In what has become a sound board for Free Press, Huffington Post published an attack piece this past weekend by Timothy Karr.  Karr is the front man for SaveTheInternet.com, a site run by Free Press.  The site has been a continuous emotional response to the issue of Net Neutrality for the last several years, a complete and full introspective of grand potential disaster scenarios for the future of the Internet, and short on data.  Karr is to Net Neutrality what Al Gore is to man-made Global Warming.  Essentially, without the strong hand of the all knowing government, the Internet as we know it is doomed.

Karr’s most recent article attacking telecommunications consultant Larry Downes is what I would term “astroturf research”.  Last week, CNET published an article by Downes that considers the possibility that the White House is stepping back from strict and over reaching Net Neutrality regulation.  This is Downes opinion, and one that he brings evidence to the table for.  We know this is his opinion because in the second paragraph of the article he states, “That’s my reading, of a number of recent developments, underscored by comments made by government speakers on a panel on the first day of a Tech Policy Summit at CES in Las Vegas.”

Downes is a journalist.  And he’s doing what journalists do, observe and report, nothing more.  In recent months several think tanks have advised that last Fall’s FCC Net Neutrality Notice of Proposed Rulemaking (NPRM) could potentially thwart the expansion of broadband across the nation to rural areas.  Specifically what are referred to as “underserved and unserved” areas of the country.  The basic notion is that by restricting the methods in which network engineers can manage their networks by way of Net Neutrality regulation, the costs of running small networks in these underserved and unserved areas will increase to the point of making them financially unsustainable.  Downes simple observation is that he believes the Obama Administrations priority is broadband expansion rather than Net Neutrality.

This suggestion does not mean that the FCC will relinquish its move toward Net Neutrality regulation.  It’s simply suggesting that Downes believes current movements and commentary indicates that the White House may be pushing it to the back burner and asking our bureaucrats to focus on broadband expansion.

Instead of acknowledging this possibility or even providing evidence to the contrary, Karr has the audacity to attack Downes credibility.  He quotes Nancy Scola of The American Prospect repeating a comment that Downes is consulting for AT&T, thus implying that he obviously can’t be unbiased in any of his reporting.  On one hand there is no evidence that Downes has been contacted to see if this accusation is even true.  On the other hand, what would it matter if it is true?  SaveTheInternet.com and Free Press are notorious for calling out other individuals and organizations for working with or accepting donations from others that share their view on policy.  But how does the not-for-profit Free Press bring in its operating budget?

“Right. Free Press takes no money from any industry groups or any members of the technology industry. We’re supposed to believe that thousands of individuals bust open their piggy banks and send the coins to Free Press’s offices … or something. Maybe a money tree Free Press grows in the garden between its unicorn pen and the jungle gym for leprechauns finance its $4 million annual budget.

It’s hard to say for sure because when you look at the group’s 990 forms to the IRS, the names of the donors are redacted. On the top of every page of contributors on Free Press’ 2007 forms is a hand-written note: “Not open to public inspection. –James G. Lakely, The Heartland Institute”

Downes currently serves as a fellow for the Stanford Law School Center for Internet and Society.  However, Karr chooses to try and dissect this as well commenting that, “Too many ‘scholars’ live this sort of double life – trading on academic credentials to lay a gloss of credibility over their telco-friendly arguments.  It’s up to news orgs (ahem… CNET) to disclose both sides of their personalities.”  It is my understanding that this comment was made from the Mount Olympus of double standards and arrogance.  SaveTheInternet.com and Free Press have made no bones siding with the likes of scholars like Tim Wu, who is Chair of Free Press, and Larry Lessig, both staunch Net Neutrality regulation proponents.  But they have never questioned these scholars about potential ulterior motives.  Furthermore, Larry Lessig himself founded the Center for Internet and Society, and would have absolutely had a say in bringing Downes on as a fellow for the project.  Are we really to believe that Lessig would have brought Downes in on a project as high profile as this at the 3^rd ranked Stanford Law School if he was suspect of devious motives?

The reality of the matter is this:  Free Press and its umbrella groups have online media spin down to a science, and I will be the first to admit that they are consummate professionals to a degree that only Bobby Jones could appreciate.

Free Press criticizes those that speak out against their goals for being puppets of the industry that shares that agenda.  They however will not criticize those that share their opinion that receive support from the industry that promotes the Free Press agenda.  Are we really to believe that industry giants like Amazon, YouTube, Google, etc, have hired no lobbyist or government relations organizations to represent them in the Net Neutrality debate?  Are we really to believe these corporate giants will not benefit financially from regulation and that they are not pouring any money into the system to protect their own interests?  Free Press would have us think that it is only possible to be a shill for an industry if you are opposing their view point when the fact of the matter is that Free Press is a shill themselves.

-nick

It apparently does to White House Deputy Technology Office Andrew McLaughlin.? This week McLaughlin compared opposing government mandated control over Internet content delivery the same thing as China censoring the Internet.? He continued,

?If it bothers you that the China government does it, it should bother you when your cable company does it,? McLaughlin said.

When we are talking about Net Neutrality, we are clearly no longer talking about the same thing as the liberals in the White House.

Look, there is simply no evidence that ISP’s want to block content.? In fact they would be nuts to do so.? Additionally, there is no evidence that the government will not block or censor content either.? What people need to begin to realize is that for the FCC to implement their recently proposed NPRM, they will at some level have to monitor traffic.? There is no clear detail how they will be doing this or if they will be monitoring at the content level.

