Friday, March 24, 2006

Neutral Debate

The following are responses to my story, "AT&T Wants to Reach Out and Control You," which was posted by the good people at the new media blog Morph. I have responded to all of the comments made there. And copied the debate below.

It's clear from this that many misunderstand the history of the Internet and in doing so downplay the threat posed by the loss of a neutral platform. I hope we can clear up this confusion and move on to doing what urgently needs to be done:
Posted by: Paulaner01 March 22, 2006 08:48 PM

From a global perspective, how are we supposed to keep up with countries like Finland, Japan, and South Korea if we're going to have our government slowing everything down? I for one don't see new laws and regulations as the solutions to making up the ground we've lost. A manufactured crisis would set us back even further, for no reason.
Reply: It's precisely because of carefully crafted regulations, public partnerships and incentive programs that countries like Finland, Japan, South Korea and even Canada have outpaced the U.S. in bringing broadband to their citizenry. For more on that, I suggest you read "Broadband Reality Check" or Thomas Bleha's excellent article in Foreign Affairs, " Down to the Wire."

The crisis in America is real. Certain communities have found themselves on the wrong side of the digital divide -- ignored by market incumbents who don't see profits in "reaching out and touching" low income or rural populations. Don't belive it? Read "Broadband Reality Check" (above) or "Are We Really a Nation Online?"
Posted by: John Rice March 21, 2006 10:05 PM

This is a provocative piece, but there are some serious inconsistencies. How about some documentation of the claims that these other countries have faster connections at lower prices? And...the scare tactics fail to pass a straight face test. There are anti-trust laws that would prevent companies from "cut (ting) off your Internet phone unless you use their service; or force you to download MP3s from his company store by slowing access to outside music sites like ITunes."
Reply to John: Anti-trust laws won't save the Internet from the cabal of large telecom and cable companies that have built their revenue projections upon a plan to tilt the Net to their favor. The Internet's future as a force for change will dim as soon as these network giants are allowed to manipulate the "pipe" and discriminate on behalf of their products and services.

By destroying the level playing field, they will shut down the outsiders, boot strappers and innovators (the Stanford kids who created Google, the Pez hobbyist who wrote the concept for eBay, the Israeli high school student who created the first Instant Messaging service, the Indian programmers who created Hotmail, etc.) whose ideas have revolutionized and democratized all media. For more, read Jeff Chester's reporting at Center for Digital Democracy and Larry Lessig's Congressional testimony posted at his blog.

There's extensive documentation that other developed countries now provide broadband to their citizens at a far lower cost-per-bandwidth ratio than the United States. For more, read Derek Turner's excellent summary at, and this recent report out of Europe. I have access to some of Derek's research. I can share this should we decide to explore the comparison between U.S. broadband and that of other developed countries.
Posted by: oldhats March 21, 2006 08:50 PM

If thousands of people were to log-on tomorrow and Google or iTunes was suddenly inaccessible, don't you think the large majority would take their business elsewhere? The telcos have said very plainly that they will not limit or degrade service on their networks. And even if you don't take them at their word, you have to assume that they know the market would punish SEVERELY the company that tried.
Reply to Oldhats: Your argument assumes that there are other broadband choices in a given market. According to a report last August by Free Press, more than 50 percent of the country has only one or no choice of broadband provider. In a large portion of remaining markets there is only a choice of a dominant telephone company (DSL) and a dominant cable provider. The largest of these have all stated plainly that they see no need for network neutrality rules. For the majority of net users in America, then, what real choices are left?
Posted by: AJ Carey March 21, 2006 07:06 PM

There is absolutely no record of any sort of site blocking or any clear plan by so-called "evil" telecoms to filter the internet. First of all it would be terrible for business: no one would stand for it. And that's the real point. Competetion is what has lead to the success of the internet. Why stop that now?
Reply to AJ Carey: Errr . . . yes, there absolutely is a record. Here are two instances that come immediately to mind (I have more): 1. In 2004, North Carolina ISP Madison River blocked their DSL customers from using any rival Web-based phone service; 2. In 2005, Canada’s telephone giant Telus blocked customers from visiting a Web site sympathetic to the Telecommunications Workers Union during a contentious labor dispute.
Posted by: lessgov March 20, 2006 10:24 PM

Villains and victims? That seems awfully presumptuous. Thus far, we have seen no instances of the sort of "site-blocking" practices you describe. People feel very strongly about the Internet remaining a free marketplace of ideas. But this marketplace has been maintained in spite of (and, often because of) the enormous profits that can be reaped from the technology. It has also been maintained because our government (who, as we have seen, has interests of its own) has kept its mitts off the Internet. That is the key to keeping the Internet free and viable for years to come.
Reply to LessGov: This notion -- that the Internet has evolved with the succor of a free market eco-system -- is one of the great myths of its brief history. The Internet itself is a byproduct of government grants and oversight. Until very recently, it had been governed, like all telecommunications services, by a rule of common carriage.

