The Net Neutrality Thread

[Mike]

President Obama has finally stepped up in the net neutrality battle, calling on the FCC to reclassify broadband as Title II, with forbearance, to create strong real net neutrality rules. Here's the key bit:

I believe the FCC should reclassify consumer broadband service under Title II of the Telecommunications Act — while at the same time forbearing from rate regulation and other provisions less relevant to broadband services. This is a basic acknowledgment of the services ISPs provide to American homes and businesses, and the straightforward obligations necessary to ensure the network works for everyone — not just one or two companies.

Investment in wired and wireless networks has supported jobs and made America the center of a vibrant ecosystem of digital devices, apps, and platforms that fuel growth and expand opportunity. Importantly, network investment remained strong under the previous net neutrality regime, before it was struck down by the court; in fact, the court agreed that protecting net neutrality helps foster more investment and innovation. If the FCC appropriately forbears from the Title II regulations that are not needed to implement the principles above — principles that most ISPs have followed for years — it will help ensure new rules are consistent with incentives for further investment in the infrastructure of the Internet.

He also encourages the following setup, while acknowledging that the FCC is independent and can create whatever rules it wants.

The FCC is an independent agency, and ultimately this decision is theirs alone. I believe the FCC should create a new set of rules protecting net neutrality and ensuring that neither the cable company nor the phone company will be able to act as a gatekeeper, restricting what you can do or see online. The rules I am asking for are simple, common-sense steps that reflect the Internet you and I use every day, and that some ISPs already observe. These bright-line rules include: No blocking. If a consumer requests access to a website or service, and the content is legal, your ISP should not be permitted to block it. That way, every player — not just those commercially affiliated with an ISP — gets a fair shot at your business.No throttling. Nor should ISPs be able to intentionally slow down some content or speed up others — through a process often called “throttling” — based on the type of service or your ISP’s preferences.Increased transparency. The connection between consumers and ISPs — the so-called “last mile” — is not the only place some sites might get special treatment. So, I am also asking the FCC to make full use of the transparency authorities the court recently upheld, and if necessary to apply net neutrality rules to points of interconnection between the ISP and the rest of the Internet.No paid prioritization. Simply put: No service should be stuck in a “slow lane” because it does not pay a fee. That kind of gatekeeping would undermine the level playing field essential to the Internet’s growth. So, as I have before, I am asking for an explicit ban on paid prioritization and any other restriction that has a similar effect.
If carefully designed, these rules should not create any undue burden for ISPs, and can have clear, monitored exceptions for reasonable network management and for specialized services such as dedicated, mission-critical networks serving a hospital. But combined, these rules mean everything for preserving the Internet’s openness.

The White House has also released the following video of President Obama discussing this:

Make sure not to miss the first few seconds of the video, in which the White House appears to acknowledge the "internet slowdown day" with a mock buffering image:

Many people engaged in the net neutrality fight had been annoyed at President Obama for not taking a strong stand on net neutrality -- a promise he had campaigned on. Instead, the White House was pretty quiet about things, and President Obama made a bunch of vague, non-committal statements about it. Making a clear and bold proclamation supporting reclassifying under Title II (with the important forbearance) is a big step forward. It won't sway Republicans who have fought against Title II from the beginning, but it may finally give folks who had been wavering and playing a political game of not fully supporting Title II in the past the political cover they need. And that includes those at the "independent" FCC...

This won't necessarily change the end result here, but this is a big win for net neutrality supporters who had been feeling abandoned, and certainly provides some political support to full reclassification to protect an open internet. It could have and should have come much earlier, but better late than never.

Originally Published: Mon, 10 Nov 2014 15:04:45 GMT
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[Mike]

Not too surprisingly, the broadband industry isn't too happy about the White House's surprise announcement that it appears to have grown a spine and is ready to go to war over reclassifying ISPs under Title II to protect net neutrality. ISPs have repeatedly made it clear that they'd sue any effort to impose real rules, and you could barely hear oneself over the noise of deep-pocketed carriers putting their legal teams, PR firms, and myriad of paid astroturfers, policy mavens, sockpuppets, fauxcademics and think tankers on high alert. The response from this status quo chorus is about what you'd expect, with most of them breathlessly insisting that Title II will kill puppies, ruin your nice dress shirt, totally disrupt your brunch plans, and destroy the Internet as we know it.