McLaughlin makes the comparison of the ability of ISP’s to block content to China’s censoring knowing full well that the government could soon have the same ability.? The double standard is brilliant, and the ploy convincing to those who aren’t familiar with the heart of the issue.? Compare anti-neutrality sentiment to a country that strictly limits freedom of speech online and quickly bring in the sheep.

If you want to seek out actual information on the issue, read all sides, that’s fine.? Then make a decision that is best for you and your house.? But while you’re at it look up the contributions from Google, Amazon, Yahoo, and Ebay to the Obama campaign compared to the McCain campaign, and know that you should take anything coming out of the White House on this issue with a grain of salt.? It’s a big fat payback for monies paid in advance.

It baffles me that ECA (Entertainment Consumers Association) continues to step on their own toes with the net neutrality issue.? If the ECA truly supports video games then they are doing video gamers a disservice by supporting anything to do with net neutrality regulation.

The FCC NPRM proposed last month prevents ANY discremination in applications.? Which means video games will have 0 prioritization. You will have massive jitter in your online games. i.e. lag or queue stacking.? You will have no priority over your next door neighbors 24/7 torrenting, or any other bandwidth heavy applications.? Gaming traffic is very, very small. But its time sensitivity is extremely high.

If you support video gaming, you should not be supporting regulation.? Support neutrality all you want, but support it by using smart infrastructure, not dumb networks that treat everything the same.? Everything on the net is not the same. And applications like video games and VoIP must have priority. If you think the neutrality argument is about blocking websites, you are very misinformed. Find your local network engineer and pick their brain, like I did here: www.digitalsociety.org/2009/11/podcast2/

-nick

At a Crossroads

Notwithstanding its unparalleled record of success, today the free and open Internet faces emerging and substantial challenges. We?ve already seen some clear examples of deviations from the Internet?s historic openness. We have witnessed certain broadband providers unilaterally block access to VoIP applications (phone calls delivered over data networks) and implement technical measures that degrade the performance of peer-to-peer software distributing lawful content. We have even seen at least one service provider deny users access to political content. And as many members of the Internet community and key Congressional leaders have noted, there are compelling reasons to be concerned about the future of openness.

Without a doubt the FCC Chairman is correct on these points.? There have occurred violations to Net Neutrality over the years.? I can count them on my hand.? Some of these violations have been mistakes and rectified.? Others were corrected when public voices and other market forces corrected the problems within days or weeks.? Still other violations to neutrality occurred because of violations to the network administrators policy or because an end user was hijacking the network.? Traditionally, these few cases have been individuals using torrenting services that were receiving and distributing high amounts of data round the clock and causing other users at the node to experience low quality service.? In these cases, the private network makes a policy decision to either allow one individual to continue dominating the last-mile, or to violate Net Neutrality for the benefit of other paying customers.

One reason has to do with limited competition among service providers. As American consumers make the shift from dial-up to broadband, their choice of providers has narrowed substantially. I don?t intend that remark as a policy conclusion or criticism — it is simply a fact about today?s marketplace that we must acknowledge and incorporate into our policymaking.

This is an argument that has been used for the better part of a decade and was most likely true up until the last 18 months.? It is probably still true in many areas around the country.? The reason for this is simple.? With the switch to broadband in the early years of the new millennium telecoms were the most suited to make adjustments to their existing networks to corner the market.? One may not like this, but it’s simply capitalism.? And while the monopoly held fast for many years, the free market has allowed new technologies to give consumers more choice.? In my home town of Atlanta, several years ago one may only have 1-2 choices for broadband.? Now they have roughly 7 depending on the exact area of town they live in.? From fiber, to multiple cable and dsl choices, to the emergence of Sprint, AT&T, and Clear 4G wireless.? This progress will continue throughout the nation as these companies move into other cities and push into the suburbs.? Rome wasn’t built over night.? Neither is America the equivalent in size to Seoul, South Korea.? It will take some time.

A second reason involves the economic incentives of broadband providers. The great majority of companies that operate our nation?s broadband pipes rely upon revenue from selling phone service, cable TV subscriptions, or both. These services increasingly compete with voice and video products provided over the Internet. The net result is that broadband providers? rational bottom-line interests may diverge from the broad interests of consumers in competition and choice.

This line of argument must fall into line with a situation resultant from the previous paragraph. i.e. If Comcast provides OnDemand video services, they would be encouraged to block Hulu and Netflix because access to those sites keeps consumers from using the Comcast service.? The argument goes on to say that this can’t be prevented because the consumer couldn’t not choose a different ISP for it’s Internet services and would be forced to be cut off from certain Internet sites.? The reality is that this is bunk logic for multiple reasons.? First we have already established that there is market choice for a growing number of consumers.? Second, the market backlash to this sort of thing would jeopardize the companies reputation.? Thirdly, companies that offer multiple services have greatly benefited financially from “Triple Play” style packages that offer the consumer items like phone, Internet, and television in one bill.? Blocking specific Internet sites in an attempt to bring more revenue in from a competing service is not a successful business model.? For one reason, even in areas where there are limited Internet provider choices, there are always multiple phone and video solutions.? Losing revenue from combined service packages would would be worse than projected revenue lost from a competing service like OnDemand.

The third reason involves the explosion of traffic on the Internet. With the growing popularity of high-bandwidth applications, Internet traffic is roughly doubling every two years. Technologies for managing broadband networks have become more sophisticated and widely deployed. But these technologies are just tools. They cannot by themselves determine the right answers to difficult policy questions — and they raise their own set of new questions.

i.e. “We the government should also have a hand in determining how broadband networks handle their traffic.”? No, the government should not be doing this.? These guys are bureaucrats, not engineers.? Bureaucrats should have the authority to determine how money should be spent or how policy should be enforced when authority to do so is given to them.? Giving bureaucrats the authority to determine how network engineers manage their networks is the equivalent of telling NASA how to design a component on a space ship.? Does that sound like a good idea?

