Excellent Net Neutrality Article from THE VERGE…

SOURCE: http://www.theverge.com/2014/2/25/5431382/the-internet-is-fucked

Here’s a simple truth: the internet has radically changed the world.
Over the course of the past 20 years, the idea of networking all the
world’s computers has gone from a research science pipe dream to a
necessary condition of economic and social development, from
government and university labs to kitchen tables and city streets. We
are all travelers now, desperate souls searching for a signal to
connect us all. It is awesome.

And we’re fucking everything up.

Massive companies like AT&T and Comcast have spent the first two
months of 2014 boldly announcing plans to close and control the
internet through additional fees, pay-to-play schemes, and sheer
brutal size — all while the legal rules designed to protect against
these kinds of abuses were struck down in court for basically making
too much sense. “Broadband providers represent a threat to internet
openness,” concluded Judge David Tatel in Verizon’s case against the
FCC’s Open Internet order, adding that the FCC had provided ample
evidence of internet companies abusing their market power and had made
“a rational connection between the facts found and the choices made.”
Verizon argued strenuously, but had offered the court “no persuasive
reason to question that judgement.”

Then Tatel cut the FCC off at the knees for making “a rather
half-hearted argument” in support of its authority to properly police
these threats and vacated the rules protecting the open internet,
surprising observers on both sides of the industry and sending new FCC
Chairman Tom Wheeler into a tailspin of empty promises seemingly
designed to disappoint everyone.

“I expected the anti-blocking rule to be upheld,” National Cable and
Telecommunications Association president and CEO Michael Powell told
me after the ruling was issued. Powell was chairman of the FCC under
George W. Bush; he issued the first no-blocking rules. “Judge Tatel
basically said the Commission didn’t argue it properly.”

In the meantime, the companies that control the internet have
continued down a dark path, free of any oversight or meaningful
competition to check their behavior. In January, AT&T announced a new
“sponsored data” plan that would dramatically alter the fierce
one-click-away competition that’s thus far characterized the internet.
Earlier this month, Comcast announced plans to merge with Time Warner
Cable, creating an internet service behemoth that will serve 40
percent of Americans in 19 of the 20 biggest markets with virtually no
rivals.

And after months of declining Netflix performance on Comcast’s
network, the two companies announced a new “paid peering” arrangement
on Sunday, which will see Netflix pay Comcast for better access to its
customers, a capitulation Netflix has been trying to avoid for years.
Paid peering arrangements are common among the network companies that
connect the backbones of the internet, but consumer companies like
Netflix have traditionally remained out of the fray — and since
there’s no oversight or transparency into the terms of the deal, it’s
impossible to know what kind of precedent it sets. Broadband industry
insiders insist loudly that the deal is just business as usual, while
outside observers are full of concerns about the loss of competition
and the increasing power of consolidated network companies. Either
way, it’s clear that Netflix has decided to take matters — and costs —
into its own hands, instead of relying on rational policy to create an
effective and fair marketplace.

In a perfect storm of corporate greed and broken government, the
internet has gone from vibrant center of the new economy to burgeoning
tool of economic control. Where America once had Rockefeller and
Carnegie, it now has Comcast’s Brian Roberts, AT&T’s Randall
Stephenson, and Verizon’s Lowell McAdam, robber barons for a new age
of infrastructure monopoly built on fiber optics and kitty GIFs.

And the power of the new network-industrial complex is immense and
unchecked, even by other giants: AT&T blocked Apple’s FaceTime and
Google’s Hangouts video chat services for the preposterously silly
reason that the apps were “preloaded” on each company’s phones instead
of downloaded from an app store. Verizon and AT&T have each blocked
the Google Wallet mobile payment system because they’re partners in
the competing (and not very good) ISIS service. Comcast customers who
stream video on their Xboxes using Microsoft’s services get charged
against their data caps, but the Comcast service is tax-free.

We’re really, really fucking this up.

But we can fix it, I swear. We just have to start telling each other
the truth. Not the doublespeak bullshit of regulators and lobbyists,
but the actual truth. Once we have the truth, we have the power — the
power to demand better not only from our government, but from the
companies that serve us as well. “This is a political fight,” says
Craig Aaron, president of the advocacy group Free Press. “When the
internet speaks with a unified voice politicians rip their hair out.”

