Tuesday, October 24, 2006

NY Times Op-Ed: Stranger than Fiction

Former FCC Chairman William Kennard threw a rabbit punch at Net Neutrality in a strange and questionable op-ed in the New York Times Saturday.

What makes this writing so strange is Kennard's notion that we can best help underserved communities by giving aid and comfort to the "merely rich" companies that routinely overlook them.

What makes the op-ed so questionable is that Kennard supports anti-Net Neutrality legislation without fully disclosing his own financial interests in its passage.

Let's start from the top.

Ignoring the 'Merely Poor'

Somehow Kennard treats the fight over Net Neutrality as a distraction to improved access for all:
"Unfortunately, the current debate in Washington is over “net neutrality” — that is, should network providers be able to charge some companies special fees for faster bandwidth ... Policymakers should rise above the net neutrality debate and focus on what America truly requires from the Internet: getting affordable broadband access to those who need it."

His solution, the nation's largest phone companies – whom he calls the "merely rich" -- should be unfettered by regulation so that they can bring better broadband to previously under-served communities.

Kennard's argument conveniently ignores the past eight years -- under a regulatory regime created in part by Kennard's decisions -- during which access to the Internet for most Americans has become controlled by a handful of companies. During the same time, increases in cost per bandwidth have priced many communities out of the market.

In the years since Kennard helped established the regulatory framework, the United States has fallen from first to 16th in the world in broadband penetration, according to the International Telecommunications Union. It's gotten so bad that The U.S. has gone from 1st in the world to rivaling, as he puts it, Slovenia.

A Problem of His Making

That's bad enough. But then Kennard's piece gets stranger than fiction.

He was the Chairman of the FCC at the time that DSL and cable modems began to roll out. Had he explicitly defined broadband as a common carrier (and hence formally subject to nondiscrimination requirements) and had the FCC produce an iron clad record to support that position, it is quite probable that we would never have opened the opportunity for the network operators to use Kennard's loopholes, as AT&T Chairman Ed Whitacre explained, to craft plans for a discriminatory tax on Web sites.

Kennard could have made Net Neutrality more enforceable and capital would have adapted itself to that framework. Instead, he put his fingers in his ears and refused to deal with the problem. This permitted the network operators to organize their legislators, lobbyists and shills to eventually lead us to the path we have taken now.

It could be Kennard’s fault that we’re in this Net Neutrality battle at all. To come out now in the pages of the New York Times describing Net Neutrality as a distraction is supreme irony, since he's partially the reason that we’re even debating the issue today.

Getting 'Merely Richer'

It gets weirder still. Kennard (and by extension the Times) attempt to cover his post-FCC tracks by disclosing only that "some companies" in which he invests at The Carlyle Group could benefit from passing legislation without Net Neutrality.

For their part, the Times states simply that Kennard sits on the newspaper's board.

But shouldn't they have mentioned that he also sits on the boards of directors of Sprint Nextel Corporation, Hawaiian Telcom and Insight Communications (a cable provider) -- companies that have lobbied to kill Net Neutrality?

It seems, as Larry Lessig puts it, "unseemly" when a FCC Chairman "moves to the boards of the companies he used to regulate, and then uses the op-ed page of a paper on whose board he now sits, to argue for the poor by pushing the agenda of the 'merely rich.'"

Ignoring the Grassroots

Kennard wrongly paints this crucial policy debate as a clash of corporate titans. He writes:
"This is essentially a battle between the extremely wealthy (Google, Amazon and other high-tech giants, which oppose such a move) and the merely rich (the telephone and cable industries). In the past year, collectively they have spent $50 million on lobbying and advertising, effectively preventing Congress and the public from dealing with more pressing issues."

It's true that the phone and cable industry opposes Net Neutrality It's also true that big Internet companies like Google and eBay support protections for Net Neutrality under the law. But the story doesn't end there.

Our unprecedented alliance represents more than 800 pro-Net Neutrality groups from across the political spectrum – including the ACLU, the Christian Coalition, the American Library Association and every major consumer group in the country.