In acknowledging the existence of challenging competitive, economic, and technological realities for today?s Internet, I want to underscore that this debate, as I see it, isn?t about white hats or black hats among companies in and around the network. Rather, there are inevitable tensions built into our system; important and difficult questions that we have an obligation to ask and to answer correctly for our country.

The reality is that a company that has spent billion of dollars designing a private network should not have to answer any questions the government has about taking over regulatory control of something that is not owned by the government.? The FCC has no obligation.? The FCC wants control of the Internet in the same way they have control over radio and television.

When I worked in the private sector I was fortunate to work with some of the greatest innovators of our time. That taught me some lessons about the importance of innovation and investment. It also taught me the importance of developing clear goals and then being focused and practical in achieving them, making sure to have the best input and ideas from the broadest group possible.

Genachowski, look I’m sorry, but “working in the private sector” for IAC, a company that goes around buying up other people’s websites and web technology innovations, and working for Expedia, TicketMaster, and Hotels.com does not qualify you to understand the things that a network engineer understands.? You have a business degree from Harvard.? Fantastic! You understand the business aspect of the technology space.? The guys you are claiming to be on the same ground with have telecommunications engineering degrees from MIT, Carnegie Mellon, and Georgia Tech.? They aren’t trying to run the business side of the companies they work for, and you do not need to be running the engineering side of their businesses.

I am convinced that there are few goals more essential in the communications landscape than preserving and maintaining an open and robust Internet. I also know that achieving this goal will take an approach that is smart about technology, smart about markets, smart about law and policy, and smart about the lessons of history.

If this is a legit claim, then you can use 20 some odd years of history of the Internet as an indicator that what you are claiming to be a problem is not a problem.

We Must Choose to Preserve the Open Internet

The rise of serious challenges to the free and open Internet puts us at a crossroads. We could see the Internet?s doors shut to entrepreneurs, the spirit of innovation stifled, a full and free flow of information compromised. Or we could take steps to preserve Internet openness, helping ensure a future of opportunity, innovation, and a vibrant marketplace of ideas.

In all seriousness how does this make any sense?? Neutralians argue that ISP’s may violate some Net Neutrality code that will stifle innovation and information.? But how is this different from giving that control over to the government?? If – and the word “if” should come with great stress in its tone – any of this banter is true, then American consumers of broadband really have two choices.
1) They can continue under the status quo, with the risk that there would be an occasional violation to Net Neutrality by an ISP that would then be under the pressure of market forces to act swiftly in rectifying the problem; or,
2) Americans can cede control of Internet regulation to the FCC and whatever administration happens to be at the helm, for the “understanding” of network management to change with every change of the administration, and the ability of these regulatory forces to over see the content we send and received and determine if it is legal and if the network is operating under their “guidelines”.? Additionally, consider that regulation would occur under the guidance of individuals like Mark Lloyd and Cas Sunstein who wish to control media and information content from every angle, television, radio, and the Internet.
I’ll take the cautious approach for $500, Alex.

I understand the Internet is a dynamic network and that technology continues to grow and evolve. I recognize that if we were to create unduly detailed rules that attempted to address every possible assault on openness, such rules would become outdated quickly. But the fact that the Internet is evolving rapidly does not mean we can, or should, abandon the underlying values fostered by an open network, or the important goal of setting rules of the road to protect the free and open Internet.

Sure, you would just expect every new technology for network management to pass your “reasonable network management” smell test.? Whatever that means…

Saying nothing — and doing nothing — would impose its own form of unacceptable cost. It would deprive innovators and investors of confidence that the free and open Internet we depend upon today will still be here tomorrow. It would deny the benefits of predictable rules of the road to all players in the Internet ecosystem. And it would be a dangerous retreat from the core principle of openness — the freedom to innovate without permission — that has been a hallmark of the Internet since its inception, and has made it so stunningly successful as a platform for innovation, opportunity, and prosperity.

If openness whas established and respected this far along in the Internet’s history without the government, why in the world would natural openness need policy for openness?

In view of these challenges and opportunities, and because it is vital that the Internet continue to be an engine of innovation, economic growth, competition and democratic engagement, I believe the FCC must be a smart cop on the beat preserving a free and open Internet.

Anyone else see Minority Report?

What We Can Do

This is how I propose we move forward: To date, the Federal Communications Commission has addressed these issues by announcing four Internet principles that guide our case-by-case enforcement of the communications laws. These principles can be summarized as: Network operators cannot prevent users from accessing the lawful Internet content, applications, and services of their choice, nor can they prohibit users from attaching non-harmful devices to the network.

The principles were initially articulated by Chairman Michael Powell in 2004 as the ?Four Freedoms,? and later endorsed in a unanimous 2005 policy statement issued by the Commission under Chairman Kevin Martin and with the forceful support of Commissioner Michael Copps, who of course remains on the Commission today. In the years since 2005, the Internet has continued to evolve and the FCC has issued a number of important bipartisan decisions involving openness. Today, I propose that the FCC adopt the existing principles as Commission rules, along with two additional principles that reflect the evolution of the Internet and that are essential to ensuring its continued openness.

I think the problem here is that no one really understands is that the FCC can adopt this, but it still doesn’t give it governance over ISP’s without Congress passing a law providing regulatory governance over private corporations.? Which has me considering if all of this FCC nonsense is actually a smoke screen.? Most individuals don’t understand government, and don’t understand bureaucratic oversight and authority.? There is a slim chance the FCC is trying to pass these rules to appease the Neutralians who don’t understand that the FCC wouldn’t have any real power to enforce them without passage of a Congressional bill.

