Fake Net Neutrality: Like Letting Enron Write the Electricity Rules

http://my.firedoglake.com/scarecrow/2010/12/21/fake-net-neutrality-what-does-corporate-capture-look-like/

Fake Net Neutrality: Like Letting Enron Write the Electricity Rules
By: Scarecrow
Tuesday December 21, 2010

David Dayen’s post this a.m. summarizes concerns about the apparent regulatory capture of the Federal Communications Commission, which is about to issue new rules to undermine internet open access, aka, “net neutrality.” NYT coverage is here.

I’ll leave to Tim Karr and others to describe the technical features and sell outs that have allowed the Western World’s Worst internet/broadband structure to become slower, more expensive and more discriminatory than services in other countries. Senator Al Franken gave an excellent speech, worth watching on the full range of policy issues.

It may help to have an analogous framework on how to think about what corporate capture of the internet and broadband service means, not just in terms of speed and coverage but in terms of content and pricing. It’s not just that our service is slower and we face monopoly pricing, it’s that a tiny handful of corporations are seizing control of what we’ll be allowed to watch and read.

Suppose that President Eisenhower had proposed we build an interstate highway system, but we’d allow only three or four large corporations to carve up and own all the main interconnections, determine the tolls and decide who got to drive on them during which hours. The corporations could also decide where the on/off ramps were, which communities they did or didn’t serve, where the routes went, depending on which provided better tax breaks.

And suppose these same companies owned a couple of auto companies, and they could decide whether cars and trucks made by their affiliate companies got better access, more lanes, higher speeds and lower tolls than cars/trucks sold by competitors.

Then suppose the Justice Department and the FTC did not think it their job to enforce the anti-trust laws of the United States, while the federal highway regulators did not believe they should have rules requiring open access, fair pricing, and non-discrimination.

Welcome to the forthcoming US policy on broadband/internet access.

We’re now told that the Democratic appointees on the FCC plan to develop a master plan for how this will all work. But until the Obama Administration and Congress forcefully and clearly direct the FCC to adopt and enforce rules for open, non-discriminatory access to the internet, the FCC has no framework consistent with the public interest for talking about some master plan. I doubt they’re even having a relevant conversation.

We saw an analogous battle over access to another network, the electricity transmission infrastructure. That industry spent over two decades struggling with the concepts of open access, non-discrimination, and efficient pricing. And after some failures and very bad false starts — recall California — we’ve made some progress there.

The electricity transmission system now connects the whole country, but its operation, once wholly balkanized, is now split between two types of system operators.

In over half the country, the transmission system is operated regionally by an independent, non-profit organization overseen by a federal regulator. Each independent system operator (ISO) functions under open access, non-discrimination rules. Every supplier, every generator, regardless of ownership, and every buyer/community/utility gets open access to the entire grid on non-discriminatory terms. Every technology/fuel source — wind, solar, coal, gas, nuclear, etc, can get on the grid just by connecting to the interconnected grid and agreeing to the open access rules. This system keeps the lights on in well over half the country, and the same model functions in about a dozen countries world wide.

However, in the rest of the US — mostly the deep South (think Southern Company) and the West (outside California) — the transmission system is owned and operated in a balkanized fashion by a [usually] private regional utility monopoly that has a vested interest in making sure competitors and/or non-preferred technologies are not given the same access as their own generators. If the owner’s lines are “full” or “congested,” the owners can allow their generators to serve their loads but curtail anyone else. Competitors are not allowed to connect to the grid under the same rules; buyers (e.g., municipal utilities) can’t buy from others and use the owner’s lines without negotiating special access deals and paying fees to the owner. The federal regulators tolerate this discrimination, because they can’t overcome the campaign contributions and political influence the monopolists have in Congress. Sound familiar?

Today’s FCC announcement reminds me of where the California electricity restructuring debate was in 1995, about the time Enron and its trader friends (remember “screw granny”?) were at the height of their influence and they were helping the large utilities write the rules that guaranteed discrimination and included rules that we knew would enable Enron’s gaming the system. Those of us who objected and demanded the system operators function as quasi-public entities and guarantee open access and non-discrimination were accused of being socialists plotting a government takeover, even a Soviet 5-year Plan! We’ve been here before, and what’s coming next will be ugly.

It’s blindingly obvious that “citizens” like AT&T, Verizon and Comcast, the nation’s largest cable provider, should never be allowed to write the rules for the internet and broadband access. Nor should their captured regulators ever sanction discrimination and anti-competitive mergers that allow Comcast to gobble up NBC.

John Chandley

The FCC's weak new "open Internet" rules

http://www.salon.com/technology/dan_gillmor/2010/12/21/fcc_network_neutrality/index.html

Tuesday, Dec 21, 2010
The FCC's weak new "open Internet" rules
A partisan vote on Tuesday displeases everyone. And everyone's right
Dan Gillmor

The neutering of the Internet is now the unofficial policy of the Federal Communications Commission. Contrary to the happy talk from FCC Chairman Julius Genachowski at a rule-making announcement today in Washington, the move is well underway to turn the Internet into a regulated playground for corporate giants.

Tuesday's FCC vote on rules purportedly designed to ensure open and free networks was a 3-2 partisan charade, with Genachowski and the other two Democratic commissioners in favor and the two Republicans against. It did nothing of the sort. The short-term result will be confusion and jockeying for position. Genachowski's claim that the rules bring "a level of certainty" to the landscape was laughable unless he was talking about lobbyists and lawyers; their futures are certainly looking prosperous. The longer-range result will be to solidify the power of the incumbent powerhouses -- especially telecommunications providers and the entertainment industry -- to take much more control over what we do online.

It's almost not worth the trouble of telling you what's in the rules, because they are so meaningless. About the only redeeming feature is a requirement that ISPs be more transparent about how they manage their networks. I would expect to see a bare minimum of compliance here, and little if any enforcement except an occasional wrist-slap, if that.

But when it came to rules that might boost network neutrality -- the notion that end users (you and me) should decide what content and services we want without interference from the ISPs -- the FCC's order paid lip service to the concept while enshrining its eventual demise. In theory, land-line carriers (traditional phone and cable companies, for the most part) won't be allowed to play favorites. In practice, the new rules invite them to concoct new kinds of services that do precisely that.

But even that fuzzy concept won't apply to mobile carriers, which means that discrimination will be explicitly permitted by companies like AT&T and Verizon for customers of the iPhone and iPad, among other devices that are increasingly the most important entry point to the Internet.

The rules are also an open invitation to ISPs to spy on their customers. Genachowski's repeated references to users' right to use "legal" content were code words for the entertainment industry's push to have ISPs become their enforcement arms in the copyright wars. Hollywood wants your ISP to watch everything people do, and then block users who are alleged to be infringing.

If Genachowski and his supporters think that they've done the right thing because they're being attacked from all sides, they're missing the reality. Sometimes, when everyone hates what you've done, you've done the wrong thing.

The FCC majority didn't have the courage, or the political support from the Obama administration (yes, another broken promise), to push for regulations that would address net neutrality in any meaningful way. So the protests from open-Internet folks was immediate, and justified.

Republicans and their house organ, Fox News, talk about Tuesday's vote as a "plan to regulate the Internet," and they're half-right. They mouth platitudes about freedom and liberty. They end up with a free-fire zone for corporations -- an oligopoly of content and services for captive consumers.

But they're right to be wary of regulation, because we've seen the corrosive effect of regulation in so many other arenas already. The FCC is already a captive of telecom companies in its traditional operations. Why would anyone expect this to be any different when it comes to the Internet? And the law of unintended consequences tells us that any regulations would be sure to have effects we can't foresee today. That's the issue the network-neutrality advocates also usually fail to address.

What wasn't on the table in the FCC's deliberations was actual competition. Unlike many other countries, the United States doesn't require Internet providers to share their lines and networks. By "share" I don't mean "give away" -- this is essentially about renting capacity to other companies that want to be ISPs. That's how the Internet got so big so fast in the first place: Phone companies were not allowed to prevent other ISPs from offering service on phone lines, but now they're allowed to prevent similar competition, and the market is a stifling oligopoly as a result.

If you think the Internet should be an enhanced form of cable television, you should be happy where we're heading. If you think it should be the messy and complex result of what innovators want to create, and what customers at the networks' edges want to do with the creations, you should worry.

A longtime participant in the tech and media worlds, Dan Gillmor is director of the Knight Center for Digital Media Entrepreneurship at Arizona State University's Walter Cronkite School of Journalism & Mass Communication. Follow Dan on Twitter: @dangillmor.

FCC Passes Net Neutrality Rules

http://www.tomsguide.com/us/Net-Neutrality-FCC-Julius-Genachowski-broadband-transparency,news-9478.html

FCC Passes Net Neutrality Rules
December 22, 2010
Kevin Parrish

It's the beginning or the end of the Internet, depending on which side of the line you're standing on.

Tuesday the Federal Communications Commission approved new rules that prohibit phone and cable companies from discriminating against or favoring Internet content and services.

The news arrived by way of a presentation in Washington D.C. By FCC chairman Julius Genachowski. According to reports, the FCC's three Democrats voted to pass the new rules and the two Republicans voted against them, calling the rules "unnecessary regulation." Afterward the Republican party on Capitol Hill quickly responded to Genachowski's speech, vowing to block the new negotiations by introducing a "resolution of disapproval."