SavetheInternet.com hasn't taken a penny of corporate money from the big Internet companies or anybody else. More than a million real people have signed a petition supporting Net Neutrality at SavetheInternet.com or on the Web sites of coalition members, generating hundreds of thousands of calls and letters to Congress.

Thousands of bloggers have linked to this site -- many of them posting free ads to counteract the expensive misinformation campaign launched by Astroturf (fake grassroots) groups like Hands Off the Internet and TV4Us.

The debate over Net Neutrality isn't being fought between corporate Titans alone. It pits the special interests of the few (phone and cable companies) against a vast grassroots effort involving Americans from every corner of society.

Kennard conveniently ignores the word-of-mouth campaign that has lifted the crucial issue of Net Neutrality from obscurity and thrown a wrench in the phone and cable giants' plan to overhaul our telecommunications laws behind closed doors.

The debate over Net Neutrality should be a broad, public conversation about what the future of the Internet will look like. By portraying this issue as corporate infighting, Kennard appeases his colleagues among the "merely rich," but he fails the rest of us.

Sunday, October 22, 2006

Should AT&T Decide the Future of the Net?

YouTube's video site beat out Google's because the Internet provided a "level playing field" upon which a video-sharing startup could compete with a major player based on its merits alone.

Stanford Law professor Larry Lessig wrote in yesterday's Financial Times that "the owners of pipes delivering video content to users on the internet did not prefer one service over the other. The owners of pipes simply passed the packets of data to users as the users chose."

Lessig, who is a charter member of the SavetheInternet.com Coalition, describes this as a perfect example of the ways the free market is nurtured by Net Neutrality. Net users are free to pick the product of their choice based on the quality of the service and NOT on the discrimination of their network provider.

YouTube beat out Google Video because of its superior video technology and social networking tools, NOT because its executives had struck a special deal with AT&T to favor its Web site over others.

It's simple. Provide a better product and let the customers decide.

Isn't that one of the most basic tenets of a free and competitive marketplace? Not according to AT&T, Verizon, Comcast and their well-heeled army of legislators, lobbyists and shills.

Network owners want to tip the Internet balance towards themselves and their corporate allies. They want to charge select companies a “premium” rate to have their sites flow more efficiently to customers. Those who can't pay the proposed telco tax would be shut out. Their Web gatekeeper scheme allows companies like AT&T – and not the consumer -- to pick which sites and ideas succeed in the online marketplace.

Do you want AT&T to decide the future of the Internet?

Writes Lessig:
"[I] f network owners are permitted to set up internet toll booths, imposing a special tax on providers of content and applications, then it will be the new innovators who bear the burden of these taxes most heavily. The point is obvious when you think about the history of YouTube. Had network owners been charging an access premium, investors in an upstart like YouTube would have had good reason to think twice. All taxes are a barrier, but this tax would be a particularly high barrier to innovation."
If we had real competition among broadband providers, the free market would sort these sorts of things out. Providers that discriminate would lose customers to those that protect Net Neutrality. But in the US broadband landscape competition is dying.

Lessig cites figures from Free Press' recent report "Broadband Reality Check II," which shows that there are fewer competitors offering broadband connectivity today than there were just six years ago. According to the report, four companies account for a majority of all consumer broadband; 10 account for 83 per cent of the market.

Another study by the Government Accountability Office found that the median number of providers available to a given household is just two. That's right. Most Americans have access to two or less broadband providers. That's all. Cable and DSL systems dominate, holding more than 98 percent of the broadband market.

There simply is not enough competition between different technologies to produce any kind of deterrent to discrimination. Without Net Neutrality, the telephone and cable duopoly will leverage its market power over the network to gain control over the content and application markets, establishing a handful of giant companies as the gatekeepers of the Internet.

Net Neutrality legislation "will make sure that the one bright spot in the internet economy – the one place where vigorous competition continues – will be protected," Lessig concludes. "Congress needs to remove the incentive to keep broadband in its currently hobbled state. A thin rule of network neutrality could help do just that."

