Net Neutrality – Careful what you ask for!

As a long-standing tree hugger I subscribe to CREDO, an organization that helps me stay current with issues related to my interests and that helps me take action to influence decision-makers.

CREDO sent me an e-mail asking me to take action to tell the FCC to stop delaying and enact strong net neutrality provisions ASAP.

I sent their corresponding e-mail to several of my friends and received some eloquent replies that I want to share with you. It seems too simple and easy to take sides when it is pointed out that doing nothing would be the best solution.

From Vaughn, the founder of a successful ISP, IT engineering and outsourcing company

The best way to maintain no regulation is to only accept “no regulation”, including any regulation designed to say “no regulation”.

Net Neutrality (from the ISP side of the world) is being seen as a nefarious victimless crime used as a winding key for the mechanical town crier’s call for new tough laws to make sure that none can step on this newly discovered slippery ice other than the federal government (and even that initially in a well intentioned effort to make sure that nobody else steps on).

Once we reach that destination though, there will be clarifications (lawyers) and revisions (slipping on the ice) and compromise (so we can let a few folks on the ice, but protect them so that nobody can knock them down (imagine 8a for ISP’s)). Once it starts the outcome is inevitable – the government gets duped into favoring one party or the other, and then sets about (again mostly well meaning) to fix it. Before you know it we will have a virtual tax code… where the well resourced have time to figure out how to pay nothing, while the middle dolts – too busy working to scheme – pick up the tab, and the bottom struggles in abject poverty.

The FCC is maneuvering and actually does (read comments from the current leadership and shudder – really!) desire to use Net Neutrality as a means to control the publishing of content the way they currently regulate radio broadcasters (sounds like Google in China?). The regulators intentions are not all white hat either. Though there is only 5% arsenic in all rat poison, there is also 95% wheat germ in most – it is what gets them to eat it. The giants in the industry, hungry to create a barrier to entry (and having the resources to find loopholes and use them) are more than willing to create the sense of urgency needed by floating just such trial balloons as you have seen today with Google/Verizon knowing full well that they would be rejected by the market because of competition… as long as it exists anyway.

The current FCC leadership is a radical “use government for social change” bunch, that will care very little if they irreparably damage our industry and as a by-product eliminate all of the small players in 18 to 36 months… it’s “collateral damage” to them. Don’t take my word for it. Research the current commission’s leadership and look for some of their quotes as relates to “making the communications on the Internet politically neutral”. This is bigger than just my industry. Hugo Chavez created a group called the “responsibility in media” commission (or something like that), that sounded very good. Its charter was to make sure that all political information was “fair”. Now, less than a decade later, there are no radio stations left in Venezuela that disagree with Chavez. The efforts that the FCC leaders have proffered as example of what they have in mind for Net Neutrality actually include reference to granting them the right to license content – with exception made of course for the lowly citizen. But what if a few citizens pool their resources and form an association (like CREDO)? Where will they fall? It depends as I see it on who has control of the white house and thereby the FCC and whether or not those organizations agree with them. Not good! It won’t start out that obviously, but it will end up there.

The big Telco and content players want protection on the ice, so they can execute impossibly profitable maneuvers – or sustain them – without the inconvenience of market rejection or commoditizing competition. The commission wants to use regulation to “manage free speech in a responsible way”. This combination of negative liberties is a marriage made in Hades, and if we don’t stop the wedding ensuring that NEITHER Google or Verizon (or anyone like them) gets any official standing when it comes to the Internet, we are all headed for something very bad.

I am not an alarmist (I think so anyway), but this one really worries me. We can’t give the FCC a sword and then get surprised when they use it. Let Verizon and Google marry. Without the Government officiating, it will be like the marriage of Time Warner and AOL. Remember how frightened everyone was then? “Could they end up controlling content on the Internet?”, and “Will they be able to put a stranglehold on rates?”, and “are they going to join with MCI-Worldcom’s Bernie Ebbers and create a new tiered Internet?”. SO where did that go? Let the market reject them both. They really don’t have any power to force the market to change (without the gov). There are still too many small players. Why? Because without regulation they can compete! With it, they will have to consolidate or fade because of the choking need for resources in order to figure out how to stay “compliant”. I am student of history, and this is how I see it going down.

Best,
~V

From Jack “The Dude” a very senior major telco executive.

Claude,

Your note compels me to comment on the so-called “Net Neutrality” debate.

This subject is grossly misunderstood by the general public and many, if not the majority, of the stake holders in the debate.

First, the Google/Verizon proposal is just that, a proposal designed to “bridge” the two sides of “the debate”. The proposal is flawed in my opinion because it treats differently wireline vs. wireless “broadband” services. While I understand why the difference, the proposal raises the hackles of the wireless user lobby by suggesting that wireless not be regulated in similar fashion to the wired infrastructure.

This debate is in reality not about “broadband” or the internet per se. It’s about the “last mile” of telecommunications service, including the services, applications and management/regulation thereof, to the end user..

Not about Broadband or the internet? That’s right. The internet today is already “broadband” and is provisioned by a consortium of carriers worldwide. In order to access/use the internet, you and I need to do business with a Tier 2 Internet Service Provider (ISP) such as Verizon, AT&T, Comcast, etc. Those providers offer us a variety of wired and/or wireless services including access to the internet. Those providers in turn contract with the real internet carrier for access to the internet. When we do business with the ISP, we’re buying a service, internet access for example) at a specific speed as delivered by the ISP’s infrastructure, not the internet per se. When the service we purchase is above a certain speed (used to be 56kb, now its 1mb and above) above the capabilities of a dial access copper telephone line, the industry and public deem that “broadband” service. If we purchase wireless internet access, we still use and transition the ISP’s wireless (and wired) infrastructure to access the internet.

