December 2010

As the mobile industry weighs the pros and cons of usage-based pricing, a new way for consumers to buy data service may be on the cusp of making an appearance. Sprint Nextel CEO Dan Hesse said that the “big development” in the mobile industry could come from carriers offering one data plan that could cover a number of devices. “Everybody in the industry is looking at it right now,” he said. Carriers are betting on data-hungry customers for future revenue, and consumers are obliging by starting to carry more than one device — smartphones, tablets, laptop cards — that require data plans. The flip side is carriers are simultaneously struggling with how to curb what they term “abuse” of their networks — enabled by unlimited data plans — by the small minority of heavy bandwidth users that cause congestion.

Is Comcast really trying to wreck the open Internet with a set of new tollbooths? Is Level 3 really trying to browbeat its way to a good deal?

Ever since the Comcast/Level 3 interconnection dispute broke wide open into public view last week, the accusations from both sides have been flying. Sorting out those accusations has been difficult, in part because it was just so hard to know, on a technical level, what exactly has been going on. Peering and transit issues can be notoriously complex but also murky, the details hidden behind nondisclosure agreements.

As the 2009 Annual Report (PDF) from the ATLAS Internet Observatory put it, such deals are "difficult to quantify due to NDA/commercial privacy." One upside of the dispute is that some of this secrecy has been lifted, and both sides have been unusually open with the press and with regulators about how they interact and what they believe to be at stake. If Level 3 is right, Comcast is trying to do nothing less than turn every Tier 1 network in the US into its customer, rather than the other way round. The result: a fundamental shift in network economics, and the beginning of an era in which the major ISPs start throwing their weight around, making it almost impossible for content companies to reach customers without paying each ISP an additional fee for direct network access. In this view, it's no coincidence that the big ISPs like Comcast, Verizon, and AT&T all operate content businesses of their own, including cable TV, video on demand, and IPTV.

If Comcast is right, Level 3 simply got in over its head and offered cut-rate pricing to Netflix in order to deliver the company's streaming video; now it needs to secure an unbelievable deal in order make the number work. More fundamentally, the entire controversy is a reminder that there are no hard-and-fast rules about network interconnection; indeed, the increasingly complex nature of these interconnection deals means that it's not always clear, even to the participants, who should be paying whom.

The critical swing vote that Federal Communications Commission Chairman Julius Genachowski needs from Democratic Commissioner Michael Copps later this month to adopt sweeping new rules for the Internet is not guaranteed.

Commissioner Copps has made no commitments to back the network neutrality initiative that Chairman Genachowski announced December 1, and could reject it if the final version doesn't sufficiently protect consumers and smaller players. Commissioner Copps, a longtime consumer advocate who has been at the FCC since 2001, is signaling that his vote won't come cheap on this historic proposal, which would have lasting implications for the Internet.

The raging controversy over the leak of classified State Department cables generated major attention in both the blogosphere and Twitter last week.

The responses highlight the differing emphases of bloggers and Twitter users. For the week of November 29-December 3, fully 16% of the news links on blogs and 24% on Twitter were about WikiLeaks, according to the New Media Index from the Pew Research Center’s Project for Excellence in Journalism. That made it the No. 2 topic on both blogs and Twitter. Attention among social media users even tracked closely with that of the mainstream press, where the topic also ranked No. 2 last week, according to PEJ’s News Coverage Index, at 16% of the newshole. Bloggers responded to a number of stories about WikiLeaks last week. But the one linked-to most often was a November 29 Washington Post column by Marc Thiessen. In the column, Thiessen accused the Obama administration of failing to stop the release of the documents and offering a weak response once they went public.