Wednesday, October 18, 2006

The Telco Lobby Abhors a Vocal Public

In the six months since the SavetheInternet.com Coalition was launched, millions of Americans have joined the campaign, spoken out for Internet freedom and put Congress and the phone companies on notice.

This grassroots movement barely existed at the beginning of 2006. Now we're on the verge of toppling one of the most powerful lobbies in Washington.

The reason for our success? Organized and overwhelming public support for a free and open Internet.

Staying Organized and Energized

Phone and cable companies have spent more than $100 million on lobbyists, Astroturf groups, political campaigns and PR firms. But they are finding that money can't overcome organized public opposition.

Internet users have mounted a defense of Net Neutrality using blogs, YouTube videos, MySpace sites and emails to send Congress an overwhelming message of public support for a free and open Internet — and opposition to any legislation that cedes control of the Internet to the phone and cable companies.

SavetheInternet.com's grassroots success has been covered in the pages of nearly every major U.S. newspaper and on innumerable blogs. According to a recent article at Salon.com, our "ragtag army" has put Congress and phone lobbyists on the run.

Tonight, Oct 18, PBS stations will air "The Net at Risk," a 90-minute documentary produced by Bill Moyers, which hails our grassroots efforts to support Net Neutrality (check local listings). After the show, participate in a live Web debate featuring Free Press Policy Director Ben Scott and phone company flack Mike McCurry of the Astroturf organization Hands off the Internet. This discussion will no doubt show -- once again -- that the arguments of phone company lobbyists and shills crumble in the face of a vocal and well-organized public.

But the debate shouldn't end there.

Stopping the Lame Duck Congress

While we have stymied the Internet gatekeepers' efforts thus far, we're not out of the woods yet.

The Senate version of the telecommunications bill -- sponsored by Sen. Ted Stevens of Alaska -- will not come to the floor for a vote before the Nov. 7 midterm election. But we must guard against any attempt by Congress to sneak through this legislation during the post-election "lame-duck" session.

SavetheInternet.com Coalition members need to keep the heat on elected officials in November and December -- before the 209th Congress gavels to a close. We need to pay particular attention to any senator who might side with the phone companies and attempt to pass Stevens' bill under the dark of night.

Keeping the Public Engaged

If Congress can't pass a communications bill in 2006, it will have to start over in January. It's possible that we will have a House and Senate that are more sympathetic to Net Neutrality. But don't expect the phone companies to simply roll over in 2007.

If we hold out against the phone companies until 2007, we'll have scored a victory "of historic proportions," according to Geov Parrish of WorkingforChange.com.

"Name the last time a lobby with that much power and money was stymied in its top legislative priority by a citizen movement," Parrish wrote "Offhand, I can't think of any examples at all. And this during the most corrupt, lobbyist-pliant Congress in recent American history."

Our success thus far reflects the Internet's new power to mobilize millions of people as a democratizing force. We've sent a potent message to Washington and need to go on the offensive in 2007 to ensure that Net Neutrality becomes law.

That's why the public's active involvement is so important. The more an organized public is engaged in the policy-making process, the more likely the Internet that Congress shapes will serve the people, not just powerful corporations.

If we keep up this fight, the era of corrupt media policy will soon come to an end.

Friday, October 13, 2006

Mega-Merger vs. Internet Freedom

Earlier this week, the Justice Department went AWOL on protecting a free and open Internet for tens of millions of Americans. Now it's left to three men and one woman at the Federal Communications Commission to approve or scuttle the proposed AT&T-BellSouth merger.

At issue is whether the AT&T colossus should be allowed to gobble up the nation's third-largest phone company in its relentless march to re-assemble the Ma Bell monopoly. But the stakes are much higher today than when – prior to its 1984 antitrust break up – just one phone monopoly ruled the nation's copper wires and rotary phones.

Big Ed
In 2006, AT&T is poised to control all electronic media – not just telephones, but TV, music and the Web – that will enter homes via its same Internet "tube." The corporate giant – led by monopolist-in-chief Ed Whitacre – sees Net Neutrality as a major obstacle to this multibillion-dollar scheme. Without Net Neutrality, he’s free to toss the open, egalitarian Internet out the window.

