Tuesday, December 21, 2010

I Whip My Hair All Around - Do We Know the Impacts of Net Neutrality?

If you only have 2 minutes to get up to speed - A Visual +  5 points on the FCC Order - Net Neutrality:

Want to send an email to your grandkids?  Press send.  
You'll get nearly the same response time as when your neighbor watches a YouTube video of "I Whip My Hair All Around" by Willow Smith.  

Basic Definition of Net Neutrality:  Think tiny smart car on the road vs. an 18 wheel semi tractor trailer.  Both are vehicles on a highway and are treated the same - same access, same costs...except what has more muscle and true right of way?

Side Note for WiFi -- For those of you that hop on free WiFi, thanks for slowing down the entire coffee shop's network while you look at the "I whip my hair all around" video by Willow Smith followed by Justin Bieber's "Baby" - you know who you are!  Not that I use free WiFI, but some of my friends do.  Not to worry yet, so far the FCC leaves wireless/cellular access largely the same in the FCC Order. 

Bottom Line:
I am holding final judgment until we can read the final FCC Order but my concern is the loser in all this is YOU.  I think you will end up paying more for the services you already have today & the rules will be more confusing.

After Reading the FCC's Press Release - What You May Get:
Rule 1:  Transparency:
-Landline providers have to give more transparency into download speeds and usage limits
-Landline providers have to publish how they manage network congestion - if they slow you down so they can speed up Google maps during peak travel times, they have to say so

Rule 2:  No Blocking & Rule 3:  No Unreasonable Discrimination
-Landline providers prohibited from blocking or slowing down content
-AT&T's home internet service could not block something like Skype or Fring because they see it as a competitor

Rule 4:  Wireless Companies shall...Oh, there is no rule #4!
-Wireless companies are, for now, less restricted because the FCC felt they needed the flexibility to handle their congestion problems

5 Points:
1.  The Internet is considered to be the foundation for 1/6 of the Nation's economy.  Any new regulation, legislation, or policy should be debated openly before we jeopardize an economic engine.

2.    Whether or not there is constitutional authority to "govern", "regulate", "legislate" the internet, via Net Neutrality, is not clear and should be reviewed and discussed.

3.  Both sides of the political aisle  are unhappy with what they think is in the FCC Order.  The FCC Order has not been published publicly, so we do not know all the details.

4.  Most people believe Net Neutrality exists today and free market principles are shaping consumer and vendor behaviors.
a.  Net Neutrality means different things - ask 50 people, you might get 50 answers.
b.  At a very basic level, it typically means all internet content and access is created equal regardless of whether it is a light burden or a bandwidth hog.

5.  FCC Order may or may not stand:
a.  It does have support from some internet giants and the White House
b.  Congress did not support earlier write ups by the FCC.  Over 300 Members of the current Congress and Senate signed a letter opposing FCC Internet regulation.  Congress has legislative powers to overturn the FCC Order, if they wish to do so, via funding as well as the Congressional Review Act; and
c.  The Court System via the U.S. Court of Appeals for the District of Columbia told the FCC they do not have jurisdiction back in a case brought by Comcast when the Court rendered their decision April 2010.
d.  Reaction in the vendor community is mixed:  Verizon concerned; AT&T said the new order was not ideal but they will work with it; and Google thinks it's a great first step but does not go far enough.

Bottom Line - Regardless of the final outcome, the prediction is:
a.  pay attention to where this leads to make sure you are informed and your voice is heard;
b.  be careful what you wish for, whenever mandates are involved, the costs are passed along and eventually are paid by the end consumer - you.

If you have 10 minutes - here is a little more information:
1/6 of the Nation's economy - is impacted by the internet.  While we are all busy with year end activities at work and festivities at home, the FCC is passing an Order for Net Neutrality.   Depending upon who you listen to or what you read, this is finally the great and fair equalizer of the internet or the end of the internet as we know it.

Bottom line:  Net Neutrality as policy, regulation, legislation, or an order should not be rushed, it should be vetted openly with healthy and vigorous debate, and we should learn lessons from past regulation and de-regulation efforts before we move forward.

Net Neutrality - It sounds like something we should all want, right?  A Neutral Internet.  Something akin to Lady Justice who wears a blindfold so all individuals have objective and equal justice without fear of favoring any group.

This write up attempts to provide some background on the various views on the Net Neutrality platform so you can decide for yourself if you like the idea, if you are concerned, or if you are net neutral on net neutrality.

In many ways, we already have Net Neutrality.  You can access any web site you want on an equal basis.  Type in the website name you want to see and presto, you've got it.  Some sites may be slower loading than others but usually that is based on the capacity of the company's web server and design.