What I am calling for here is not new regulation of the Internet. What's happened is that there has been a radical change in the underlying regulatory infrastructure for telecommunications. Last August the FCC took the final step to remove those principals of common carriage and neutrality from any part of the broadband network.

That neutrality principle has been central to guaranteeing that outsiders face few technical obstacles to build new applications and content for the Internet. Most of the major innovations in the history of the Internet have been made by outsiders -- often kids and non-Americans. That's because the architecture of the Internet, built upon this value of end-to-end neutrality, invited outsiders in to innovate. Now this neutrality -- again, a concept of common carriage that has regulated telecommunications for decades -- is threatened by efforts of AT&T and other large corporations to rewrite the rules.

What will happen if they succeed in removing neutrality from the network? The largest ISPs will auction off the highest value chunks of the broadband network to the highest bidders. The next generation of revolutionary applications and services will find it virtually impossible to compete against those offered by network giants. New media will begin to look like old media, with a few large corporations controlling the ebb and flow of content and services, as diversity and innovation gets pushed to the margins.

This threat to the Internet is not a myth. Unless we make more of an effort to guard against plans to dismantle network neutrality, the Internet's future isn't nearly as open, free and bright as you might think.

Sunday, March 19, 2006

AT&T Wants to Reach Out and Control You

Speak Out
Behind the story of the AT&T-BellSouth merger is a tale about the future of all media. It has villains and victims; intrigue and peril, and -- if the public doesn’t speak up soon -- could spell the end of Internet freedom as we know it.

The aim of AT&T’s $67 billion deal is to create a network giant with nationwide reach controlling nearly half of all telephone land lines in the United States. But the real danger is the control AT&T would gain over access to high-speed Internet services.

Soon all electronic media -- telephone calls, TV, radio and the Web -- will reach your home via a broadband Internet connection. The few corporations trying to control this “pipe” – and the hundreds of billions of dollars at stake -- are racing to gobble up as many competitors as possible before consumers make the digital media shift. Verizon’s $8.5 billion purchase of MCI in January is one other episode in the merger mania that has seized the telecommunications sector.

The new AT&T -- which already includes what used to be SBC -- would create the nation’s largest high-speed Internet provider. According to company chief Ed Whitacre, this behemoth would “benefit customers through new services and expanded service capabilities” with “innovative, competitively priced products.”

Ed the Red
But experience shows that bigger is rarely better. As large companies merge and jockey for position over the lucrative broadband market, average Americans will suffer from the fallout – especially those living in rural or poorer urban areas.

These corporations have done a lousy job rolling out their services to remote communities and low-income neighborhoods they've deemed unprofitable. This is why nearly half of all Americans have just one option for high-speed Internet service or can’t get broadband at all.

In other countries, the cost of broadband has dropped dramatically as speeds and choices have increased. Nations such as South Korea, Japan, Finland and even Canada have much faster Internet connections at lower prices than what is available here. As a result, America has fallen from third to 16th place in penetration of broadband per capita.

Not only are Americans being offered limited choices at higher costs, but now the companies that provide access also want to control the content and services that are delivered to customers. Whitacre recently alarmed consumer advocates and Internet entrepreneurs alike by dismissing the principle of "network neutrality" -- a standard that ensures all users can access the online content or run the applications and devices of their choice without interference from their Internet service providers.

If Whitacre gets his way, AT&T could cut off your Internet phone unless you use their service; or force you to download MP3s from his company store by slowing access to outside music sites like ITunes. Those controlling the pipes could also charge you extra to guarantee that your email gets past their spam filters.

The network giants are trying to make your Web experience look like cable TV, where you pay for a limited selection of programs that they select, own or control. These types of package schemes would stifle the Internet’s revolutionary ability to spread new ideas, serve marginalized communities, spark business innovation and encourage democratic discourse.

A standard of nondiscrimination has been in the DNA of the Internet since its inception. The network’s only job should be to move data — not to choose which data to privilege with higher quality of service. The brilliance of the end-to-end network is that the intelligence is at the edge of the network, with you and me, and the wires in between simply pass along the information.

