Of Bandwidth Hogs, QoS, and Regulatory Chameleons

I can live with the internet as a best efforts network. I can live with the internet as a regulated utility. What I absolutely cannot stand is the idiocy of the current regulatory scheme that allows broadband access providers to justify the deregulated state of a competitive best efforts environment because they need to provide a public utility.

Case in point, Comcast’s recent actions of cutting off “bandwidth hogs” and purportedly throttling BitTorrent traffic to its subscribers (Comcast denies it targets BitTorrent traffic). Comcast in its user agreement explicitly reserves the right to cut off users using “too much bandwidth” — although Comcast refuses to say how much bandwidth is “too much.” Comcast defends its actions (including the secrecy of the bandwidth limit) on the grounds that “bandwidth hogs” overload the system capacity and thus slow down everyone’s use of the system.

As I discuss below, Comcast and the other broadband providers are speaking out of both sides of their mouths. They claim they have no liability for anything and should not be regulated because they are providing “best efforts” services and everyone knows it. But when they want to cut off users, tier traffic, or indulge in other behavior that sticks it to subscribers they haul out the “Quality of Service (QoS)” and “critical infrastructure” arguments. “What about voice?” They cry. “What about poor crippled Tiny Tim and his medical monitoring unit, cut off by some bandwidth hog downloading pirated child pornography and Al Qeda instructional videos (which, we will admit, makes a very interesting mash up when viewed via deep packet inspection)? You have to let us do whatever we want and charge whatever we want because people are relying on us for critical services.”

Of course, historically, companies that provided critical services were “public utilities.” At which point, the telcos and cable cos amazingly morph back into laissez faire “best efforts” providers and subscribers need to know there are no guarantees and that which we tell you three times may or may not be true.

My further analysis of the amazing regulatory chameleon, the private public utility, below….

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The Bush Administration DOJ Just Can't Do Enough For Its Friends

I’ve said it before and I’ll say it again. For AT&T and its industry compatriots, domestic spying is the gift that keeps on giving.

Today, the Department of Justice Antitrust Division announced it had filed written comments in the FCC’s Inquiry Into Broadband Industry Practices, aka lets do a wussy study on net neutrality so we can pretend we are defending the public by ‘being vigillant.’ And — surprise, surpirse, SURPRISE! — the DOJ Antiutrust division comments look like the “Cliffsnotes version” of the AT&T filing.

So to recap, in the last few weeks, we have seen top Administration officials go public with classified data to push for retroactive immunity for the telcos for domestic spying, we’ve seen AT&T admit that they “accidentally” bleeped out Pearl Jam’s anti-Bush lyrics, and now we have the DOJ Antitrust division going to the mat for their buddies at the FCC.

I tell you, in this day and age of rampant cynicism and political opportunism, it warms my heart to see the Bushies stick with their buddies through thick and thin, and to see AT&T doing the same. Never mind what it looks like! As Mirror Universe (Evil) Cartman would sing: “You guys are my best friends, through tick and thin we’ll always be together . . . I love you guys.”

Of course, it probably helps that the tiering that the telcos and cable cos want to do makes it much easier to monitor traffic via deep packet inspection, and the fact that it is an “information service” rather than a telecom service means the telcos and cable cos can do whatever they want with the data (they don’t even need to get a warrant, as they would to take advantage of CALEA). But it’s mutual self-interest like this that keeps friendships strong! This way the DOJ gets its domestic spying built into the architecture, and the cable and telcos get to fulfill their fantasies of exacting monopoly rents out of every single bit that crosses their networks (despite the collateral damage to free speech and the long term damage to the economy as a whole). But hey, a “duopoly tax” in the form of higher costs for slower speeds is a small price to pay to have surveillance equipment built directly into the network architecture — and to help a true friend.

You can read my official reaction as VP Media Access Project in this press release on the MAP web page (also reproduced below).

Stay tuned . . . .

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David Weinberger's Excellent Piece On Structural Separation

Despite the efforts to make common carriage and structural separation of wholesale and retail services a forbidden topic of discussion (go read the piece Greg Rose and I wrote last year on how industry rationalizes policy by controlling the debate), the old and highly successful idea of structural separation for carriers continues to undergo a significant revival. For starters, the Europeans have recently embraced structural separation as a policy goal, and have consequently begun kicking our rear ends in broadband speed, price and overall adoption. For another, some of us do not forget that structural separation used to be the law under the Computer Proceedings, and that this old form of open access is what gave us the internet in the first place. Finally, the argument advanced that simply because we have more providers in the market, the underlying rationale for structural separation goes away, as always struck me as poor policy driven by ideology.