A Bigger AT&T Is Bad for the Net

On Wednesday, the Justice Department stunned public interest advocates by green-lighting Whitacre's massive deal without any conditions or judicial review. The FCC as early as today could give a final approval. FCC Chair Kevin Martin has already indicated his willingness to follow the DoJ's lead and rubber stamp the $78 billion deal without protecting Internet freedom.

In Martin's view, the proposed merger does not raise a significant threat to Internet choice or Net Neutrality. Regrettably, this view ignores the enormous market power that a new AT&T would wield. The merged entity would become the principal – in most cases only – DSL provider in 23 states.

Martin has also ignored prior statements by executives of both companies. In interviews with the Financial Times, Washington Post and Business Week, Whitacre and BellSouth executives have outlined plans to consolidate their control over the Internet by erecting new online toll booths and discriminating against Web sites that don't pay their "special service" fees.

"There’s no bigger interest to the public than maintaining a free and open Internet," writes Art Brodsky of Public Knowledge. "But, like the Justice Department, the FCC is preparing to take a dive on the issue of Net Neutrality."

Deadlocked at the FCC?

But there is a growing glimmer of hope. Since Wednesday, when the DoJ passed on the deal, more than 20,000 Free Press and SavetheInternet.com activists have sent letters asking for a Net Neutrality condition to be placed on the merger. Two of the four commissioners who will vote, Democrats Michael Copps and Jonathan Adelstein, have indicated that they will support this as part of any merger. But they still need strong public support to prevail.

The fourth, Republican Deborah Tate of Tennessee, is expected to follow Martin's lead – deadlocking the FCC at 2-2.

According to Harold Feld of Media Access Project, the only way to break the tie would be for Martin to force a fifth commissioner, Robert McDowell, to "un-recuse" himself from the process. McDowell had backed away from involvement due to a conflict of interest from his prior work for phone companies trying to compete with AT&T.

"The FCC General Counsel has the authority to declare McDowell's recusal invalid if the public interest in resolving the merger application outweighs any appearance of impropriety," Feld says. "Such a move would be extraordinary, however. To the best of my knowledge, it has never happened."

It's up to the FCC to step in where the Justice Department fears to tread; to put away rubber stamps and 11th-hour maneuvers and serve the interests of a free and open Internet and the millions of Americans who use it.

Wednesday, October 11, 2006

Phone Giant CEO Hails Prospects for Merger

Richard P. Merryweather

Watch Our Exclusive Interview with Richard P. Merryweather, President and CEO of CT&T Com

Part I: 'Merger and Me'
Part II: 'Money Well Spent'

On the eve of the merger of the first and third largest phone companies, we sat down for a frank discussion with the mastermind behind the deal.

Moments after our meeting with CT&T Com's CEO Richard P. Merryweather, the Department of Justice green-lighted his company's plans to gobble up NorthBell -- a $78 billion deal that would create a communications colossus with access to more than 50% of the U.S. market.

Merryweather's merger goes before the Federal Communications Commission tomorrow, when it's expected to receive a favorable review from agency Chairman Kevin J. Martin. If approved, the deal would effectively re-assemble the Ma Bell monopoly that ruled our nation's communications industry for several decades.

But the merger isn't without its detractors. FCC commissioner Jonathan S. Adelstein, called the Justice rubber stamp of CT&T Com's merger “a reckless abandonment of DoJ’s responsibility to protection competition and consumers.”

Public interest advocates at Free Press, Consumers Union and Consumer Federation of America said that it is now "imperative" that the FCC add conditions to the merger, such as network neutrality -- the longstanding principle that prevents phone companies from controlling what users do, where they go and what they see on the Internet.

"The government has been deceived before by false promises that mergers of potential competitors benefit the public," said Mark Cooper, research director for Consumer Federation of America. "It should not be fooled again."

Critics 'Whiny'

"Who could possible think that a bigger CT&T Com could be bad," Merryweather told SavetheInternet.com.