In the meantime, the new "net neutrality" rules are broken down into six primary components:

1. Consumers and innovators have a right to know the basic performance characteristics of their Internet access and how their network is being managed.

2. Consumers and innovators have a right to send and receive lawful traffic. Consumers can go where they want, say what they want, experiment with ideas-- commercial and social, and use the devices of their choice. The rules thus prohibits the block of lawful content, apps, services and the connection of devices to the network.

3. Consumers and innovators have a right to a level playing field. The FCC rules state that no central authority, public or private, should have the power to pick winners and losers on the Internet. This is essentially a ban on unreasonable discrimination.

4. Broadband providers need meaningful flexibility to manage their networks to deal with congestion, security and other issues. The section also honors the business practice of tiered pricing.

5. The principle of Internet openness applies to mobile broadband. This means that there is only one Internet, and it must remain an open platform despite the device used for access. Mobile broadband providers are thus required to remain transparent and are prohibited from blocking websites or blocking certain applications provided by competitors.

6. The FCC will remain vigilant in promptly enforcing the rules and vigilant in monitoring developments in areas such as mobile and the market for specialized services which may affect Internet openness.

To enforce the new rules, the FCC has launched an Open Internet Advisory Committee that will assist the Commission in monitoring the state of Internet openness and the effects of the rules. It has also launched an Open Internet Apps Challenge at challenge.gov to stimulate app developers into creating tools that will help consumers monitor their own broadband connections.

"Today, for the first time, we are adopting rules to preserve basic Internet values," Genachowski said. "For the first time, we'll have enforceable rules of the road to preserve Internet freedom and openness."

The Most Important Free Speech Issue of Our Time

http://www.huffingtonpost.com/al-franken/the-most-important-free-s_b_798984.html

Al Franken
U.S. Senator, Minnesota
December 20, 2010
The Most Important Free Speech Issue of Our Time

This Tuesday is an important day in the fight to save the Internet.

As a source of innovation, an engine of our economy, and a forum for our political discourse, the Internet can only work if it's a truly level playing field. Small businesses should have the same ability to reach customers as powerful corporations. A blogger should have the same ability to find an audience as a media conglomerate.

This principle is called "net neutrality" -- and it's under attack. Internet service giants like Comcast and Verizon want to offer premium and privileged access to the Internet for corporations who can afford to pay for it.

The good news is that the Federal Communications Commission has the power to issue regulations that protect net neutrality. The bad news is that draft regulations written by FCC Chairman Julius Genachowski don't do that at all. They're worse than nothing.

That's why Tuesday is such an important day. The FCC will be meeting to discuss those regulations, and we must make sure that its members understand that allowing corporations to control the Internet is simply unacceptable.

Although Chairman Genachowski's draft Order has not been made public, early reports make clear that it falls far short of protecting net neutrality.

For many Americans -- particularly those who live in rural areas -- the future of the Internet lies in mobile services. But the draft Order would effectively permit Internet providers to block lawful content, applications, and devices on mobile Internet connections.

Mobile networks like AT&T and Verizon Wireless would be able to shut off your access to content or applications for any reason. For instance, Verizon could prevent you from accessing Google Maps on your phone, forcing you to use their own mapping program, Verizon Navigator, even if it costs money to use and isn't nearly as good. Or a mobile provider with a political agenda could prevent you from downloading an app that connects you with the Obama campaign (or, for that matter, a Tea Party group in your area).

It gets worse. The FCC has never before explicitly allowed discrimination on the Internet -- but the draft Order takes a step backwards, merely stating that so-called "paid prioritization" (the creation of a "fast lane" for big corporations who can afford to pay for it) is cause for concern.

It sure is -- but that's exactly why the FCC should ban it. Instead, the draft Order would have the effect of actually relaxing restrictions on this kind of discrimination.

What's more, even the protections that are established in the draft Order would be weak because it defines "broadband Internet access service" too narrowly, making it easy for powerful corporations to get around the rules.

Here's what's most troubling of all. Chairman Genachowski and President Obama -- who nominated him -- have argued convincingly that they support net neutrality.

But grassroots supporters of net neutrality are beginning to wonder if we've been had. Instead of proposing regulations that would truly protect net neutrality, reports indicate that Chairman Genachowski has been calling the CEOs of major Internet corporations seeking their public endorsement of this draft proposal, which would destroy it.

No chairman should be soliciting sign-off from the corporations that his agency is supposed to regulate -- and no true advocate of a free and open Internet should be seeking the permission of large media conglomerates before issuing new rules.

After all, just look at Comcast -- this Internet monolith has reportedly imposed a new, recurring fee on Level 3 Communications, the company slated to be the primary online delivery provider for Netflix. That's the same Netflix that represents Comcast's biggest competition in video services.

Imagine if Comcast customers couldn't watch Netflix, but were limited only to Comcast's Video On Demand service. Imagine if a cable news network could get its website to load faster on your computer than your favorite local political blog. Imagine if big corporations with their own agenda could decide who wins or loses online. The Internet as we know it would cease to exist.

That's why net neutrality is the most important free speech issue of our time. And that's why, this Tuesday, when the FCC meets to discuss this badly flawed proposal, I'll be watching. If they approve it as is, I'll be outraged. And you should be, too.

AT&T Gains FCC's Ear as Regulators Near Decision on Net Neutrality

http://www.bloomberg.com/news/2010-12-01/net-neutrality-vote-by-u-s-fcc-set-for-december-after-year-of-conflict.html

AT&T Gains FCC's Ear as Regulators Near Decision on Net Neutrality Rules
Todd Shields
Nov 30, 2010

A U.S. regulator set a vote on rules to bar Internet service providers led by AT&T Inc. and Comcast Corp. from interfering with subscribers’ Web traffic.

Federal Communications Commission Chairman Julius Genachowski said in a statement today that he sent colleagues “draft rules of the road to preserve the freedom and openness of the Internet” for adoption at the agency’s Dec. 21 meeting.

Genachowski, a Democrat appointed by President Obama, proposed net-neutrality rules in September 2009, and debate has expanded to involve Congress, courts and companies. Proponents including technology companies said regulations are needed to keep the Internet free of restrictions, while opponents such as telephone and cable companies said rules aren’t needed and may stifle investment.

Google Inc. and Verizon Communications Inc. struck a compromise in August that didn’t call for rules on wireless Internet service. The proposal wasn’t adopted by officials. Genachowski said his rules build upon a proposal advanced in September by Representative Henry Waxman, a California Democrat, who proposed less-stringent rules for the mobile Web than for service delivered over wires.

The net-neutrality regulations before the FCC “would ensure that the Internet remains a powerful platform for innovation and job creation,” Genachowski said in his statement released by e-mail.

The proposed rules would bar Internet-service providers from blocking or slowing access to lawful content and applications, he said.

Congestion, Harmful Traffic

Providers would have flexibility to deal with congestion or harmful traffic, Genachowski said. Wireless networks would be subject to different regulations that include a no-blocking rule, and the FCC would “be prepared to step in” to address anti-competitive behavior, he said.

Net neutrality encompasses the idea that Internet-service providers can’t interfere with content they deliver to subscribers, or favor their own offerings. Technology companies backing regulations include search company Google, Internet- retailer Amazon.com and Dish Network Corp., which provides on- demand movies to subscribers using Internet lines.

Cable and phone companies that provide Web service say rules may make it difficult to manage the growing traffic on their networks and would limit investment in new Internet capacity. AT&T and Verizon, the majority owner of the largest U.S. mobile provider, Verizon Wireless, have told the FCC that rules aren’t needed for wireless networks.

Obama ‘Big Believer’

President Barack Obama, as a candidate, made net neutrality a campaign issue and has called himself a “big believer” in the approach.

Last month, Republican lawmakers toldGenachowski not to set policy they said was best left to Congress.

Democratic lawmakers released a letter yesterday urging the chairman to act this year to ensure “that the Internet remains an open network.” The letter was signed by Senators John Kerry of Massachusetts, Byron Dorgan of North Dakota and Ron Wyden of Oregon.

The regulations need three votes to pass at the FCC, where two Democrats join Genachowski to form the agency’s majority.

Genachowski said he had abandoned his proposal to put Internet service under the regulatory regime used for telephone service -- a prospect opposed by companies that said such a move could lead to rate regulation.

Not applying rules for telephone companies would be a positive for AT&T, Comcast, Verizon, Time Warner Cable Inc. and Cablevision Systems Corp., Paul Gallant, a Washington-based analyst with MF Global, said in a Nov. 19 note to clients.

Telephone regulation offered a way to reclaim authority undermined by a U.S. court, Genachowski said in May. Judges ruled in April the the FCC lacked authority to punish Comcast for interfering with subscribers’ Web traffic.

“I am satisfied that we have a sound legal basis” for proceeding without using telephone rules, Genachowski said in his statement today.

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

To contact the editor responsible for this story: Allan Holmes at aholmes25@bloomberg.net

FCC Calls for 911 System that Accepts Texts

http://www.pcmag.com/article2/0,2817,2373241,00.asp

FCC Calls for 911 System that Accepts Texts
Sara Yin
11.23.2010

Given that 70 percent of calls to 911 are made through a mobile phone, and 72 percent of Americans text, it is mind-boggling to realize that our national emergency hotline can't process SMS-based pleas for help.

This is why Federal Communications Commission Chairman Julius Genachowski called for a "Next-Generation 9-1-1" service that would allow Americans send mobile texts, videos, and photos to 911.