Five Fast Facts Regarding the FCC Order:
1.  We do not know what the FCC Order looks like.  We have an inkling but it has not been released to the public.
2.  Opinions are diverse "for" and "against" the FCC Order.
3.  When you read the opinions "for" and "against", there are many points on both sides of the argument that make sense, at least in the abstract.
4.  We can only guess at what the FCC Order, if allowed to be enacted and enforced, will do to current business models and future innovation.
5.  Both sides of the political aisle have voiced they are unhappy with the FCC Order - Democrats say it does not do enough and Republicans say it is a Federal Government overreach.

Bottom Line - My Prediction is a Hit to Your Wallet:
I believe the stage is set for your internet access pricing to go UP, regardless of where the FCC Order goes.
a.  For the users that like steady and slow- your access might be free or you will just get less service for your current fee.
b.  Moderate to power users:  Want to watch your favorite sports team or look at a "how to" video on YouTube?  You will probably need to upgrade your service in the near future to a higher price to get the access you already enjoy today.

Open Debate Is Needed:
The issue of Net Neutrality and what it should or should not cover needs open, honest debate and all parties need to be heard because the internet, right or wrong, is now part of the backbone of our infrastructure.  When private sector meets public sector, where does the role of Government begin and end, especially for the internet?

Net Neutrality Definition - Layman's Terms:
1.  What is "Net Neutrality"?  Initially, the core of the concept is that everyone has equal and same access to the internet.  Regardless of who you are and the content you seek, speeds and access are the same.  Smart Cars and Semi Trucks use a road differently but get same and equal access for the same monthly price.

2.  What is the FCC Order regarding Net Neutrality?  We do not have the final language yet but we have had some sneak peaks and some guesses.  Based on the information we know so far the definition could be:  
a.  The FCC dips its toe into regulating internet content when it is accessed via an internet cable but not via wireless or mobile; and
b.  The FCC can now require transparency from companies regarding their network management practices; and
c.  There will be 2 internet lanes - fast for those that pay the toll and a slow lane for free access.

3.  What we think the FCC Order includes:
1.  Internet providers must allow access to all kinds of web content (that is legal)
2.  Internet providers cannot slow delivery of some kinds of content while putting others on the fast track but they would have flexibility to deal with network congestion as long as they disclose how
3.  #1 and #2 requirements would not apply to mobile devices that are connected to wireless networks
4.  Providers must disclose their network management practices

Note:  The FCC says it will not publish the order for several days to work through edits and reviews.

Opposition to the FCC Order:
Who is "opposed" to the current FCC Policy?  Interestingly enough, both sides of the political aisle.  Some Democrats think the FCC "sold out" to internet companies and many Republicans and Independents think this is a Federal Government overreach.  

What is the current debate about?  There is a new FCC Order called, "Preserving the Open Internet".  It has not been published for the public to see, the FCC will not ask for your opinion, and you can complain to your elected officials but they do not get a chance to vote on FCC Policy.  It might end up being something great but why do it behind closed doors?

Points to Consider:
1.  Does the Federal Government have a constitutional authority to regulate the internet?  

2.  Should the Federal Government have regulatory authority over the internet?  If yes, how deep does it need to or should it go?

a.  If yes, What Federal Government jurisdiction should the internet fall under?  The internet is a "highway", a way to "communicate", you can conduct "commerce", store information, use it instead of the "USPS".  

FCC is phone, TV, wire (not wireless), cable...Internet is kind of all of the above and kind of not.  Federal Highways have Department of Transportation.   The internet is NOT a Federal Highway.  

2.  Should the voters decide, through their elected officials, the rules for the internet?  In other words, is this better handled in the Legislative branch of our Government?  Or, does this truly reside only within the reach of a Federal Government agency?  Or neither?  Is there another option that you think is better?

3.  If the FCC Order stands, does this open the door for more Federal Government intervention into the Internet?

4.  I submit 5 practical rules for consideration when it comes to regulating the internet.  If we are going to "regulate" the internet, I respectfully submit that maybe the rules should be:
a.  easy to track & easy to enforce
b.  easy for the every day lay person to understand
c.  truly deter the "bad guys"
d.  fostering growth, innovation, and competition opening doors to new and existing companies
e.  not just a ruse to create a new tax or to put arbitrary burdens on internet users or companies

The Minister of Communications in the UK, Ed Vaizey, has looked at implementing rules and, according to the Guardina, he is watching closely to see where this path takes the U.S.

Quote from the FCC Chairman:
“We must take action to protect consumers against price hikes and closed access to the Internet—and our proposed framework is designed to do just that: to guard against these risks while recognizing the legitimate needs and interests of broadband providers,” FCC Chairman Julius Genachowski, FCC blog post.

If you have more than 10 minutes...Additional Background Information --

The Federal Communications Commission - the FCC was established in 1934 to regulate interstate and international communications by radio, TV, wire, satellite, and cable.    The internet is not really "cable" or "wire".  It is a new infrastructure and it is more than "communications". 