Verizon, for one, offered a fairly predictable response, insisting that Title II would destroy the Internet as we know it. To hear Verizon tell it, Title II simply wouldn't survive a legal challenge (pro tip: to avoid a legal challenge, how about you don't sue?):

"Reclassification under Title II, which for the first time would apply 1930s-era utility regulation to the Internet, would be a radical reversal of course that would in and of itself threaten great harm to an open Internet, competition and innovation. That course will likely also face strong legal challenges and would likely not stand up in court. Moreover, this approach would be gratuitous. As all major broadband providers and their trade groups have conceded, the FCC already has sufficient authority under Section 706 to adopt rules that address any practices that threaten harm to consumers or competition, including authority to prohibit ‘paid prioritization.’ For effective, enforceable, legally sustainable net neutrality rules, the Commission should look to Section 706."

Amusingly, every time Verizon speaks on this issue they not only forget to mention that Title II governs huge swaths of their infrastructure with absolutely no ill effects (and actually some tax benefits for Verizon), but that they were the company that decided to sue over the very Section 706 rules they now profess to support. AT&T similarly ponied up a statement that first pretends that turning telecom regulators into spineless wimps is some kind of bi-partisan miracle accomplishment, then proceeds to insist that relying on a broken, bickering Congress flush with AT&T cash is the only way to move forward:

"Light-touch regulation has encouraged levels of investment unprecedented by any industry and spawned incredible innovation. Today’s action puts all of that at risk – and puts it at risk not to remedy any specific harm that has occurred. Instead, this action is designed to deal with a hypothetical problem posed by certain political groups whose objective all along has been to bring about government control of the Internet. The White House is proposing to put the Internet and our economy at risk as a result of such political pressures."

And by "political pressure," AT&T means the four million people who wrote the FCC annoyed at the fact that AT&T now gets to literally write and purchase all telecom laws. By "government control of the Internet" AT&T means regulators that actually do their job, and by "unprecedented" levels of investment AT&T's referring of course to their fixed-line network investment CAPEX that's been dropping like a stone despite fifteen years of broadband industry deregulation.

Comcast to lobbyist David Cohen (who calls himself the company's "Chief Diversity Officer" to skirt lobbying rules) offered a similar response that trots out ye olde "consumer protection kills network investment" talking point:

"Comcast and cable companies (along with the telcos) have led the broadband revolution, being the first to roll out America’s fastest broadband speeds across the country. As the White House itself acknowledged in its broadband report in 2013, this only happened because we were not subject to the intrusive regulatory regime designed for a different era."

Again though, AT&T and Verizon in particular have almost-entirely frozen any meaningful deployment of "next gen" FioS and U-Verse services (with the exception of a few, scattered, wealthy high-end development communities), and overall network investment continues to decline. You're meant to ignore the fact that this decline happened after fifteen years of dramatic deregulation of the broadband industry. You're also meant to ignore the fact that these policy choices are giving cable a stronger broadband monopoly than ever before in many markets, because phone companies (despite being flush with government subsidies) are refusing to upgrade DSL customers, consciously driving those users to the same cable companies they used to compete with.

But I digress. Like AT&T, the cable industry's top lobbying group, the NCTA (now run by former FCC boss Michael Powell), would similarly prefer it if the FCC left net neutrality to a dysfunctional Congress awash in telecom industry lobbying cash:

"The FCC is an independent agency and it should exercise independent judgment in crafting new rules. This is truly a matter that belongs in Congress and only Congress should make a policy change of this magnitude. Congress can easily unravel the legal and jurisdictional knot that has tied up the FCC in crafting sustainable open Internet rules, without resorting to rules of the rotary-dial phone era. We urge Congress to swiftly exercise leadership of this important issue."

Because when you think about Congress, "easy," "swift," and "leadership" are certainly the very first words that jump to mind. As we've noted quite a few times now, in the absence of meaningful broadband competition (something that's not getting fixed anytime soon), Title II with forbearance is the only sensible way forward if we want neutrality rules that not only protect consumers from aggressive duopolists, but help prevent future iterations of the FCC from over-reaching. Most of the ISP claims about the impact on investment are the same tired talking points they've trotted out for every cocktail party and policy issue for the last thirty years, and they're going to need a new repertoire of scary bogeymen if they hope to keep the latest chapter in the net neutrality saga truly entertaining.

Originally Published: Mon, 10 Nov 2014 20:54:00 GMT
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[Mike]

Well, we already wrote about President Obama's somewhat surprising decision to come out strongly in favor of Title II reclassification for broadband (with strong forbearance) to setup some real net neutrality rules. We also covered the unhappy response from the big broadband players who are just repeating the same talking points from the past year, claiming that they'll suddenly stop investing in broadband and how this will kill the internet (ignoring that they already rely on Title II for a number of things, including internet infrastructure).