"The Virginia Tech campus shootings in 2007 are a tragic, real-life reminder of the technological limitations that 9-1-1 is now saddled with," Genachowsk said in a speech at the Arlington County Emergency Center this afternoon. "Some students and witnesses tried to text 9-1-1 during that emergency and as we know, those messages never went through and were never received by local 9-1-1 dispatchers."

Modernizing the hotline would allow Americans to text for help in situations when a call might jeopardize their safety. Furthermore, accepting mobile videos and photos could provide first responders with on-the-ground information to assess a situation in real time, the FCC said in a statement.

"Many 911 call centers don't even have broadband, and some are in communities where broadband isn't even available," Genachowski admitted. "That is unacceptable."

As Iowa probably discovered in 2009, expanding 911's communications platform would require the cooperation of numerous parties: federal, state and local partners, public safety, lawmakers, communications and broadband service providers and equipment manufacturers.

The Next-Generation 9-1-1 plan falls under the FCC-drafted National Broadband Plan. Funded by stimulus money, the plan aims to harness broadband to improve public safety, specifically through the creation of an interoperable public safety wireless broadband communication network by 2020.

In December, the FCC will lead a "Next-Generation 9-1-1 proceeding," to gauge the public's opinion.

FCC Lets Hollywood Turn Off Your Output Jacks

http://www.wired.com/threatlevel/2010/05/fcc-allows-soc
FCC Lets Hollywood Turn Off Your Output Jacks
By David Kravets May 7, 2010

Hollywood will soon have the power to remotely disable the analog outputs on your set-top box, under a decision by federal regulators on Friday intended to prevent home recording of new movie releases.

The move by the Federal Communications Commission grants cable and satellite providers the power to block consumers from viewing just-released movies in an analog format through a process known as Selectable Output Control. Hollywood requested SOC powers as a condition of allowing providers for the first time to release movies to their in-home customers while the film is in theaters.

The Motion Picture Association of America said its member studios would not authorize the early movie releases unless it won the ability to deploy Selectable Output Control. The reason: Analog video signals can easily be recorded, while digital video standards include a copy protection scheme that lets providers set a no-copy flag on the signal.

Digital rights group, Public Knowledge, said millions of older televisions, including 11 million HD sets, would be affected, a number the MPAA disputes. Owners of those devices would not have the luxury of being able to view the latest theater blockbuster at home through video on-demand services.

“The FCC is allowing the MPAA to control your television,” John Bergmayer, Public Knowledge staff attorney, said in a telephone interview.

Howard Gantman, a Motion Picture Association of America vice president, said in a telephone interview that, while some consumers may be left out, “It’s not going to stop you from getting what you get now.”

The FCC said it sided with the MPAA in the name of “public interest,” and granted SOC controls for no longer than 90 days per title.

“We believe that providing consumers with the option to view films in their homes shortly after those films are released in theaters will serve the public interest,” the FCC said in its order. It added that permission to deploy Selectable Output Control “is necessary to provide adequate protection against illegal copying of the proposed service.”

Gantman said it’s now about four months between theater debut to home or DVD release. With Friday’s decision, he said, it was not immediately clear how much shorter that span would become.

Agreements between studios, producers and the cable and satellite providers need to be worked out, he said.

“We’re not breaking anybody’s TVs,” he said.

Airwaves Could Beam High-Speed Internet

http://www.popsci.com/technology/article/2010-01/internet-ether

Airwaves Abandoned by TV Could Beam High-Speed Internet Everywhere
By Amina Elahi
02.05.2010

When TV went digital, Verizon, AT&T and other cellphone carriers shelled out a combined $19 billion for some of the freed-up airwaves, known as white spaces. Now wireless company Spectrum Bridge is using the parts that are still unclaimed to deliver high-speed Internet from its broadcast tower to your laptop computer.

As soon as next month, the Federal Communications Commission is expected to allow commercial white-space Internet, which could help hook up the 54 percent of rural homes without broadband. These white-space channels use lower frequencies than Wi-Fi, so they can pass through physical obstacles easier and travel farther. Last October, Spectrum activated the first white-space network, in Claudville, Virginia, under an experimental FCC license. The town’s hilly landscape and abundant trees made conventional wireless near-impossible, so the company set up an Internet-connected radio transmitter at the town’s edge and gave the school, business district and a few homes modem-like radio receivers. “They’ve been trying to get connected to the outside world for the better part of this century,” says Jeff Schmidt, Spectrum’s director of engineering.

Because wireless mics and news cameras can also use white-space channels, Spectrum’s system chooses among unused channels listed by the FCC. If all goes well in Claudville, the company plans to test the tech in the more crowded airwaves of cities this year.

My Beef With Big Media

Thanks to Checking for Elves ( http://checkingforelves.blogspot.com ) for forwarding the following...

http://www.washingtonmonthly.com/features/2004/0407.turner.html

My Beef With Big Media
How government protects big media--and shuts out upstarts like me.
By Ted Turner

In the late 1960s, when Turner Communications was a business of billboards and radio stations and I was spending much of my energy ocean racing, a UHF-TV station came up for sale in Atlanta. It was losing $50,000 a month and its programs were viewed by fewer than 5 percent of the market.

I acquired it.

When I moved to buy a second station in Charlotte--this one worse than the first--my accountant quit in protest, and the company's board vetoed the deal. So I mortgaged my house and bought it myself. The Atlanta purchase turned into the Superstation; the Charlotte purchase--when I sold it 10 years later--gave me the capital to launch CNN.

Both purchases played a role in revolutionizing television. Both required a streak of independence and a taste for risk. And neither could happen today. In the current climate of consolidation, independent broadcasters simply don't survive for long. That's why we haven't seen a new generation of people like me or even Rupert Murdoch--independent television upstarts who challenge the big boys and force the whole industry to compete and change.

It's not that there aren't entrepreneurs eager to make their names and fortunes in broadcasting if given the chance. If nothing else, the 1990s dot-com boom showed that the spirit of entrepreneurship is alive and well in America, with plenty of investors willing to put real money into new media ventures. The difference is that Washington has changed the rules of the game. When I was getting into the television business, lawmakers and the Federal Communications Commission (FCC) took seriously the commission's mandate to promote diversity, localism, and competition in the media marketplace. They wanted to make sure that the big, established networks--CBS, ABC, NBC--wouldn't forever dominate what the American public could watch on TV. They wanted independent producers to thrive. They wanted more people to be able to own TV stations. They believed in the value of competition.

So when the FCC received a glut of applications for new television stations after World War II, the agency set aside dozens of channels on the new UHF spectrum so independents could get a foothold in television. That helped me get my start 35 years ago. Congress also passed a law in 1962 requiring that TVs be equipped to receive both UHF and VHF channels. That's how I was able to compete as a UHF station, although it was never easy. (I used to tell potential advertisers that our UHF viewers were smarter than the rest, because you had to be a genius just to figure out how to tune us in.) And in 1972, the FCC ruled that cable TV operators could import distant signals. That's how we were able to beam our Atlanta station to homes throughout the South. Five years later, with the help of an RCA satellite, we were sending our signal across the nation, and the Superstation was born.

That was then.

Today, media companies are more concentrated than at any time over the past 40 years, thanks to a continual loosening of ownership rules by Washington. The media giants now own not only broadcast networks and local stations; they also own the cable companies that pipe in the signals of their competitors and the studios that produce most of the programming. To get a flavor of how consolidated the industry has become, consider this: In 1990, the major broadcast networks--ABC, CBS, NBC, and Fox--fully or partially owned just 12.5 percent of the new series they aired. By 2000, it was 56.3 percent. Just two years later, it had surged to 77.5 percent.

In this environment, most independent media firms either get gobbled up by one of the big companies or driven out of business altogether. Yet instead of balancing the rules to give independent broadcasters a fair chance in the market, Washington continues to tilt the playing field to favor the biggest players. Last summer, the FCC passed another round of sweeping pro-consolidation rules that, among other things, further raised the cap on the number of TV stations a company can own.

In the media, as in any industry, big corporations play a vital role, but so do small, emerging ones. When you lose small businesses, you lose big ideas. People who own their own businesses are their own bosses. They are independent thinkers. They know they can't compete by imitating the big guys--they have to innovate, so they're less obsessed with earnings than they are with ideas. They are quicker to seize on new technologies and new product ideas. They steal market share from the big companies, spurring them to adopt new approaches. This process promotes competition, which leads to higher product and service quality, more jobs, and greater wealth. It's called capitalism.

But without the proper rules, healthy capitalist markets turn into sluggish oligopolies, and that is what's happening in media today. Large corporations are more profit-focused and risk-averse. They often kill local programming because it's expensive, and they push national programming because it's cheap--even if their decisions run counter to local interests and community values. Their managers are more averse to innovation because they're afraid of being fired for an idea that fails. They prefer to sit on the sidelines, waiting to buy the businesses of the risk-takers who succeed.

Unless we have a climate that will allow more independent media companies to survive, a dangerously high percentage of what we see--and what we don't see--will be shaped by the profit motives and political interests of large, publicly traded conglomerates. The economy will suffer, and so will the quality of our public life. Let me be clear: As a business proposition, consolidation makes sense. The moguls behind the mergers are acting in their corporate interests and playing by the rules. We just shouldn't have those rules. They make sense for a corporation. But for a society, it's like over-fishing the oceans. When the independent businesses are gone, where will the new ideas come from? We have to do more than keep media giants from growing larger; they're already too big. We need a new set of rules that will break these huge companies to pieces.