To be continued…

Part 1

-nick

After reading over FCC Chairman Julius Genachowski’s speech and considering my comments, I felt that a lot of the nuances of what he talked about may get lost in a simple response.? So I decided that I would just break the whole thing down.? I’ll be splitting his speech up over several parts and providing responses to what he had to say.

If you’d care to listen to the speech in full first, then here you go:

You can also find the text of the speech unmolested by my comments here.

So here comes our break down, paragraph by paragraph.? My comments in bold.

Prepared Remarks of
Chairman Julius Genachowski
The Brookings Institution, Washington DC
September 21, 2009

I?d like to thank Brookings for hosting me and this discussion about the future of broadband and the Internet.

We?ve just finished a summer of big-ticket commemorations, celebrating the 40th anniversaries of the Apollo landing and of Woodstock; 1969 was also a good year to be a kid in New York, with Joe Namath calling the Super Bowl, and the Knicks? season that ended with the legendary Willis Reed in Game 7. I grew up a long fly ball from Shea Stadium and soaked up every minute of the Miracle Mets? season. Maybe that?s why I tend to believe in miracles.

But perhaps the most momentous birthday from that famous summer of 1969 went by just a couple of weeks ago with little mention. Just over forty years ago, a handful of engineers in a UCLA lab connected two computers with a 15-foot gray cable and transferred little pieces of data back and forth. It was the first successful test of the ARPANET, the U.S.-government-funded project that became the Internet — the most transformational communications breakthrough since the printing press.

Today, we can?t imagine what our lives would be like without the Internet — any more than we can imagine life without running water or the light bulb. Millions of us depend upon it every day: at home, at work, in school — and everywhere in between. The Internet has unleashed the creative genius of countless entrepreneurs and has enabled the creation of jobs — and the launch of small businesses and the expansion of large ones — all across America.

Yes, the Internet has unleashed creativity and created jobs, and has done so without the help of the government or having any of its facets regulated.

That?s why Congress and the President have charged the FCC with developing a National Broadband Plan to ensure that every American has access to open and robust broadband.

There are several assumptions here.? First off, Congress has not charged the FCC with a National Broadband Plan, nor have they charged the FCC with regulating the Internet or determining that the Internet must exist under regulated, binding by law Net Neutrality rules.? The only thing Congress has done in regards to this issue was pass the American Recovery and Reinvestment Act which had two things in relation to these issues. 1) There existed monies in the stimulus package for the expansion of broadband into unserved and underserved areas.? The funding is limited, and less than half of what Verizon alone has spent on developing their entire fiber network.? It is the FCC who labeled and determined this to be a “National Broadband Plan.”? Congress simply provided money for the development of limited networks.? That is significantly different than being “charged” with accomplishing some mission that Genachowski apparently considers is his destiny as Chairman.? 2) Congress did not charge the FCC to ensure an open Internet.? Within the stimulus the language insinuates that grantees of stimulus funds must build networks under the guidelines of FCC policy statements.? It is therefore the FCC that determines what those policy statement conditions are, not Congress.

Additionally, this statement carries with it the assumption that access to the Internet is both desired by everyone and a right.

The fact is that we face great challenges as a nation right now, including health care, education, energy, and public safety. While the Internet alone will not provide a complete solution to any of them, it can and must play a critical role in solving each one.

These statements are a bit of a reach.? I understand that part of the job of the Chairman is to act as a pitchman for the Obama Administration’s platform and policy agenda, but these claims are weak at best.? I guess I can see where the Internet is a useful tool in research for health care and education, as far as ones ability to search out the best insurance policy or the ability to take an online class.? But as far as health care goes, one could just as easily open the YellowPages and make phone calls and write some stuff down.? But I certainly don’t understand how increasing Internet access will improve public safety and solve our energy issues in this context.? Is there by chance some Einstein-esque man with a secret energy solution that just cannot get his message out at the moment, and if only he had Twitter all our energy problems would be solved?? Something about beach front property in Colorado goes here.

Openness is the Key

Why has the Internet proved to be such a powerful engine for creativity, innovation, and economic growth? A big part of the answer traces back to one key decision by the Internet?s original architects: to make the Internet an open system.

Historian John Naughton describes the Internet as an attempt to answer the following question: How do you design a network that is ?future proof? — that can support the applications that today?s inventors have not yet dreamed of? The solution was to devise a network of networks that would not be biased in favor of any particular application. The Internet?s creators didn?t want the network architecture — or any single entity — to pick winners and losers. Because it might pick the wrong ones. Instead, the Internet?s open architecture pushes decision-making and intelligence to the edge of the network — to end users, to the cloud, to businesses of every size and in every sector of the economy, to creators and speakers across the country and around the globe. In the words of Tim Berners-Lee, the Internet is a ?blank canvas? — allowing anyone to contribute and to innovate without permission.

This is a fantastic paragraph.? Genachowski hits the nail on the head here.? Unfortunately he is too blind to see that government intervention is ubiquitous for not being hands off.? Regulated Net Neutrality is the exact polar opposite approach to what Genachowski has written here.? Government now has the power to pick winners and losers.? They have the power to know what data is being transferred by having the power to conduct deep packet inspection to determine the contents of data traveling across networks.? They will have the power to tell network operators how to manage their networks and how to manage the flow of data, slowing or speeding up the delivery of certain types of applications.? That is the essence of picking winners and losers right there.? Period.? Genachowski wants the Internet to be a “blank canvas” with a little FCC logo down at the bottom right hand corner.

