Obsidian Wings

Et Tu, NPR?

by publius

I'm pretty sure I have never -- before today -- yelled at NPR's Robert Siegel in my car.  But his intro to the segment on the FCC ruling left me no choice (audio):

The Internet has gone largely unregulated since it came into being more than 30 years ago[.]  But today the Chairman of the [FCC] announced his intention to change all that. . . .

No no no no.  The FCC is changing nothing.  It is preventing change. 

As I've argued before, the Internet succeeded because of regulation.  It's true, of course, that higher-layer content services (email, videos, browsing, etc.) have always been unregulated.  But these services have traditionally relied upon an underlying regulated open access regime that allowed them to flourish.

To be grossly general, just imagine roads.  The world today would be much different if the Ford Motor Company owned the interstate highways and could block Hondas from using it.  In short, you could imagine a "closed" interstate highway system.  But that's not how the interstates work.  They're "open."  Anyone can use them.  Any "device" with wheels will work on them.  

The Internet could have very easily evolved into a "closed" network, but it didn't.  Instead, the Internet is open because we adopted policies in the 1960s and 70s that required it to be open (namely, we prevented AT&T from strangling it).  The FCC today is merely protecting what has always been.

The point of confusion is that the Bush Administration -- an ongoing gift to the world -- adopted new legal labels for "the roads."  In short, the Bush FCC started deregulating the physical transmission facilities by legally equating them with content services like Google.

In sum -- the Bush FCC expanded the definition of "the Internet" to include things that have always been regulated.  The FCC today merely reaffirmed these traditional protections.  And so it's only an "unprecedented" regulation if you ignore the entire history of the Internet.  Come on NPR -- you're NPR.

Kudos to the FCC

by publius

I've only scanned the speech, but on first glance, it looks pretty solid.  It hits the right notes on the value of open networks -- it expands substantive protections.  It's good.  Also, one particularly nice and unexpected touch -- very Obama/Genachowski-ish -- is that the FCC launched a new website today called openinternet.gov. 

But back to the speech, this passage seems to be the key, for the reasons I mentioned last night:

I will soon circulate to my fellow Commissioners proposed rules prepared by Commission staff embodying the principles I’ve discussed, and I will ask for their support in issuing a notice of proposed rulemaking. This notice will provide the public with a detailed explanation of what we propose to do and why.

It looks like the FCC is going with rules rather than adjudications.  It's a good day for the Internets.  Rejoice and be glad. (And more to come).

An FCC Win -- Probably

by publius

In further evidence that elections matter, the FCC is taking an aggressive step tomorrow toward protecting open networks (a more accurate term than "net neutrality").  The WSJ reported on Saturday:

The U.S. government plans to propose broad new rules Monday that would force Internet providers to treat all Web traffic equally[.]

The FCC has four "net neutrality" principles . . . .  Mr. Genachowski is expected to propose the agency clarify its current principles and turn them into formal rules. He will also tack on a new one, which would require carriers practice "reasonable" network management. The agency will ask for guidance on how to define "reasonable."

A few points here.  First, this is obviously good news.  Even if the final measures are ultimately more modest, part of this battle is simply about establishing norms.

Second, the issue to watch is whether the FCC actually puts these "principles" into formal rules.  The WSJ suggests that they will, but it's not entirely clear.

Right now, the FCC has an informal "Policy Statement" protecting open networks.  This Policy Statement isn't itself binding -- the idea is that the Policy Statement clarifies how the FCC interprets other sources of legal authority.  It's sort of like a signing statement in that respect -- it doesn't technically create authority, but it effectively does so by indicating how the FCC interprets and applies its powers.

One question then is whether the FCC will simply add to this Policy Statement, or whether they'll actually put the whole thing into formal rules. 

I much prefer rules.  The reason is that Republicans will (sadly) once again rule the FCC one day.  And it's much harder to reverse formal rules (for you law dawgs, it requires notice-and-comment proceedings, etc.).  As long as these principles remain in the informal Policy Statement, however, it means that the FCC is enforcing these policies only through adjudication.  And adjudications can be easily changed at any time.

Third, arguably the best part about the FCC's announcement is that they're applying these principles to wireless carriers too.  That's huge -- regardless of whatever else happens.