The big squeeze

In the 1970s, I became convinced that a 24-hour all-news network could make money, and perhaps even change the world. But when I invited two large media corporations to invest in the launch of CNN, they turned me down. I couldn't believe it. Together we could have launched the network for a fraction of what it would have taken me alone; they had all the infrastructure, contacts, experience, knowledge. When no one would go in with me, I risked my personal wealth to start CNN.

Soon after our launch in 1980, our expenses were twice what we had expected and revenues half what we had projected. Our losses were so high that our loans were called in. I refinanced at 18 percent interest, up from 9, and stayed just a step ahead of the bankers. Eventually, we not only became profitable, but also changed the nature of news--from watching something that happened to watching it as it happened.

But even as CNN was getting its start, the climate for independent broadcasting was turning hostile. This trend began in 1984, when the FCC raised the number of stations a single entity could own from seven--where it had been capped since the 1950s--to 12. A year later, it revised its rule again, adding a national audience-reach cap of 25 percent to the 12 station limit--meaning media companies were prohibited from owning TV stations that together reached more than 25 percent of the national audience. In 1996, the FCC did away with numerical caps altogether and raised the audience-reach cap to 35 percent. This wasn't necessarily bad for Turner Broadcasting; we had already achieved scale. But seeing these rules changed was like watching someone knock down the ladder I had already climbed.

Meanwhile, the forces of consolidation focused their attention on another rule, one that restricted ownership of content. Throughout the 1980s, network lobbyists worked to overturn the so-called Financial Interest and Syndication Rules, or fin-syn, which had been put in place in 1970, after federal officials became alarmed at the networks' growing control over programming. As the FCC wrote in the fin-syn decision: "The power to determine form and content rests only in the three networks and is exercised extensively and exclusively by them, hourly and daily." In 1957, the commission pointed out, independent companies had produced a third of all network shows; by 1968, that number had dropped to 4 percent. The rules essentially forbade networks from profiting from reselling programs that they had already aired.

This had the result of forcing networks to sell off their syndication arms, as CBS did with Viacom in 1973. Once networks no longer produced their own content, new competition was launched, creating fresh opportunities for independents.

For a time, Hollywood and its production studios were politically strong enough to keep the fin-syn rules in place. But by the early 1990s, the networks began arguing that their dominance had been undercut by the rise of independent broadcasters, cable networks, and even videocassettes, which they claimed gave viewers enough choice to make fin-syn unnecessary. The FCC ultimately agreed--and suddenly the broadcast networks could tell independent production studios, "We won't air it unless we own it." The networks then bought up the weakened studios or were bought out by their own syndication arms, the way Viacom turned the tables on CBS, buying the network in 2000. This silenced the major political opponents of consolidation.

Even before the repeal of fin-syn, I could see that the trend toward consolidation spelled trouble for independents like me. In a climate of consolidation, there would be only one sure way to win: bring a broadcast network, production studios, and cable and satellite systems under one roof. If you didn't have it inside, you'd have to get it outside--and that meant, increasingly, from a large corporation that was competing with you. It's difficult to survive when your suppliers are owned by your competitors. I had tried and failed to buy a major broadcast network, but the repeal of fin-syn turned up the pressure. Since I couldn't buy a network, I bought MGM to bring more content in-house, and I kept looking for other ways to gain scale. In the end, I found the only way to stay competitive was to merge with Time Warner and relinquish control of my companies.

Today, the only way for media companies to survive is to own everything up and down the media chain--from broadcast and cable networks to the sitcoms, movies, and news broadcasts you see on those stations; to the production studios that make them; to the cable, satellite, and broadcast systems that bring the programs to your television set; to the Web sites you visit to read about those programs; to the way you log on to the Internet to view those pages. Big media today wants to own the faucet, pipeline, water, and the reservoir. The rain clouds come next.

Supersizing networks

Throughout the 1990s, media mergers were celebrated in the press and otherwise seemingly ignored by the American public. So, it was easy to assume that media consolidation was neither controversial nor problematic. But then a funny thing happened.

In the summer of 2003, the FCC raised the national audience-reach cap from 35 percent to 45 percent. The FCC also allowed corporations to own a newspaper and a TV station in the same market and permitted corporations to own three TV stations in the largest markets, up from two, and two stations in medium-sized markets, up from one. Unexpectedly, the public rebelled. Hundreds of thousands of citizens complained to the FCC. Groups from the National Organization for Women to the National Rifle Association demanded that Congress reverse the ruling. And like-minded lawmakers, including many long-time opponents of media consolidation, took action, pushing the cap back down to 35, until--under strong White House pressure--it was revised back up to 39 percent. This June, the U.S. Court of Appeals for the Third Circuit threw out the rules that would have allowed corporations to own more television and radio stations in a single market, let stand the higher 39 percent cap, and also upheld the rule permitting a corporation to own a TV station and a newspaper in the same market; then, it sent the issues back to the same FCC that had pushed through the pro-consolidation rules in the first place.

In reaching its 2003 decision, the FCC did not argue that its policies would advance its core objectives of diversity, competition, and localism. Instead, it justified its decision by saying that there was already a lot of diversity, competition, and localism in the media--so it wouldn't hurt if the rules were changed to allow more consolidation. Their decision reads: "Our current rules inadequately account for the competitive presence of cable, ignore the diversity-enhancing value of the Internet, and lack any sound bases for a national audience reach cap." Let's pick that assertion apart.

First, the "competitive presence of cable" is a mirage. Broadcast networks have for years pointed to their loss of prime-time viewers to cable networks--but they are losing viewers to cable networks that they themselves own. Ninety percent of the top 50 cable TV stations are owned by the same parent companies that own the broadcast networks. Yes, Disney's ABC network has lost viewers to cable networks. But it's losing viewers to cable networks like Disney's ESPN, Disney's ESPN2, and Disney's Disney Channel. The media giants are getting a deal from Congress and the FCC because their broadcast networks are losing share to their own cable networks. It's a scam.

Second, the decision cites the "diversity-enhancing value of the Internet." The FCC is confusing diversity with variety. The top 20 Internet news sites are owned by the same media conglomerates that control the broadcast and cable networks. Sure, a hundred-person choir gives you a choice of voices, but they're all singing the same song.

The FCC says that we have more media choices than ever before. But only a few corporations decide what we can choose. That is not choice. That's like a dictator deciding what candidates are allowed to stand for parliamentary elections, and then claiming that the people choose their leaders. Different voices do not mean different viewpoints, and these huge corporations all have the same viewpoint--they want to shape government policy in a way that helps them maximize profits, drive out competition, and keep getting bigger.

Because the new technologies have not fundamentally changed the market, it's wrong for the FCC to say that there are no "sound bases for a national audience-reach cap." The rationale for such a cap is the same as it has always been. If there is a limit to the number of TV stations a corporation can own, then the chance exists that after all the corporations have reached this limit, there may still be some stations left over to be bought and run by independents. A lower limit would encourage the entry of independents and promote competition. A higher limit does the opposite.

Triple blight

The loss of independent operators hurts both the media business and its citizen-customers. When the ownership of these firms passes to people under pressure to show quick financial results in order to justify the purchase, the corporate emphasis instantly shifts from taking risks to taking profits. When that happens, quality suffers, localism suffers, and democracy itself suffers.

Loss of Quality

The Forbes list of the 400 richest Americans exerts a negative influence on society, because it discourages people who want to climb up the list from giving more money to charity. The Nielsen ratings are dangerous in a similar way--because they scare companies away from good shows that don't produce immediate blockbuster ratings. The producer Norman Lear once asked, "You know what ruined television?" His answer: when The New York Times began publishing the Nielsen ratings. "That list every week became all anyone cared about."

When all companies are quarterly earnings-obsessed, the market starts punishing companies that aren't yielding an instant return. This not only creates a big incentive for bogus accounting, but also it inhibits the kind of investment that builds economic value. America used to know this. We used to be a nation of farmers. You can't plant something today and harvest tomorrow. Had Turner Communications been required to show earnings growth every quarter, we never would have purchased those first two TV stations.

When CNN reported to me, if we needed more money for Kosovo or Baghdad, we'd find it. If we had to bust the budget, we busted the budget. We put journalism first, and that's how we built CNN into something the world wanted to watch. I had the power to make these budget decisions because they were my companies. I was an independent entrepreneur who controlled the majority of the votes and could run my company for the long term. Top managers in these huge media conglomerates run their companies for the short term. After we sold Turner Broadcasting to Time Warner, we came under such earnings pressure that we had to cut our promotion budget every year at CNN to make our numbers. Media mega-mergers inevitably lead to an overemphasis on short-term earnings.

You can see this overemphasis in the spread of reality television. Shows like "Fear Factor" cost little to produce--there are no actors to pay and no sets to maintain--and they get big ratings. Thus, American television has moved away from expensive sitcoms and on to cheap thrills. We've gone from "Father Knows Best" to "Who Wants to Marry My Dad?", and from "My Three Sons" to "My Big Fat Obnoxious Fiance."

The story of Grant Tinker and Mary Tyler Moore's production studio, MTM, helps illustrate the point. When the company was founded in 1969, Tinker and Moore hired the best writers they could find and then left them alone--and were rewarded with some of the best shows of the 1970s. But eventually, MTM was bought by a company that imposed budget ceilings and laid off employees. That company was later purchased by Rev. Pat Robertson; then, he was bought out by Fox. Exit "The Mary Tyler Moore Show." Enter "The Littlest Groom."