We can do it. Let’s start.

THE INTERNET IS A UTILITY, JUST LIKE WATER AND ELECTRICITY
Go ahead, say it out loud. The internet is a utility.

There, you’ve just skipped past a quarter century of regulatory
corruption and lawsuits that still rage to this day and arrived
directly at the obvious conclusion. Internet access isn’t a luxury or
a choice if you live and participate in the modern economy, it’s a
requirement. Have you ever been in an office when the internet goes
down? It’s like recess. My friend Paul Miller lived without the
internet for a year and I’m still not entirely sure he’s recovered
from the experience. The internet isn’t an adjunct to real life; it’s
not another place. You don’t do things “on the internet,” you just do
things. The network is interwoven into every moment of our lives, and
we should treat it that way.

“COMMON CARRIER RULES ARE BASICALLY FREE SPEECH.”
Yet the corporations that control internet access insist that they’re
providing specialized services that are somehow different than water,
power, and telephones. They point to crazy bullshit you don’t want or
need like free email addresses and web hosting solutions and goofy
personalized search screens as evidence that they’re actually
providing “information” services instead of the more highly regulated
“telecommunications” services. “Common carrier rules are basically
free speech,” says the Free Press’ Aaron. “We have all these
protections for what happens over landline phones that we’re not
extending to data, even though all these people under 25 mostly
communicate in data.”

It’s time to just end these stupid legal word games and say what we
all already know: internet access is a utility. A commodity that
should get better and faster and cheaper over time. Anyone who says
otherwise is lying for money.

THERE IS ZERO COMPETITION FOR INTERNET ACCESS
None. Zero. Nothing. It is a wasteland. You are standing in the desert
and the only thing that grows is higher prices.

70 percent of American households have but one or two choices for
high-speed internet access: cable broadband from a cable provider or
DSL from a telephone provider. And since DSL isn’t nearly as fast as
cable, and the cable companies are aggressive in bundling TV and
internet packages together, it’s really only one choice. And that
means the level of innovation from these providers has almost
completely stagnated, even as prices have gone up.

Why are cellphones so much cooler now than they were in 2000? Because
Apple and Google and Samsung all had to fight it out and make better
products in order to survive. They’re competing. Comcast hasn’t had to
fight anything, at any time. It is fat and lazy and wants nothing more
than to get fatter and lazier. That’s why Comcast is spending $45
billion on Time Warner Cable instead of integrating Netflix into its
cable boxes and working with Apple and Google and Microsoft on the
real next generation of TV: when you’re the only real choice in 19 of
America’s 20 biggest markets, you get to move real slow and still make
a lot of money. It’s not clear Comcast even knows what real
competition looks like.

“Unless the FCC thinks that there is a realistic chance that the deal
will reverse two decades of rising prices, it should stop the merger,”
writes Columbia Law School professor Tim Wu. “Passing on savings has
never been part of Comcast’s business model.” Monopolies are nice like
that.

Despite the innovation in phones, the same is true for mobile
internet. There are only four major national carriers, most of whom
run incompatible networks and all of which are stronger in various
regions. If you hate your Sprint or Verizon service, switching to AT&T
or T-Mobile is anything but simple and probably requires paying off a
two-year contact of some kind. (Even T-Mobile, which is aggressively
eliminating contracts for service, maintains a number of device
payment plans that require a contract.) Chances are once you’ve chosen
a wired broadband carrier and a wireless carrier that works well in
your area, you’re stuck: there are few other places to go, and even if
you have choices the high costs of switching mean you’re not very
likely to leave at all.

(And if anyone tries to tell you that ultra-expensive mobile broadband
is somehow competitive with wired service, ask that person to buy you
a nice dinner and tell you the story of when they realized dignity had
a price. You’re talking to a cable industry lobbyist; they can afford
it.)

What happens in countries where there’s real competition? In the UK,
where incumbent provider BT is required to allow competitors to use
its wired broadband network, home internet service prices are as low
as £2.50 a month, or just over $4. In South Korea, where wireless
giants SK Telecom and LG Uplus are locked in a fierce technology
battle, customers have access to the fastest mobile networks in the
world — up to 300Mbps, compared to a theoretical max of 80Mbps on
Verizon that’s actually more like 15 or 20mbps in the real world.