But the real fun is coming from the politicians and the pundits who seem to be trying to out-crazy each other in coming up with the most ridiculous analogy/description of what Title II means for the internet and the world. The one getting the most attention has to be Senator Ted Cruz who declared net neutrality "Obamacare for the internet."

It's not, of course. Not even close. Matthew Inman, over at TheOatmeal has penned a fantastic response to Cruz, explaining the basics of what net neutrality is really about, and why it's just ridiculous to claim it's "Obamacare for the internet." You should read the whole thing, because it's much funnier than just this snippet (and you'll also understand the crab taco reference), but here's a snippet:

But, honestly, the "Obamacare" line was just one of many crazy comparisons. Here's Fox legal analyst Andrew Napolitano calling it "Orwellian" (I'd embed the video, but apparently MediaMatters still doesn't realize how to use SSL, so we can't) to refer to it as "net neutrality" saying that it's really about taking "the choice of buyers and sellers out of the market." And that's in response to Fox's Stuart Varney claiming (incorrectly) that the President's proposal is "one speed for all, one price for all." Neither of those statements are even close to true. There is nothing in the proposal that involves "one price for all" or "one speed for all." It's just about setting up a system where a broadband provider cannot discriminate and favor their own services over another's. It's the kind of thing you'd think the guys at Fox would appreciate, given that one of their main competitors, MSNBC, is owned by Comcast.

How do you think Fox's Napolitano and Varney would feel about Comcast slowing down access to Fox's videos and websites while pushing those visitors to visit MSNBC instead?

And if that wasn't crazy enough, let's take it up another notch. We got an unsolicited "statement of Roslyn Layton" in response to President Obama's proposal. I have no idea who "Roslyn Layton" is and, and frankly, have no interest in doing the Google search to find out, but I know plenty from the fact that she's actually claiming that this new plan to make sure that the internet is open and free from unfair blocking for all is somehow a victory for the Russians, Chinese and Iranians:

During President Obama’s official visit to China today, the White House issued a statement of support of government regulation of the Internet with the classification of broadband under Title II of the Telecommunications Act from 1934. The symbolism of this statement appearing while President Obama is in China could not be more Orwellian. The Chinese internet is everything that we don’t want in the US: state ownership of the enterprises that comprises the Internet, its infrastructure, content, and connectivity; top-down regulation of every aspect of the Internet experience; and government collusion with industry to create Internet companies. Should the US take the route of reclassifying broadband under Title II as Obama suggests, it would bring the the US dangerously closer to the Chinese model where the internet is “government allowed”.

Title II is not only bad news for the US, but for the rest of world. Indeed foreign authoritarian governments have been looking for justification to monitor networks and users under the guise of net neutrality and the “Open Internet”. Obama’s announcement could not be a better present to the leaders of China, Iran, and Russia.

Except that's the opposite of fact. A plan that specifically calls for "no blocking, no throttling, increased transparency and no paid prioritization." Does that really sound like a plan from China, Iran and Russia? Does Layton think anyone thinks that statement is even within the same area code as the truth? While some others are making similar statements, they at least admit that those countries will use "any action" by the US government as a supposed defense for seeking to regulate the internet.

But that includes any rules that would be put forth, including the rules under Section 706. So the fact that Russia, China and Iran would lie and totally misrepresent what rules under Title II mean doesn't magically mean that Title II would give them any extra cover.

And that's because it's simply wrong that Title II is "regulating the internet." As we've explained many times, there are legitimate concerns about using Title II -- but these complaints above are hysterical and simply wrong. And by being so hyperbolic and apoplectic, they're actually doing their side a disservice. Anyone who actually knows what's going on knows for a fact that rules under Title II aren't anywhere near as problematic as all of these claims are making it out to be.

Taking clear rules that are designed to keep the internet more accessible and more open and less susceptible to interference shouldn't be seen as a partisan issue (a la Cruz) or "regulating the internet." It's not. It's about defining the rules under which underlying infrastructure must agree to -- to keep the internet itself free from dangerous interference by gatekeepers who have a long history of interfering. It's certainly not about supporting totalitarian censorship-happy regimes, but the exact opposite. It's about making sure that everyone can get their message or service out there, and not worrying about having a giant broadband player block access over its last mile monopoly.

To take an issue that is about keeping the internet open and free, and pretending it's going to lead to a censored and "Orwellian" internet is just ridiculous and wrong.

Reacting like this just makes everyone making such claims look really, really silly.

