I believe that Rep. Rick Boucher said at the Freedom to Connect conference this morning that the House Judiciary Committee will look at initiating antitrust action against telephone companies that violate the principle of Net neutrality (i.e., offering transport while preferring some content to others). I believe this is news.

[Tags: f2c rick_boucher net_neutrality ]

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Rep. Rick Boucher is here at Freedom to Connect, the day that the Telecom Subcommittee has opening statements about the “franchise” bill. It would mean that companies wishing to offer cable TV wouldn’t have to get a franchise from local communities. He expects the House will pass it in May.

He says the bill creates a national franchise for multichannel video providers that are seeking to enter the cable TV market as competitors. First, this will be the telephone companies. Verizon, he says, is unusual in that it is building fiber to users, which he wishes more companies would do. E.g., for Verizon to offer multichannel video to its subscribers, it would have to get 10,000 local franchises, while it was in fact getting about 15 franchises a year. Boucher supports creating a national one-stop shop for franchising. A company that wants to offer multichannel TV [which I think just means “cable tv”] can simply file a federal application, so long as they agree to support certain rules: 1. They pay a 6% franchise fee to the local government, which is 1% more than the typical cable franchise fee; 2. They’ll have to carry the same public access and educational channels; 3. They have to abide by the same right of way rules as apply to cable; 4. They have some consumer protection requirements that will be laid out by the FTC. Cable companies will get a national franchise when their local contract runs out so long as there is a wired competitor (not satellite because it’s already national) in that community. The provider may not “red line,” choosing to serve only the rich part of town. But it doesn’t say that within a certain number of years the new provider would have to serve the entire cable franchise area; this portion of the bill is contentious.

Boucher also strongly supports opening the door for local communities to offer wifi. We’re 20th in broadband penetration. We’re paying more and getting less. Some states have barred muni wifi. The new law will make it illegal for states to bar this. Boucher is also excited about what mesh networks could do because it is a “far more efficient and lower cost way” of putting wireless into play, especially in poorer neighborhoods.

But, Boucher is not a fan of Network neutrality. He says the FCC didn’t enforce Powell’s Four Principles because it wasn’t clear that it had the statutory authority to turn them into rules. “These principles are fine as far as they go, but they don’t go far enough.” The principles are:

1. Consumers are entitled to access the lawful Internet content of their choice;
2. Consumers are entitled to run applications and services of their choice, subject to the needs of law enforcement;

3. Consumers are entitled to connect their choice of legal devices that do not harm the network; and
4. Consumers are entitled to competition among network providers, application and service providers, and content providers.

[David Isenberg has pointed out that the FCC Commissioner Martin’s modification of these rules effectively guts them.]

The new bill gives the FCC statutory authority to enforce the principles. It gives it a complaint process so that the agrieved party could file a complaint and the FCC could resolve it with authority. But the FCC would not be allowed to elaborate on these principles; they can’t expand on them by issuing a rule. The big problem, he says, that when the principles were announced, no one knew that the telcos would be charging content providers (e.g., Google, Microsoft) for fast-lane treatment. Everyone else gets slow-lane. The major problem with this is that there could be a dramatic adverse effect on innovation. “It wasn’t very long ago that Google was in a garage getting started, and there are Google wannabes in garages right now. How is that Google wannabe going to pay every provider to get fast ane access. In the slow lane they won’t be able to compete.” [Yay!] [As always, all quotes are approximate, and all non-quoted paraphrases are even more approximate.]

The telephone companies say “Let’s wait and see how the market developments.” But, says Boucher, once revenue is being derived from a business model it’s simply impossible to outlaw the business model.

Boucher and three other Democrats will offer an amendment that says that if a telephone company or broadband provider of any kind decides to prioritize any content, they have to offer that same fast-lane treatment to all content providers without charge.

Q: (Frankston) The bits have noting to do with the content, so why isn’t there anti-trust case?
A: This is a competition issue in part, and it’s an effort on the part of the telephone companies to exert market power, extending their power from transport to content. Under traditional antitrust principles, that is viewed with suspicion. The House Committee on the Judiciary has antitrust oversight, and we’ve begun to look at this and the recombination of Ma Bell with SBC now having acquired most of the local exchanges and AT&T’s long distance service, although I think there are less obvious antitrust implications because of the dramatic changes since it was broken up. But I’m excited about looking at the antitrust implications of going from transport to content.

