A Death Blow To Net Neutrality? Ctd

John Blevins argues that the FCC ruling hasn’t killed the open net:

The FCC’s open Internet rules quite sensibly prevented Internet access providers from engaging in blocking and other unreasonable discrimination. The D.C. Circuit, however, struck down these rules, which has led to criticisms that network neutrality is dead. Fortunately, it’s not.  The court vacated only these particular rules, not the FCC’s ability to act in the future. Specifically, it concluded that the FCC could regulate Internet providers under a statute known as Section 706, which authorizes the FCC to take various steps to promote broadband deployment. The court correctly recognized that prohibiting blocking and discrimination can lead to greater broadband deployment by increasing consumer demand. For instance, the introduction of the World Wide Web (which required no permission or toll payments) fueled the network investments of the 1990s. The growth of online video is driving modern investment today. …

In sum, the FCC still has sufficient authority to protect the open Internet. The million-dollar question is whether it will choose to use it — and whether the public will pressure it to do so. Following the opinion, Chairman Tom Wheeler stated his preference to proceed in a “common law fashion,” which is legalese for individualized decision-making. I am therefore tentatively hopeful that the FCC is heading in this precise direction.

Matthew C. Klein highlights the costs net neutrality impose on ISPs:

The reality is that these companies must spend vast sums on capital expenditures to keep pace with soaring demand for high-speed Internet service. For all the talk about stifling competition and hurting startups, the existing system means that text-based websites end up paying the same rates to Internet access providers as video-streaming services that consume far more bandwidth. Why is one-size pricing — an effective subsidy — fair?

How is that in the interest of consumers? Why shouldn’t companies pay for the data needs they create? If the government can prove that broadband providers should be classified as common carriers in the same manner as telephone companies, then it should regulate these companies as utilities. If not, it should let Verizon Communications Inc., Comcast Corp. and Time Warner Cable Inc. set Web access prices as they see fit. They could use the extra revenue to invest in new capacity and make U.S. consumers better off.

Berin Szoka and Geoffrey Manne assert that the ruling actually gives the FCC “carte blanche to regulate the entire internet”:

[C]ounterintuitively, there’s every reason to think new entrants — the little guys — would benefit most from non-neutrality: Payola (paying radio stations directly for extra airplay), for example, is frequently derided by those who misunderstand it, but it actually helps new artists break through. Sponsored data and other prioritization arrangements on the internet are just a further extension of this. The FCC’s earlier approach would have foreclosed innovative, upstart edge providers from buying the preferential treatment or “premium carriage” they might need to gain recognition and draw users away from well-established incumbents.

Bottom line: The FCC should stop trying to ban prioritization outright and focus only on actual abuses of market power. But instead of adopting antitrust principles, Wheeler’s case-by-case approach will probably be guided by little more than the outer boundary of avoiding common carriage regulation (if even that). And that’s the real issue here. It’s not about what the FCC wins or loses, but that net neutrality “common law” could be haphazard and devoid of economic rigor — and, worse, that the FCC could use the same Section 706 power to regulate internet services beyond broadband. That’s where we should be focusing this discussion: the FCC’s new, sweeping discretion.

Reihan understands net neutrality proponents’ concerns, even if he doesn’t share them:

The broadband market is defined by high barriers to entry, and one suspects that at least some ISPs will be willing to test the bounds of their customers’ patience before competitors spring up to challenge entrenched incumbents. Or perhaps ISPs will find ways to differentiate their offerings in ultimately consumer-friendly ways. I would feel more comfortable if the U.S. were more open to alternative arrangements, like municipal broadband networks, and if more spectrum were available for innovative wireless technologies deployed by new entrants.

Kevin Werbach thinks competition will allow for more innovation than net neutrality has:

It’s important to keep in mind that the point of network neutrality isn’t to ensure that no company ever has a competitive advantage; it’s to allow innovators to thrive and win in the marketplace. And the best way to do that is through a competitive market. Network neutrality was devised in the early 2000s as a “second-best” response after the FCC refused to require physical open access to dominant broadband networks, the approach adopted in most of the world. Even now, the best hope for a dynamic, affordable, and innovative Internet is real broadband competition.