It is easy to look at today?s Internet giants — and the tremendous benefits they have supplied to our economy and our culture — and forget that many were small businesses just a few years ago, founded on little more than a good idea and a no-frills connection to the Internet. Marc Andreessen was a graduate student when he created Mosaic, which led to Netscape, the first commercially successful Web browser. Mark Zuckerberg was a college student in 2004 when he started Facebook, which just announced that it added its 300 millionth member. Pierre Omidyar originally launched eBay on his own personal website. Today more than 600,000 Americans earn part of their living by operating small businesses on eBay?s auction platform, bringing jobs and opportunity to Danvers, Massachusetts, Durham, North Carolina and Lincoln, Nebraska, and many other communities in both rural and urban America. This is the power of the Internet: distributed innovation and ubiquitous entrepreneurship, the potential for jobs and opportunity everywhere there is broadband.

Yes, you too can create the next Amazon in your garage!? With all the grandeur of these statements, the fact remains that all of these massive Internet companies were established under current conditions.? Evidence of the success of the Internet without regulated Net Neutrality is evidence in support of the absence of regulation, not a promotion for regulation.? This paragraph is an argument for keeping the established norm, not for change.? The problem with Genachowski and Neutralians is that they are banking on some ridiculous cosmic notion that the Internet is currently neutral and that they must enact laws to keep it that way.? It is this notion of, “There isn’t a problem, but maybe, possibly, there might be in the future, so we have to do something about that at the risk of destroying the innovation inherent in the Internet and proper network management.”

And let us not forget that the open Internet enables much more than commerce. It is also an unprecedented platform for speech, democratic engagement, and a culture that prizes creative new ways of approaching old problems.

Then why mess with that system based on what essentially boils down to your bet that something bad may happen that the market itself could not correct, when actual case study shows that any violation to Net Neutrality principles has been met with swift action by market forces and immediately corrected within weeks or even days?

In 2000, Jimmy Wales started a project to create a free online encyclopedia. He originally commissioned experts to write the entries, but the project only succeeded after moving to volunteers to write them collaboratively. The result is Wikipedia, one of the top 10 most visited websites in the world and one of the most comprehensive aggregations of human knowledge in our history. The potential of collaboration and social media continues to grow. It is changing and accelerating innovation. And we?ve seen new media tools like Twitter and YouTube used by democratic movements around the globe.

Again, if it ain’t broke, don’t fix it.

Even now, the Internet is beginning to transform health care, education, and energy usage for the better. Health-related applications, distributed over a widely connected Internet, can help bring down health care costs and improve medical service. Four out of five Americans who are online have accessed medical information over the Internet, and most say this information affected their decision-making. Nearly four million college students took at least one online course in 2007, and the Internet can potentially connect kids anywhere to the best information and teachers everywhere. And the Internet is helping enable smart grid technologies, which promise to reduce carbon dioxide emissions by hundreds of millions of metric tons.

This is obvious marketing speak for the promotion of Obamacare and administration policy objectives that has nothing to do with anything we are supposed to be hearing about in this speech, which is supposed to be an FCC position statement on Net Neutrality.

At the same time, we have also seen great strides in the center of the network. Most Americans? early exposure to the Internet was through analog modems, which allowed a trickle of data through the phone lines to support early electronic bulletin boards and basic email. Over the last two decades, thanks to substantial investment and technological ingenuity, companies devised ways to retrofit networks initially designed for phones and one-way video to support two-way broadband data streams connecting homes and businesses across the country. And a revolution in wireless technologies — using licensed and unlicensed spectrum — and the creation of path-breaking devices like the Blackberry and iPhone have enabled millions of us to carry the Internet in our pockets and purses.

Yes, Genachowski, and this is what makes the Internet the most wonderful creation man has ever made.? It is a world without you, the government.? It is the last remaining frontier of the Wild West.? And I don’t mean that in a way to reflect the “red light districts” of the net.? I mean that from the perspective that the Internet is a world of self regulation.? Even the regulation on certain websites is determined by the members or owners that inhabit those sites.? It is because of this unbridled nature of the medium that such creativity has flowed.? It is kin to the Age of Enlightenment.? Discovery blossomed when one mans quest for power over another man was finally somewhat extinguished.

It is said that early America buoyed The Enlightenment via the American Revolutionary War.? America thrust off the chains of its oppressor, those that wished to control it, and it blossomed forth.? This is why the Internet has proved successful.? The barriers to entry that exist in many brick and mortar and “meatspace” opportunities are much higher than those of small business and upstarts on the Internet.? Especially in the Internet’s earliest days.? To regulate that now, and possibly restrict innovation and economic development based on a whim is just dumbfounding to me.

The lesson of each of these stories, and innumerable others like them, is that we cannot know what tomorrow holds on the Internet, except that it will be unexpected; that the genius of American innovators is unlimited; and that the fewer obstacles these innovators face in bringing their work to the world, the greater our opportunity as citizens and as a nation.

Does this seem like backwards logic to anyone else?? Genachowski praises the lessons we can learn of success under an unregulated Internet, and then goes on to promote the idea that fewer obstacles improve innovator output and end user opportunity, but he wants to regulate the Internet.? You know that noise Scoopy-Doo used to make when he was confused?? I just made that noise.? How do you limit obstacles by introducing regulation that increases obstacles?? Baffling…

To be continued…Part 2

-nick

This will be sure to rub carriers the wrong way, as many companies exclude certain applications on cell phones existing on their networks that would compete with those carriers ability to offer their own services.? For example, you have the recent Google Voice application being denied by AT&T/Apple from the iPhone because it bypasses AT&T’s ability to provide cell phone service.