Originally Published: Tue, 11 Nov 2014 14:11:00 GMT
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[Mike]

Oh, AT&T. For a good thirty years the telco has used a halt in "network investment" as a bogeyman to scare government away from any and all consumer protection policies. Do something we don't like, AT&T will usually argue, and we won't invest in the technologies of tomorrow, leaving you all stuck in the stone age and regretting the day you tried to challenge us. Usually said network expansion is a phantom; the company will simply manipulate numbers to actually create artificial broadband gaps, then promise to fill those gaps each and every time they want a regulatory favor.

AT&T has been doing it again lately with the DirecTV deal -- promising to shore up broadband gaps that should have filled years ago (thanks to billions in government subsidies) if it's allowed to gobble up a pay TV competitor. Basically, I've watched for ten years as AT&T just shaves off a few million users from their existing or already-planned network build projections, then pretends these users will be new upgrades -- but only if AT&T gets deregulated, faces fewer price controls, gets some new subsidies, or is allowed to buy BellSouth, DirecTV, or T-Mobile.

This week, "the good time, down home AT&T network investment bogeyman stage show" came to town in the form of a pouting response to the President's clear support for Title II reclassification. AT&T CEO Randall Stephenson has breathlessly proclaimed that the telco is going to freeze fiber expansion because they're concerned about Title II network neutrality protections:

"We can't go out and invest that kind of money deploying fiber to 100 cities not knowing under what rules those investments will be governed," CEO Randall Stephenson said..."We think it is prudent to just pause and make sure we have line of sight and understanding as to what those rules would look like," he added."

In other words, do what we want or we'll make sure the United States remains a broadband backwater. The problem? It's a childish, transparent bluff, as AT&T gave up on meaningful fixed-line fiber investment years ago.

Despite a decade of massive, sweeping telecom industry deregulation, AT&T's fixed-line network investment has consistently dropped like a stone as the telco focuses on wireless services, where socking users with overage fees and imposing bizarre new anti-competitive pricing models is far more profitable. In fact, AT&T announced yet another $3 billion fixed-line CAPEX investment cut just last Friday, long before the President announced he wanted to go to war over Title II. As for those "100 cities," AT&T says were getting fiber under the "Gigapower" brand? All AT&T's really doing is cherry picking a few high-end wealthy housing developments where fiber is already in the ground, then dressing up those deployments to make them look much, much larger than they actually are.

It's something I affectionately refer to as fiber to the press release.

When Google Fiber entered the market, pampered, competition-phobic, incumbent ISPs like AT&T, CenturyLink and Frontier began putting on a stage show, proclaiming that they too were joining the 1 Gbps race. Usually these announcements come in the form of a press release with absolutely no meaningful statistics in terms of timeline, coverage areas, or the actual number of users covered. That's again because it's largely bullshit: with a few exceptions, the companies are simply bumping speeds in housing communities where in many cases, fiber was in the ground as part of the building process. You'd be amazed (or perhaps not) just how well this works on the press, helping to craft the image AT&T's keeping pace as a next-generation broadband powerhouse.

But not only is AT&T not significantly upgrading the majority of its users to fiber, they're actively pulling out of vast swaths of the United States under the guise of something they're calling the "IP transition." As I've noted previously, AT&T's going state by state, promising state politicians amazing new levels of network investment -- but only if AT&T is completely deregulated and all consumer protections (like having to continue to offer dial tone to old people so they can call 911) is stripped off the books. In reality, AT&T's looking to sever the connections of tens of millions of DSL users they don't want to upgrade, which will only strengthen the cable monopoly in many markets.

This week, AT&T's once again pretending that if the government doesn't do what the pampered duopolist wants, they'll freeze fiber investments that were already stagnating by choice. It's a bluff that AT&T never stops using because the press, politicians and public seemingly never learn to stop believing it. Of the dozens of technology news outlets covering AT&T's announcement, only a handful could be bothered to mention that AT&T's 100 city promise was incredibly ambiguous and disingenuous to begin with, or the fact that AT&T had cut fixed-line investment projections already just days earlier.

Originally Published: Wed, 12 Nov 2014 19:06:21 GMT
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[Mike]

The Washington Post put up an article last night claiming that FCC boss Tom Wheeler is telling tech companies that he isn't going to follow President Obama's net neutrality plan, following the President's surprise announcement on Monday of his support for real net neutrality rules under Title II. We've heard from a few people who were at that meeting who claim that the Washington Post article isn't entirely accurate. It is true that Wheeler is still very interested in a potential hybrid plan that almost no one likes, but that much of Wheeler's statements at the meeting were actually more focused on delaying an official decision by the FCC, which many had expected to come in a December FCC meeting. Wheeler, it appears, wants more time to study the different options. Another FCC commissioner, Jessica Rosenworcel (who seems more likely to support a plan including Title II reclassification), has apparently been pushing for the FCC to stick to the existing schedule and to make a decision "without delay."