Q: (Cynthia de Lorenzi) Why are we cutting off copper when we put in fiber? It’s a usefully redundant network, and unlike fiber it doesn’t run on batteries.
A: This is a big issue. There’s no reason to root out the copper. The telephone companies say that if they’re required to leave it in place, they have to maintain it even though they’re not using it. The better approach might be to buy the copper from them. [Who would maintain it?]

Q:
A: The principles would apply to anyone who offers broadband service to customers, over the last mile, no matter who or what technology.

Q: Yesterday Michael Powell warned us not to codify his principles
A: These principles are broadly applicable. I don’t know what his concern is. The FCC ought to be able to assert its authority in a case like the Madison River case.

Q:
A: If we all had lots of bandwidth, these issues wouldn’t arise. But so long as we’re restricted to a couple of megabits, this is a critical issue. It’s a transitional issue. (He says 30Mbps would be a good starting point; the IRC disagrees where one contributor says Japan has 100Mbps symmetric for US$ 30/month.)

[Tags: f2c rick_boucher net_neutrality ]

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For personally dumb reasons, I came in at the end of Dave Hughes‘ presentation, just as he was advising innovating our way around restrictions. Sorry I missed the full presentation. [Tags: f2c dave_hughes]

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Michael Powell is interviewed by Jonathan Krim.

Powell: We are looking at a radical reframing of spectrum. I’ve always been a big fan of open spectrum. But there’s very little spectrum left to give out. [That is, he’s a fan of opening spectrum, not of Open Spectrum in the sense of unlicensing spectrum and letting smart/cognitive radios negotiate frequencies.] And it requires coordinating with many many agencies: DoD, Dept. of Transportation, etc.

Q: Would Net neutrality matter if there were more competition?

A: I’m not happy with there being so few competitors. I’d like to see gov’t dedicate more of its energy to developing alternative platforms. Multi-platform competition is the key. If we’re going to get the Star Trek world I dream about in which you flip open your device and you’re connected to the world’s information, you need at least three ways of connecting. Anti-trust lawyers like me believe magic things happen at three.

Q: Will three come quickly enough?
A: In the history of infrastructure deployment, it’s pretty darn quick. You’re right to be impatient, but remember that infrastructure is a construction project. And I’m proud that this country is pursuing a multi-platform strategy rather than building up a single platform in order to get faster penetration. We should stop talking about tech as a utility; tech policy is education policy, is social welfare policy, etc.

Powell: It’s a mistake to rely on the government to maintain Net neutrality. The legislators have a very shallow understanding of the tech. Let the weight of inertia be on your side. Don’t play their game.

Q: Should gov’ts be prohibited from launching muni wifi?
A: No.

Q: Is it fair for consumers to think of the Internet as a public place?
A: As long as there are producers chasing value for consumers in order to make a profit, it will be a private enterprise system. “The Tennessee Valley program for broadband is not coming.”

Q: (Isenberg) At the FCC, you did at least 3 great things, one of which survives: You created a more technologically literate commission. That survives. Then you initiated the spectrum policy re-thinking, which stopped when you left. Third, you articulated the four Internet freedoms which the current restatement significantly waters down.
A: You rarely make linear progress in policy.

A: Maybe we need a secretary of technology….

Q: Does the common carrier model work for where we’re headed?
A: I loathe the common carrier model. The queen grants you exclusive use of her land if in return you serve the people. It’s cumbersome and stymies innovation. I’m not sure I want the model for the Internet to be 16-gauge rails for Northern Pacific or ferries across the Thames. [Tags: f2c michael_powell]

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(Moderated by Drew Clark of the National Journal.)

James Assey (Senate Commerce Committee) says that the new House telcomm bill should have a “markup” before Easter. After Easter the Senate will start putting together a complementary package. Congress is trying to figure out “what the right rules of the road should be to create greater certainty and meeting consumer expectations.”