Anyway, it will be interesting to hear what the FCC actually says tomorrow.

The Need for Speed

by publius

I mentioned earlier that expanding bandwidth capacity (i.e., speed) should be one of our primary communications policy goals, and that requiring open networks furthers those goals. 

Many people don't realize, though, just how much societal value faster broadband would create.  It's about a lot more than simply downloading stuff faster.  Greater speeds will create new services -- and markets, wealth, jobs, expression, etc. -- that we can't even conceive of yet.

Think about YouTube.  In a dialup world, a site like YouTube (and embedded video more broadly) couldn't exist.  And so, when people started shifting to broadband, it didn't merely improve their download speeds.  It created the necessary conditions for brand new services and innovation to emerge -- services like YouTube.  And think about all the tremendous value (economic and social) we get today from YouTube -- heck, we have Jim Webb because of YouTube. 

So that's the point.  As our country moves to next-generation networks with significantly higher speeds, lots of new services (particularly video services) will emerge that we can't even imagine.  Higher speeds (plus openness) will enable this innovation.

[On an aside, people interested in this stuff should read AppRising.  It's a great telecom blog, and it's a big believer (like me) in promoting fiber for precisely these reasons).

Why Open Networks Matter

by publius

A while back, Julian Sanchez expressed skepticism about net neutrality regulation.  Essentially, he made two key arguments: (1) the problems are "largely hypothetical"; and (2) the threat of regulation might be better than actual regulation.  I'm going to take a stab at both, though I think the second point is more interesting.

To begin, his first point just isn't accurate -- as he concedes in an update.  Comcast got caught redhanded blocking BitTorrent traffic.  And AT&T's blocking of Google Voice on the iPhone is another example.

What's concerning about both of these incidents is the potential anticompetitive motives involved.  Comcast, for instance, fears competition from movies and video distributed via BitTorrent.  AT&T fears Google Voice could cause people to stop paying for voice minutes.  In this sense, both incidents cut to the very heart of why we need required open networks -- there are too many incentives for the underlying facilities owners to discriminate in "downstream" retail markets.

His second point is more interesting though -- and it's one I've dabbled with too (not in 'Nam of course).  The basic idea is that threatening regulation is the best of both worlds.  You get the behavior you want without the messiness of imposing regulations. 

This point deserves a longer discussion, but I'll try to distill why I disagree:

First, past performance is no guarantee of future results.  Remember that net neutrality advocates are seeking to maintain the status quo.  The Internet has operated under mandated openness since pretty much forever.  And it's been a big success.  The reason that people like Comcast are playing nice today is because they're still operating within the shadow and the norms of required openness.  Once those requirements are officially lifted, things could change quickly (particularly under a Republican FCC).

Second, monkey business on networks is hard to detect.  Comcast implemented BitTorrent blocking in a way that was very hard to detect.  The company only got burned because a sophisticated computer consultant happened to notice and got suspicious.  So I'm not sure that "crowdsourcing" will be effective here (particularly without extensive disclosure).

Third, the real point of openness requirements, to me, is less about blocking, and more about creating the proper incentives for future growth.  Requiring openness gives Internet access providers incentives to expand capacity as opposed to leveraging scarcity.  

Think of it like this.  Imagine you have a road and more and more people want to travel on it (assume that more travelers creates enormous societal benefits).  You can either build bigger and better roads, or... you can decide to increase the price of travel.  You might, for instance, carve out the entire right lane for "first class" travelers who can afford to pay.  Everyone else would get relegated to the congested lane -- and that, in turn, would make people decline to get on the road in the first place.  

In short, we want to create incentives to expand.  Open networks requirements would do that.  As higher-data services like video become more important, Internet providers know they'll have to expand capacity rather than exploiting scarcity.

[Disclaimer:  I'm currently assisting on an amicus brief on these issues, but for no money.  Negative money, actually.]

The FCC's Wretched Website

by publius

It's ironic, but fitting perhaps, that the agency in charge of broadband policy has a website from the Flintstones era.  It's truly the worst.  Q-Bert arcade games from the 1980s are more advanced than today's FCC website.  Retro cool is fine, but it's not very functional.