Loss of localism

Consolidation has also meant a decline in the local focus of both news and programming. After analyzing 23,000 stories on 172 news programs over five years, the Project for Excellence in Journalism found that big media news organizations relied more on syndicated feeds and were more likely to air national stories with no local connection.

That's not surprising. Local coverage is expensive, and thus will tend be a casualty in the quest for short-term earnings. In 2002, Fox Television bought Chicago's Channel 50 and eliminated all of the station's locally produced shows. One of the cancelled programs (which targeted pre-teens) had scored a perfect rating for educational content in a 1999 University of Pennsylvania study, according to The Chicago Tribune. That accolade wasn't enough to save the program. Once the station's ownership changed, so did its mission and programming.

Loss of localism also undercuts the public-service mission of the media, and this can have dangerous consequences. In early 2002, when a freight train derailed near Minot, N.D., releasing a cloud of anhydrous ammonia over the town, police tried to call local radio stations, six of which are owned by radio mammoth Clear Channel Communications. According to news reports, it took them over an hour to reach anyone--no one was answering the Clear Channel phone. By the next day, 300 people had been hospitalized, many partially blinded by the ammonia. Pets and livestock died. And Clear Channel continued beaming its signal from headquarters in San Antonio, Texas--some 1,600 miles away.

Loss of democratic debate

When media companies dominate their markets, it undercuts our democracy. Justice Hugo Black, in a landmark media-ownership case in 1945, wrote: "The First Amendment rests on the assumption that the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public."

These big companies are not antagonistic; they do billions of dollars in business with each other. They don't compete; they cooperate to inhibit competition. You and I have both felt the impact. I felt it in 1981, when CBS, NBC, and ABC all came together to try to keep CNN from covering the White House. You've felt the impact over the past two years, as you saw little news from ABC, CBS, NBC, MSNBC, Fox, or CNN on the FCC's actions. In early 2003, the Pew Research Center found that 72 percent of Americans had heard "nothing at all" about the proposed FCC rule changes. Why? One never knows for sure, but it must have been clear to news directors that the more they covered this issue, the harder it would be for their corporate bosses to get the policy result they wanted.

A few media conglomerates now exercise a near-monopoly over television news. There is always a risk that news organizations can emphasize or ignore stories to serve their corporate purpose. But the risk is far greater when there are no independent competitors to air the side of the story the corporation wants to ignore.

More consolidation has often meant more news-sharing. But closing bureaus and downsizing staff have more than economic consequences. A smaller press is less capable of holding our leaders accountable. When Viacom merged two news stations it owned in Los Angeles, reports The American Journalism Review, "field reporters began carrying microphones labeled KCBS on one side and KCAL on the other." This was no accident. As the Viacom executive in charge told The Los Angeles Business Journal: "In this duopoly, we should be able to control the news in the marketplace."

This ability to control the news is especially worrisome when a large media organization is itself the subject of a news story. Disney's boss, after buying ABC in 1995, was quoted in LA Weekly as saying, "I would prefer ABC not cover Disney." A few days later, ABC killed a "20/20" story critical of the parent company.

But networks have also been compromised when it comes to non-news programs which involve their corporate parent's business interests. General Electric subsidiary NBC Sports raised eyebrows by apologizing to the Chinese government for Bob Costas's reference to China's "problems with human rights" during a telecast of the Atlanta Olympic Games. China, of course, is a huge market for GE products.

Consolidation has given big media companies new power over what is said not just on the air, but off it as well. Cumulus Media banned the Dixie Chicks on its 42 country music stations for 30 days after lead singer Natalie Maines criticized President Bush for the war in Iraq. It's hard to imagine Cumulus would have been so bold if its listeners had more of a choice in country music stations. And Disney recently provoked an uproar when it prevented its subsidiary Miramax from distributing Michael Moore's film Fahrenheit 9/11. As a senior Disney executive told The New York Times: "It's not in the interest of any major corporation to be dragged into a highly charged partisan political battle." Follow the logic, and you can see what lies ahead: If the only media companies are major corporations, controversial and dissenting views may not be aired at all.

Naturally, corporations say they would never suppress speech. But it's not their intentions that matter; it's their capabilities. Consolidation gives them more power to tilt the news and cut important ideas out of the public debate. And it's precisely that power that the rules should prevent.

Independents' day

This is a fight about freedom--the freedom of independent entrepreneurs to start and run a media business, and the freedom of citizens to get news, information, and entertainment from a wide variety of sources, at least some of which are truly independent and not run by people facing the pressure of quarterly earnings reports. No one should underestimate the danger. Big media companies want to eliminate all ownership limits. With the removal of these limits, immense media power will pass into the hands of a very few corporations and individuals.

What will programming be like when it's produced for no other purpose than profit? What will news be like when there are no independent news organizations to go after stories the big corporations avoid? Who really wants to find out? Safeguarding the welfare of the public cannot be the first concern of a large publicly traded media company. Its job is to seek profits. But if the government writes the rules in a way that encourages the entry into the market of entrepreneurs--men and women with big dreams, new ideas, and a willingness to take long-term risks--the economy will be stronger, and the country will be better off.

I freely admit: When I was in the media business, especially after the federal government changed the rules to favor large companies, I tried to sweep the board, and I came within one move of owning every link up and down the media chain. Yet I felt then, as I do now, that the government was not doing its job. The role of the government ought to be like the role of a referee in boxing, keeping the big guys from killing the little guys. If the little guy gets knocked down, the referee should send the big guy to his corner, count the little guy out, and then help him back up. But today the government has cast down its duty, and media competition is less like boxing and more like professional wrestling: The wrestler and the referee are both kicking the guy on the canvas.

At this late stage, media companies have grown so large and powerful, and their dominance has become so detrimental to the survival of small, emerging companies, that there remains only one alternative: bust up the big conglomerates. We've done this before: to the railroad trusts in the first part of the 20th century, to Ma Bell more recently. Indeed, big media itself was cut down to size in the 1970s, and a period of staggering innovation and growth followed. Breaking up the reconstituted media conglomerates may seem like an impossible task when their grip on the policy-making process in Washington seems so sure. But the public's broad and bipartisan rebellion against the FCC's pro-consolidation decisions suggests something different. Politically, big media may again be on the wrong side of history--and up against a country unwilling to lose its independents.

Ted Turner is founder of CNN and chairman of Turner Enterprises. www.tedturner.com

Time to settle net neutrality debate

http://www.mercurynews.com/business/ci_11240110

Time to settle net neutrality debate
By Chris O'Brien
Mercury News

12/16/2008

I had lulled myself into believing we were all but done with this whole debate about net neutrality, the notion that service providers must treat all traffic equally.

I mistakenly thought a ruling by the Federal Communications Commission back in September in a case involving Comcast had settled the issue, once and for all.

Silly me.

A story that appeared on The Wall Street Journal's Web site over the weekend and in Monday's paper claimed that Google was asking for preferential treatment from network providers that appeared at odds with its previous support for net neutrality. The article also said that President-elect Barack Obama was backtracking on the issue. And the story reported that Stanford Professor Lawrence Lessig, a leading advocate for a free and open Internet, had "softened" his stance.

The article prompted heated denials from all three.

But while the story may have been off target, it's clear from the subsequent dust-up that the issue of net neutrality is far from settled. The article and the subsequent back-and-forth of blog postings and press releases revealed that some fault lines remain, even among supporters.

So job one for the new FCC under President Obama should be to define and make permanent net neutrality. The FCC should establish clear guidelines for what constitutes acceptable network management. It's in the best interest of service providers, Internet companies and consumers to get this done and move on to other issues.

If net neutrality seems like so much Washington policy wonkishness, well, it's not. As Internet traffic explodes, telecommunications companies like Comcast and AT&T have argued that they're spending vast sums of money on new infrastructure that companies like Google are eating up with their search and video traffic. The service providers would like to charge some companies more to carry certain types of content, or to restrict the amount or type of content to end users to help manage that flow of traffic.

For instance, Comcast was accused of blocking file sharing and peer-to-peer network services for extended periods, uses that generate a heavy amount of traffic. Until the practice was brought to light, confused customers couldn't understand what was happening.

The problem is that this punishes consumers, who face either lower quality service, or higher costs. Telecom companies could essentially set up a toll service, and those costs will get passed on to consumers either directly, in the form of higher broadband costs, or indirectly by companies that are forced to pay more to have their content carried across the Internet.

This is bad for innovation and bad for our wallets.

A few months ago, the FCC ruled that Comcast had engaged in such a practice, a decision that net neutrality supporters hailed for finally creating a precedent. But clearly, confusion remains.

In the Journal story, for instance, Google is apparently asking ISPs for permission to co-locate its servers into their facilities so its content can be physically closer to end users, and thus be delivered more quickly. Companies such as Akamai of Cambridge, Mass., have made big businesses out of providing such services.

Richard Whitt, Google's Washington telecom and media counsel, wrote on the company's public policy blog: "Despite the hyperbolic tone and confused claims in Monday's Journal story, I want to be perfectly clear about one thing: Google remains strongly committed to the principle of net neutrality."

Clearly, some folks thought this ran afoul of net neutrality principles. I'd disagree, since such a service in effect keeps some types of traffic off the Internet and helps reduce congestion.

