In an unusually passionate meeting that included multiple disruptions from protesters, the FCC today approved Chairman Tom Wheeler’s delicately crafted proposed rule-making plan for net neutrality policy in a 3-2 vote on partisan lines. “What we’re dealing with today is a proposal, not a final rule,” he says adding that it’s an issue “I understand in my bones.” The agency is “dedicated to protecting and preserving an Open Internet” and will continue to consider mechanisms to protect it — including the possibility of reclassifying the web as a so-called Title II common carrier service, making it easier to regulate. Today’s vote begins a four month period when the public can comment on what should be in the rules that the FCC ultimately adopts.
Wheeler’s proposal follows a January ruling by the U.S. Court of Appeals for DC to vacate the net neutrality rules the FCC adopted in 2010. Justices said that the agency had overstepped its authority – in part because it had classified the Internet as an information service, subject to light regulation.
The FCC chairman says that the fastest way to get new net neutrality rules is to stick with the current classification arrangement. He challenged those who’ve said that regulations without such a reclassification might … Read More »
Comcast EVP David Cohen just made the comment in a remarkably thorough and thoughtful discussion of his company’s views about Internet policy and media consolidation at the first MoffettNathanson Media & Communications Summit. Bullet points: He thinks net neutrality advocates have engaged in an “almost hysterical reaction” to FCC Chairman Tom Wheeler’s effort to set new open Internet rules without reclassifying the Web as a regulated common carrier service. Cohen sees usage based Internet pricing becoming the norm in a few years. And he doesn’t fear that Comcast’s $40B acquisition of Time Warner Cable would be endangered if AT&T agrees to buy DirecTV — which he says would do more to reduce competition.
On net neutrality, Cohen says that activists calling on the FCC to reclassify the Internet as a so-called Title II common carrier service that could be more easily regulated would be disappointed in the result. “There is nothing in Title II that provides authority for saying that all [Web] services have to be treated the same” — in other words, preventing Internet providers such as Comcast from offering a for-pay fast lane for certain content providers. Telecommunications companies now deemed common carriers “are allowed to provide different levels of service for different amounts of money.” A change also could backfire: “There’s no way Google is going to invest the money they’d need to invest” in Google Fiber if the Web is a Title … Read More »
FCC Chairman Tom Wheeler’s leadership and negotiation skills are being tested ahead of a Thursday meeting when the agency is scheduled to consider his new net neutrality rules. He’s having trouble rallying fellow Democrats Mignon Clyburn and Jessica Rosenworcel to support a proposal that would limit “commercially unreasonable” practices by Internet providers — but would still enable them to create a so-called fast lane for companies willing to pay for speedy transmissions. Wheeler’s hands were somewhat tied in January when the D.C. Court of Appeals remanded earlier FCC net neutrality rules saying that they went too far as long as the agency classified the Web as a lightly regulated information service. That’s why consumer and activist groups want the FCC to reclassify the Web as a common carrier service, which the agency would have a clear right to regulate.
“The open Internet’s impact on the creative community cannot be overstated,” says a letter to the FCC today signed by artists and musicians including Mark Ruffalo, Eddie Vedder, Roger Waters, Michael Stipe, Eric McKeown, Joe Perry, Tom Morello, Fred Armisen. “The Internet has enabled artists to connect directly with each other and with audiences….And it has allowed people — not corporations — to seek out the film, music and art that moves them.”
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Tom Wheeler had a bracing message for attendees of the National Cable Show being held this week in LA: When it comes to his new rules for Net Neutrality — which consumer groups complained would allow the creation of a for-pay Internet fast lane — cable companies should “put away the party hats.” His open Internet rules designed to comply with court rulings that remanded the FCC’s previous ones “will be tough, will be enforceable, and will be in effect with dispatch.” What’s more, “all options on the table.” If Internet providers still tip the scales to favor certain services, then he would consider reclassifying the Web to make it a regulated common carrier service instead of largely unregulated information service. “I know in my bones how hard it is to start a company with innovative ideas. Now, as Chairman of the FCC, I do not intend to allow innovation to be strangled by the manipulation of the most important network of our time, the Internet.” He adds that cable companies should back off from their efforts to persuade states to bar municipalities from creating competitive broadband systems. The FCC “has the power — and I intend to exercise that power — to preempt state laws that ban competition from community broadband.”