The reason that “broadband” and Internet access creep into the debate is simple and relates to the demand, both current and future, for bandwidth across the “last mile”. Bandwidth, or the delivery thereof, is not limitless. That reality applies to both Wired and Wireless last mile connections. The investment required by the ISP’s is tremendous and continuing and very much is determined by the types of services they offer over the “last mile”. Video, streaming video, P2P, Games, Facebook or the so-called social networking services all compete for the same bandwidth when delivered to the end-user. In the wired world, coax and fiber (e.g., Verizon”s FIOS, have mitigated the last mile bandwidth problem for ISP’s and subscribers. The so-called “broadband” wireless infrastructure is still fighting the bandwidth demand problem due to the relative immaturity of the available “wireless” technology. Compounding this problem is the advent of new generation wireless phones every 5 minutes that have the capability of saturating a wireless network with various wireless applications.

The FCC’s role to date has been limited to wired, inter-lata telecommunications, i.e., those telecommunications services that are enabled by Federal Tariff. Also, the FCC says grace over the radio frequencies assigned various types of communications, including TV and “cellular” communications. The FCC has never been involved with below the line ISP operations, including internet access.

So, in order for the FCC to regulate “net neutrality”, they must assume a universal (intra and inter lata) regulatory role for ISP operations and policy, including of course the “last mile” of ISP service. Stand by for the howling from each states PSC.

The morale of the story?

Be careful what you wish for

“The Dude”

Mark Kelley Interview

Mark’s history mirrors the wireless industry closely and includes being the CTO of Leap and leading developments at Nextwave and Qualcomm. Today, he is doing some consulting and thinking about new opportunities in the market.
With all this history the discussion takes us to in-depth analysis. He blogs about various aspects of the industry and his life at http://spassmeister.com/ .

On this call, we discussed.
The History of GSM and CDMA and why we are at where we are.
The role of WiMAX in the market.
How it relates to wireless backhaul.
The issues of spectrum.
The smartphones impact on the carriers.
Demand and Costs are converging on the carriers roll out of wireless backhaul.
What business models are making sense right now?
What the opportunity for White Space in the market?

You can find Mark’s website at http://markkelleyonline.com/index.html

Net Neutrality: Can Open be Governed?

FCC Chairman Julius Genachowski has expanded from four to six the principles of freedom associated with Net Neutrality. Now however these principles are now going to be codified into regulatory rules. So the question has to be asked can the concept of “open” be governed. Join us as we look at how these principles will be incorporated into policy. What companies, services and devices will be subject to these rules. And discuss if the jurisdiction of the FCC has to be modified to enable these principles.

Participants include: Todd Daubert of Kelley Drye, Hank Hultquist of AT&T and Rick Whitt of Google.
Join us on Tuesday October 6th, 2009 at 12:30 EST to 1:30 EST as we see if Open can be Governed (http://apps.calliflower.com/conf/show/58623)

Next Week Guest Hosting

Next week I will be guest hosting Alec Saunders’ Squawkbox.
Below is the agenda, but this is a reminder that it’s a conference call / interview. Open to a lot of people in a lot of ways. Your participation is welcome.
Agenda for the Week of 7 / 14 – 7/ 17.

Monday July 14th. Guests: Jim Kohlenberger and Brita Strandberg

Title “Deployed Globally, Regulated Locally”

Jim Kohlenberger, Executive Director of the VON Coalition and VON Coalition International, takes a look at the world and the regulatory obstacles facing VoIP in various countries.

And then sets the stage for a discussion with Brita Strandberg of Harris Wiltshire. Regarding Web 2.0, (or other terms for the migration such as Telco 2.0, Communication As A Service [CAAS], etc.)

These issues have implications for everyone in our space. Your users and you may not consider the services you render as telecom and you consider yourselves good Netizens, but the way the laws are being written you may have to “quack like a duck” after all.

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Tuesday July 15th Guests Hank Hultquist of ATT and ???(Perhaps some one on the California issues as well? – Jim it may be you again)

Title “Following the Money”

After centuries of taxes and service fees based on the use of local switching by a phone company, the application of those rules to services on the Internet is burdensome. Can Intercarrier Compensation be placed into a model that is logical for all participants? While fighting for this vision on an international and national level, some municipalities are pushing us into even more complexity.

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Wednesday July 16th Guests Todd Daubert and Ron Del Sesto

Title: “Net Neutrality”

On “the Hill”, some issues take on lives of their own. The term Net Neutrality has been claimed by almost every contingent in the market. Ron Del Sesto of Bingham McCutchen, will provide context and talk about the way that the subject is being perceived by Congress. Todd Daubert of Kelley Drye will add to discussion with the concerns that face vendors and carriers alike in this debate.

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Thursday July 17th Guests Sam Shiffman, and a player to be determined.

Title: “Day in the life Regulatory Reality”

How does a carrier stay in compliance with regulation, when so many agencies claim jurisdiction? What resources are required and what issues are faced in coping with expanding services beyond a specific jurisdiction? Sam Shiffman and a fellow service provider will provide some insight as to the realities managing telecom regulation.