Josh Lamel (office of Sen. Ron Wyden) says that network neutrality is a contentious issue. (Wyden introduced a net neutrality bill.) “After BrandX and the FCC’s DSL order, there is no net neutrality. If we don’t address this through legislation, the status quo is that there is no net neutrality.”

Dana Lichtenberg (office of Rep. Bart Gordon) says Congress needs to think much harder about what net neutrality actually means.

Mike O’Rielly (legislative assistant to John Sununu) says Sununu is still trying to figure out what to do about net neutrality.

[It suddenly gets much more interesting. Too much going on to continue blogging. Sorry.]

[Tags: f2c]

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Brad Wurtz, ceo of Caspian, says the keys to industry growth are: 1. Ensure quality and choice for consumers; 2. Enable innovation for online services; 3. Achieve requitable return on investment.

To achieve this, he proposes “fair use”: 1. Divide bandwidth equally among active users, regardless of the applications they’re running. 2. Allow dynamic, fledxible premium services for online providers and incumbent operators. [Tags: f2c brad_wurtz caspian]

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Doc and I are scheduled to do the last session at Freedom to Connect today. Last week we decided we’d interview each other and came up with some questions. But now those questions seem uninteresting. Plus everyone here knows more than I do about this topic. We’re probably going to stick with the mutual interview approach. Any suggestions for topics/questions/tap dance routines?

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in this session, a bunch of people get 8 minutes each to talk.

Dewayne Hendricks is a network activist. He says that three years ago he was saying that wireless will be a competitor to cable and telcos, but people thought he was crazy. Now muni wireless is sweeping through. If you couldn’t see it three years ago, what did you miss and what are you missing now? Five years ago, Yakima County (sp?) in Washington state built a county-wide wifi network for public safety officials. Yet, wifi isn’t supposed to be able to go further than 300 feet, according to Michael Powell’s testimony to Congress three years ago, plus it’s going to moving vehicles. People making decisions don’t have standing because they’re not implementers.

A year ago, Dewayne says, counties started to put in clouds. All you hear about are the cities. Forces seem to be at work to keep us from hearing about the county implementations. He talks about Sandoval county where Dewayne’s business has already finished the first phase of a project to deliver 100mb to anyone in the county. This is the tipping point, he says, to make wireless a competitor. (The project started last October.) What’s changed is that there are now cheap, good commodity radios — you can put in multiple links to gain more capacity, plus range is better. Dewayne’s project is trying to drive the cost per megabit to a dollar, where it’s currently $125/mb. So far, Dewayne’s gotten the cost down to $50 and they hope to get it down to $25 soon. (In Hong Kong, you can get a megabit for $0.24, he says.) “Once you know something is possible, it changes everything. Wireless is the wild card. Let’s play it.”

Michael Calabrese is VP of the New America Foundation. He considers the empty TV channels as “rocket fuel for Dewayne’s vision.” Just the channels that have no licensed users range from 20-75% in various markets. There’s legislation that would free this up. It’s our “best chance for a commons.”

Rick Ringel, director of engineering at Inter-Tel, wonders how we define progress. What will the end-user’s experience be in the new network we’re building. He calls the new network “The Enlightened Network,” because in the Enlightment we talked about personal choice and fundamental rights.

Ben Scott of the Free Press. “We have a major education problem on the Hill” when it comes to the Internet. And with the rest of the country. So, here are some ways of telling the story: 1. The question is not who controls the architecture of the internet but who controls the user experience of the Net. 2. Net neutrality is about whether the Internet will become like the cable television networks where the operator determines what you can see. [I missed #3. Sorry.]

Brad Templeton, chairman of the EFF.org [you are a member, aren’t you?], talks about the invention of the Internet as a contract in which we all pay for lines to the middle and don’t worry about packets. Then his evil twin takes over and argues in favor of stopping competition and innovation by requiring permission to innovate, e.g. CALEA. (Brad’s presentation is here.)

Jeff Chester of the Center for Digital Democracy: “It’s time now to stand up and fight to create a digital medium and a society that reflects our highest aspirations of our culture.” “We have to have a loud cry!”

