WISP Fights Neutrality Rules in Big Players’ Absence

Expansive bans on discrimination in management represent “attempts to hijack the net neutrality bandwagon” that could put “the competitive provider out of business,” Glass said. P2P foists expenses onto ISPs that other content-delivery systems don’t, Glass said: “This cost- shifting isn’t fair, and it’s not neutral.” He pleaded against any ban on measures for network operators to protect themselves from this.

No solid evidence shows net neutrality rules would reduce prices or boost capacity, investment or freedom, said George Ford, chief economist of the free-market Phoenix Center. Under the Telecom Act’s deregulatory mandate, “the burden of proof rests” on those asserting “that regulation will make things better off,” Ford said. U.S. broadband “is a concentrated market, and it’s going to be a concentrated market for a very long time,” Ford acknowledged. “Problems will arise” from that, he said. “Get used to it.”

Regulation prompts operators like Madison River, subject of FCC action against VoIP blocking, to abuse subscribers, but doesn’t prevent those actions, Ford said. ISP anti-congestion efforts shouldn’t raise flags, because operators have economic incentives to respond too weakly rather than too harshly, he said.

Sling Media CEO Blake Krikorian said of Ford, “I commend him for showing up.” This seemed to be a reference to the paucity of net neutrality opponents among the 14 witnesses and two professors who introduced them and endorsed regulation at the hearing. All the largest U.S. broadband ISPs -- Comcast, Time Warner, AT&T and Verizon -- turned down invitations to send witnesses, commissioners said.

Much of the discussion seemed to rest on the question of whether business responses like Comcast’s to discrimination complaints render new rules unnecessary and perhaps counterproductive, save for controls on disclosure of network management practices. Statements by Republican Commissioners Deborah Tate and Robert McDowell went in that direction, in direct contrast to those by Democratic Commissioners Jonathan Adelstein and Michael Copps. In a long presentation, Stanford law professor Lawrence Lessig, who helped bring the hearing to his campus, also argued against new rules. Chairman Kevin Martin, a Republican, repeated his view that, other than requiring disclosure, the FCC should apply “strict scrutiny” to any variation in network operator treatment of comparable Internet applications.

The Slingbox, which enables users to watch programming from distant TV sets over broadband-connected devices, “wouldn’t have existed… if it wasn’t for the open Internet,” said Krikorian, whose company makes and sells the product. At first cable companies acted “incredibly threatened” by the device, he said: “We were going to take down their network, destroy their network.” In fact, the Slingbox has created demand for higher-speed Internet access, increasing cable revenue, so now the industry likes the product, Krikorian said. The pattern occurred with programmers, he said. Now they see a great advertising opportunity where once they saw only violations of their territorial restrictions on broadcasts, Krikorian said. He compared the responses to the MPAA’s vehement 1980s fight against VCRs, proven eventually to be a gold mine for the studios.

ISPs must make money, and the FCC needs to bear in mind the risk of “unintended consequences” in anti- discrimination rules, Krikorian said. But the commission must “hold people accountable” for lying to it or the public, he said in an apparent reference to allegations that Comcast repeatedly misstated management practices. And policy should recognize that, along with big cable and phone companies, consumers are “stakeholders” in the debate, Krikorian said.

Policy Director Ben Scott of Free Press called neutrality and network management among the most important matters ever addressed by the FCC. “The future of the Internet for everyone depends on it,” he said. Corporate responses to net neutrality don’t “mean the FCC can pack up and go home,” Scott said. The question that the commission faces isn’t increasing regulation -- it’s showing seriousness about enforcing its Internet freedom principles, he said.

The FCC should urge cable to shift some capacity to Internet access from TV service to relieve online congestion, Scott said. But when Copps asked a follow-up question, Lariat’s Glass said “you don’t necessarily get less congestion” by adding highway lanes, an analogy also true of Internet traffic, he said.

FCC hearings are having the “salutary effect” of getting Comcast to make concessions, Harold Feld, senior vice president of Media Access Project, said acerbically. At today’s rate, “it will only take 25 or 30 meetings of the commission” for the company to stop interfering with Internet traffic and deliver the service it promises customers, Feld said. Current problems stem from a 1999 FCC refusal to force open to competing ISPs the former AT&T Broadband network, now part of Comcast, he said. Now the company has “openly defended as sound network management practices” MAP’s worst nightmares of Internet discrimination, seeking to fend off FCC action with vague promises that “some day they're going to have something” to prevent abuses, Feld said.

Invoking Tate’s repeated references to leaving operators free to stop child porn, Feld said that in P2P tests MAP set up, “download of adult-oriented material didn’t fail once,” while 276 of 300 attempts to download the King James Bible failed. Tate repeatedly got witnesses to affirm that illegal activity shouldn’t be protected online but got less agreement with a declaration that requiring operators to reveal network-management practices would be a sufficient FCC response.

Feld rejected Commissioner Robert McDowell’s comparisons of the private entities that largely have run the Internet to Comcast’s responses through business groups to demands for net neutrality rules. There’s no indication that Comcast’s work is structured to ensure openness to other interests seen in bodies like ICANN and the Internet Engineering Task Force, Feld said. -- Louis Trager

* * * * *

Comcast sent FCC commissioners a copy of its Tuesday announcement with Pando that the companies will collaborate on peer to peer file sharing practices (WID April 16 p1). “In this and other ways, Comcast will continue to deliver on its commitment to work cooperatively with other participants in the Internet marketplace,” it said in an ex parte. A Recording Industry Association of America executive told FCC Commissioner Robert McDowell at a Tuesday meeting that the agency shouldn’t issue rules limiting Internet service providers’ ability to discourage illegal transmission of music files, according to an ex parte filing. The FCC is examining Comcast’s treatment of P2P traffic.