I am pleased to see that David Weinberg has now written this excellent piece on structural separation. This marks the second internet “thought leader” to offer well-written and challenging pieces pleading the case of structural separation, the first being David Isenberg’s Making Network Neutrality Sustainable. Both these authors make the case for the next logical step in the Network Neutrality fight — going back to a set of rules that will prevent the network operators from interfering with the content that flows over the network by altering the economic incentives of the carriers.

Not surprisingly, we can anticipate two responses, the standard antiregulatory response (“Regulation is bad, hmmmmmmKay….Cause, if you do the regulation, then, that’d be government, and big government is bad, hmmmmmmKay….so regulation is bad, hmmmmmKay……”) and the economic response about how such a scheme destroys producer incentives so networks don’t get built. The chief problem with the producer incentive argument, however, is that the empirical evidence in Europe and Asia appears to prove the opposite case: a combination of structural separation and government subsidy facilitates deployment and maximizes incentives and revenue throughout the value chain, while focusing strictly on incentives for core network providers (e.g., the AT&T’s and Comcasts of the world) produces inferior results by every metric other than network operator profits.

My key takeaway here is that we continue to see a revitalized public policy debate that moves beyond the timid counsels of the edge-based industry players who define their “ask” in terms of what the incumbents have defined as possible, and despite every effort by the incumbents and their supporters to convince the broader public that “network neutrality” is dead and lawmakers should not worry their pretty little heads about it. Yes, we are in a legislative lull at the moment, as the public policy pendulum swings away from the incumbents and towards a more aggressive public policy more in line with the broadband success stories of Europe and Asia. But as Weinberg and Isenberg have shown, the public education and public debate remains quiet lively and continues to advance.

Stay tuned . . . .

How is the OECD Different From the FCC? OECD Takes Its Number Seriously.

I must laugh at the recent back and forth on the recent national broadband rankings by the Organization for Economic Cooperation and Development (OECD). Back in December, OECD released its latest set of statistics for broadband penetration for its 30 member states. While the U.S. had the greatest number of broadband subscribers (defined as speed in excess of 256 KBPS one way), we still ranked 14th overall on number of subscribers as a percentage of population (the traditional way of measuring phone penetration).

What these figures do or do not mean I leave to others to debate. OTOH, if we had this kind of crappy penetration in plain old telephone (POTS) or power, we’d be a developing country. OTOH, broadband deployment is still relatively new and the other countries that have pulled ahead of us all have different circumstances that arguably distinguish it from us. No, my point here is merely to highlight the amusing battle of words between the OECD and a consulting firm called Market Clarity. Market Clarity recently issued a report challenging the validity OECD stats.

So far pretty ho hum. Then the fun begins with this OECD Response. It appears that, unlike our FCC, which can run silent for years about possible funny business in its numbers (until prodded by a change in Congress, it decides to ask for advice on how to suck less), the OECD takes its reporting rather seriously. As a consequence, they wasted no time in explaining to Market Clarity, with all the snark that serious researchers reserve for telling hired guns they are ignorant wankers, that Market Clarity didn’t know what the heck it was talking about.

Not to be outdone, Market Clarity quickly issued its own delightfully snarky response to the OECD response.

I have no idea where this ends up, as it rapidly devolves into a series of exchanges like: “While we welcome serious interest and robust public debate, you couldn’t regress your way out of a paper bag!” “Oh yeah, well for an organization with the 30 most powerfull economies as members, you’d think they’d hire some folks who can do basic math!” All I can say is that the Aussies seem to be having more fun with their public policy. And at that I wish our FCC took as much professional pride in their work product as the OECD.

Of course, the FCC would have to do work to be proud of rather than outcome-driven “research” first. But maybe someday . . .

Stay tuned . . . .

Independent Musicians Launch “Rock The Net” Network Neurtality Campaign

My good friends at Future of Music Coalition (FMC) launched a major campaign today for net neutrality. Called “Rock the Net” (a name whose lameness caused some modest embarsement at the begining of the call, but sometimes you gotta grab that cliche by the horns so you can trample the wolves while swimming from the sharks), the campaign brings together major music groups to raise awareness of the net neutrality issue and press for network neutrality legislation (such as the Dorgan-Snowe bill pending in the Senate).

Why do musicians care about network neutrality? And who are Future of Music anyway? See below….

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Great Paper on NN Out of University of Florida

I’m back from a vacation in Israel to discover an amazing economic analysis of network neutrality posted by my good buddies at Consumers Union on hearusnow.org. Written by University of Florida Economists Hsing Cheng, Subhajoyti Bhandyopadhya and Hong Guo, Net Neutrality: A Policy Perspective applies game theory to the network neutrality debate. They conclude that abandoning network neutrality would create a disincentive for broadband network providers to build fatter pipes.