"This merger will bring convergence and innovation to American consumers as fast as you can say 'massive vertically integrated telephone monopoly.'"

Merryweather spoke about the work being done in CT&T Com research and development laboratories to find "new and exciting ways to repackage plain old telephone services and unreliable broadband connections so they look exciting and new."

"Competition has taught us that we must be innovative at re-branding old services in order to charge the highest possible prices. This merger will make that easier for us."

Merryweather said that public advocates and "renegade members of the FCC" who criticize the merger were "living in the past."

Merryweather praised CT&T Com's "Pay Us Twice" plan as an alternative to network neutrality. "With Net Neutrality the Internet is just too complicated," he said. "With CT&T Com's 'Pay Us Twice' and middleman services, we'll ensure that we make lots of money.

Under the rule of CEO Merryweather, CT&T Com is leading the effort to rid the books of network neutrality protections.

Soon all digital media -- telephone, TV, radio and the Web -- will enter homes via a single broadband connection. Merryweather is seeking to control this "pipe" -- and the billions of dollars at stake -- by erecting new Internet toll booths and serving only those Web sites that can afford CT&T Com's special service fees.

Monday, October 09, 2006

Stopping Big Media, One Voice at a Time

Martin in action
Last week's FCC hearing in Los Angels was an extraordinary moment in U.S. media history. People came out in overwhelming numbers to tell the Federal Communications Commission that Americans want to turn back the tide of media consolidation.

Nearly 1,000 people packed auditoriums in downtown L.A. and El Segundo; and all but one of the more than 75 people who came forward testified against further media consolidation. Over eight hours of testimony, artists, writers, producers, directors, actors, small business owners and local citizens told all five commissioners about the devastating impact of media consolidation. (Listen to some of the testimony)

The question now is whether FCC Chairman Kevin Martin will actually listen to the public outcry and stop big media.

All around him, evidence is mounting that shows the serious problems caused by media consolidation. Free Press recently released a groundbreaking study showing the shockingly low number of TV stations owned by women and people of color. Upon reading the report, FCC Commissioner Michael Copps called the FCC's failure to promote diversity in our media a "national disgrace."

This followed news that the FCC had suppressed two studies that revealed the negative impact of media consolidation -- including one that showed media concentration was disastrous for local news coverage.

Chairman Martin has pledged to hold five more public hearings before the FCC votes on any media ownership rules changes. If Martin holds to this promise and hears out the public, he will learn that a vast majority of Americans do not want concentrated media. They want local owners, local coverage, and media that represent our diverse communities.

The StopBigMedia.com Coalition is working to make certain these hearings are publicized and packed to the rafters. After five more hearings like the one in Los Angeles, it would be unthinkable for the FCC to turn a deaf ear to the public and allow the Clear Channels, Disneys, Sinclairs and News Corporations to gobble up even more local media.

Media policies made in the public's name must not be made without the public's informed consent. That's why your active involvement is so important. The more all policies reflect public debate, the more likely the media system they shape will serve the people, not just powerful corporations.

Saul Alinsky famously wrote that the only way to beat organized money is with organized people. Well, last week organized people landed a haymaker in Los Angeles. If we keep up the fight, the era of corrupt media policymaking will come to an end.

Citizen Army Slays Telco Giants in DC

A ragtag army of bloggers and Internet activists have tripped up the phone and cable "Goliaths" using an arsenal of YouTube videos, MySpace sites, musical remixes, traditional grassroots tactics and innovative online organizing to make the case for Net Neutrality.

That’s how Daniel Reilly portrayed SavetheInternet.com’s efforts in his lead feature at Salon.com. Reilly writes about ordinary people who have banded together to beat back corporate lobbyists and their allies in Congress. This broad grass- and net-roots mobilization has successfully stalled a piece of legislation that only nine months earlier was slated for quick passage on Capitol Hill.