AMERICANS PAY MORE FOR SLOWER SPEEDS THAN ANYONE ELSE IN THE WORLD
And Americans pay more for these slower wireless speeds than anyone
else in the world: in Germany, where customers can freely switch
between carriers by swapping SIM cards, T-Mobile customers pay just
$1.18 per Mbps of speed. In the US, our mostly incompatible wireless
networks lock customers in with expensive handsets they can’t take
elsewhere, allowing AT&T and Verizon to charge around $4 per Mbps each
and Sprint to clock in at an insane $7.50.

American politicians love to stand on the edges of important problems
by insisting that the market will find a solution. And that’s mostly
right; we don’t need the government meddling in places where smart
companies can create their own answers. But you can’t depend on the
market to do anything when the market doesn’t exist. “We can either
have competition, which would solve a lot of these problems, or we can
have regulation,” says Aaron. “What Comcast is trying is to have
neither.” It’s insanity, and we keep lying to ourselves about it. It’s
time to start thinking about ways to actually do something.

NO INTERNET PROVIDER DESERVES SPECIAL TREATMENT
Mobile carriers like AT&T and Verizon love to pretend they are special
flowers, the magicians who managed to fill our thin, empty air with
the magic of wireless broadband. Mobile is so difficult, they argue,
and spectrum so scarce, that any sort of check or oversight on their
behavior would crater their delicate business and derail the entire
industry.

This is nonsense, of course. If anything, we need to keep a sharper
eye on the endless shenanigans of mobile carriers, because they pose a
constant and growing threat to the overall health and innovative
potential of the internet. The bad behavior is real, and it’s been
happening for years: AT&T blocking FaceTime and Hangouts and Verizon
knifing Google Wallet is just the tip of the iceberg. These industry
behemoths also wield the wireless spectrum they lease from the public
like a weapon, denying both competitors and potential competitors the
most fundamental tool they need to get into the game.

THE SHENANIGANS OF MOBILE CARRIERS POSE A CONSTANT THREAT TO THE INTERNET

Wireless executives will tell you they need to own as much wireless
airspace as they possibly can, going on about a so-called “spectrum
crunch” that has never really materialized: networks haven’t been
brought to their knees by an apocalyptic wave of iPads with a
voracious appetite for streaming video. In fact, cable companies
bought a wide swath of prime spectrum in 2006, only to let it sit
unused for years before flipping it to Verizon years later. Even the
inventor of the cellphone denies that the crunch is a real phenomenon.

This shit is insane. It is unacceptable. The smartphone revolution was
about putting a powerful computer and an internet connection in
everyone’s pocket; it was not about creating a new class of economic
gatekeepers with the unchecked power to control and destroy markets
with zero oversight and little true competition. Famed venture
capitalist Fred Wilson at Union Square Ventures has called the net
neutrality situation a “nightmare” for startups trying to get funded,
saying that he expects telecom companies to “pick their preferred
partners, subsidize the data costs for those apps, and make it much
harder for new entrants to compete with the incumbents.”

And allowing these companies to get away with these antics has
repercussions we’ve barely even begun talking about: a recent Pew
survey found that 45 percent of the poorest Americans use a mobile
phone as their primary internet device. Same with nearly half of all
Americans aged 18-29, and particularly among minorities and the
less-educated. Young, poor, not white: let’s definitely make sure we
put them in the ghetto internet of corporate control.

THE FCC IS WEAK AND INEFFECTIVE
The Federal Communications Commission is ostensibly in charge of
managing broadband deployment and regulating companies like AT&T and
Comcast, but it’s shown no actual ability to do so in a focused and
effective way — and when it tries, it does so in such a half-assed way
that it gets smacked around in court and loses.