If this analysis seems familiar, it’s because I wrote something similar (but without the fancy math) about a year ago. As always, I get warm fuzzies whenever economists confirm my Econ 101 “gut check.”

Of course, these guys being real economists (as opposed to undergrad posseurs like yours truly) have a bit more to say on the subject and use lots of fancy math that I will not try to reproduce. But I offer some brief plain language explanation (including what I think are the brilliant points in the analysis) below….

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Wireless Broadband As Information Service: Brand X Is Not Enough

According to this story, FCC Chairman Kevin Martin told the Senate he has circulated a Notice of Proposed Rulemaking to classify broadband via wireless as an “information service.”

This might at first seem no big deal. After all, in the wake of the Brand X decision, the FCC has moved to declare broadband an “information service” for DSL and cable and, more recently, for broadband over power lines (BPL). So, while I may not be happy with using regulatory classifications to achieve back-door deregulation, what makes wireless services different?

The answer has to do with the peculiar way the Communiations Act works, and the physical reality that use of the electromagnetic spectrum really is different than laying a fiber line. True, “technological neutrality” is one of the great regulatory shibboleths these days, even if it does to reality what Yiphtach (Jeptha) did to the people of Ephriam. But the law and reality do matter sometimes. Like here.

I must give fair warning that the analysis below hinges on what will appear to non-lawyers an incredibly bizzare and artificial distinction with no apparent difference in immediate outcome. But among lawyers, this is like mistaking a Satmar Chassid for a Hesder bachur.

Some analysis below.

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Telcos Find Link Between Google, Net Neutrality, and Al Qeda

As others have chronicled, the people who brought you “Net Neutrality Is In Its Last Throes” and “Deregulated Telecoms Will Be Greeted As Liberators” have now launched a new campaign based on the highly successful tools of this administration and the conservative noise machine generally. This is perhaps unsurprising given the paucity of arguments the anti-net neutrality folks have at this point.

The fear of Google is attractive. Any huge entity attracts concern, and rightly so. I’m pleased that Google has “don’t be evil” as a credo, and that by and large it has done a good job sticking to that. But they are a large corporation like any other, and if they become convinced that something contrary to the public interest is in their best financial interest, I know which way to bet. For this reason, you find a number of perfectly reasonable folks, such as industry observer Robert Cringley (whose push for local ownership of infrastructure hardly makes him a telco or cable enthusiast) is now worried that Google has accumulated a sufficient mass of resources to take over the internet the same way Microsoft took over the desk top.

Please note that this has nothing to do with network neutrality. In fact, if Google really did have an evil plan to leverage its network assets and services to dminate the internet, thelast they would want would be network neutrality. Network neutrality means treating everyone equal, so if Google became the uber-Tier 1 carrier — what Cringley alleges is Google’s ultimate plan — the last thing Google would want would be a requirement to carry everyone’s traffic equally. It would be like Microsoft fighting to keep its monopoly by making the GNU GPL mandatory for all desktop operating systems.

But, as the current Administration has discovered, we don’t need logic. We just need a big old cloud of anxiety and the power of repetition. If you fear Iran and its nuclear ambitions, you must support a surge in Iraq , because Iran supports U.S. withdrawal from Iraq, and Iran has nuclear ambitions. If you fear Google invading your privacy or dominating net applications, you must fear network neutrality, because Google supports network neutrality and they’re big and scary. Network neutrality is a plot by Google to take over the internet, because Google wants to take over the internet and they like network neutrality. And did we mention they’re big and scary? Biiiiiiiiiiiiiiiigggggggg and scaaaaarrrrrrryyyyy!!!! And they like network neutrality. So Network neutrality is scary and bad, like Google, but without the “I’m feeling lucky!” button.

Mind you, you can find plenty of examples of this kind of logic in the mainstream media. You can see this amazing (as always) clip of Stephen Colbert demonstrating how the mainstream media uses this technique on Barack Obama. In a world where the mainstream media apparently believes that voters will make their decision on whether his middle name is Hossein or whether his “business casual look” is too much like Iranian President and fashion plate Mahmoud Ahmadinejad, we can expect the cable cos and telcos to push the link between Google, net neutrality, and Al Qeda

I’ve been at Media Access Project snce 1999. Long enough to remember when America Online and the telcos supported not just network neutrality, but “open access” (letting ISP resell broadband capacity). A fair number of folks accused open access supporters of being AOL shills or tools of the telcos. But after AOL merged with Time Warner, and Michael “deregulate them all and God will know his own” Powell took over the FCC, the companies that had backed open access switched sides. But the public interest community, including MAP, kept fighting the same fight (which has now morphed into the ‘net neutrality’ fight) long after the industry folks switched sides or dropped out.