Most of the greatest barriers to broadband competition are at the local level: State prohibitions adopted at the behest of the incumbent carriers, difficulties with zoning and access to rights of way, and limited willingness to invest in the kinds of municipal open access fiber optic utilities that are wildly successful in cities like Stockholm. The FCC has been hesitant to confront these impediments, perhaps because it was so focused on net neutrality. Yet even Judge Silberman, who dissented in part in the Verizon case because he thought it gave the FCC too much authority, expressly stated the Commission could take such actions.

Paul Waldman fleshes out the competition argument:

Is net neutrality the reason that here in America we have some of the most expensive Internet service in the world, at speeds that have consistently lagged other highly developed nations? No. The reason our broadband is so expensive and yet so mediocre is simple: ISPs operate as virtual monopolies, with most Americans having only a couple of choices for broadband service, but we don’t regulate them like monopolies, meaning they can keep raising prices all they want. It’s the deadly combination of low competition and low regulation.

Susan Crawford doubts that competition will keep ISPs in line:

The court’s opinion is about much more than net neutrality. In finding that the FCC must be held to its decision to exempt Comcast Corp. (CMCSA)Time Warner Cable Inc. (TWC), AT&T Inc. and Verizon Communications Inc. from common carriage obligations, the court says the commission can’t require these giants to connect to any other networks, treat new businesses the same as old ones, carry the speech of Americans without altering it, or otherwise refrain from imposing their profit-driven interests. In the Internet access business, competition cannot replace regulation, because real competition doesn’t exist. At the moment the court’s ruling came down, I was in my living room in Cambridge, Massachusetts, talking to my friendly Comcast installer. He told me that our mayor had signed an exclusive agreement with Comcast so that no competitors would be allowed in town. The man may have been a little confused about the legal niceties of what’s happened here, but he was dead on about the reality: My only choice for high-speed Internet access in Cambridge is Comcast. And the same is true for more than 77 percent of Americans: The local cable monopoly is the only seller of wired high-speed, high-capacity Internet access. I asked whether Comcast would soon be installing fiber-optic service — the fastest kind. Nope, he said. Too expensive. Yet in Stockholm, a city I had just visited, 100 percent of the businesses and 90 percent of the homes have fiber optics. In New York, where I also live, I pay four times as much as someone in Stockholm does for service that is an 18th as fast.

Tim Fernholz bets that this ruling blowing up in the winners’ faces:

The basic question—one at the heart of a lot of internet issues—is to what extent the internet’s pipes should be considered public infrastructure, like roads, water lines or telephone lines. Such “common carriers” may not unreasonably discriminate against their customers. The FCC doesn’t consider ISPs common carriers but “information services,” exempt from regulation as new, developing technologies. The federal appeals court said, in essence, that the FCC can only impose net neutrality on the broadband providers if it first declares them common carriers. It could now take that step. The carriers’ allies in Congress have long opposed such a move, but they probably couldn’t force the Obama administration to block it. Congress itself could also put in place—or prohibit—net neutrality rules, although it’s unlikely to do either. Even failing a common-carriers declaration, net neutrality isn’t buried. Both its opponents and proponents believe the court decision has unintended consequences that will empower the FCC to enforce the essentials of net neutrality without re-classifying ISPs. Even if they aren’t considered common carriers, the FCC is empowered to regulate them under a different statute.

A Death Blow To Net Neutrality?

Andrew Leonard outlines the effects of a Tuesday court ruling that invalidated the FCC’s net neutrality rules:

In a decision widely seen as a victory for the big telecommunication companies and a defeat for defenders of the “open” Internet, the D.C. Court of Appeals struck down the FCC’s “net neutrality” rules on Tuesday. The decision in Verizon v. FCC effectively gives providers of Internet access the right to discriminate in favor of particular Internet services —  to create “express lanes” on the good old information superhighway. … But the decision is not necessarily a clear-cut ruling that net neutrality is unconstitutional. The court based its decision on a more technical issue: whether or not the broadband companies could be classified as “common carriers” that are not allowed to give special preferences to any users of their network infrastructure. Since the FCC had previously decided that broadband ISPs are not common carriers, the court ruled that the FCC could not then turn around and regulate the ISPs as common carriers.