Reilly writes:
"[T]he Net Neutrality issue surfaced from the Internet and murky halls of Congress into wider public awareness. An unlikely coalition of advocates … motivated by what they see as threats to free speech, started taking the issue to their constituents with renewed passion. [Craig] Aaron of SavetheInternet.com says the strange coalition has definitely turned heads in Washington. 'For far too long, media policy has been big companies making decisions behind closed doors. Folks in D.C. got very used to making this sort of monumental decision without ever bothering to ask the public what they think about it.'"
At the beginning of the year most had predicted that the 2006 telecom bill was on the legislative fast track -- with Congress deep under the influence of hand outs from the phone and cable lobby.

According to OpenSecrets.org and Arlen Communications, these companies have spent more than $100 million on campaign contributions, Beltway TV and radio ads, congressional junkets and lobbyists this year. This spending spree is part of an effort to pressure elected officials to pass regulations that would place the financial interests of companies like AT&T, Verizon and Comcast before those of the public.

Many elected officials were willing to reap the corporate largesse and gut Internet freedom until a loose network of Web organizers, online innovators and grassroots activists brought the Internet sell off to light.

"Two very different models are now coming to head," Aaron told Reilly. "One is entrenched lobbyists in D.C. doing what they have always done, fighting it out inside the Beltway. On the other side is this new grass-roots movement, using new communications tools and finding new ways to organize. This is people using the Internet to save the Internet."

While we're pleased to receive praise for SavetheInternet.com's efforts, it's too early to declare victory for the grass roots and Net Neutrality. Members of Congress this week returned home as the 2006 election cycle enters its home stretch. It's possible, though, that Senator Stevens' will push his bad legislation through during the "lame duck" session that follows the November 7 vote.

Americans need to stay on alert. It's time to let all elected representatives know that a vote against Net Neutrality and for Stevens' bad bill, is a vote against a free and open Internet and a healthy democracy.

Tuesday, October 03, 2006

L.A. Hearing Our First, Best Chance to Stop Big Media

Martin in action
The Federal Communications Commission is in Los Angeles today to test the public waters against its plan to loosen the last remaining curbs to media ownership.

If recent public comments are indication, those waters are still boiling hot since the last time the federal agency tried -- but failed -- to hand over more control of local airwaves to massive media conglomerates like Tribune Company, News Corp and ABC/Disney.

As FCC chairman Kevin Martin prepares for his first in a promised half dozen public hearings, more than 100,000 Americans have already filed comments opposing the chairman's plans to unleash a new wave of media consolidation.

But the public outcry in 2006 might not be loud enough to stop the powerful forces of corporate consolidation.

At issue is whether the parent companies of newspapers should be allowed to own TV and radio stations in the same market. If the existing rules are lifted one company sould dominate major media in a single market -- owning as many as eight radio stations, three television stations and a major newspaper. A majority of the five commissioners at the FCC have indicated their desire to sweep away the rules that would prevent this, and clear a path for “media company towns” in which local public discourse is dictated by a single national media chain.

When the FCC tried to push through similar rule changes in 2003, millions of people contacted the FCC and Congress to voice their opposition, sparking a congressional rebuke and a Third Circuit Court return of the rules to the FCC. The FCC is now seeking to rewrite the rules. While we have yet to see 2003 levels of public response in 2006, the Los Angeles hearing may ignite a broader outcry.

Martin’s latest attempt to unleash consolidation is driven by the massive lobbying of the nation's largest media companies. Their motive is to fatten their wallets and not serve the public interest. Regrettably, this powerful media lobby has the ear of many at the FCC.

This is why speaking out in Los Angeles is so important. If you live within driving distance of one or both of the scheduled hearings today, do make the effort to get to the events. The StopBigMedia.com coalition has posted a number of resources (including fliers, posters, speakers' guides and parking information) that will help make your presence count. Volunteers also will be on hand to ensure that people get the chance to testify during the hearing.

Take a personal day off work, skip class, re-arrange your schedule and head to USC or El Segundo today.

Let Martin know that he can't simply ignore public opinion. Los Angeles is our best chance to set the tone for future hearings. Media concentration is bad news for the American public. It's time the FCC stopped Big Media.