If you have any interest in the subject, then you should check out the entire speech. Here it is: Read More »
Will Netflix end up challenging Comcast’s $45.2B deal to buy Time Warner Cable? It didn’t look that way last month when they made what they described at the time as a “mutually beneficial” interconnection deal that involved Netflix payments to Comcast. But the streaming video company’s chief Reed Hastings cast the agreement in a different light in a blog post today. He called the payments an “arbitrary tax” that he had to pay to improve the quality of transmissions which had slowed on the cable company’s systems. “If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future,” he says. He also called this a net neutrality issue, even though it involves Netflix transmissions to Comcast — not the ones the cable company sends to subscribers. Without what he calls “strong net neutrality,” major Internet providers including Comcast “can demand potentially escalating fees for the interconnection required to deliver high quality service.” That will drive up consumer costs: “For any given U.S. household, there is often only one or two choices for getting high-speed Internet access and that’s unlikely to change. Furthermore, Internet access is often bundled with other services making it challenging to switch ISPs. It is this lack of consumer choice that leads to the need for strong net neutrality.” Comcast, he says, “has been an industry leader in supporting weak net neutrality.” Netflix … Read More »
UPDATE, 9:53 AM: Verizon General Counsel Randal Milch assured broadband users today that the U.S. Court of Appeals ruling overturning FCC net neutrality rules “will not change consumers’ ability to access and use the Internet as they do now. The court’s decision will allow more room for innovation, and consumers will have more choices to determine for themselves how they access and experience the Internet. Verizon has been and remains committed to the open Internet which provides consumers with competitive choices and unblocked access to lawful websites and content when, where, and how they want. This will not change in light of the court’s decision.” The company, and the National Cable & Telecommunications Association, say that the ruling actually upholds the FCC’s authority to regulate the Internet. “While we fully expect some to rush to judgment about the fate of the open Internet, we should remember neither the adoption of the Open Internet Order, nor its partial repeal, has led or will lead to significant changes in how ISPs manage their networks,” NCTA chief Michael Powell — a former FCC chairman — says. “The cable industry has always made it clear that it does not – and will not – block our customer’s ability to access lawful Internet content, applications or services.”
PREVIOUS, 7:28 AM: The FCC relinquished its authority to regulate Internet traffic in 2002 and 2005 when it defined broadband as an information service as opposed to a phone-like common carrier service, the … Read More »
“We’re ready to intervene,” FCC Chairman Tom Wheeler said this week about the new AT&T plan that has raised the hackles of net neutrality advocates. But that’s short of a full-fledged commitment to deal with an issue that media and entertainment companies will closely monitor. The wireless carrier told an audience at the International CES confab that it will begin to let content providers pick up the tab for some of their 4G transmissions. It’s “similar to 1-800 phone numbers or free shipping for Internet commerce,” AT&T says. In theory, that could range from a studio paying data costs for mobile device users to watch a movie trailer — to ESPN or Netflix helping people to watch their programming. The idea is “a win-win for customers and businesses,” says AT&T Mobility CEO Ralph de la Vega. Net neutrality advocates counter that AT&T’s plan would give well-funded industry giants a huge advantage over challengers in an environment where companies would effectively have to pay in order to reach mobile device users. “In addition to being a ripoff for both consumers and content creators, AT&T’s plan erects a massive barrier in front of anyone hoping to be the next big thing online,” says Public Knowledge Acting Co-President Michael Weinberg. Read More »
Tom Wheeler gave students at Ohio State University a lesson in political savvy today in his first policy speech since he became FCC chairman last month. His address alternately preached the virtues of small government, and public interest advocacy — especially on the controversial question of the FCC’s role in regulating the Web. “What the Internet does is an activity where policy makers must be judiciously prudent and should not be involved,” he says. But the longtime industry lawyer and former lobbyist left the FCC a lot of wiggle room to advance what he calls the “Network Compact” to promote communications accessibility, interconnection, and public safety and security. His idea of accessibility “means the ability of [Internet] users to access all lawful content on a network,” he says — adding that’s why the FCC “adopted enforceable rules to preserve the Open Internet.” The FCC needs to be the public’s representative in a transition to what he calls “the fourth network revolution” following the development of the printing press, railroads, and the telegraph. The Internet “is not a law-free zone. It depends upon standards of conduct. And it depends on the ability of the government to intervene in the event of aggravated circumstances.” Read More »
This would be just the third veto Barack Obama has made, but the White House says today that he’ll go there if the Senate on Thursday endorses a bill to upend the FCC’s net neutrality rules. The resolution to scrap the regulations — which are due to take effect on November 20 — is similar to one that the House passed in April. The Senate vote could be close: Texas Republican Kay Bailey Hutchinson’s bill has 42 co-sponsors. Supporters include Maine Republican Olympia Snowe, who favors net neutrality but says the issue should be decided by Congress — not the FCC. In today’s “Statement of Administration Policy,” the White House says that “the open Internet enables entrepreneurs to create new services without fear of undue discrimination by network providers.” For example, Comcast wouldn’t be able to favor transmissions over its broadband lines for a service it likes, such as Hulu, over those of a rival such as Netflix. The administration says that disapproval of net neutrality would “threaten the very foundations of innovation in the Internet economy and the democratic spirit that has made the Internet a force for social progress around the world.” If the Senate passes the bill, then the administration statement says “his senior advisers would recommend that he veto the Resolution.” Read More »
Verizon’s fight to overturn the FCC’s net neutrality rules is on. The phone giant today asked the U.S. Court of Appeals in D.C. to step in and consider whether regulators have the right to set rules for the Internet. Verizon Deputy General Counsel Michael Glover says that the FCC’s “assertion of broad authority to impose potentially sweeping and unneeded regulations” on the Web is “inconsistent with the statute and will create uncertainty for the communications industry, innovators, investors and consumers.” The FCC says the rules are needed to protect competition: They would bar most broadband providers from favoring their own services — for example, Comcast couldn’t transmit videos from Hulu faster than ones from, say, Netflix. ”Ruling in Verizon’s favor would end the open Internet as we know it and leave companies like Verizon in charge of which sites and services work and which don’t,” says Matt Wood of consumer activist group Free Press — which just filed its own appeal to make the rules tougher.