There will also exist a concern by network managers on what exactly “reasonable network management” is.? As this implies that the government will be able to step in and examine and then determine whether a company is managing their own network up to government standards.? Whatever those standards may be.

We will be eagerly anticipating Genachowski’s comments on Monday.

-nick

Lessons from Previous Rural Expansion Programs

The project will most likely be modeled after the Department of Agricultures Rural Utilities Service Broadband Grant and Loan Program (RUS). This was a program designed to extend broadband services into rural areas of the country. The program was a one stop shopping solution to the broadband needs of any rural area, and was met with little or at least questionable success. An audit of the program reported that, ?During the 4 years the Rural Utilities Service (RUS) has administered Federal loans and grants for extending broadband service to rural America, the programs? focus has shifted away from those rural communities that would not, without Government assistance, have access to broadband technologies. This change in the programs? emphasis has occurred for two reasons. First, in its loan program, RUS has not satisfactorily implemented statutory requirements for serving rural instead of suburban areas, nor does it have a system that can guarantee that communities without preexisting service receive priority. Second, RUS? inconsistent administration of the programs has resulted in irregularities in approving and servicing grants and loans. Of the $895 million in loans and grants funded, we reviewed $599.1 million (67 percent) and questioned the use of over $340.4 million?almost 57 percent of the approved funds reviewed.?[31]

What occurred with the RUS rural broadband program was that there were no clear cut well defined statements of what a rural community was, what the requirements were for installation of services, and consistent adhering to the grant and loan requirements they had defined. This resulted in the program having, ??issued over $103.4 million in loans to 64 communities near large cities, including $45.6 million in loans to 19 planned subdivisions near Houston, Texas.?[32]

RUS was also funding competing service providers without adhering to program policy that stated that underserved or areas with no service were priority to receive funding. The audit also addresses the fact that the Office of the Inspector General is concerned about the ethicality of supporting competing service providers, stating, ?Furthermore, we question whether the Government should be providing loans to competing rural providers when many small communities might be hard pressed to support even a single company. In these circumstances, RUS may be setting its own loans up to fail by encouraging competitive service; it may also be creating an uneven playing field for preexisting providers operating without Government assistance.?

If the Obama administration?s desire is to extend broadband into rural areas, and this is their model, we have a problem. The taxpayer would be just as easily served to throw their wallet out the window as they are driving down the street. At least they would know where their money went in that case. This model needs serious work and accountability. And the ethicality argument is a very good one. Should the government reimburse service providers that go out of business in low volume user areas because the government chose to subsidize a competitor to come into their area and offer service? There is no scenario in which this should occur.

Recommendations Moving Forward

Broadband should be instituted in communities without a strings attached approach. The appropriate move would be to deregulate broadband industries making it easier and more cost efficient for them to expand into rural areas. If the only way the administration will promote broadband expansion is through public funding, operated via a set of rules and regulations determining how that network can be built and how it can be managed, then that is simply not in the best interest of the consumer, and that promotion should be discontinued.

Competition and community need should be the driving force behind expansion of services; giving the free markets a chance to appropriately solve any problem areas and the needs of rural communities. Ultimately, with passage of the American Recovery and Reinvestment Act, public funding is unfortunately assured. But there is still an opportunity to recommend a change in burdensome regulation and neutrality requirements during the creation of the National Broadband plan and implementation. With great emphasis it is recommended that there be reconsideration on forcing the implementation of FCC net neutrality requirements so that the impeding of technology and innovation that may interfere with wealth creation is avoided. Strict refinement of policies used in RUS with defined terminology of what is considered a rural area and plainly distinguish what is an unserved or underserved area. Additionally, ethics policies need to be both put in place and enforced in regards to awarding grants to companies that would use funds to move into areas already served by a service provider, or subsidizing one company over another in underserved areas where two providers may exist and one is seeking to expand services. It cannot be stressed enough that government should not be picking winners and losers; maybe even more so when it comes to technological solutions and innovation.

-nick

A full copy of this article including complete citations can be found here.

Gateway Neutrality

Within the American Recovery and Reinvestment Act of 2009 exists Title VI SEC. 6001(j).[26] This describes the non-discrimination and interconnection mandate which must be followed to obtain stimulus funds as a grantee, part of which is the adherence to the FCC Policy Statement on Broadband.[27] This FCC policy statement is a point-by-point description of the commission?s definition of net neutrality.? While there are no specific details regarding the rigidity with which these policies would be enforced, traffic shaping is generally considered a violation of net neutrality principle.? The result of which is that network operators will not be able to alter packet transfer to best suit the needs of their customer base.? An example of this is the recent announcement by Cox Cable to introduce a new traffic management system.[28] Neutrality proponents disagree with this type of active management because it does not treat each and every packet equally.? This is the common nature of the Internet.? As Richard Bennett, a network architect who has testified before the FCC, describes it, ?In its essence, the Internet is a resource contention system that should, in most cases, resolve competing demands for bandwidth in favor of customer perception and experience. When I testified at the FCC?s first hearing on network management practices last February, I spent half my time on this point and all other witnesses agreed with me: applications have diverse needs, and the network should do its best to meet all of them. That?s what we expect from a ?multi-purpose network?, after all.?[29] At some point in the neutrality debate, the lines of argument were confused, and neutrality in packet transfer became equivalent to protecting the end user and providing them the best experience.? In actuality, an ISP that can manage traffic in real time as they monitor their own network provides the best experience for the consumer.? Imagine if fire trucks and ambulances were regulated to obey the same traffic laws that standard commuters are forced to obey?? Obviously in those cases we are dealing with emergency situations, but the principle still applies.? A network manager can see traffic conditions in real time, and can prioritize those time sensitive packets like an ambulance through street traffic allowing the application to work correctly and seamlessly on the end users side.? Innovative techniques and technologies like these will be limited or disallowed under imposed net neutrality regulation that will be enforced in broadband stimulus legislation.? Furthermore, networks built with government funding could find themselves at the will of government censorship creating First Amendment violations.