Still, it does appear that Wheeler wants more time to potentially explore the possibility of the hybrid option, or whether or not to really support the President's Title II plan. According to the Washington Post, he made this rather unfortunate analogy:

“What you want is what everyone wants: an open Internet that doesn’t affect your business,” a visibly frustrated Wheeler said at the meeting, according to four people who attended. “What I’ve got to figure out is how to split the baby.”

Except, first of all, no, he doesn't need to "split the baby." The whole point of the split the baby story is not about compromising and going down the middle, but about how such a plan for a compromise is actually a decoy to get parties to reveal their true positions, leading to the final result, which does not involve such a compromise. Perhaps Wheeler thinks he's playing the long game here, and his apparent attraction to the hybrid plan is something of a similar decoy, but it's not at all clear right now.

Meanwhile, the White House is making lots of noise about how the President is really serious in supporting Title II and "itching for a fight" if Congress tries to challenge such net neutrality rules:

Ultimately, the White House decided that telecom companies probably would challenge any strong FCC rules in court anyway, so why not fully support calls by the tech lobby for far-reaching rules protecting an open Internet?

The aides saw a political upside to a strong statement. A key contingent of the president’s base — young, tech-savvy progressives — would be energized by the action, and a strong statement on net neutrality could also help his relationship with congressional Democrats, according to government and industry officials.

Obama also saw a more immediate opportunity to retake the political high ground from Republicans, according to a Democratic congressional aide. Should GOP lawmakers vote to overturn any protections enacted by the FCC, a presidential veto would put Obama on the side of millions of consumers who have called on the FCC to adopt strong regulations.

“I see him almost salivating over a congressional fight, or a fight with the carriers, over this issue,” said the aide, who spoke on the condition of anonymity because he is not authorized to talk on the record. “This is a populist issue he thinks he can win on.”

If true, that's a good sign, but unfortunately, we've grown accustomed to promises to take on issues like this, not followed up by any actual actions. But hopefully the message is being made clearly to Wheeler at this point that there is political backing if he decides to take the most reasonable step and support reclassification.

Originally Published: Wed, 12 Nov 2014 18:00:00 GMT
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[Mike]

Most of the industry's biggest ISPs have spent the last week either threatening to sue over the President's surprising support of Title II, or in the case of AT&T, pouting like a child and making empty threats. Most of the biggest ISPs also spent the week insisting that the FCC should simply back away from meaningful consumer protections, leaving such heady tasks to a broken, bickering Congress awash in telecom lobbying cash.

Since then, Comcast's top lobbyist (sorry, Chief Diversity Officer) David Cohen has come out with a second blog post entitled: "Surprise! We agree With the President's Principles on Net Neutrality." In it, Cohen does yeoman's work trying to pretend that Comcast's, like, totally on board with what the President is selling:

"While some have been led to believe something else, we support net neutrality. And we’ve been consistent in expressing our strong support for an open Internet – in statements, speeches, blog posts, filings, and advertising."

Like that time we ham-fistedly throttled all BitTorrent traffic then lied about it repeatedly, leading to a massive national firestorm of criticism, remember? Good times! Comcast proceeds to insist that gosh -- there's no need for real neutrality protections moving forward because they're already doing all that great stuff out of the goodness of their giant, altruistic heart:

"What is remarkable is that if you compare the President’s articulation of his vision for net neutrality as set forth in the White House talking points released yesterday afternoon, we are on the record as agreeing with every point: Free and open Internet. We agree – and that is our practice. No blocking. We agree – and that is our practice. No throttling. We agree – and that is our practice. Increased transparency. We agree – and that is our practice. No paid prioritization. We agree – and that is our practice."

Yes, remarkable! Except Cohen forgets to mention that the only reason they're still adhering to the shadow of the FCC's original rules is because they're required to do so as a condition of their 2009 acquisition of NBC Universal, a condition they're promising to expand to get their $45 billion acquisition of Time Warner Cable approved. Again though, those promises and conditions don't mean much because the FCC's original net neutrality rules contained oodles of loopholes that ISPs can easily dance over, under and around -- just as long as they claim their behavior was for the safety and security of the network.

