February 2015

No, the FCC Isn’t Destroying the Internet

[Commentary] Listening to large cable and phone companies might lead some people to conclude that the Federal Communications Commission is about to unleash the technological equivalent of the bubonic plague upon the Internet, or what some are calling “utility regulation.” Don’t believe the hype.

Common carrier regulation has played a vital role in the growth of the Internet. In brief, a company designated as a common carrier can’t engage in unjust and unreasonable discrimination. (Lots of businesses fall into this category including phone companies, hotels and airlines.) Under that principle, the FCC in the late 1960s ordered AT&T, then a regulated monopoly, to allow users to attach devices not made by the company to its networks. One of those devices was the Carterfone, which allowed people to connect their landlines to two-way radios. This decision eventually led to more detailed FCC rules, which, in turn, made it possible for AOL and others to offer dial-up Internet service. Now the FCC appears poised to say that broadband Internet service should also be treated like a common carrier, at least to an extent. FCC Chairman Tom Wheeler wants to do this to prevent cable and phone companies like Comcast and Verizon from blocking or slowing down content requested by their customers. This is a smart, new use of an age-old concept that remains valid.

How White House Thwarted FCC Chief on Internet Rules

In November, the White House’s top economic adviser dropped by the Federal Communications Commission with a heads-up for the agency’s chairman, Tom Wheeler. President Barack Obama was ready to unveil his vision for regulating high-speed Internet traffic. Days later, President Obama said he the Internet should be overseen as a public utility, with the “strongest possible rules” forcing broadband providers to treat all Internet traffic equally.

The prod from President Obama came after an unusual, secretive effort inside the White House, led by two aides who built a case for the principle known as “net neutrality” through dozens of meetings with online activists, Web startups and traditional telecommunications companies. Acting like a parallel version of the FCC itself, R. David Edelman and Tom Power listened as Etsy, Kickstarter, Yahoo’s Tumblr and other companies insisted that utility-like rules were needed to help small companies and entrepreneurs compete online, people involved in the process say. In an office on the fourth floor of the Old Executive Office Building, some companies claimed they would have never gotten off the ground if they had been forced to pay broadband providers. The big losers in the White House process were cable and phone companies, which spent years lobbying to gain support for their view that toughened rules would make it harder for them to offer new kinds of services. Executives who tried to go over the two aides’ heads, including by appealing directly to Valerie Jarrett, Obama’s senior adviser, got nowhere.

New FCC net neutrality proposal: Not as rigid as ISPs think

[Commentary] Federal Communications Commission Chairman Tom Wheeler proposed outright prohibitions on only three things: blocking lawful sites, applications, services or devices; impairing or degrading lawful traffic based on its content or origin; and prioritizing traffic from sites for a fee ("paid prioritization") or from affiliates. Aside from the three no-no's outlined above, ISPs don't have to get the commission's permission to do anything.

Instead, Wheeler's proposal would require consumers or site operators who object to something an ISP is doing to file a complaint, which the FCC's enforcement bureau will then review. That's a much more flexible approach than the one the commission took with local phone monopolies, who had to obtain prior approval for seemingly every initiative. This ex-post-facto review would be used in two ways under Wheeler's proposal. One is a general standard of openness and neutrality for ISPs. Such a standard would be applied when ISPs do things that appear to favor certain sites but don't actually block, degrade or prioritize traffic. In such a circumstance, the FCC would use Title II's just-and-reasonable standard to measure whether the ISP "unreasonably interfered with or unreasonably disadvantaged" rival sites. The other situation when ex-post-facto review would be used is when a content provider or network operator outside the last mile believes that an ISP is hindering its ability to interconnect, that is, to deliver traffic into the ISP's network. Interconnection is not a net neutrality issue, but it's something the FCC has been exploring in response to complaints by Netflix. For those, the FCC would examine the ISP's actions to make sure they were just and reasonable.

The FCC's new rules for a free and open Internet

[Commentary] Since the Federal Communications Commission set out to preserve the free and open nature of the Internet more than a decade ago, there's never been a question about the importance of that goal. Instead, the often bitter debate has been over how to achieve it. The latest proposal from FCC Chairman Tom Wheeler -- to impose the strictest rules yet on Internet service providers, including mobile networks -- will almost certainly draw a challenges in the courts and from Republicans in Congress. But Wheeler and his allies make a persuasive case that the more permissive approach favored by Comcast, AT&T and other ISPs won't protect consumers and competition in the long run.

Before it votes on the new rules, the FCC needs to do as much as it can to whittle down Title II and clarify what ISPs would be barred from doing. Chairman Wheeler is properly focused on waiving the parts of Title II that would be most harmful to investment, including price controls, taxes and network-sharing mandates. Just as important, though, is making sure ISPs don't have the power to stifle investment by everyone else online. That's why the FCC should keep pushing for enforceable, effective net neutrality rules.