Juan Cole warns that the ruling could allow “the corporatization of the Internet”:

The reason readers of Informed Comment can reach it as quickly and conveniently as they can reach a multi-billion dollar corporate web site is the principle of internet neutrality, built into the system by Tim Berners-Lee and other architects of the World Wide Web, which went live in 1991. Large private corporations that have been allowed to build out the pipes through which internet traffic flows have long wanted to introduce a different system, of net metering. In essence, if a corporation paid the internet provider a million dollars a year, readers could get to that site immediately. But for a site like Informed Comment without those sorts of bucks, service would be deliberately slowed and readers would have to wait a minute or two for the site to load. Studies have showed that most people won’t wait that way. So the entire independent cybersphere would be made invisible and more or less swept away. A similar thing happened to radio, which was a grassroots medium at the beginning and then was corporatized with government help.

Marvin Ammori isn’t giving up:

Those of us who had been involved with the net neutrality debate knew that, without reclassification, the flawed FCC order would never stand. But there were 100 ways it could have fallen. I thought that the court’s decision would be a baby-splitting half-loss that could enable the FCC to wipe its hands of network neutrality and pretend everything was A-OK. I was wrong on that point. The loss was so definitive, the powers granted to cable and phone companies so outrageous, that the FCC has a live grenade in its lap.

Now, every side is settling on its narrative. AT&T, Verizon, and their allies will argue that the decision means network neutrality is illegal, full stop, and the FCC can never adopt an order. They will also argue that the FCC needs to go to Congress to get more authority. Both arguments are wrong, of course. The FCC has all the power it needs to clean up the mess, simply by doing what [former FCC Chairman Julius] Genachowski—who, it must be said, is a very nice guy—knew he had to do but lacked the spine for.

Drum peers into his crystal ball:

The next step might be an appeal to the Supreme Court or it might be an FCC decision to reclassify the internet as a common carrier. But that’s what it’s come down to. If the Supreme Court upholds this decision (or refuses to hear an appeal), net neutrality is dead unless the FCC or Congress decide to reclassify broadband internet as a telecom service regulated as a common carrier. If they don’t, it will up-end the internet as we know it, with carriers free to provide, say, Amazon or Google with preferred service in return for higher access fees. That could be a big problem for startups—or anyone the telecom providers consider a competitor—who would have to contend with slower service as they tried to build their businesses. The big telecom companies say that’s not what they have in mind, and maybe they don’t right now. But they will. It’s only a matter of time.

Pethokoukis calls the ruling a victory for consumers and the free market:

The FCC rules were meant to impose one-size-fits-all price controls on Internet service providers and force them to treat, as The Wall Street Journal describes, “similar content on their broadband pipes equally.” Sounds innocent enough. Sounds fair. Sounds neutral. But at its core “net neutrality” really is nothing more than an attempt at rent seeking by content providers who want the ISPs to pay the tab for future network upgrades. It’s kind of like Apple lobbying for price controls on shippers like FedEx when transporting iPads from China to America. Whenever the transport firm bought new planes, it would have to eat the cost or pass it downstream to some other customers. In this case, the customers would have been regular consumers.

Bret Swanson agrees:

The court’s basic finding is correct and good for the Internet economy. Common carriage style regulation is not appropriate for the Internet. The Internet is a fast changing, multipurpose network, built and operated by numerous firms, with many types of data, content, products, and services flowing over it, all competing and cooperating in a healthy and dynamic environment. Old telephone style regulation, meant to regulate a monopoly utility that used a single purpose network to deliver one type of service, would have been a huge (and possibly catastrophic) step backward for what is today a vibrant Internet economy.