Comcast's faux support of real neutrality protections is not "game playing or sophistry on our part" insists Comcast's Cohen, who'd have you forget that at the same time they're professing to love "transparency," they're working to make sure details governing their controversial interconnection details with Netflix -- a form of paid prioritization they're working to ensure aren't covered by net neutrality rules -- aren't made available to us plebeians.

After breathlessly claiming the company supports Obama's plan, Cohen then proceeds to proudly announce that the company doesn't support the only meaningful part of it:

"There is one important technical legal difference of opinion between the President and Comcast: we do not support reclassification of broadband as a telecommunications service under Title II. Doing so would harm future innovation and investment in broadband and is not necessary to put in place strong and enforceable Open Internet protections. We continue to believe that Section 706 of the Telecommunications Act provides more than ample authority to impose those rules, as the DC Circuit made clear."

It's amusing to see an industry whose speeds, service and customer support are so bad claim that if the government simply does its job, all of the wonderful things customers are experiencing will be taken away. Like all of that "investment" Comcast puts into its customer support, resulting in not only the worst satisfaction ratings in telecom, but the worst customer satisfaction ratings across any industry. Carriers are definitely going to need some fresher talking points as the debate heats up the next few months, as "we'll continue to skimp on investment and quality if meaningful rules get passed" isn't working very well.

Judging from the rather desperate ISP responses this week to the President's support of Title II, it's becoming more and more apparent that ISP executives are terrified that net neutrality and Title II are starting to see the kind of intense, authentic grass roots support we witnessed during SOPA. Equally worrysome for ISP executives is that the partisan divides that have stalled meaningful neutrality rules in the past are starting to fall away, as people of all affiliations begin to realize that the broadband industry is so broken and uncompetitive, that Title II is the only path forward when it comes to protecting consumers from telecom industry shenanigans and skulduggery.

Originally Published: Thu, 13 Nov 2014 21:39:00 GMT
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[Mike]

Earlier this week, we mocked AT&T's pouty and bogus announcement that it was "halting" fiber deployments because of "uncertainty" over the FCC's decision on net neutrality. As we pointed out, AT&T's fiber promises were mostly bogus in the first place -- using "fiber to the press release" in which it would announce fiber plans, but never actually deliver them (beyond, perhaps, a few carefully chosen developments). Furthermore, AT&T had announced that it was cutting back investment spending a week earlier, totally unrelated to the net neutrality stuff. Pretty much everyone saw AT&T's announcement as nothing but a ridiculously obvious ploy in response to President Obama's plan for real net neutrality.

However, it appears the FCC isn't going to just let AT&T get away with it. It has now sent the company a letter, calling its bluff, and asking for actual evidence that AT&T is really doing anything different as a result of net neutrality uncertainty. The letter notes that AT&T says it will only deliver fiber to the 2 million homes it committed to in hoping regulators would approve its DirecTV acquisition, and then asks for more detailed information on the plans beyond those homes:

(a) Data regarding the Company’s current plans for fiber deployment, specifically: (1) the current number of households to which fiber is deployed and the breakdown by technology (i.e., FTTP or FTTN) and geographic area of deployment; (2) the total number of households to which the Company planned to deploy fiber prior to the Company’s decision to limit deployment to the 2 million households and the breakdown by technology and geographic area of deployment; and (3) the total number of households to which the Company currently plans to deploy fiber, including the 2 million households, and the breakdown by technology and geographic area of deployment;

(b) A description of (1) whether the AT&T FTTP Investment Model demonstrates that fiber deployment is now unprofitable; and (2) whether the fiber to the 2 million homes following acquisition of DirecTV would be unprofitable; and

© All documents relating to the Company’s decision to limit AT&T’s deployment of fiber to 2 million homes following the acquisition of DirecTV.

You can almost hear the gritted teeth from AT&T's spokesperson claiming that the company is "happy to respond to the questions posed by the FCC." Yes, I'm sure happy is exactly how people there feel...

Originally Published: Fri, 14 Nov 2014 22:42:00 GMT
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[Mike]

We've talked more than a few times about the telecom industry's favored tactic of paying minority groups to parrot bad telecom policies, even if said policies actually harm these groups' constituents. Whether it's AT&T paying the The Hispanic Institute to support AT&T's failed bid for T-Mobile (a deal that would have raised rates for wireless users) or Comcast paying The United States Hispanic Chamber of Commerce to support their acquisition of Time Warner Cable (a deal that will likely only make bad customer service at both companies worse), combining these groups with the existing payroll of fauxcademics, consultants, think tankers and other sockpuppets helps create the illusion of broad support for anti-consumer policies.