Washington Conquers the Internet

[Commentary] Federal Communications Commission Chairman Tom Wheeler unveiled a plan to demolish a policy that for two decades has allowed the Internet to become the jewel of world-wide communication and commerce. His new “Open Internet” plan represents a monumental shift from open markets in favor of government control. It is a grave threat to American innovation.

Reclassifying broadband as a telecommunications service would expose it to rate regulation by the FCC and new Universal Service taxes. Chairman Wheeler says he will avoid placing these and myriad other burdens on digital networks by exercising the commission’s “forbearance” authority. Chairman Wheeler may promise forbearance, but watch out, because that’s not how government works. The nature of bureaucracies is to grab power and expand it. Once the FCC assumes the authority to set “rates, terms and conditions” across the online economy, expect a political land rush. The Beltway struggle for advantage will be so intense and the stakes so high that even Kate Upton might pause before strolling on to this digital battlefield. And if there is one certain result from this clash of lobbyists, it is that the average Internet user will not be the winner. Even if the FCC forbears from most of the ancient rules, the Chairman’s plan explicitly gives the commission authority to decide which business terms are “just and reasonable” and which practices are “unjust and unreasonable.”

The FCC chairman will then become the Frank Underwood of the Web. And as with the “House of Cards” character, the communications and media companies that want something done in DC will have to go through him.

Ending Welfare for Telecom Giants

[Commentary] Should the federal government hand out more than $3 billion from American taxpayers to a Fortune 500 company as part of a program to help small and disadvantaged businesses compete with large corporations? Of course not, but it’s about to happen.

Nothing undermines confidence in government more than the perception that big, sophisticated and connected corporate interests can work the system at the expense of ordinary people. The Federal Communications Commission needs to do a top-to-bottom review of policies that aid billion-dollar interests at the expense of entrepreneurs. Congress should conduct oversight and put an end to this corporate welfare.

Carey: Spectrum Numbers ‘Pretty Interesting’

21st Century Fox is taking a hard look at the Federal Communications Commission's proposed spectrum incentive auction, President and COO Chase Carey says. "It's certainly something we're taking seriously, we're engaged in," said Carey. "Some of the numbers that get thrown around are pretty interesting." Acknowledging that key details of the auction still remain to "get fleshed out," Carey noted that, "we've got a lot of stations and a lot of spectrum. We're certainly fully engaged and there are a number of signs that say it could be interesting." Fox has duopolies in 11 of the top 24 markets, making it a prime candidate for monetizing some of its spectrum.

Moonves looks to buy CBS ahead of potential Viacom merger

CBS boss Les Moonves, fearful a merger with Viacom will be forced upon his company after majority owner Sumner Redstone dies, is discussing ways to buy out the broadcaster’s controlling shareholder, National Amusements.

Moonves believes a merger with Viacom will leave him in an inferior position vis-à-vis Philippe Dauman, the Viacom CEO, and could shortchange CBS minority shareholders. As a result, Moonves has been having discussions with Wall Street heavy hitters about backing such a buyout, sources said.

Trade Groups Urge US to Push Against Chinese Regulations

United States trade groups gave the Chinese government an earful about new policies that could hamper the ability of major technology multinationals to do business in China. Now, the other shoe has dropped. In a letter addressed to key United States officials -- including Secretary of State John Kerry, Treasury Secretary Jacob J. Lew and Commerce Secretary Penny Pritzker -- 17 trade groups headlined by the United States Chamber of Commerce urged the government to push back against the Chinese policies.

The letter called for the United States government to take “immediate action to work with Chinese officials to reverse an alarming number of troubling, new Chinese government policies impacting the information and communications technology (ICT) sector.” The frustration felt by American companies shows how they find themselves in the middle of a deepening conflict between China and the United States over online security and technology policy.

China Is Requiring People to Register Real Names for Some Internet Services

China announced sweeping new regulations requiring users of an array of Internet services to register with their real names and avoid spreading content that challenges national interests.

Internet users will also be punished for adopting misleading handles such as “Putin,” “Obama” or “People’s Daily,” state media said of the new rules, which could hurt some of the country’s biggest Internet companies. The requirements apply to users of blogs, microblogs, instant-messaging services, online discussion forums, news comment sections and related services, said the Cyberspace Administration of China, the country’s Internet regulator, in a statement posted on its website. Internet users will still be allowed to select their own usernames and avatars as long as they don’t involve “illegal or unhealthy” content. “Username chaos” had become a serious problem on the Chinese Internet, the state-run China News Service said in a report on the new regulations, citing an unidentified representative of the regulator. Fake accounts, it said, had “polluted the Internet ecology, harmed the interests of the masses, and seriously violated core socialist values.”

Benton

Search