But that wasn't the only area of dispute. In a blog post, Lessig noted that he had always supported the concept that service providers should be allowed to provide different tiers of service, allowing some companies such as Google to pay more for access to faster networks. Lessig acknowledged that some members of the net neutrality community disagree. Lessig writes: "But the suggestion that the position is 'recent' is baseless. If I'm wrong, I've always been wrong."

With all due respect, he's wrong.

Among those who agree with me is Ben Scott, a policy director for the Free Press, a consumer advocacy group based in Washington. I chatted with Scott on Monday about the Journal story. Scott noted that while Lessig sat on the Free Press board, they had a healthy disagreement on this piece of the puzzle.

"If you create a super tier, and it's a million dollars a month, what happens is that the big guys go in and bid up the price, and it becomes a barrier to entry," Scott said.

Agreed. Clearing up the confusion over such unsettled issues will be good for everyone. Scott also noted that with Obama coming in, codifying net neutrality has become a question of "not if, but when."

The answer should be sooner, not later.

Contact Chris O'Brien at cobrien@mercurynews.com or (415) 298-0207. Follow on Twitter at sjcobrien and read his blog at blogs.mercurynews.com/obrien.

Google Wants Its Own Fast Track on the Web

http://online.wsj.com/article/SB122929270127905065.html

DECEMBER 15, 2008
Google Wants Its Own Fast Track on the Web Article
By VISHESH KUMAR and CHRISTOPHER RHOADS

The celebrated openness of the Internet -- network providers are not supposed to give preferential treatment to any traffic -- is quietly losing powerful defenders.

Google Inc. has approached major cable and phone companies that carry Internet traffic with a proposal to create a fast lane for its own content, according to documents reviewed by The Wall Street Journal. Google has traditionally been one of the loudest advocates of equal network access for all content providers.

At risk is a principle known as network neutrality: Cable and phone companies that operate the data pipelines are supposed to treat all traffic the same -- nobody is supposed to jump the line.

But phone and cable companies argue that Internet content providers should share in their network costs, particularly with Internet traffic growing by more than 50% annually, according to estimates. Carriers say that to keep up with surging traffic, driven mainly by the proliferation of online video, they need to boost revenue to upgrade their networks. Charging companies for fast lanes is one option.

One major cable operator in talks with Google says it has been reluctant so far to strike a deal because of concern it might violate Federal Communications Commission guidelines on network neutrality.

"If we did this, Washington would be on fire," says one executive at the cable company who is familiar with the talks, referring to the likely reaction of regulators and lawmakers.

Separately, Microsoft Corp. and Yahoo Inc. have withdrawn quietly from a coalition formed two years ago to protect network neutrality. Each company has forged partnerships with the phone and cable companies. In addition, prominent Internet scholars, some of whom have advised President-elect Barack Obama on technology issues, have softened their views on the subject.

The contentious issue has wide ramifications for the Internet as a platform for new businesses. If companies like Google succeed in negotiating preferential treatment, the Internet could become a place where wealthy companies get faster and easier access to the Web than less affluent ones, according to advocates of network neutrality. That could choke off competition, they say.

For computer users, it could mean that Web sites by companies not able to strike fast-lane deals will respond more slowly than those by companies able to pay. In the worst-case scenario, the Internet could become a medium where large companies, such as Comcast Corp. in cable television, would control both distribution and content -- and much of what users can access, according to neutrality advocates.

The developments could test Mr. Obama's professed commitment to network neutrality. "The Internet is perhaps the most open network in history, and we have to keep it that way," he told Google employees a year ago at the company's Mountain View, Calif., campus. "I will take a back seat to no one in my commitment to network neutrality."

But Lawrence Lessig, an Internet law professor at Stanford University and an influential proponent of network neutrality, recently shifted gears by saying at a conference that content providers should be able to pay for faster service. Mr. Lessig, who has known President-elect Barack Obama since their days teaching law at the University of Chicago, has been mentioned as a candidate to head the Federal Communications Commission, which regulates the telecommunications industry.

The shifting positions concern some purists. "What they're talking about is selling you the right to skip ahead in the line," says Ben Scott, policy director of Free Press, a Washington-based advocacy group. "It would mean the first part of your business plan would be a deal with AT&T to get into their super-tier -- that is anathema to a culture of innovation."

Advocates of network neutrality believe it has helped the Internet drive the technology revolution of the past two decades, creating hundreds of thousands of jobs.

The concept of network neutrality originated with the phone business. The nation's longtime telephone monopoly, nicknamed Ma Bell, and its regional successors were prohibited from giving any public phone call preference in how quickly it was connected. When the Internet first boomed in the 1990s, content largely traveled via telephone line, and the rule survived by default.

'Dumbpipes'

The carriers picked up the unflattering nickname "dumbpipes," underscoring their strict noninterference in the Internet traffic surging over their networks. The name heightened resentment among the carriers toward the soaring wealth of the content providers, such as Amazon.com Inc., that couldn't exist without the networks of the telecom and cable companies.

In August 2005, amid a deregulatory environment, the FCC weakened network neutrality to a set of four "guiding principles." The step had the effect of making the FCC's power to enforce network neutrality subject to interpretation, emboldening those looking for ways around it.

Stirring the waters further, major phone companies including AT&T and Verizon announced they intended to create new fast lanes on the Internet -- and would charge content companies a toll to use it. They claimed Internet companies had been getting a free ride.

That unleashed a firestorm of criticism. A diverse group including Internet companies Google, Microsoft and Amazon joined the likes of the Christian Coalition, the National Rifle Association and the pop singer Moby in what they characterized as a fight to "save the Internet." The coalition claimed such steps could endanger freedom of speech.

Advocates of network neutrality also claimed that dismantling the rule would be the first step toward distributors gaining control over content, since they could dictate traffic according to fees charged to content providers. The fortunes of a certain Web site, in other words, might depend on how much it could pay network providers, rather than on its popularity.

That concern would grow if the carriers themselves offer content, which some have tried, with mixed success. AT&T, the country's largest broadband provider, recently launched its own online video service, called VideoCrawler, to compete with YouTube and others.

"One way AT&T can win that competition is to give their own video service preferential treatment on their network," says Robert Topolski, a networking engineer based in Portland, Ore. An AT&T spokesman says the company has no plans to give VideoCrawler preferential treatment on its network.

Mr. Topolski discovered that Comcast was slowing a video file-sharing service called BitTorrent. That discovery eventually led to sanctions against Comcast by the FCC. Comcast has appealed the decision, arguing the FCC did not have the authority to make such a ruling.

In 2006, Microsoft felt strongly enough about the issue that it wrote Congress to declare that saving network neutrality "could dictate whether the U.S. will continue to lead the world in Internet-related technologies."

The debate eventually reached a stalemate. Legislation to codify network neutrality failed to pass, and carriers backed off their plans for a tiered Internet.

During his presidential campaign, Mr. Obama spoke frequently about the Internet, which was a critical tool in his grass-roots effort to reach new voters, and the importance of network neutrality. "Once providers start to give privilege to some Web sites and applications over others, then the smaller voices get squeezed out," he told Google employees a year ago when he campaigned at the company. "And then we all lose."

Obama Advisers

But some of those who advise the new president on technology have changed their view on network neutrality. Stanford's Mr. Lessig, for one, has softened his opposition to variable service tiers. At a conference, he argued that carriers won't become kingmakers so long as the faster service at a higher price is available to anyone willing to pay it.

"There are good reasons to be able to prioritize traffic," Mr. Lessig said later in an interview. "If everyone had to pay the same rates for postal service, than you wouldn't be able to differentiate between sending a greeting card to your grandma versus sending an overnight letter to your lawyer."

Some telecom experts say that broadband is the most profitable service offered by phone and cable companies, and they are simply trying to offset declining revenue from their traditional phone business.

In the two years since Google, Microsoft, Amazon and other Internet companies lined up in favor of network neutrality, the landscape has changed. The Internet companies have formed partnerships with phone and cable companies, making them more dependent on one another.

Microsoft, which appealed to Congress to save network neutrality just two years ago, has changed its position completely. "Network neutrality is a policy avenue the company is no longer pursuing," Microsoft said in a statement. The Redmond, Wash., software giant now favors legislation to allow network operators to offer different tiers of service to content companies.

Microsoft has a deal to provide software for AT&T's Internet television service. A Microsoft spokesman declined to comment whether this arrangement affected the company's position on network neutrality.

Amazon's popular digital-reading device, called the Kindle, offers a dedicated, faster download service, an arrangement Amazon has with Sprint. That has prompted questions in the blogosphere about whether the service violates network neutrality.

"Amazon continues to support adoption of net neutrality rules to protect the longstanding, fundamental openness of the Internet," Amazon said in a statement. It declined to elaborate on its Kindle arrangement.

Amazon had withdrawn from the coalition of companies supporting net neutrality, but it recently was listed once again on the group's Web site. It declined to comment on whether carriers should be allowed to prioritize traffic.

Yahoo now has a digital subscriber-line partnership with AT&T. Some have speculated that the deal has caused Yahoo to go silent on the network-neutrality issue.

An AT&T spokesman said the company should be able to strike any deal it sees fit with content companies. Yahoo said in a statement that carriers and content companies "should find a consensus on how best to ensure that Americans have access to a world-class Internet."

Google Connections

Google, with its dominant market position and its perceived ties to the Obama team, may hold the most sway. One of President-elect Obama's most visible supporters during the campaign was Eric Schmidt, Google's chief executive officer. Mr. Schmidt remains an adviser during the transition.