Part of the problem is historical: before former Chairman Julius
Genachowski released the first National Broadband Plan after taking
office in 2009, the FCC wasn’t even completely focused on the
internet, and was mostly known for enforcing indecency rules on radio
and TV stations, a role that reached the pinnacle of absurdity in 2004
when Janet Jackson’s nipple was exposed for just over half a second
during the Super Bowl halftime show. The agency under then-Chairman
Powell responded by wildly issuing indecency fines, ultimately
resulting in ABC stations across the country declining to air Saving
Private Ryan on Veteran’s Day for fear of government reprisal and yet
another major loss in court when its indecency rules were found
unconstitutionally vague in 2012.

“COMCAST AND VERIZON HAVE TAKEN ALL THE REASONABLE OPTIONS OFF THE TABLE.”

Genachowski succeeded in shifting the agency’s entire focus to the
internet, but he instantly crumpled in the face of high-powered
telecom lobbying. Genachowski’s first attempt at net neutrality rules
were framed the right way and classified internet service providers as
common carriers, but the industry succeeded in utterly killing that
plan by stoking political outrage at the idea of “regulating the
internet” — resulting in the half-baked rules that just got thrown out
because the FCC didn’t call broadband providers common carriers.
“Comcast and Verizon have so much clout in Washington that they’ve
taken all the reasonable options off the table,” says the Free Press’
Aaron. “Regulators come at things sideways.” Genachowski had the right
ideas, but his soft-pedal tactics led to inherently weakened
regulations — Cardozo Law School’s Susan Crawford called his approach
a “house of cards.”

The FCC also sat in the back seat when AT&T tried to buy T-Mobile, has
remained virtually silent about the rumored linkup between Sprint and
T-Mobile, and has offered little public comment about the Comcast /
Time Warner deal — instead letting the Department of Justice take the
lead in opposing these obviously anticompetitive mergers. The FCC’s
stunning lack of presence and leadership during these watershed
moments in communications history is an extraordinary failure for an
agency that is officially tasked with protecting the consumer
interest.

The FCC “doesn’t seem to have the confidence to stop a merger,” says
Columbia’s Wu. New FCC Chairman Tom Wheeler has “to be willing to take
the heat,” if he’s going to get involved, says Aaron. “If you’re going
to take this job, you have to lead,” he says. “The whole reason we
have an independent agency is to shield it from Congress.”

But there are no rules shielding the FCC from the companies it’s
supposed to regulate, leading to an uncomfortable pattern: FCC
commissioners are drawn from the ranks of industry lobbyists, while
industry lobbyists are drawn from the ranks of FCC commissioners.
Current Chairman Wheeler has served as president and CEO of both the
NCTA cable lobby and the CTIA wireless lobby; former Chairman Powell
is now the current president and CEO of the NCTA; former Commissioner
Meredith Baker, who voted in favor of the Comcast / NBCUniversal
merger, is now the head of Comcast’s DC lobbying office. “I think for
the top jobs the industry can veto people who they might think would
be too hard on them,” says Wu. “After all, it’s their agency.”

“THE FCC IS SCARED OF ONE THING: ACTUAL PEOPLE.”

This cozy relationship leads to the repeated insistence that consumer
protections are too difficult to implement, even when they’re not
complicated. “Somehow when they’re pushing through unpopular things
that a few big companies want, the FCC can do it,” says Aaron. “But
when it’s things the people want that the corporations don’t, it’s
suddenly impossible.”

But not all hope is lost. “The FCC is scared of one thing: actual
people,” says Wu. “When they sense that something is a popular issue
suddenly the FCC is terrified.”

So there’s the entire problem, expressed in four simple ideas: the
internet is a utility, there is zero meaningful competition to provide
that utility to Americans, all internet providers should be treated
equally, and the FCC is doing a miserably ineffective job. The United
States should lead the world in broadband deployment and speeds: we
should have the lowest prices, the best service, and the most
competition. We should have the freest speech and the loudest voices,
the best debate and the soundest policy. We are home to the most
innovative technology companies in the world, and we should have the
broadband networks to match.

We should stop fucking it up.

“There is much greater consensus around the fundamentals of the open
internet than this binary up and down debate that’s going on,” says
former FCC Chairman and current NCTA President Michael Powell. “There
is common ground to find an answer.”

Free Press president Craig Aaron is blunt. “What we need right now is
decisive action,” he says. “We can still unfuck the internet.”

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