Additionally this implementation could ease the enforcement of neutrality rules on other public or private networks acting as a ?gateway drug?.? This would be similar to the voluntary neutrality regulation passed in Norway recently.[30] At some point, when the voluntary policy has obtained enough big market player signatures, passage of enforced, involuntary regulation will quickly follow.

The Keynesian Assumption

At the root of the Obama stimulus, even in regards to broadband, the plan is still Keynesian.? The government will still be taking in taxes to pay for what it believes will stimulate the economy.? They will be dictating what areas networks should be built in, pre-determining that they will be successful promoters of economic stimulus and wealth creation, and ultimately determining the technological and innovation side future of the Internet in part or in whole.? When looking at the data, and the growing market saturation of broadband usage, it appears that the majority of those who desire broadband services and have access to them have joined.? ISP?s know this and recognize the consumer desire for those services.? They will, without a shadow of a doubt, extend their services into rural areas that show a need for broadband access when the market is suitable to expand into those areas.

To be concluded…
Part 4

-nick

Technology & Implementation at the Local Level

The Broadband Technology Opportunities Program, which is the official title of the broadband stimulus, does call for the maximum use of the infrastructure,[11] which could suggest lower speed connections. However, Obama is a supporter of fiber optic technology.[12] This will inevitably be the primary technology that his administration pushes for when details are hammered out in the months following stimulus passage.[13] Regulating a specific technology is not appropriate for the future of the Internet. One solution to network infrastructure will be stifling for innovation and the use of many available technologies that exist in the market place to extend and improve broadband availability. Additionally, networks that would be required to be open access would regulate the type of network that could be built, and determine its usefulness. And regulating network design may well hinder that networks ability to truly be innovative and useful in decades to come.

Christopher Yoo, legal professor at The University of Pennsylvania points out that, ?Consumer demand for more time-sensitive applications, such as Internet telephony and streaming media, may be providing much of the impetus away from standardization. Forbidding network owners to introduce routers that can assign different priority levels to packets based on the nature of the application would have the effect of precluding consumers from enjoying the benefits of certain types of applications. The current ubiquity of TCP/IP makes it seem like an appropriate default rule and appears to justify placing the burden on those who would deviate from it. A moment?s reflection makes clear how adherence to the Internet?s nonproprietary structure may actually impede innovation?.[14]

With Obama already being billed as the ?Science and Technology President? and claiming to ?restore science to its rightful place,?[15] in his inauguration speech, it would seem impeding innovation with regulations that may become a burden under future network technologies would be counter to his goals of progress in those areas. Additionally, settling for one design as a national broadband standard will prove cost inefficient. The optimal expedition of future network expansion and improvement needs to include many differing technologies based on what is needed at the local level. Preferably, competition between last-mile providers would create the best options for the consumer. Local market competition along with a survey of the needs of that community, extended area, or region should determine what broadband technologies are best. But in any case, an examination of available technologies and what suits each community is the most optimal route with a consideration of many options including cable DOCSIS 3.0 technology, WiMax, Fiber Optic, Hybrid-Fiber, new innovations with Satellite and Satellite-Hybrid networks.

The expansion of broadband Internet use in the United States produced innumerous innovations.[16] Nearing the end of 2007, broadband Internet usage had captured some 78% of the of all Internet connectivity in the nation.[17] And by mid-2008 was expected to reach 90%.[18] Leonard Waverman, the dean of the Haskayne School of Business at the University of Calgary and developer of the ?Broadband Scorecard? has stated that America leads the world in using broadband technologies in the workplace for economical means. Alluding to the mythology that Korea?s high-speed connections to the home are the end-all-be-all example of what America should strive for, he said, ?Korea has great broadband to the house, but businesses in Korea don?t use the best networks and don?t have the skills and computing assets they need to take advantage of them.?[19] This is where America shines, and we have been doing this through private sector investment in infrastructure.

Additionally, we are probably nearing a saturation point. Evidence of this was shown in the Pew Internet & American Life Project that reports two-thirds of those without broadband don?t want it.[20] This is most certainly a reality. No matter how much those in the technology community belabor the joys of using broadband, to some, it will always be a useless toy and not a necessity. Many individuals only use Internet at work as a tool for their profession. Some may only check email or use the Internet for very infrequent, light browsing. For these individuals, and countless other examples, the need for broadband is unnecessary, or its additional expense cannot be justified. This is similar to individuals choosing higher octane gasoline. Some buy cars that require a higher octane and they justify the expense, while to others the lowest grade will operate their car just as well, and the added cost of a higher grade is wasteful. The market provides options, and the consumer chooses what works best for them.

Certainly, without question, the Internet?s existence has been a remarkable boon to the US and world economies. Being that broadband Internet has allowed a richer more in-depth experience to be had by the end user, it certainly suggests that the extension of broadband networks in the U.S. could increase the opportunities both start-ups and end users may have. Furthermore, the reach of content providers whose offerings to the consumer requires broadband speeds would be greatly extended. Individuals who may not have had access to a fee based streaming media service for instance, would now have those services at their finger tips, and would be paying back into the economy.