Eric Schmidt

Google's proposed arrangement with network providers, internally called OpenEdge, would place Google servers directly within the network of the service providers, according to documents reviewed by the Journal. The setup would accelerate Google's service for users. Google has asked the providers it has approached not to talk about the idea, according to people familiar with the plans.

Asked about OpenEdge, Google said only that other companies such as Yahoo and Microsoft could strike similar deals if they desired. But Google's move, if successful, would give it an advantage available to very few.

The matter could come to a head quickly. In approving AT&T's 2006 acquisition of Bell South, the FCC made AT&T agree to shelve plans for a fast lane for 30 months. That moratorium expires in the middle of next year. A Democratic lawmaker has already promised new network-neutrality legislation early in 2009. And a new chairman of the FCC could take a stricter position on forcing companies to comply with network neutrality.

Richard Whitt, Google's head of public affairs, denies the company's proposal would violate network neutrality. Nevertheless, he says he's unsure how committed President-elect Obama will remain to the principle.

"If you look at his plans," says Mr. Whitt, "they are much less specific than they were before."

Write to Vishesh Kumar at vishesh.kumar@wsj.com and Christopher Rhoads at christopher.rhoads@wsj.com

Internet Users Stop Comcast

http://www.huffingtonpost.com/timothy-karr/internet-users-stop-comca_b_112153.html

Timothy Karr
Internet Users Stop Comcast, Net Neutrality Win on the Horizon
July 11, 2008

Read More: Cable, Comcast, Fcc, Internet, Kevin Martin, Net Neutrality, SavetheInternet.Com, Media News

Federal Communications Commission Chairman Kevin Martin is taking action against Comcast for illegally violating Net Neutrality, after a coalition of Net users and activists caught the cable giant blocking open access to the Internet.

Martin told the Associated Press last night that Comcast had "arbitrarily" blocked Internet access and failed to disclose to consumers what it was doing. "We found that Comcast's actions in this instance violated our principles."

Topolski Ignites the Fire

The move is the agency's response to a complaint filed by Free Press and members of SavetheInternet.com, which called for severe action against Comcast for jamming people using popular "file-sharing" applications. But the story goes back further than that.

Organized People Beat Organized Money

Martin's action -- to be voted on by the full FCC in three weeks - would be a major milestone for the growing open Internet movement, marking another defeat of entrenched corporate interests in Washington and a stunning victory for ordinary people who want to control their Internet experience.

If adopted by the FCC, Martin's order could set an historic precedent for protecting the future of the open Internet. Against every ounce of conventional wisdom in Washington, everyday citizens and consumer advocates have taken on a major corporation and won a major victory.

The decision follows nearly a year of organizing and action by a growing alliance of bloggers, Internet innovators, consumer groups, organizations from across the political spectrum, and Net activists from all walks of life.

In that time, tens of thousands of people wrote the FCC in support of Net Neutrality after Free Press filed its complaint against Comcast and asked the agency to levy the largest fine in its history.

Comcast's "Shame"

Hundreds of others packed public hearings to speak out against would-be gatekeepers (even after Comcast notoriously attempted to keep them out by hiring drowsy seat warmers in Boston).

The Power of One

But it all started with one person. When barbershop quartet enthusiast Robb Topolski found Comcast was preventing him from sharing legal music files with other fans, he took to his computer and launched a one-man investigation.

Topolski uncovered conclusive evidence that Comcast was secretly blocking his uploads. His concerns echoed those of hundreds of other Comcast users, who had taken to the blogs and chat rooms to express their dismay.

He posted his findings on a single tech blog. This had a cascading effect, and soon dozens of others were writing about his findings. The Associated Press and the Electronic Frontier Foundation conducted their own investigations with similar results. The evidence was indisputable: Comcast was blocking the Internet.

The wheels of government started churning. This time for the better.

The Fight Continues

Martin's move is a major victory. But this fight is far from over. His order has yet to pass, though it seems likely. The cable companies -- and the phone companies, too, even though they're trying to distance themselves from Comcast -- will be back with their money, lawyers and phony grassroots groups to try to take control of the Internet and establish themselves as gatekeepers.
Companies like Comcast, AT&T and Verizon are spending hundreds of millions of dollars to lobby Washington to gut Net Neutrality and hand over control of the Internet to them. But they so far have failed to overcome widespread and organized public opposition.

Today we can celebrate a huge victory for real people, but we need to continue this fight to send a clear signal to the next Congress and White House that standing with regular people for a free and open Internet is a winning proposition.

A Hole in McCain’s Defense?

http://www.newsweek.com/id/114505/

February 22nd, 2008
A Hole in McCain’s Defense?
An apparent contradiction in his response to lobbyist story.
By Michael Isikoff / Newsweek

A sworn deposition that Sen. John McCain gave in a lawsuit more than five years ago appears to contradict one part of a sweeping denial that his campaign issued this week to rebut a New York Times story about his ties to a Washington lobbyist.

On Wednesday night the Times published a story suggesting that McCain might have done legislative favors for the clients of the lobbyist, Vicki Iseman, who worked for the firm of Alcalde & Fay. One example it cited were two letters McCain wrote in late 1999 demanding that the Federal Communications Commission act on a long-stalled bid by one of Iseman's clients, Florida-based Paxson Communications, to purchase a Pittsburgh television station.

Just hours after the Times's story was posted, the McCain campaign issued a point-by-point response that depicted the letters as routine correspondence handled by his staff—and insisted that McCain had never even spoken with anybody from Paxson or Alcalde & Fay about the matter. "No representative of Paxson or Alcalde & Fay personally asked Senator McCain to send a letter to the FCC," the campaign said in a statement e-mailed to reporters.

But that flat claim seems to be contradicted by an impeccable source: McCain himself. "I was contacted by Mr. Paxson on this issue," McCain said in the Sept. 25, 2002, deposition obtained by NEWSWEEK. "He wanted their approval very bad for purposes of his business. I believe that Mr. Paxson had a legitimate complaint."

While McCain said "I don't recall" if he ever directly spoke to the firm's lobbyist about the issue—an apparent reference to Iseman, though she is not named—"I'm sure I spoke to [Paxson]." McCain agreed that his letters on behalf of Paxson, a campaign contributor, could "possibly be an appearance of corruption"—even though McCain denied doing anything improper.

McCain's subsequent letters to the FCC—coming around the same time that Paxson's firm was flying the senator to campaign events aboard its corporate jet and contributing $20,000 to his campaign—first surfaced as an issue during his unsuccessful 2000 presidential bid. William Kennard, the FCC chair at the time, described the sharply worded letters from McCain, then chairman of the Senate Commerce Committee, as "highly unusual."

The issue erupted again this week when the New York Times reported that McCain's top campaign strategist at the time, John Weaver, was so concerned about what Iseman (who was representing Paxson) was saying about her access to McCain that he personally confronted her at a Washington restaurant and told her to stay away from the senator.

The McCain campaign has denounced the Times story as a "smear campaign" and harshly criticized the paper for publishing a report saying that anonymous aides worried there might have been an improper relationship between Iseman and McCain. McCain, who called the charges "not true," also told reporters Thursday in a news conference that he was unaware of any confrontation Weaver might have had with Iseman.

The deposition that McCain gave came in the course of a lawsuit challenging the constitutionality of his landmark campaign finance reform law, known as McCain-Feingold. The suit sheds no new light on the nature of the senator's dealings with Iseman, but it does include a lengthy discussion of his dealings with the company that hired her, including some statements by the senator that could raise additional questions for his campaign.

In the deposition, noted First Amendment lawyer Floyd Abrams (who was representing the lawsuit's lead plaintiff, Kentucky Sen. Mitch McConnell) grilled McCain about the four trips he took aboard Paxson's corporate jet to campaign events and the $20,000 in campaign contributions he had received from the company's executives during the period the firm was pressing him to intervene with federal regulators.

Asked at one point if Paxson's lobbyist (Abrams never mentions Iseman's name) had accompanied him on any of the trips he took aboard the Paxson corporate jet, McCain responded, "I do not recall." (McCain's campaign confirmed this week that Iseman did fly on one trip returning to Washington from a campaign fund-raiser in Florida.)

At another point Abrams asked McCain if, "looking back on the events with Mr. Paxson, the contributions, the jets, everything you and I have just talked about, do you believe that it would have been justified for a member of the public to say there is at least an appearance of corruption here?"

"Absolutely," McCain replied. "And when I took a thousand dollars or any other hard-money contribution from anybody who does business before the Congress of the United States, then that allegation is justified as well. Because the taint affects all of us." Elsewhere McCain said about his dealings with Paxson, "As I said before, I believe that there could possibly be an appearance of corruption because this system has tainted all of us."

Abrams's purpose at the time was not especially damaging to McCain. The lawyer's argument, which he later unsuccessfully made to the Supreme Court, was that the "appearance of corruption" was relatively commonplace in Washington and therefore too amorphous a standard to justify the intrusion on free speech that Congress made by passing a law that restricted big-money campaign donations and last-minute campaign advertising by outside groups.

In his deposition McCain got the opportunity to emphasize some of the same points his campaign made in 2000 and again this week about his letters to the FCC at Paxson's behest: that he never pressed the agency to rule in Paxson's favor, only to make a decision one way or another.

