consumer can now get any device they want (within reason), the restrictions on say HBO having to be a channel line up partner with Comcast or TWC no longer exist. An example would be the Roku folks lining up HBO, FBN, NFL and other content as either free or pay ala-carte. Roku just does the cross billing to/for the consumer.

  Oddly the Comcasts of the world don’t need to be left out of this game. They could switch over what they currently carve out of their baseband to broadband and play the same game with the providers they already have.

• The handset race will heat up. With proven chipsets to support network access without concerns for interoperability the universe of devices and device types are going to skyrocket. Some old main stays like Motorola and Nokia might find themselves outclassed. The rate of change may become so fast that brand manufacturing may become a lost art.

In many ways the edges are going to be a new game. A great deal more diversity in product selection is on the horizon.

Linky.

Yes I told you so. More than once. Net neutrality is a paper tiger. The duopoly is seeing to that handily. Rules written by the revolving door insiders at the FCC will never be a positive agent of change.  AT&T is using Google as the boogeyman in its quest to twist the new rules to effectively rub out any potential competitor. We may very well get new “net neutrality” rules that will only make the situation worse.

In a letter to the FCC (PDF) this week, AT&T went on the attack to portray Google as a big powerful company that’s trying to fool the FCC into believing that the rules shouldn’t apply to it. In the letter, AT&T is still trying to cover all of its bases. That means that, at times, it’s hard to follow which arguments it’s trying to make - the one about Google Voice or the one about net neutrality. And it doesn’t help that it stooped a little too low by referencing a convent of Benedictine nuns in a list of those who were handicapped by having calls to their numbers blocked to and from Google Voice numbers.  (ZDnet)

There are problems with AT&T’s posturing that could more permanently lock us into duopoly dominance. Since Google has gottten big and scary,  it’s an easy target, but there more to this. If enacted, net neutrality rules should ONLY apply to companies who have last mile right of ways and / or wireless spectrum. If the holder of spectrum will provide equal network access to competitors it should be exempt. Google owns no spectrum, no right of ways and does not charge for Google voice which does not even directly connect a telephone call. Calling it a competing phone service is like saying Colgate in in the dentistry business. The real reason behind AT&T’s attack on Google is to have rules written that will force providers of virtual services into the same regulatory framework that governs entities that have monopolies in last mile access or wireless spectrum. The net effect of the regulations AT&T wants would impair the ability of every VoIP, online entertainment and interactive online service to compete against a protected monopoly. There probably  are anti  competitive  issues in the way Google is doing business. They should be considered on their own merit and not used a lever to enslave us to a duopoly for the next several decades.

The only way to get open networks is with an open market. If a duopoly must exist. the only fix is to require it to divest from non access businesses.

This blog has been saying that voice channels on mobile is a anachronism. With the largest chunk of CPE now being smart that supports both a voice and data channel, the reality is the voice channel is passe. Well it looks like AT&T saw the handwriting –

Bowing to openness pressure from the FCC, AT&T renounced on Tuesday its opposition to internet telephone calls that use the iPhone’s 3G data connection.

In short, Skype on the iPhone is now OK by AT&T, the company said in letters to Apple and the FCC.

AT&T’s change of heart comes just after the FCC controversially announced that it was planning to extend internet openness rules to mobile networks. The wireless carriers are fighting back, arguing that wireless networks are not robust enough to operate without intense network management.

AT&T made no mention of the FCC in its announcement, crediting the change instead to a routine examination of its policies.

Now the result we applaud. Though we are left with a bad after taste considering that AT&T was dragged there kicking and screaming. But that is not a panacea either. Consider that in certain markets like NYC the 3G bandwidth is overburdened and drops are a given with the average iPhone user. So having a Skype call dropped could be annoying. Especially since 1/3 of iPhone data calls are dropped daily.

We are 2 steps forward, one step back. We now have some open light on open access. But we are hindered by the lack of bandwidth coupled with a reduced revenue of the providers to fund the upgrades for more bandwidth.

Linky.

A lot more of your monthly wireless spend will be going to Washington DC this year. The biggest players in the wireless cartel want to keep their cartel privileges.

In the most radical neutrality program ever outlined in the US, the new-look FCC is insisting that wireless carriers should account for their open policies in the same way as their wired broadband counterparts.

The proposed policy outlined this week would allow the FCC to monitor cellcos’ policies and rule on how well they conform to guidelines on neutrality. Genachowski also plans to toughen up the rules for the big phone companies such as Verizon and AT&T.

He has reaffirmed the 2005 broadband principles that consumers are entitled to access any legal internet content, and run any apps, from their choice of legal device, and with the right to competition among operators and providers of services, content and applications. These principles will now be formalized by the FCC and extended to mobile broadband.

Genachowski has also added two extra principles. Access providers will be barred from discriminating against particular internet content or apps, and they must be transparent about the network management practices they adopt. (The Register)

If we must have a wireless cartel, regulation is necessary. Unfortunately, many of the practices our new FCC chair seeks to end were originally enabled by regulations. For wireless there is simply too much spectrum licensed to to few providers to have a competitive market. With so much money involved, we can count on any new rules performing less well than advertised. Acts of Congress can and will undo any regs that the cartel cannot manipulate at the FCC level.

We need to rethink and retool how we allocate spectrum. Too little is available to the masses and too much is in the control of a very few companies. If there were robust competition , net neutrality would be a non issue.