Bruce Kushnick of Teletruth and author of “The Two Hundred Billion Broadband Scandal” — the scandal is that customers were charged for a fiber optic network that was supposed to be open to all competitors. “Why don’t we get the money back?” It began when Al Gore proposed an information superhighway. (His father had helped create the national highway system.) The Bells said they’d do it. Bruce has a document in which Verizon promises NJ that it could provide this service by 2001. “We were lied to.” They couldn’t build the networks so they rolled out DSL over the existing copy wires. “This happened in the majority of states.” Bruce thinks the municipalities ought to get their money back. “We should get mad.” Instead of making the argument that there are God-given rights, we should be pointing out that we already paid for a network that wasn’t built. [Tags: f2c bruce_kushnick net_neutrality jeff_chester cynthia_de_lorenzi, dewayne_hendricks brad_templeton rck_ringel]

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Martin Geddes argues against Net neutrality.

Price discrimination is a good thing, he says. It’s good you can save some money by buying your airline tickets in advance.

And there is no moral right to Net neutrality.

“The Internet isn’t sacred.” So there’s no reason to worship the Net as it currently stands.

Net neutrality also doesn’t stand up as a practical issue. The telcos will be able to get around it because there are so many ways to get around it, from obscure terms and conditions to setting defaults. “You’re fighting the telcos on their natural ground, lobbying.”

It would be a benefit to consumers to let them access an only-local network that gives them p2p access to neighbors. Or maybe we do want a network that lets Google subsidize delivery, e.g., they subsidize the 10mb download of Google video to consumers who have only bought 2mb connections.

The current network, he says, is not neutral. It has beliefs embedded in it. E.g., the Internet address space doesn’t respect country values, which is a value. And it doesn’t let you trace back to the individual, only to the ISP.

He does concede that there’s a free speech issue.

The Net neutrality harms people at the bottom of the economic scale because it disallows price discrimination. E.g., suppose the cheap account only gives you access to Yahoo or MSN, etc. [There’s a difference between discriminating on the cost of bandwidth for accessing an open network and discriminating based on what you can access. The latter distorts the open market for innovation.]

We need to focus on innovation on pricing, financing and purchasing of networks, he says. We cannot now easily allow a community to create its own.

David Isenberg: Well, that was provocative!

Tim Wu: Were the attachment rules a mistake? (= the rule that you are allowed to attach whatever device you want to the phone network)

Martin: No, because there was no competition.

Tim: Do you think the broadband market is competititive?

Martin: No, it’s not. But network neutrality takes you away from alternative funding models.

Tim: So you want the Internet to look more like cell phone networks.

Martin: No. It should be able to do price discrimination but if the Net market were competitive, that would constrain the price discrimination.

[Tags: f2c martin_geddes net_neutrality]

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Tim Wu asks if Network neutrality is a fad. Such phrases have a lifecycle, he says. The phrase doesn’t matter as much as the ideas and intuitions it captures. It depends on what you see a network for, he says. If you see a network as something that facilitates other human activities — the idea that the “value of a network is what it makes possible” — is enough to get you to want law to keep the network as open as possible. “That’s the link between neutrality and the social value of the network.”

Tim talks about the history of the telegraph. In the 1876 election, a squeaker, Western Union leaked information about Democratic concerns to the Republicans, which ultimately changed its outcome. This is an example of what happens when a carrier isn’t neutral. The same arguments occurred over opening ports to any type of cargo. Our intuition that openness works better is strong and right.

You’d think carriers would figure out that being neutral is in their interest, says Tim, but sometimes that doesn’t happen: Hotels refused service to African Americans for a long time. Sometimes it takes government action.

Tim says there are internal battles in the relevant companies with people — often engineers — saying the restrictive, discriminatory models are crazy. Some of the most successful companies offer general purpose tools.

Tim singles out blocking, non-transparency and tiering as problems.

[Excellent]

(Frank Paynter recomends the wikipedia article on the Kingsbury Commitment. Looks good.)

[Tags: f2c tim_wu net_neutrality]

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