Tuesday, July 15, 2008

Beware of Cable Guys Making Promises

Comcast can't seem to get it straight.

On the one hand, the cable giant blocks access to certain Web applications. On the other, Comcast executives extol the virtues of a "free market" to safeguard against any abuse of users' right to choose online.

So which is it?

What the cable giant really wants is to thwart any policies that would stop it from doing whatever it pleases. And at this moment the company wants to play gatekeeper -- "managing" its network in a way that prevents users from gaining access to the Open Internet.

Of course, Comcast's executives will never admit this. But their true intentions lurk in the fine print of statements and filings they have made at the Federal Communications Commission over the years.

These filings reveal a familiar pattern. The company uses free-market rhetoric and pledges of good corporate citizenship to exact favorable rule changes from the federal agency. Once those rulings are in place, it does an about face -- breaking promises and creeping further towards throttling our Web experience and dominating the access market.

As the FCC weighs how to sanction the company for blocking access to applications like BitTorrent, it's worth looking into Comcast's Washington history of bait and switch.

A little digging through FCC's archives tells the tale.

Exhibit A: Open Access

Back in early 2002 Comcast was engaged in the debate over whether cable companies should share “their pipes” with competing Internet service providers. Such "open access" requirements were the law during the age of dial-up Internet, resulting in dozens of competing ISPs delivering services via a single phone line into the home.

Free Market Do Do Birds

Casserly: Friend to Open Access?

Comcast was set against open access rules being extended to cable Internet and deployed legions of lobbyists in Washington to fight the notion. But when they worried their purchase of (the old) AT&T’s broadband service might be derailed, they pledged to offer open access to competing services.

In an "ex parte" letter filed at the Commission in February of that year, Comcast's attorney James L. Casserly touted this promise as:
Concrete evidence of Comcast's intention to afford high-speed Internet customers a choice of ISPs and of the ability of industry participants to make the necessary arrangements through voluntary, commercial negotiations
In a subsequent filing Comcast promised that the merged entity "will have a significant incentive to continue to work with independent ISPs." And in another filing still, the company pledged: "Comcast is committed to negotiating mutually beneficial commercial arrangements with independent ISPs."

Comcast coupled these filings with press releases heralding the company’s partnership with independent ISPs like NetZero, Juno and Earthlink (remember them?) as a sign of their commitment to open access.

Comcast Changes its Tune

So what happened? Based upon Comcast's promises of good behavior, the Commission exempted cable companies from open access rules – opening the door to the court decision and subsequent FCC rulings that put Net Neutrality in jeopardy.


Waz: The Old Bait and Switch

On the heels of the FCC decision against open access, Comcast did a 180. In October 2003, the Washington Post reported that "Comcast officials say they are no longer so keen on the idea" of agreeing to provide access to other services. Joe Waz, a Comcast vice president, added: "If you don't need ISPs for basic connectivity to the Internet, what value do they bring to our customers?"

In other words, as soon as Comcast execs got what they wanted from the FCC, the promises to share their wires at a fair price were forgotten. The press releases touting their deals with competing provider weren’t worth the paper on which they were written.

The end result is that, today, a Comcast customer has no other choice but Comcast for Internet service via their exclusive cable connection. They're stuck with one option, and the "free market" – little more than a chimera in America's high speed Internet world -- had nothing to do with it.

Exhibit B: The Open Internet

Fast forward to 2008. Comcast is now making promises to work with competing video and Internet telephony services and stop blocking popular file-sharing applications. They insist there’s no need for FCC oversight to protect our right to use services of our choice every time we connect to the Web.

Free Market Do Do Birds

Cohen: Free Market Wise Guy

Washington should "rely on the marketplace rather than government regulation to advance the provision of Internet services," wrote Comcast Executive Vice President David Cohen in a March filing with the agency. Cohen points to a press release -- issued jointly by BitTorrent, Inc. and Comcast -- as evidence of the "fundamental wisdom of this approach."

In a July filing with the Commission, Vice President Kathryn Zachem pledges Comcast's commitment "to provide network management solutions that benefit consumers and competition."

If past is prologue, why should we expect things to be any different?

Trust the Profit Motive Only

The Comcast message, in case you’ve missed it, sounds like this: "With the free market, we can solve our own problems and deliver to end users the Internet experience that they desire. Trust us."

"A company has a nature," Professor Larry Lessig said earlier this year. "Its nature is to produce economic values and wealth for its shareholders." That one essential truth is about as much trust that we need to extend to corporations, Lessig adds.

Public policy, on the other hand, is designed to make it profitable for corporations to behave in ways that serve the public interest.

With Chairman Martin's latest move to hold the cable company accountable, it seems some at the federal agency have learned this valuable lesson.

No comments: