Wednesday, September 13, 2006

Major U.S. Trade Group Makes Case for Neutrality

The American Electronics Association (AeA) released a report yesterday strongly supporting Net Neutrality and urging Congress: "Don't stifle competition and innovation by allowing network operators to change and distort what is currently a highly competitive system."

"The principles of Net Neutrality have created the Internet as we know it -- the most dynamic network for communication and commerce in human history," states The Case for Preserving Net Neutrality, a report by AeA, which represents 2,500 companies from every corner of the high-tech industry.

In this latest brief on market competitiveness, the AeA calls on Congress to "safeguard the competitive nature of the Internet by allowing consumers and content providers to connect with each other in an open marketplace, providing consumers with equal access to all content."

According to the report, the only way to do this is for Congress to prevent companies like AT&T, Verizon and Comcast from abusing their market power by imposing discriminatory new surcharges that favor the content from companies and Web sites that pay them the most.

Allowing the nation's largest phone and cable companies to tilt the market in favor of larger and better funded content providers would "undermine the fundamental principles of open and free exchange of information across the network," according to the AeA report.

Despite the spin now emanating from the phone and cable company PR firms, the threat is very real.

Big Ed
AT&T chief Edward Whitacre Jr. (pictured right), claimed last year that Internet content providers plan to start charging extra for use of "my lines." BellSouth’s Chief Technology Officer, William Smith, told reporters that his firm should be able to charge content providers to prioritize their content. Verizon's Chief Executive Ivan Seidenberg told the Wall Street Journal of company's plans to start charging Web sites more so they "don’t sit on our network and chew up our capacity.”

Flat Out Lies

The report explodes the telco myth that content providers aren't already paying for access, conservatively estimating that the largest service providers receive at least $13.1 billion annually in bandwidth fees from 7.3 billion business Internet subscribers.

This is direct contradiction to telco spinmeister Mike McCurry, who in an op-ed for the Baltimore Sun claimed that Google’s access to bandwidth doesn’t cost the company a dime -- an assertion that Tech Dirt's Michael Masnick called "a flat out lie."

Neither McCurry (pictured right) nor the army of lobbyists that the phone and cable companies have unleashed upon Washington can be trusted in this argument against Net Neutrality.

Telcos already profit handsomely from charging companies for their share of bandwidth. Now, they want to add surcharges that are based on the ownership or source of content -- a concept that would result in a tiered Internet, weighted towards the largest companies and against the sort of Web innovation that typically bubbles up from below.

According to the AeA report:
"By tiering the Internet based on who pays the most to prioritize their content, the telecom industry is creating a system of haves and have-nots: those that can afford the premium for preferred treatment and those that cannot.

"A tiered system for broadband services is already in place, but it is based on the bandwidth purchased by the consumer and content provider, who both are already paying for Internet access. This current system allows consumers equal access to any legal content they choose and gives even the smallest content provider the chance to compete in a robust marketplace. This system treats all packets equally."

Companies like AT&T, Verizon and Comcast will stifle the competitive marketplace if they're allowed to discriminate based on who can afford to pay their planned premiums.

The phone and cable companies seek to strip away the egalitarian idea on which the Internet was founded -- which rewards the best concepts or Web sites -- and shift power to the larger companies that can outbid competitors for preferential treatment.

The AeA report provides guidance for those in Congress who are willing to stand with the public and protect the Internet from such predatory and anti-competitive schemes.


Anonymous said...

Is everyone aware of one of the most powerful opponents of Net Neutrality? We should be aware and perhaps be somewhat afraid.

His name is Scott Cleland. Don’t know him? Well, much of “official” Washington, the mass media, and Wall Street relies upon him – consistently – as an alleged “objective” source of information regarding Telecommunications laws and Internet Policy. and here:
Common Cause has even tangled with him:

But Mr. Cleland is not a lawyer – he’s a former investor researcher for the financial industry and now a shaper of companies’ messages . His background is in providing advice for picking stocks, bonds, and securities.
He’s never written a legal brief, but he sure has a number of interesting legal opinions.

He’s also a paid consultant of the Baby Bells and other large companies opposed to net neutrality. Mr. Cleland has consistently preached the gospel being sold by large companies such as Verizon (formerly Bell Atlantic) and AT&T (formerly SBC). He’s pushed these policies to the FCC and to Congress, as far back as when new companies spawned in the wake of the 1996 were attempting to offer alternative telephone services.

Mr. Cleland assisted companies like Bell Atlantic in promoting policies in a successful effort to change policies which ultimately denied the public of competitive choices for their phone and cable services.

Who is calling Mr. Cleland to task? What’s his stake in this debate? Isn’t he supposed to be an “objective” analyst for financial investors? How can they rely upon his advice if he’s just a shill for the (Big) Baby Bells? Again, are we aware?

- WashFirm Lawyer
(Who am I? I'm an attorney at a large law firm in DC which reprsents players in the NetNeutrality "game". I'd rather not identify myself, but I know many of the issues and thought this was one to bring forth for consideration and discussion).

Scott Cleland said...

This is Scott Cleland responding to the "anonymous source" that did not have a strong grasp of the facts.

I have been very upfront that, of which I am Chairman, is funded by broadband companies. I sought them out because I thought the net neutrality idea was a horrible one and that it could be defeated in a free and open debate on its merits.

The anonymous person also does not have a very good memory. My past hard hitting research on other subjects actually enraged the very assocations and companies that I work with now.

What gives me credibility in Washington is that I am driven by the facts, the evidence, the analysis, and the merits of arguments.

I also am not afraid to go on the record with a strong opinion and share my analysis and views. I have a long record of standing up to monopolists and for being a free marketeer. I firmly believe competition better serves consumers than monopolies of regulation.

I am happy to debate the facts and the merits by the anonymous washDC member of the DC bar... but I doubt if I will ever find out who it is becuase law firms generally are very wary about having their lawyers comment on blogs because of the liability for the firm.

And as any good lawyer knows, personal attacks are what you stoop to when you can't win in the open or on the merits.