It's a parlor trick that has seen endless implementation in the net neutrality debate. The latest example is the Minority Media and Telecom Council (pdf), which alongside a laundry list of diversity and minority groups (pdf) has been lobbying the FCC with net neutrality talking points that (surely coincidentally) mirror the broadband industry's. Namely, that weaker Section 706 rules are the best path forward (ignoring they do nothing and likely won't survive another legal challenge) and that tougher rules under Title II will kill network investment (which, as we've noted repeatedly, is also bunk).

At the front of this disingenuous diversity army appears to be Jesse Jackson, who, the Washington Post states, spent some time recently lobbying the FCC for weaker net neutrality protections. Why? Apparently Jackson believes that carrying the water for lumbering duopolies somehow will magically create jobs:

"Jackson "was unequivocal in voicing his opposition to Title II because of its effects on investment in broadband and because of the ultimate impact on minority communities and job creation," said Berin Szoka, another participant in the meeting with Wheeler who has also argued for Section 706."

Szoka is the same individual who has repeatedly tried to argue that killing off net neutrality will be a great thing for startups, so if anything, this latest FCC meeting must have at least had great entertainment value. As for the claim that Title II will kill investment (and therefore jobs), this has been debunked time and time and time again. When parts of Verizon's FiOS network were classified under Title II (mostly to net tax breaks for Verizon), you'll be pleased to learn that the sky didn't fall. Meanwhile, after a decade of deregulation companies like AT&T and Verizon have made it clear they're never going to upgrade many poor areas. In fact, they intend to back away from many of the communities they do serve.

Shockingly, neither Jackson nor any of the lobbying groups listed in "united" support seem aware of these realities in the slightest:

"Civil rights and diversity organizations are largely united in their support for Section 706, Jackson said in an interview Monday. He added that no matter which legal approach the FCC chooses, the agency's net neutrality rules should not end up marginalizing minorities and the poor. "We got a lot of poor folks who don't have broadband," said Jackson. "If you create something where, for the poor, the lane is slower and the cost is more, you can't survive."

Of course if you've been playing along at home you know that the entire concept of net neutrality revolves around protecting everyone (including the poor) from the nation's broadband duopoly, and the price hikes and assorted gatekeeper shenanigans they've been experimenting with for the better part of a decade. Yet somehow in Jackson's head, protecting the incumbent ISP's right to engage in anti-competitive pricing models will be a good thing for less affluent areas:

"Jackson raised substantive concerns Thursday about the ability of low-income Americans and minority communities to afford bandwidth-hogging Internet services, according to someone who attended the FCC meeting and had lunch with Jackson beforehand but who spoke on condition of anonymity because the meeting was private. Internet plans that exempt some applications from consumers' monthly data caps are one way to make data more affordable, and the tactic has become a popular business strategy in developing countries. But the practice also cuts against the principle of "strong" net neutrality because exempting some services from the cap necessarily means giving them special treatment over others. "[Jackson] immediately glommed on to this," said the person. "There are some strands of net neutrality … that are in direct conflict with low-income Americans."

Plans that "exempt some applications from consumers monthly data caps" sounds a lot like AT&T's misguided "Sponsored Data" efforts, which involve companies paying AT&T a fee for their content to bypass the company's usage caps. It's an idea that's solely about creating a new revenue stream for AT&T, but has the potential to hurt small companies and non profits that may not be able to pay AT&T's troll toll (how exactly would that help the poor?). And while there are some international examples of cap-exempt services being experimented with in developing nations where infrastructure barely exists (see 0.facebook.com and Google Free Zone), we're talking about the United States.

And here in the United States, our friendly neighborhood duopoly giants are looking for any opportunity to jack up what are already some of the highest prices in the developing world. If Jackson and friends really want to help their constituents, these diversity and minority groups could focus on things like fighting state laws that ban communities from improving their own broadband. I'll go out on a limb and guess that these groups' obfuscated financial donors would prefer that doesn't happen. Instead, by supporting the status quo and ensuring we take the weakest path possible on net neutrality, Jackson and friends are fighting against the best interests of the very same people they claim to be supporting.

Originally Published: Wed, 19 Nov 2014 19:23:36 GMT
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[Mike]

While Title II is the best net neutrality option available in the face of a lumbering broadband duopoly, it still doesn't fix the fact that the vast majority of customers only have the choice of one or two broadband options. It's this lack of competition that not only results in net neutrality violations (as customers can't vote down stupid ISP behavior with their wallet), but the higher prices and abysmal customer service so many of us have come to know and love. Stripping away protectionist state laws can help a little, as can the slow rise of services like Google Fiber. But even these efforts can only go so far in blowing up a broadband duopoly, pampered through regulatory capture and built up over a generation of campaign contributions.