For instance, I'm currently researching for filed comments on this page.  I typed in the date "5/03/2007."  That's not good enough, because the month has to be entered "05," with the zero.  Otherwise, it won't work.  I usually remember to enter the zeros (and of course the full year, 2007, not "07").

But I forgot today, and then I thought "why is this site so terrible."  And because the world should know, I'm telling you.

"Unfair" Competition

by publius

I've been doing a lot of research lately on municipal fiber broadband networks.  As city projects go, fiber is infinitely better than wireless -- but that's a post for another day.

Anyway, one common theme I've seen is that municipalities that pursue fiber networks inevitably face intense legal and regulatory challenges from incumbent telephone and cable companies.  (See, e.g., Bristol, VA; Lafayette, LA; Utah's "Utopia" projects).  One recurring argument in these challenges is that municipal networks would represent "unfair" competition because they can use tax subsidies, etc.  It's very similar to some of the arguments against the public option.  (You knew I'd eventually tie it back to health care, right?).

There are several problems, though, with this "unfairness" argument.  First, I'm not sure why I should even care about fairness.  If the service is better and cheaper, who cares. 

But even assuming I should care, it's not like we're living in a world of "fair" competition anyway.  Companies like AT&T and Verizon benefit from legacy networks constructed and subsdized in a monopoly era.  For decades, they were shielded from competition by force of law. 

These extensive physical networks simply can't be replicated today, and that's one reason why the broadband access market has such enormous barriers to entry. 

The point, then, is that incumbents today benefit "unfairly" from their legacy network infrastructure every day.  And so, in assessing "fairness," we can't just pretend like this history didn't happen.  The Verizons and AT&Ts of the world don't get to start the analysis on a blank slate where the status quo magically transforms into a perfectly free market.

Similar logic applies to opponents of the public option who cite "unfair" competition.  Yes, government insurance plans have some advantages.  But so do big private insurers.  Governments (including captured legislators/regulators) have been systematically tilting the playing field for years toward them. 

For that reason, the insurance companies don't get the benefit of a blank slate when it comes time to assess what is "fair."

The New Net Neutrality Bill

by publius

I just finished reading the net neutrality bill that Markey and Eshoo introduced last week -- the "Internet Freedom Preservation Act of 2009 (H.R. 3458) (pdf).  And it's really good stuff.  The leadership should move on it.

The bill covers all the more well-known problems.  For instance, it prevents Internet providers from blocking sites, and from entering into agreements to deliver certain sites at higher speeds.  That's all to the good.

But the bill has several important provisions that you may not be as familiar with.  Below the fold, I've listed a few that stood out to me:

The Limits of Twitter

by publius

Twitter is obviously one of the big stories to come out of the Iranian election.  And it's been a remarkable development -- no argument there.  The tweets have been inspiring and courageous.  And there's an aesthetic dimension to them that's hard to resist.

But understand... the tweets could be stopped (more on that below).  In fact, I worry that Twitter's success in Iran will create a false confidence that the Internet can't be stopped, and that people's digital voices can't be silenced.  They can -- and we should understand that keeping an open global Internet requires aggressive effort and activism.

I'm not a network guy, so techies please jump in and help me out.  But here's my understanding of why Iran could stop the tweets if they really wanted to.  In short, they could just turn off the Internet, much like Myanmar did.

From my tentative understanding, Iran's network is a lot like China's in that it's very centralized.  This post explains (and illustrates) that the Iranian Internet traffic passes through a centralized bottleneck.  (Imagine if the Holland Tunnel were the only way into Manhattan). 

With this bottleneck in place, it's easy to filter traffic.  Just like the post office could theoretically block every envelope going to San Francisco, Iran can block packets going to the IP address for "Facebook" or "Twitter."  (Great NYT article on these basics here).

So here's where "proxies" come in (and techies, please help me out here if my understanding is off).  Let's say you want to send a letter to San Francisco, but the post office doesn't allow it.  Well, if you know that some dude in Kansas would forward your letter on to San Francisco, then you could go ahead and mail your SF-bound letter, but it would appear to the post office like it's going to Kansas.