Hands Off
As large communications companies maneuver to control and profit from broadband, they seek to dismantle the Internet freedoms that stand in their way. Without network neutrality, the network owners would have a business incentive to discriminate in favor of their own services and content by making them download faster or simply blocking their competitors. This discrimination is already built into the business plans of the largest providers.

The AT&T merger would spread the corporate gospel of Internet discrimination into more than half of the nation's broadband markets.

Thanks to AT&T's legions of lobbyists, some predict this merger will sail through Washington. But with so much at stake, perhaps it’s time for our regulators and representatives to put away their rubber stamps and say enough is enough.

Without Internet freedom guarantees, new media will soon become ruled by the same lumbering, discriminatory corporations that dominate old media.

Thursday, March 09, 2006

The New Media Monopoly

Originally published at AlterNet

Corporate Copulation
The race is on to control the future of American media. Unfortunately, those vying for the prize are a limited cadre of corporations hostile to the public interest.

On one hand, there are the remnants of the 1984 breakup of Ma Bell -- four formerly Baby Bells that now dominate the multibillion-dollar marketplace for telecommunications. Over the past 10 years, these have rapidly morphed into massive corporations by swallowing up smaller competitors and positioning themselves atop the heap.

AT&T's announcement earlier this week that it plans to acquire BellSouth is a stunning development in the unrelenting shift toward fewer choices and bigger companies -- essentially stitching back together the monopoly that ruled telecommunications three decades ago.

The aim of AT&T's $67 billion merger is to assemble a new behemoth to dominate the "triple play" of modern communications: voice, video and data. In the near future, all new media -- telephone calls, radio, television or the web -- will travel via a broadband connection to your home. The corporations that control this network are racing to gobble up as many competitors as possible before consumers complete the new media shift.

Left behind, of course, is the American public. As large telecom companies merge and jockey for position with the cable industry over the most lucrative broadband markets, the communities at the edges have been left on the wrong side of the digital divide.

According to the U.S. Census Bureau, nearly 60 percent of households with incomes over $150,000 annually have broadband access, compared to just 10 percent of households with incomes below $25,000.

These corporations have done a lousy job rolling out their services to rural areas and low-income urban communities they've deemed unprofitable. As a result, America has fallen from third to 16th place in penetration of high-speed internet services per capita.

But even those who can afford to pay for connectivity are increasingly subject to limited choices at higher prices. According to a Free Press report late last year, the number of Americans who have only one or no choice of broadband provider is near 50 percent.

Meanwhile, the cost of broadband in other countries has dropped dramatically as speeds have increased. On a per megabit basis, U.S. consumers pay five to 25 times more than broadband users in France and Japan. Nations such as South Korea, Finland, and even Canada have much faster internet connections at a lower cost than what is available here.

Not only are Americans being offered limited choices at higher costs than other countries, the cable and telecom companies that control access to the "pipes" now want to control the content and services that are delivered to customers.

Consumer advocates and internet rights groups are especially concerned about AT&T chief executive Edward Whitacre's outspoken resistance to the principle of "network neutrality," a standard that ensures all users can access the content or run the applications and devices of their choice without discrimination from internet service providers.

"I think the content providers should be paying for the use of the network," Whitacre told the Financial Times earlier this year. "Now they might pass it on to their customers who are looking at a movie, for example. But that ought to be a cost of doing business for them. They shouldn't get on [the network] and expect a free ride."

In December, BellSouth's William Smith told reporters that he would like to turn the internet into a "pay-for-performance marketplace," where his company could charge for the "right" to have certain services load faster than others.

What this would mean for you is higher costs, fewer choices and less control.

Kick-starting the revolution
AT&T, Verizon, Comcast and others could block you from viewing a favorite podcast or blog, cut off internet phones unless we use their service, or force you to download MP3s from their company store by slowing access to outside music sites. The profit motive of a few corporations would supplant the freedoms of all users, determining which features end up shaping our digital future.

These types of corporate schemes discriminate against those of us who rely on the internet as an accessible tool to spread new ideas, spark innovation and encourage dissent.

Now AT&T executives are asking regulators at the Justice Department and Federal Communications Commission to rubber stamp their merger. They argue, incredulously, that bigger is better for consumers.

At a moment marked by America's precipitous decline in the global ranks of communications leaders, the Justice Department and FCC should correct our problems -- not exacerbate them. This merger must be stopped.