"My job as chairman of the committee, Mr. Abrams, is to see that bureaucracies do function," McCain said. "Bureaucracies are notorious for not functioning and not making decisions. I believe that Mr. Paxson had a legitimate complaint. Not about whether the commission acted favorably or unfavorably, but that the commission act."

But despite McCain's own somewhat detailed descriptions of his conversations with Paxson about the matter in the deposition, his campaign Thursday night stuck with its original statement that the senator never discussed the issue at all with the communications executive or his lobbyist.

"We do not think there is a contradiction here," campaign spokeswoman Ann Begeman e-mailed NEWSWEEK after being asked about the senator's sworn testimony five and a half years ago. "We do not have the transcript you excerpted and do not know the exact questions Senator McCain was asked, but it appears that Senator McCain, when speaking of being contacted by Paxson, was speaking in shorthand of his staff being contacted by representatives of Paxson. Senator McCain does not recall being asked directly by Paxson or any representative of him or by Alcalde & Fay to contact the FCC regarding the Pittsburgh license transaction.

"Senator McCain's staff recalls meeting with representatives of Paxson, and staff was asked to contact the FCC on behalf of Senator McCain," Begemen continued. "The staff relayed to Senator McCain the message from Paxson's representatives. But we have checked the records of the Senator's 1999 schedule and it does not appear there were any meetings between Senator McCain and Paxson or any representative of Paxson regarding the issue."

There appears to be no dispute that Paxson lobbyist Iseman did indeed contact McCain's top communications aide at the time about the Pittsburgh license issue. Mark Buse, who then served as McCain's chief of staff at the Commerce Committee and is now chief of staff in his Senate office, recalled to NEWSWEEK that Iseman came by his office, talked to him about the issue before the FCC, and left behind briefing material that he used to draft the letters under McCain's signature. He said there was nothing unusual about this. "That's Lobbying 101," Buse said. "You leave paper behind."

But the campaign's insistence that McCain himself never talked to Paxson about the issue seems hard to square with the contents of his testimony in the McCain-Feingold case.

Abrams, for example, at one point cited the somewhat technical contents of one of his letters to the FCC and then asked the witness, "where did you get information of that sort, Senator McCain?"

McCain replied: "I was briefed by my staff."

Abrams then followed up: "Do you know were they got the information?"

"No," McCain replied. "But I would add, I was contacted by Mr. Paxson on this issue."

"You were?"

"Yes."

Abrams then asked McCain: "Can you tell us what you said and what he said about it?"

McCain: "That he had applied to purchase this station and that he wanted to purchase it. And that there had been a numerous year delay with the FCC reaching a decision. And he wanted their approval very bad for purposes of his business. I said, 'I would be glad to write a letter asking them to act, but I will not write a letter, I cannot write a letter asking them to approve or deny, because then that would be an interference in their activities. I think everybody is entitled to a decision. But I can't ask for a favorable disposition for you'."

Abrams a few moments later asked: "Did you speak to the company's lobbyist about these matters?"

McCain: "I don't recall if it was Mr. Paxson or the company's lobbyist or both."

Abrams: "But you did speak to him?"

McCain: "I'm sure I spoke with him, yes."

Google Likely Out, And Happy

http://www.forbes.com/business/businesstech/2008/02/06/auction-wireless-spectrum-tech-wire-cx_ew_0206auction.html

Wireless Auction
Google Likely Out, And Happy
Elizabeth Woyke
02.06.08

After dominating the U.S. wireless spectrum auction for months, from influencing the terms of the auction to bidding, it looks like Google is off the hook.

Nine days into the closely watched Federal Communications Commission auction, it appears that enough competitors are keen on the spectrum that Google won't be stuck shelling out billions of dollars for the right to own and operate a new wireless network. Instead, analysts believe that Verizon--thought to be the only bidder besides Google that is both rich and motivated enough--is poised to win the coveted C block of spectrum that Google was eyeing.

The spectrum is being auctioned off in five blocks, labeled A, B, C, D and E. Blocks C and D are national; the others are divided into regional licenses. To prevent cheating, bidding is anonymous and companies are barred from discussing their participation.

"Verizon wants more spectrum to close the gap between it and AT&T," said Stifel Nicolaus analyst Rebecca Arbogast. Verizon owns 49 megahertz of spectrum compared to AT&T's 75 megahertz. "I'm reasonably confident that Google does not have the spectrum now," she added.

But Verizon likely didn't bid for the C block directly, analysts said. Instead, it likely bid on a host of less expensive regional slices of spectrum and made sure that the total amount was more than what was bid for the C block. It's a savvy strategy, because under FCC rules, if the regional bids top the bids for the C block, that block must be split up and apportioned to the highest bidder or bidders. By the end of Tuesday, the regional bids added up to $4.74 billion, about $30 million more than the current total for the C block.

Analysts speculated that Google likely bid $4.7 billion for the C block last week. Under FCC rules, a bid of at least $4.6 billion would ensure the creation of a broadband network "open" to any devices or application. Industry watchers speculated that Google, which lobbied the FCC to adopt open access rules for the auction, was participating in the auction out of a sense of duty rather than a desire to win.

Ceding the C block to Verizon would allow Google to exit the auction gracefully and direct its billions elsewhere. For instance, the Internet giant is reportedly interested in providing financial assistance to Yahoo! to stave off an unsolicited acquisition bid from Microsoft. (See: "Google Slams Microsoft Bid For Yahoo!")

Spectrum serving Chicago (currently priced at $892 million) and Seattle ($219 million) is in high demand, with various operators, including regional players such as Leap Wireless and Metro PCS, likely battling for these regions. Cable companies could also be in the mix. Cablevision, Cox Communications and EchoStar are all approved bidders.

The auction isn't over yet. Under FCC rules, it stays open until all bids dry up; the latest round of bidding, late Tuesday, attracted 90 new bids and an additional $6 million. Taken together, high bids for all five blocks totaled $18.9 billion on Tuesday night. Still, analysts and observers are already calling it a done deal. "We're now seeing stability in the C and D blocks," says Arbogast. "I don't think there will be any radical shifts."

Industry watchers say Verizon has a clinch on the C block while another carrier, perhaps Alltel, likely has won one or two licenses. Google is presumed to be (happily) out, and AT&T, the other major player, is thought to be buying up smaller, cheaper slices of spectrum in the A and B blocks to complement a chunk of spectrum it acquired from an independent company last October.

A new FCC rule should also speed up the auction. Starting Wednesday morning, auction participants will have to use more (95% rather than 85%) of their "bidding units" to discourage them from sitting out rounds or making other stealth moves. "It will flush out people's positions," Arbogast said.

That's not likely to help the D block, however, which has languished since the auction's first round, when it attracted its sole bid of $472 million. The FCC wants the D block to be used as a combined commercial and public safety communications network. Experts say the challenges of building out such a network has scared bidders away. If the $1.3 billion reserve price isn't met, it will probably be auctioned again.

The only question left is whether the E block will sell. It is considered less useful because it is limited to one-way data transmission. Bids on that block are still 10% below the FCC's reserve price. If the floor price isn't met, it could be auctioned again as well, but Arbogast suspects that wireless technology firm Qualcomm will step up and grab it. The company is a registered bidder and already owns similar spectrum that it uses for its mobile TV network, mediaFLO.

NBC Blocks Kucinich From Debate

http://www.truthout.org/docs_2006/011408R.shtml

NBC Blocks Kucinich From Debate
By Christopher Kutruff
t r u t h o u t Report
Monday 14 January 2008

Two days after inviting Dennis Kucinich to Tuesday's January 15 presidential debates, NBC decided to change its previously announced criteria and exclude the Ohio congressman.

Friday morning, NBC political director Chuck Todd informed the Kucinich campaign that NBC would be "re-doing" the criteria for the debates and only Barack Obama, Hillary Clinton and John Edwards would be included.

Representative Kucinich said he had met the previous qualifications by ranking fourth in several national polls including a January 4-6 USA Today/Gallup poll.

In a Wednesday, January 9, email to the Kucinich campaign, NBC Democratic Party debates consultant Jenny Backus wrote, "Congratulations on another hard-fought contest. Now that New Hampshire is over, we are on to Nevada and our Presidential Debate on Tuesday, January 15. This letter serves as an official invitation for your candidate to participate in the Nevada Presidential Debate at Cashman Theatre in downtown Las Vegas. You have met the criteria set by NBC and the Debate."

The Kucinich campaign filed an emergency complaint earlier with the Federal Communications Commission for being excluded from ABC's coverage of the debates. The congressman said he is considering similar legal action against NBC for its policy reversal.

Despite his long-shot status, Kucinich continues to attract an audience on the campaign trail, which he attributes to "the emerging culture of information technology that's Internet-based. And the other one is the more conventional TV technology which is coming to a clash. And I think they reflect some political trends in this country that maybe aren't getting too much attention. But they are going to have an impact," according to recent comments Kucinich made during an interview with newsman Bill Moyers.

In a recent Democracy for America online survey, Kucinich ranked first with about 32 percent of the vote. The survey, which was not a scientific poll, attracted about 150,000 participants.

Kucinich won the December 23 Virginia Democratic Party's online presidential straw poll, eclipsing Hillary Clinton and gaining about a third of the votes. He has also came out on top of a Washington State straw poll. But despite these signs of momentum, major networks have maintained a separate focus - limiting Kucinich's exposure.

These factors, the Kucinich campaign contends, should allow the congressman to participate in prime-time debates.

Christopher Kutruff is a regular contributor to Truthout.