Where the trouble lies in all of this is that someone has to build these rural networks. And this will not be cheap. To work effectively, broadband technologies must remain close to an Internet backbone. Based on this, using Verizon FiOS for example, the costs of running fiber all the way to the home can be extreme. Verizon has spent roughly $18-$20 billion doing so.[21] AT&T has spent considerably less, roughly $6.5 billion using VDSL technology, which is a hybrid-fiber connection using the existing coaxial network in ones home.[22] Additionally, bear in mind that both companies are upgrading their networks in areas with major Internet backbones. President Obama?s broadband stimulus is intended to build networks in a method that will ?maximize use of the supported infrastructure by the public,?[23] which indicates clearly that the objective is to reach more with less instead of less with more. The FCC has defined broadband to be access to the Internet at speeds of at least 768Kbps,[24] and therefore the proposed stimulus for broadband would require the grantee to build a network that would provide as many greater than or equal to 768Kbps connections as possible, rather than a smaller higher bandwidth network. This is honorable in its goal to reach individuals that do not have broadband connectivity in rural areas that may desire it. However, if by the time the network is built it lags behind the rest of network technology, and more money has to be spent to upgrade it, building a more future-proof smaller network and expanding it on an as needed basis may be a better option, and one that could more readily be handled by the private sector. In either case, going back to the original examples, the project will be extremely expensive, because not only will it incur the costs of the area network itself, but will require the extension of a backbone brought to the area. In a report on broadband stimulus by Free Press, it is estimated that installing a Fiber-to-the-Home network for the 6-8 million unserved homes across America will cost roughly $2,000-$5,000 per home, ultimately billing out between $12-$40 billion.[25] Ultimately, the costs will most likely be too high for the government to desire to handle on their own, especially considering that the $7 billion included in the stimulus is actually separated into different areas of provision related to broadband. The use of the USF and other Congressional aid may be sought in the future to provide the additional funds required to build out a future proof network like this. However, the majority of the costs for building these networks will most likely be incurred by the grantee. Yet it will be this grantee that will be forced to adhere to a taxing set of regulations.

To be continued…

Part 3 here.

-nick

Ever since the now YouTube famous Google interview of then Senator Barack Obama promoting broadband Internet deployment nation wide,[1] broadband deployment as part of Obama?s overarching $825 billion stimulus package has been a ready topic of conversation in technology circles.? Broadband penetration in the United States is only 25.67% of all Internet connectivity or available to roughly 71 million Americans, ranking the U.S. 19th in the world.[2] Home connections via broadband have risen to 92.4%, creating the argument that the majority of Internet users are engaged in daily activities that require, or at least benefit from, broadband connectivity.[3] Obama has promoted this line of thinking, and believes ?that America should lead the world in broadband penetration and Internet access?.[4] Pushing it even farther, he believes that the Universal Service Fund should be implemented in the expediting of deployment.[5] This line of thinking is more than likely impossible.

Economic Stimulus?

There is no clear winning argument for why America should lead the world in broadband connectivity, first of all.? It is reasoned by Free Press and like minded individuals and organizations that broadband stimulus will be a boon to the American economy and job creation.? This is probably based on a report created by Brookings and MIT scholars that has been circulating recently which claims that ??for every one percentage point increase in broadband penetration in a state, employment is projected to increase by 0.2 to 0.3 percent per year. For the entire U.S. private non-farm economy, this suggests an increase of about 300,000 jobs??[6] What is generally not reported is the continuation of this paragraph, ?assuming the economy is not already at ?full employment? (the national unemployment rate being as low as it can be with a low, stable rate of inflation). At a more disaggregated level, we find that employment in both manufacturing and services industries (especially finance, education and health care) is positively related to broadband penetration.?[7] The point being that the argument can easily be reversed, countering that prosperity and wealth creation stimulate broadband penetration; i.e. Individuals improving their job placement will either have additional wealth to afford a broadband connection increasing broadband penetration in an area, or an increase in an areas social scale drives corporations to expand services into an area that previously was unable to receive that service.? Additionally, the author?s note in a follow-up post on Brookings website that, ?While most communications sector analysts concur that the ability to deliver broadband communications is a critical feature of the modern global communications infrastructure, there is limited recent empirical research on the economic effects of broadband. In particular, much of the available research is now several years old or refers to the benefits of the Internet generally or more broadly of the “digital economy” rather than to the broadband telecommunications infrastructure per se.?[8] This speaks for itself.

Backing Obama?s position and encouraging him to move forward are the 57 member companies and organizations of the Broadband Coalition,[9] many of whom would be involved in building an expanding broadband infrastructure. ?Not to anyone?s surprise being that federal funding would reduce their overall project costs for expanding their broadband networks, which sounds strangely reminiscent of the $200 Billion provided to the telecommunications industry in tax breaks and relief from price controls to build the US a fiber and hybrid-fiber network by the year 2000 that never happened.[10]

Encouraging the expansion of broadband could be beneficial to the country, and there exists the potential to create new jobs and produce a greater commerce revenue stream through that expansion.? But doing so via the spending of federal dollars will only enhance social welfare on the Internet because existing regulations have resulted in too little private investment in broadband. Eliminating government barriers would alleviate any potential benefit from public investment in broadband. Additionally, expansion when subsidized could reduce competition in certain areas.? In grand plans like these, the federal government tends to design their strategy around a one size fits all solution for the entire country.? This isn?t going to work.? Broadband infrastructure will need to be expanded at the state and local level where unique area specific issues can be solved, and the best technology and methods of implementation can be achieved for that specific location.? It would be costly, difficult, and unwise to begin running fiber into the Appalachian Mountains, and WiMax becomes vulnerable to low efficiency when it is set too far away from Internet backbones.

To be continued…

Part 2 can be found here.

-nick