As I have said many times before, citizen movements must stay citizen driven. Corporations will act in their best interest. They will spend money if they think it will help them earn more money. But that’s as far as they go.

You can’t get a million people or more in this overworked, busy 24/7 world to fight for something — in the face of a continued barrage of advertising, push-polling and the pervasive corrosive cynicism that you can never hope to win in our corrupt political system against the corporate powers that be — unless they believe in it. And you can’t get people to believe in it — especially in the face of the barrage of misinformation — unless there is really something to it. Especially when we are talking about a geeky technical policy issue that no one outside Washington ever heard of a year ago.

So yeah, Google supports network neutrality, and for their own reasons. But chosing to support or not support a cause because Google does is about as stupid as deciding whether or not to vote for Obama because both he and Ahmadinejad hate ties.

For the record, I hate ties too, and I support network neutrality. Just like Obama supports network neutrality. So I guess I must have links to Ahmadinejad. Hopefully, this will not scare away too many readers. But for those unafraid of the frightenng link between network neutrality, me, Barack Obama, and Ahmadinejad,

Stay tuned . . . .

GAO Report: Believing in Competition Doesn’t Make It Happen

Sometimes I think that the D.C. Circuit and the Republicans running the various Commerce Committees are the Arch Priests of Kiplings Gods of the Market, and it has brow-beaten the poor FCC through repeated reversals accompanied by tongue lashings into embracing this nonsense. The chief tenant of the Gods of the Market Place is that by deregulating the industry, competition emerges and consumers enjoy all the happiness that comes from a competitive environment. If this fails to happen as expected, adherents of the Gods of the Market practice a discipline called “Denial of Reality.” Practitioners of Denial of Reality believe that if you sufficiently discredit people who tell you about actual reality, and keep repeating that the reality you want actually exists, then Actual Reality will eventually by browbeaten into conforming to the reality promised by the Gods of the Market Place. And the FCC, like a good little penitent, keeps trying to produce reports that give the D.C. Circuit and the Republicans in Congress the world they want to see rather than actual reality.

Sadly, as GAO studies keep demonstrating, wishing for competition doesn’t make it so. This latest GAO Report on the lack of competition for business customers in major urban areas (and nicely explained in this piece here) is but the latest in a series of real world reports demonstrating that you can only ignore reality for so long before it bites you in the tender places. Sadly, however, it chomps down hard on the just and the unjust alike.

My analysis below . . .

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Latest AT&T/BS Merger Twist, and Why Bill Kennard Case is Different from Robert McDowell’s

In the latest chapter of the FCC’s most gripping “telecomnovella” Death Star Reborn: The AT&T/BellSouth Merger, FCC Chairman Kevin Martin has set in motion the process to get 3rd Republican Commissioner Robert McDowell “unrecused”. The FCC has been deadlocked 2-2 because Commissioner McDowell used to represent CompTel, one of the groups opposing the merger, creating a conflict of interest. (You can see my previous coverage explaining all this here.)

McDowell, while not champing at the bit to be unrecused, has announced he’s ready to serve if the FCC’s General Counsel tells him he has to vote to break the deadlock. So it becomes possible to get this done before the new Congress takes over. Although why this should be such a big deal is beyond me, since it’s not like Congress can directly interfere with FCC merger review, and the indirect threats for payback are already on the table.

Martin, conscious of the controversial nature of the move, wrote a letter to the Chairs and ranking members of the Senate and House Commerce Committees explaining the need for such extraordinary action. In doing so, Martin observed that the FCC General Counsel had previously authorized former FCC Chairman William E. Kennard to break a 2-2 deadlock despite Kennard’s previous recusal.

Now some months back, when folks first started wondering about the “McDowell Option,” I opined that while the FCC General Counsel could force McDowell to vote, such a move would be “extraordinary” and “To the best of my knowledge, it has never happened.” So what’s all this about Kennard then?

Art Brodsky does an excellent job explaining why the Kennard situation was radically different. But, my honor being involved and all, I decided to dig a bit deeper. As explained below, the facts on the Kennard case were so bizzare and different (starting with the fact that Kennard had not been legally required to recuse himself in the first place but had done so, in his own words “out of an abundance of caution”), that I still think my original statement stands and that, if the FCC unrecuses McDowell, and requires him to vote, it’s really breaking new ground.

More detail than you could possibly want (including a timeline and relevant quotes from Kennard’s public statement in 2000 on unrecusing himself) below….

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