Mr. Genachowski and President Obama have known each other for years.  Mr. Genachowski was an editor for the Harvard Law Review when President Obama was the President of the publication.  They played informal basketball together and have stayed in touch since their days at Harvard.  Mr. Genachowski also chaired the Obama election campaign’s TMT group (technology, media and telecommunications).   White House visitor logs show at least 11 personal meetings between Mr. Genachowski and President Obama.

April 2010:
In April 2010, the U.S. Court of Appeals for the District of Columbia ruled that the FCC does not have the authority to mandate that broadband providers give equal treatment to all web traffic flowing over the internet.  The case came before the court by Comcast Corp.  In 2008, the FCC ordered it to allow subscribers using BitTorrent to do downloads.  Comcast argued they did not have the authority to tell mandate what they could allow or disallow.  Comcast had limited access for downloads that used BitTorrent because BitTorrent can swallow up capacity and create bandwidth issues.  The ruling was unanimous in Comcast's favor.  

December 2010:
On December 21, 2010, the FCC voted 3-2 to create an FCC Order that regulates the internet under the banner of Net Neutrality.

In their press release, the FCC cites Section 706 of the Telecommunications Act of 1996 as a provision that gives them authority:  "This provision directs the FCC to encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans...."shall take immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment and promoting competition in the telecommunications market..."

Voices of Opponents & Supporters

Internet Freedom Advocates do not think it goes far enough.

Watchdogs at the Electronic Frontier Foundation are afraid the FCC Order will squash new innovation and new company launches due to legal and costly barriers to entry.

Senator Al Franken, D-Minnesota, was on the floor lambasting that the plan does not go far enough.
He feels that if the rule passes Verizon can cut off access to Google maps and Google apps, even if they are not as good.

One of the FCC Commissioners is very concerned about the direction of the FCC on the Net Neutrality program.  His name is Robert McDowell.  Here is a quote from his explanation of his concerns were were published December 19, 2010 in the Wall Street Journal:

"...Ample laws to protect consumers already exist. Furthermore, the Obama Justice Department and the European Commission both decided this year that net-neutrality regulation was unnecessary and might deter investment in next-generation Internet technology and infrastructure.
Analysts and broadband companies of all sizes have told the FCC that new rules are likely to have the perverse effect of inhibiting capital investment, deterring innovation, raising operating costs, and ultimately increasing consumer prices. Others maintain that the new rules will kill jobs..."

You might be able to place the current Congress as an opponent to the FCC program.  Earlier this year, a large and bipartisan majority of Congress asked the FCC to stop pursuing policy and let Capitol Hill run with it. 

If the FCC Order moves forward and Congress desires to overturn it, they may be able to use the Congressional Review Act.  This Act allows Congress to vote down a regulation if they can pass a joint resolution.

"Today's action could - and should - have gone further," said Michael Copps, one of the other two Democrats on the commission. But, he added, the regulations do represent some progress "to put consumers - not Big Phone or Big Cable - in control of their online experiences."

"Internet Gets New Rules of the Road", Amy Schatz and Shayndi Raice, Wall Street Journal, December 22, 2010.

"FCC Acts to Preserve Internet Freedom and Openness", FCC Press Release, FCC.gov, December 21, 2010.

"Net neutrality: US expected to ratify new rules on internet access",  Josh Halliday, Guardian.co.uk, December 21, 2010.

"Why you NEED to Care About Net Neutrality", Jeremy A. Kaplan, Fox News, December 21, 2010.

"The Net Neutrality Coup", John Fund, The Wall Street Journal, December 21, 2010.

"F.C.C. Is Set to Regulate Net Access", Brian Stelter, New York Times, December 20, 2010.

"Get Ready for the Two-Speed Internet", John Johnson, Newser.com, December 21, 2010.

"The Internet Splits in Two", Dan Lyons, The Daily Beast, December 21, 2010.

"Why is FCC's 'net neutrality' order still a secret?", Amy Gahran, Special to CNN, December 21, 2010.

"Net neutrality compromise won’t calm new Congress", James Pethokoukis, Money & Politics columnist for Reuters Breakingviews, December 21, 2010.

"The FCC's Threat to Internet Freedom", Mr. Robert M. McDowell, Wall Street Journal, December 19, 2010.

"Report:  'Net Neutrality' Set to Become New Reality' ", Meredith Jessup, The Blaze, December 20, 2010.

"Divided FCC Adopts Rules to Protect Web Traffic", Joelle Tessler, AP, December 21, 2010.

"Preparing for the FCC's Net Neutrality Vote", Jonathon M. Seidl, The Blog at The Blaze, December 20, 2010.

"Don't Tangle the Web With Rules", Investors Business Daily Editorial, December 17, 2010.

"U.S. court rules against FCC on Net neutrality", Joelle Tessler, Associated Press, April 6, 2010.

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