So that's how tweets are getting through.  They're essentially being sent to "middlemen" proxy servers -- which, in turn, allows the information to pass "in disguise" through the filter.  It's like a digital Underground Railroad.  (Great overview of proxies and services like Tor here).

But here's the thing -- they're only getting through because Iran has (for now) left its networks open, even though the government has apparently tried to limit bandwidth to prevent videos and pictures from getting out.

So assuming my descriptions are accurate, the point is that the Iranian government could in fact shut down the Internet, which would essentially strangle the tweets.  I'm not sure why they haven't -- maybe the PR would just be too terrible.

So, yes, so long as the Internet remains open, it will be hard to limit people's voices.  But that shouldn't disguise the depressing fact that governments exert enormous control over Internet access -- and could shut the whole thing down.  For those interested in this very theme, I'd recommend the Wu/Goldsmith book Who Controls the Internet:  Illusions of a Borderless World.

(Obviously, none of this is intended to downplay the extraordinary role Twitter and its users have played under truly frightening circumstances.  It's inspiring.  My only point is that it shouldn't give way to an excessive Internet triumphalism.  An open Internet depends on policy choices -- it's not a independently-living organism that can overcome repressive policies.)

The Origins of Our Broadband Failures

by publius

For those interested in telecom policy, I have some recommended reading for you. Free Press (the best media reform public interest organization in the country) has just released a comprehensive white paper on national broadband policy (pdf here).  It’s the single best summary I’ve seen of the history and failures of deregulatory telecom policy.  And it lays out where we should go from here.

It’s essentially a short book – but it strikes a good balance between informing the general public and addressing wonks.  It’s worth checking out.

One theme that emerges is the enormous opportunity costs we incurred because George Bush was elected.  The years 2000-2005 were a formative period for broadband policy – and it’s an unfortunate accident of history that the FCC and the DC Circuit happened to be controlled by Republican industry hacks at the time.

One example of these mistakes is how the government completely ignored the pro-competitive spirit of the 1996 Telecommunications Act after broadband emerged for real in the late 90s. 

One purpose of the 1996 Act was to introduce competition into the local phone markets that had traditionally been controlled by legacy monopoly providers.  The 1996 Act attempted to achieve this goal by forcing the incumbents to “open” their networks to competitors through various measures such as line sharing or reselling or unbundling (the basic idea is that incumbents who controlled the “interstate highways” had to provide new competitors access to those “highways” to provide service). 

The justification for opening the networks was that the incumbents’ networks had been publicly subsidized for decades and that there were numerous barriers to entry (e.g., it was economically irrational to build an entirely new physical network).

And for a while, it worked.  Lots of new competitors entered and prices started going down.  Critically, this new competition was premised upon foundational regulation (oogedy-boogedy) that guaranteed open access, nondiscrimination, etc.

But in the late 90s, broadband started hitting the prime time.  Cable companies increasingly offered high-speed connections, and phone companies soon followed with DSL. 

From a policy perspective, it made perfect sense to apply the 1996 Act’s “open” framework to broadband.  But that’s not what happened.  To make a long story short, the DC Circuit and the Bush FCC combined to deregulate broadband access – to treat as something completely different than the traditional phone service regulated by the 1996 Act. 

Rather than “opening” broadband, government “closed” it.  For that reason, most of you have broadband either from your cable company or your phone company – gone are the days of dial-up where dozens of Internet providers competed for your business.

As a result, our national broadband sucks on any metric you care to pick (speed, value, price) – particularly compared to other advanced economies.  Interestingly, the Free Press report explains that countries that adopted “openness” regulations (like the kind the 1996 Act envisioned) are kicking our butts in broadband.  Indeed, most of them passed us up between 2000 and 2007.

What’s maddening – policy-wise – is that there was simply no justification for treating broadband regulation differently than traditional phone service.  Just like phone service, broadband was provided over traditional legacy networks that were impossible for the private market to recreate.  The very same logic that required the phone networks to be “opened” should have required broadband networks to be opened too.

So it was a combination of bad policy and bad luck.  Unfortunately, broadband hit the big time a few years after 1996.  And soon after it did, we elected an administration that was blindly pro-industry.

The rest, as they say, is history.