One solution is the return to the country's barely-tried implementation of unbundling and network open access, or requiring that the nation's subsidy-slathered monopolists open their networks to allow other competitors to come in and compete. There are many variations of this concept, and it's something Google Fiber promised in its markets before backing away from it (much like their vocal support of net neutrality). Obviously being forced to compete is an immensely unpopular concept for the nation's incumbent ISPs. Given that those companies dictate and often literally write the nation's telecom laws, these requirements were eliminated in a number of policies moves starting in 2001 and culminating in the FCC's Triennial Review Remand Order of 2004 (pdf).

This was amazingly presented at the time as a way to improve competition and spur investment, but primarily resulted in a bloodbath as dozens of consumer-friendly, smaller independent ISPs and CLECs were killed off, perpetuating and further cementing the noncompetitive duopoly we have today.

One of the few small ISPs to manage to run that gauntlet and survive it was California's Sonic.Net, which has since proceeded to not only build a sizable regional network of its own in California, but to manage to treat consumers well while doing it (Sonic has been praised by the EFF repeatedly for consumer-friendly data disclosure policies). In a blog post last week, Sonic.net CEO Dane Jasper notes that neutrality issues are just a symptom of the lack of competition, and to fix these we're going to need to start thinking differently:

"Lets call it like it is: in most of America, we’ve got a broadband duopoly at best. And it’s simple economic theory and best-practice capitalism that in an unregulated near-monopoly, you will see manifestations of policies, practices and behaviors that are not always customer friendly. If we accept that high speed Internet access is essential for modern life, the fact that we need a set of controls that assure that an entrenched operator won’t use their captive audience in an unreasonable way shouldn’t come as a surprise.

While neutrality is the topic of the day, the real fix is to reinvigorate competitive Internet access in America. Competitive access in Europe supported by legislation similar to The 1996 Act has resulted in lower costs for consumers and far more choices in Europe. What Michael Powell decided to do hasn’t worked out as well for Americans. Today’s FCC should return to the roots of the Telecom Act, and reinforce the unbundling requirements, assuring that they are again technology neutral. This will create an investment ladder to facilities for competitive carriers, opening access to build out and serve areas that are beyond our reach today."

This isn't just a pipe dream. While we pretended to try open access as a concept, we never tried very hard. For the few years it was attempted, incumbent ISPs repeatedly made cooperation impossible for a smaller carriers, intentionally sabotaging installs, delaying support calls, and generally doing their very best to make sure that the concept didn't work. Carriers paid regulators to nap on these issues before then FCC boss Michael Powell (now the top lobbyist for the cable industry) ultimately decided to kill the idea for good. This is, opponents of the idea will insist, somehow proof positive that the concept of open access doesn't work.

Except real-world data has repeatedly shown the open access model results in more competition and lower prices. This Berkman Center study (pdf) commissioned by the FCC (which the agency promptly ignored) showed the positive benefits of an open access model in a significant number of countries, including France. The result? French consumers, awash in competition, pay among the lowest prices anywhere for telecom services. This Venture Beat report from last week conveniently illustrates how an American that was paying Comcast and AT&T $230 every month had his mind blown by the experience of real competition:

"Now we live in the city center of Toulouse, France, in an apartment where I’m a broadband customer of a company called Numericable. Here’s what I get for $63 per month: 100 Mbps download speed, 250 cable channels, a home telephone with unlimited international calling, and a mobile phone that includes unlimited minutes and 3GB of data usage each month. (The only tradeoff was losing my unlimited AT&T data plan; but I also never come close to using 3GB.)...Separately, I’m getting ready to sign my wife up for a $20-per month mobile plan with mobile provider Free that comes with unlimited calling and 3GB of data."

Despite the fact this model clearly works, it's never considered in policy discussions as a serious possibility. Why? Quite simply because the incumbent providers don't want it. Through the use of their various PR folk, astroturfers, think tankers, fauxcademics and assorted hired mouthpieces, they've successfully managed to utterly vilify the concept, painting it as the very worst sort of government meddling in (not actually) free markets. Instead, we've chosen to head down the path of letting the nation's duopolists dictate telecom policy, and the end result should at this point be painfully obvious to everyone. Well, except the industry lobbyists who still somehow insist we're all living in a competitive broadband Utopia.

Originally Published: Fri, 21 Nov 2014 20:35:47 GMT
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