Verizon’s challenge was expected: It tried early this year to have the net neutrality rules shot down but the court said the effort was premature since they hadn’t been formalized yet. That changed last week when the FCC put the regulations into the Federal Register.
It may be premature for consumer advocates to do their victory dance now that the FCC has taken the legal step necessary to implement its controversial net neutrality rules. Regulators today put the open Internet standards into the Federal Register, which means they could take effect on Nov. 20. The rules are designed to promote competition on the Web by making it illegal for most broadband providers to favor some content providers. For example, Comcast can’t transmit video streams from Hulu faster than similar streams from, say, Netflix.
But Verizon’s been waiting for just this moment to challenge the rules in court. Early this year, the phone company asked the U.S. Court of Appeals in D.C to shoot them down — the company says the FCC lacks the authority to regulate the Web. The court threw the case out saying that it was premature. Now a Verizon spokesman says that “the expectation is that we will file again although there’s no timeline on when we’ll file.” The cable industry lobby, the National Cable & Telecommunications Association, isn’t commenting on the FCC’s decision to move ahead. Consumers Union policy counsel Parul Desai says his group, which favors net neutrality, “will keep fighting to ensure the Internet remains open to all.” And Free Press policy director Matt Wood says his public interest group will “fight to make the rules stronger and to hold the FCC accountable.”
Liberty Media chairman John Malone is probably getting an earful from his pals in the cable industry this afternoon after he made a comment that’s sure to haunt both him and them. Talking to Wall Street analysts about the growing number of consumers who buy high-speed Internet services from cable companies, Malone said that “cable is pretty much a monopoly now” in broadband. Oops. The executive who once was considered such a monopolist in cable TV that Al Gore referred to him as Darth Vader caught himself, adding, “I don’t want to use that word.” But he may be reminded that he used the M word every time consumer advocates call on federal regulators to crack down on cable — for example, by insisting on net neutrality rules. Malone says consumers won’t cut the cord with cable even as services including Netflix offer movies and TV shows over the Web. Phone companies such as Verizon and AT&T “are not going to aggressively” build out fiber-optic services that could match the speed and security of cable’s broadband, he said. Meanwhile, “the threat of wireless broadband is way overblown. There just isn’t enough bandwidth” for them.
In contrast to Malone’s blunt comments, other Liberty executives said they wouldn’t provide many details about Starz’s new lawsuit against Dish Network. Starz, and in a separate suit Disney, allege that Dish violated their contracts by giving satellite customers free access to the premium channel for about a year. Starz CEO Chris Albrecht says that his company didn’t lose money; Dish pays a fixed annual rate to offer Starz and Encore. But the additional viewers may have helped Starz’s ratings. Read More »
UPDATED: Amidst criticism from both sides of the political spectrum, the FCC today adopted new rules designed to ensure that broadband service remains open to all. The five-member commission’s 3-2 vote went down along party lines, with the 3 Democrats supporting and the 2 Republicans opposing the measures that will prohibit broadband providers from blocking access to lawful content and discriminating against sites, giving priority to some over others. Offenders will face fines and injunctions. “Today, for the first time, we are adopting rules to preserve basic Internet values,” FCC Chairman Julius Genachowski said. “These rules will increase certainty in the marketplace; spur investment both at the edge and in the core of our broadband networks, and contribute to a 21st century job-creation engine in the United States.”
Under the new rules, Internet providers will still have room to manage their traffic but have to disclose their practices to the consumers. Also, they are stricter for wired Internet providers while giving leeway to wireless providers. In a statement, the Motion Picture Association of America applauded today’s ruling while stressing the need for protection of intellectual property on the Internet. “Combating IP theft is especially critical in an online world,” MPAA president and interim CEO Bob Pisano said. “Consistent with statements by the Obama Administration and recent law enforcement initiatives, the Commission understands that stemming the rising tide of online theft requires active participation by Internet service providers. Notably, Internet service providers … Read More »