The Importance Of Broadband

Christopher Mims believes that it is “now a core infrastructure requirement”:

[I]t seems likely that broadband is a great enabler, like mass transit, good ports, a system of functioning courts, and other hallmarks of developed economies. As Daniel Ek, CEO of Spotify, emphasized to me the last time we spoke, the one reason a country as small as Sweden has a disproportionate share of successful internet startups is that Swedish teenagers grow up taking gigabit internet connections for granted. And it’s not just traditional web startups and IT giants that need fast internet connectivity. Arguably, as businesses move more functions to the cloud and mobile becomes increasingly important, everyone needs fast internet connectivity.

(Video: A resident explains why Google should bring its free Google Fiber service to his neighborhood in Kansas City, MO)

Broadband For All? Ctd

Readers take issue with the claim that “the only time latency becomes an issue is for a gamer.” A professor of computer networking who “co-authored one of the standards used in voice over Internet communications” writes:

The article you quoted by Jon Brodkin on satellite broadband is flat out wrong. It is not only gamers who suffer from half-second latency. 150 milliseconds is the maximum delay that you want for voice over Internet. Anything over that is definitely noticeable and anything over 400 milliseconds is flat-out unacceptable. With half-second delays, meaning 500 milliseconds, each speaker has to wait to be sure the other has heard, people talk over each other, it is a mess. There really is no debate on this in the scientific or telecommunications communities.

Another cites issues with latency and virtual private networks (VPNs):

Another gotcha on the latency issues affects telecommuters and other remote workers seeking to use a corporate VPN. Many corporate VPNs can’t tolerate the latency, so folks (like me) who work from (our) rural homes can’t use satellite services to connect to our offices.

Another gets pissed:

While I imagine most Dishheads would click through and give the Ars Technica article you linked to a close read, and would have thus seen some of the caveats raised in both the article itself and in the top comments on it, looking to satellite Internet as a panacea for our sluggish broadband penetration rate — as your post seemed to me to do, intentionally or not — is folly. The forums and user reviews at DSLReports for satellite ISPs are rife with complaints about punitive data caps and/or metering schemes, terrible customer service, outrageous pricing, and unreliable connectivity. See here for ViaSat, mentioned in the Ars post; here for HughesNet; and here for WildBlue.

I could rant on and on about the myriad disgraces of our nation’s telecommunications service providers, but I’m channeling my frustrations toward them into finding a job where I can help, in some way, to bring affordable, fast, uncapped broadband to everyone in the country. (As a recent college graduate [and “digital native”] living at home with a 1.5Mbps up/768Kbps DSL connection, you could say I’m triply motivated to find such a career.) It’s about time more of us started getting pissed off about our dismal standing in global broadband penetration and speed rankings – and letting our legislators know it.

Broadband For All?

Jon Brodkin reports on satellite companies that claim they can "provide broadband speed to nearly every American without costly construction projects to bring cables to the home":

Latest-generation satellites operated by HughesNet and ViaSat offer 10 to 15 Mbps down and 1 to 3 Mbps up to nearly any home in the US, representatives of those companies said. They believe the industry simply suffers from an awareness problem. Previous-generation satellite products offered only a fraction of that speed, and even people who realize satellite is available to them may not know that the latest products are as fast as they are.

But gamers beware:

"We can't get around physics and the speed of light," said Dan Turak, VP of sales and distribution at ViaSat Communications. "We have about a half-second latency. The only time latency becomes an issue is for a gamer. We're very clear to that customer that you'll probably lose if you're playing against someone without satellite broadband. That latency is just enough to cause delay."

Previous Dish on broadband access here.

The Right To Broadband?

Susan Crawford notes America's insufficient high-speed Internet access. She wants the FCC to take charge:

Bottom line: For $30 a month, we must be able to provide high-speed internet access to every American. This fiber connection service should include voice, data, and basic broadcast channels at speeds that meet global standards. It’s embarrassing that one of the most innovative nations in the world can’t do this. And if private providers don’t want to do it, local and federal government needs to undertake this infrastructure investment. We need to build fiber rings around every U.S. town and city.